Drinking habits affect Nigerian brewery industry - CNBC Africa

Drinking habits affect Nigerian brewery industry

Western Africa

by Dara Rhodes 0

Row of assorted drinks in a bar. PHOTO: Getty images

According to Nwafor, the market has seen that more 'sophisticated' drinkers, that the big players sell to, are moving away from beers and moving towards wines and spirits.

“There’s increasing awareness among the big brewers, Nigerian breweries and Guinness about the need to play in that space - mainstream space - before 2011, they really didn’t have brands in the economy segment but now you see them coming up with brands,” Ifeoma Nwafor, consumer goods analyst, ARM investment managers told CNBC Africa.

International breweries recorded a 22 per cent increase to 33 kobo and a 20.9 per cent increase in profit after tax to 1.08 billion naira.

“We’ve seen pressures for earnings for the big brewers, something we’ve observed since last year and that’s continued through this year and it’s what we feel to be caused by a possibility of structural change,” she explained.

Other consumer stocks in the country reported a good growth in earnings for the third quarter, however, Nigerian brewers and Guinness reported negative results. Nwafor believes that when performance in the smaller players is compared with big players, the smaller players pulled in much larger numbers.


“We believe that there is continued pressure on key markets for those big players.”

Nonetheless, the market is quite optimistic about the pickup of consumer spending towards next year.

“We are likely to see a better year for consumer stocks because the consumer is already adjusting to whatever changes have happened last year. So we see an improvement this year and we envision growth for private consumption,” she concluded.