Giant beer company, AB InBev has revealed that it is committed to serving Nigerians with various beer brands at affordable prices.
In view of how big the Nigerian beer market is, the Marketing Manager of AB InBev, Mr Arne Bruse disclosed that consumers of beer will be able to buy some of the company’s beer brands at about ₦100 to ₦150.
Bruce, who spoke at a conference held at Radisson Blu Hotel, Lagos, added that the company had employed several strategies to better serve beer lovers in the country.
“We have great plans for our consumers in Nigeria. We want to grow, we are busy building our brewery, we are busy expanding our capacity and we are investing in infrastructures, we are hiring people. Nigeria is the biggest market for us on the continent, so it is definitely a focus area for the company,” Bruce said.
He noted several beer brands have already been strategically launched to cater to particular geography and culture within the country.
“If you look at the Western part of Nigeria, we have Trophy specifically produced for our consumers in that region. Unlike the West, we introduced Hero beer in the Eastern part of the country,” the Marketing Director said.
AB InBev is the world’s largest beer company by volume and sales, with over 400 beer brands to boot as of January 2017.
Get excited beer lovers because international beer brand, Budweiser is launching in Nigeria in 2018.
Brand owner, Anheuser-Busch InBev (AB InBev) is set to launch the premium lager into the Nigerian market as part of its long-term investment since taking over the business of SAB Miller.
AB InBev already owns the Hero and Trophy lager brands, which have recorded enormous sales in the past couple of years.
Interestingly, Budweiser might not have an official launch party like most other beverage brands in Nigeria. Recall how Hero Lager was introduced to the market? The brand capitalised late Chukwuemeka Odumegwu Ojukwu’s heroic status in the East and launched the product during his burial. As a matter of fact, it was not a ‘launch’ per se, it was more of a massive release during the burial of the Biafran War hero.
With Nigeria’s Super Eagles qualifying for the FIFA World Cup in Russia, and Budweiser being official sponsors of the Mundial, our fingers are crossed regarding what sneaky marketing technique will be used to introduce the lager to Nigerians.
AB InBev’s decision to introduce Budweiser alongside Beck’s into the Nigerian market is hinged on creating stiff competition for Nigerian Breweries’ Heineken and Star Lager. Where does that point us? A triangular beer war between AB InBev, NB Plc, and Guinness Nigeria in the coming year.
Also, the merger between International Breweries Plc (based in Ilesha), Intafact Breweries Ltd (based in Onitsha), and Pabod Breweries Ltd (based in Port Harcourt) was completed early this year with the final company to be known as International Breweries Plc.
Budweiser’s launch coincides with the launch of a newly-completed “over $250 million” brewery in Sagamu by 2018.
“We are investing in a fourth brewery, a large brewery outside of Lagos, in the Sagamu area that will come online next year and it’s our largest brewery in Africa outside of South Africa,” said, Annabelle Degroot, Managing Director-designate of International Breweries Plc.
AB InBev acquired SAB Miller Nigeria, ex-owners of the three merged companies, in a deal reportedly valued at $106 billion in 2016.
Anheuser-Busch InBev NV is making a huge entrance into the Nigerian beer market in 2018, as it plans to make a stake in Africa’s second-largest beer market.
The news of having the largest producers of beer in the world in the Nigerian market will not sound melodious to Heineken-owned Nigerian Breweries and Diageo’s Guinness Nigeria Plc. However, the two biggest brewers will be geared up for the beer war as they look not to be taken unawares.
Considering the turbulent nature of the Nigerian market, many analysts are eagle-eyed on the plans AB InBev has on the ground to succeed. However, certain factors are in favour of the company who are not only here for the competitive beer market but looking at growing its investment in the country.
The Economy out of Recession
With the Nigerian economy out of recession, there is no better time for the company to invest in Nigeria. Christian Nouboue, On Trade Manager of Moet Hennessy in Nigeria, said that “the more the country comes out of recession, the more the GDP grows, which means higher employment, higher consumer income, and higher disposable income.”
Despite recent economic challenges, AB InBev’s business in Nigeria recorded double-digit growth over the last quarter. According to BussinessDay data, International Breweries shares have jumped 161 percent in the past year, Guinness Nigeria shares are up 19.79 percent while NB is up a mere 0.98 percent.
With that kind of growth, the brewer will be more confident in mounting a strong fight for a market takeover.
In October 2016, AB InBev, the world’s largest beer producer, completed a $106 billion takeover of SABMiller, the second largest. That merger meant that one in three beers that are consumed will be coming from the giant brewer. That merger also resulted in AB InBev taking over the business of SABMiller in Nigeria, which has led to the merger between International Breweries Plc (based in Ilesha), Intafact Breweries Ltd (based in Onitsha), and Pabod Breweries Ltd (based in Port Harcourt) which would be completed next year with the final company to be known as International Breweries Plc.
According to sources, AB InBev currently owns 75% of Intafact, 82.8% of Pabod and 72.2% of International Breweries. International Breweries Plc is listed on The Nigerian Stock Exchange and should be the leeway for the consolidated company to achieve its aim of becoming the 5th largest listed company on the exchange.
With a united front, which will also oversee productions in Ghana, the company will not only cut cost in operations but will also avoid any unforeseen delay in decision making.
