Whisky in Africa

20 August, 2014

Nigeria to the west is the continent’s second largest whisky market and stood at 0.6m cases in 2013, growing at 40%. Kenya, to the east, saw sales of 0.2m cases, growing at 62%, making it the fourth likely destination for whisky last year, behind Egypt, the sales of which are influenced by tourism. These figures don’t quite tell the whole story as the informal market, which is not trackable, is somewhat significant in Africa. Opportunity and demand is certainly greater than the figures would have us believe. 

South Africa 

South Africa is Africa’s largest whisky market by a factor of 10 and, according to the Scotch Whisky Association’s Rosemary Gallagher, it has long been the scotch industry’s star market. “Last year it was the sixth largest [global] market by value with exports reaching £163 million, up 1% on the previous year,” she says. 

All the economic excitement clings to Nigeria, but according to Distell’s Caroline Snyman, head of luxury brands at Distell, South Africa still holds great appeal. “While Angola, Namibia and Nigeria are the fastest-growing countries in Africa in terms of wealth per capita, according to a recent report by New World Wealth South Africans are ranked as the wealthiest individuals on the continent. The major global scotch whisky brands are present but so are many domestic brands eager to capitalise on the growing consumer disposable income.”

According to Marco Di Ciacca, senior brand manager for Burn Stewart, now part of Distell, the challenge for whisky brands is to convert black consumer groups from the traditional brandy to the more aspirational scotch brands. “Twenty years ago we would have targeted white male consumers but now it is just male consumers,” he says. “South Africa is the one market that is mature and immature at the same time.”

Diageo has successfully blurred the race-category lines with Johnnie Walker. The group has a joint venture with Brandhouse in South Africa, which also offer beers from Heineken and Namibia Breweries. 

According to a presentation in Diageo’s recent Africa Conference, beer enabled the group “to accelerate” its “sales force rollout into the main market landscape” which “benefited spirits”. 

The company’s spirits performance has seen an 11% CAGR over 2005-2013 and it is the number one whisky supplier in the market. Here Johnnie Walker Red is the main player and has seen 60% growth over the past three years thanks to the country’s “emerging middle class” and the brand’s “achieving scale in the attractive trade-up segments”. 

Though a hub of the south, “South Africa is no longer the single point of entry into the rest of Africa,” says Distell’s Snyman. “Many of the multinational producers are engaging with targeted African nations directly, given the ongoing improvement in infrastructure in many of these countries which is facilitating the transportation of goods. 

“These producers are also working closely with some of the major retail groups, which have established themselves in these markets and which are themselves investing in infrastructure to bring their goods to consumers.”

Nigeria and West Africa

The case for Nigeria’s emergence as Africa’s powerhouse of consumerism is compelling, despite a backdrop of deep religious fault lines and current terrorist factions. By 2050 it is forecast to be the third most populated country in the world, overtaking the US, according to the UN. 

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