BY BAMIDELE FAMOOFO
Revenue in the Nigerian beer segment will amount to $5.31 billion (about N2.45 trillion) in 2023, according to a report by Statista. The report also stated that the market is expected to grow annually by 11.90 percent cumulative average growth rate (2023-2027).
In global comparison, most revenue will be generated in China ($125.60bn in 2023). In relation to total population figures, per person revenues of $23.90 will be generated in 2023. The report further stated that, by 2027, 2 percent of spending and 2 percent of volume consumption in the beer segment will be attributable to out-of-home consumption (e.g., in bars and restaurants).
“In the beer segment, volume is expected to amount to 2,075.6ML by 2027. The market for the beer segment is expected to show a volume growth of 2.4 percent in 2024. The average volume per person in the Beer segment is expected to amount to 8.52 L in 2023,” the report revealed.
Going by analyst opinion, beer is the most important segment in the global alcoholic drinks market, both by volume and value. In comparison to other segments of the alcoholic drinks market, this segment is already quite concentrated, with the top five players accounting for roughly 60 percent of global volume – half of which is attributable to market leader AB InBev alone.
Beer encompasses fermented beverages made from malt, hops, and water. Also included in the report is non-alcoholic beer with a maximum alcohol content of 0.5 percent alcohol by volume (ABV).
The beer segment is divided into 2 sub-segments: Alcoholic Beer (minimum alcohol content: 0.5% ABV) and Non-Alcoholic Beer (maximum alcohol content: 0.5% ABV). Meanwhile, Nigeria’s top leading contenders in the industry –Nigerian Breweries Plc, Guinness Plc and International Breweries Plc, all listed in the Nigerian Exchange are expected to also drive volume and revenue in 2023.
In readiness for the year’s competition, Nigerian Breweries Plc has launched a new phase of its N100 billion commercial paper programme, allowing the firm to raise N20 billion from investors to further enhance its production capacity. The capital raise comes in three series of varying maturities: the first has a tenor of 91 days, the second 120 days and the third 154 days.
Typically unsecured, commercial papers provide corporations an opportunity to borrow from investors to meet short-term financial obligations at a fixed interest rate. Nigerian Breweries said the debt will cater for its “short-term funding needs.”
“The CP Programme continues to provide the opportunity for non-equity investors to invest in the company, support the company’s cost management initiatives and serve as an additional source of funding for the company,” it added.
In December, the brewer announced a proposal to issue about 2.1 billion ordinary shares to reward stockholders in the proportion of 1 new share for every 4 currently held. It hopes to achieve that by setting aside over N1 billion from the share premium account, which had a balance of N77.5 billion as of the end of 2021.
On its part, Guinness Nigeria Plc, declared revenue of N206.88 billion for the financial year ended June 30, 2022, against N160.42 billion it declared in the corresponding period of 2021, translating to a 29 per cent increase. The company’s profit before tax grew by 310 per cent from N5.7 billion to N23.6 billion, while profit for the year increased from N1.25 billion to N15.6 billion in 2022.
The Guinness Board Chairman, Omobola Johnson, also declared the payment of dividend of N7.14 for every ordinary share or 50 kobo upon approval. “The forward looking strategic investments we have made and the array of innovative brands we have in the pipeline makes us well positioned for further growth in 2023 financial year,” Guinness disclosed.