Before the takeover by AB InBev, SABMiller was the third largest brewer in Nigeria after Heineken’s Nigerian Breweries and Diageo’s Guinness Nigeria.
Although it entered the Nigerian beer market late in 2009, it moved swiftly to acquire Pabod Breweries, makers of Grand lager beer, International Breweries, makers of Trophy lager, and in 2012, SABMiller established a $100 million brewery in Onitsha, which brews Hero lager.
That regional strategy by SABMiller has created the perfect in-road for AB InBev coming into the Nigerian beer market. This is coupled with the fact that its beers are about 40 percent cheaper than its rivals, which gives them an upper hand in terms of pricing.
Increasing Local Production
Managing Director-designate of International Breweries Plc, Annabelle Degroot, disclosed recently that the brewer would be completing an “over $250 million” brewery in Sagamu by 2018.
This plant is to serve the company’s target of increasing production lines at existing breweries.
“We are investing in a fourth brewery, a large brewery outside of Lagos, in the Sagamu area that will come on line next year and it’s our largest brewery in Africa outside of South Africa,” Ms. Degroot said.
“The exciting news is that we will be introducing some new brands, so we are very proud of our Hero brand and our Trophy brand, and those brands will grow because we like to focus on local, great brands.”
One important reason why AB InBev will be producing locally is to avoid the prohibitive tax placed on the importation of beer. This means to have their global brands in the market, they have to be produced locally in Nigeria. Thus the plant in Sagamu, and other plants as well, will not only continue to support the growth of the local brands but also enable their global brands to be present in the Nigerian market.
Introduction of Global Brands – Budweiser and Beck’s
AB InBev’s plan to hit the market with two of its global brands will create a strong fighting fort for the giant brewer. The company plans to introduce Budweiser and Beck’s into the Nigerian market, mainly as competition for Heineken and Star Lager of Nigerian Breweries. The company has already introduced Castle Lite into the market which NB Plc has tried to match with the introduction of Star Lite.
Budweiser is the leading brand for AB InBev globally, and it will spark the curiosity of Nigerians to try it out. It will be positioned to knock off Heineken Lager in the premium beer category. For Beck’s, this is more like a re-introduction as it was once brewed by Champion Breweries in Uyo, partly owned by Nigerian Breweries. Beck’s will give Budweiser added support in the international brand category for the company.
AB InBev’s Sneaky Marketing Strategy
The manner in which SABMiller sneaked up on Nigeria’s biggest brewer, NB Plc, is no cheerful news to the AB InBev’s competitors in the beer market.
Rather than go with the usual fanfare that follows the launch of a new product, the brand capitalised on the heroic status of Chukwuemeka Odumegwu Ojukwu in the East and launched the product during his burial. It was not actually a ‘launch’, it was more like a massive release during the burial of the Biafran War hero. From then on, it found love with the people and it had to take the release of Life Lager by Nigerian Breweries to curb the harm it was doing to other brands in the market.
It is sneaky strategies like that that has kept NB Plc and Diageo’s Guinness on their toes, as they warm up to the beer war analysts have envisaged for 2018.
Bloomberg reported last year that AB InBev was cutting 3% of its workforce in three years after its takeover of SABMiller, which amounts to over 5,000 staff. This is in line with the company’s global plans to save up to $1.4bn annually.
In that same light, the company is renowned for its penny-pinching policies which have seen to it that there are no free beers on its plants, no private offices for top executives, no lavish parties, and no hideaways at high-end hotels. With the money saved on these luxuries and staff reduction, AB InBev will have enough cash in its armour to match the fierce competition it expects from Nigerian Breweries in Nigeria.
AB InBev Nigeria, through its Onitsha-based Intafact Beverages Limited, has donated patrol vehicles to the Nigerian Police, Anambra State and Delta State Command and the Federal Road Safety Commission (FRSC).
The donations which included six Hilux patrol trucks was done at a handover ceremony at the company’s facility in Onitsha. Andries du Plessis, Managing Director, AB InBev Nigeria and Ghana stated that the donations was part of AB InBev’s social responsibilities in creating a better world.
Director of Corporate and Legal Affairs, AB InBev Nigeria, Otumba Michael Daramola, also added that the gesture was company’s way of showing appreciation for the good work the security agencies are doing as well as the cordial relationship they have enjoyed with them over the years.
He further stressed that the vehicle donations was Intafact’s contribution towards ensuring security in the country, as well as in keeping with its policy of carrying out social responsibility in its operation.
The donation brings to 12 the number of vehicles the brewer has given out to security agencies in four years. This is in line with other projects like provision of water and electricity to neighbouring communities and assisting over 50 youths with funds to start their own businesses, as pointed out by Daramola.
Inspector General of Police, the Anambra State Commissioner of Police, Mr. Garba Umar, who received the vehicles on behalf of both security agencies, commended the company for the gesture, promising good use of the vehicles as well as proper maintenance.
Intafact Beverages Limited is one of three breweries AB InBev inherited following their massive 2016 merger with SABMiller. Other breweries owned by beer giants are International Breweries Plc in Ilesha and Pabod Breweries Limited located in Port-Harcourt.