BUSINESS STRATEGY

Guinness Nigeria changes indicative of an evolving beverage market?

By our News Team | 2023

Forex challenges and the differing attitudes of younger African drinking-age consumers may be among factors driving new strategy.

Guinness Nigeria recently announced that, with effect from April 2024, it will no longer import or distribute certain Diageo international premium spirits products – including the Johnnie Walker and Singleton whisky brands and Baileys liquor brand – imported under its 2016 Sale & Distribution Agreement with Diageo plc, its London-based parent company.

 

According to a media statement, this move is in line with Guinness Nigeria’s long-term growth strategy and is also in alignment with Diageo plc’s decision to establish a new, wholly owned spirits-focussed business to manage the importation and distribution of its international premium spirits portfolio in West and Central Africa.

Business Strategy

Photo credit: Benoit Larochelle via Wikimedia Commons

Currently, imported Diageo international premium spirit products constitute only around 6% of Guinness Nigeria’s total revenues.

 

Guinness Nigeria will continue to manufacture and distribute its full portfolio of non-alcoholic drinks, beer, ready-to-drink (RTDs) and locally produced spirits. These include Orijin, Captain Morgan Gold, Gordon’s Moringa, and Smirnoff X1 Choco.

 

The company says the change will enable Guinness Nigeria to better focus on its core business and its strength in the manufacturing, marketing and distribution of its local product portfolio.

 

Lingering foreign exchange scarcity

 

“This strategic change reduces [Guinness Nigeria’s] foreign exchange requirements and mitigates the negative impacts of lingering foreign exchange scarcity and exchange rate volatility on the financial performance of the company,” the media statement says.

 

Commenting on the announcement, the beverage industry news website, Just-drinks.com, says a number of African countries – including Kenya, Egypt, Zimbabwe, Nigeria, Ghana, Tanzania and Zambia – have struggled with US dollar liquidity shortages in recent times, which has caused an upsurge in import prices. 

 

The website quotes David Harris, an alcoholic beverages research director at GlobalData, as saying: “With this, Diageo will be counting on growing moves towards spirits among younger African drinking-age consumers, who are increasingly seeking domestically-produced products which resonate with them, rather than imported western brands.”

 

“Despite Guinness’ ongoing popularity across Africa, we have seen a consistent shift away from unflavoured, traditional beer brands by younger consumers. Often viewed unfavourably as ‘your dad’s beer’, this move is a symbolic shift by Diageo away from the old and into a new era of targeting younger African drinkers with exciting African products.”

 

Comments Trendtype, the London-based emerging market consultancy: “It is notable that, in May 2023, Diageo completed the sale of its Guinness Cameroon business to Castel, which has far larger and wide-ranging brewing operations across West, Central and North Africa – but no footprint in Nigeria or Ghana.

 

“The big question is: does Diageo want to be running a brewing operation in Nigeria? We are not sure it does. Diageo HQ is streamlining its strategy in Africa to optimise spirits sales, which is less complicated, higher margin and fundamentally less problematic at the moment.”

  

View all articles »
author avatar
[email protected]
See Full Bio
0
    Your Cart
    Your cart is emptyReturn to Shop
    Continue Shopping

    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.