Guinness Nigeria changes indicative of an evolving beverage market?

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.”