Whisky in Africa

20 August, 2014

A variety of elements are combining to make African countries exciting prospects for whisky producers. Hamish Smith investigates

AFRICA IS NOT A COUNTRY AND IS NOT A MARKET. Africa is a continent of a billion people that by 2050 will become nearer two and a half billion. It is a populace spread between 54 countries that stretch 7,000km north to south and east to west. What happens in the medinas of Morocco does not happen among the Nigerian billionaires of Victoria Island, or indeed a few kilometres north into the Lagos slums. To succeed in the last of the developing continents, spirits companies must forget about Africa’s whole and explore its parts. 

If we are to find a commonality, it is in the continent’s ascension to the internet age. In 10 years the web has illuminated Africa’s darkest corners, exposing its consumers to worldwide trends. Figures from The Ecomomist suggest 59% of Nigerians and 68% of Kenyans own mobile phones. With the worldwide web in one hand, it’s no wonder status spirits such as Hennessey and Johnnie Walker have found their way into the other. 

Henry Carew, CEO of the Overlands Partnership, has spent his career advising drinks groups on strategy in Africa. “Africa’s strong urbanisation trends, combined with the relatively lower penetration of international brands, offers strong opportunities,” he says. “By 2030 an additional 300 million people will flood Africa’s ‘consumption cities’.”

But that’s where the generalities end for Carew. “While sharing some similarities African countries have very different consumer landscapes. A deep understanding of the local consumer needs to be acquired and strategies tailored to their needs. 

“A business choosing to invest in Africa needs to decide where to invest. There can be a temptation to prioritise those where the cost of entry is lower than in the countries where the large competitors are already well established. But it is worth remembering that fishermen usually recommend to ‘fish where the fish are’. However, those considering investment might well bear in mind the risk environment.” 

Where there are fish there are fishermen and in the most important African markets Diageo and Pernod Ricard are the giant trawlers. Diageo established its presence through a Guinness brewery in Nigeria in the sixties but its business interests didn’t stop at the black stuff. 

Where the right conditions for trading are met in a country – growing GDP
and per capita wealth, an emerging middle class, relative security, infrastructure improvements and improved route to market – Diageo is there.

Whisky is the most popular category in Africa and scotch is the most popular whisky. Diageo estimates it sells more than 70% of all the scotch in its African markets and dominates the ‘international premium’ segment in Nigeria, South Africa, Ethiopia, Angola, Cameroon, Ghana, Kenya, Tanzania and Uganda. At its Africa conference late last year, a group spokesman said Diageo plans to “extend its footprint” in Ethiopia, Angola and Mozambique.

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