Guinness Nigeria, the third largest brewing company in Nigeria, is planning to scale up its operations. The company has acquired a 10-hectare strategic industrial asset in the Ikeja industrial hub of Lagos State, The Nation reported on July 2. Until 2017, the property belonged to Universal Steel Limited before it was sold to a group of private investors.
Guinness Nigeria so far did not comment on the expansion plans. The company which was incorporated in 1963 and was early to develop the market is suffering from growing competition as other brewing groups increase their investments in the country.
The biggest player in the country is Heineken. Its subsidiary Nigerian Breweries has 11 production sites in the country and a market share of about 55% in 2019.
More importantly, AB InBev is aggressively increasing market share. In 2019, International Breweries, which became part of AB InBev in 2016 when the world’s largest brewer purchased Johannesburg-based brewing group SAB Miller, has opened a new USD 250 million brewery near Lagos, Nigeria and overtook Guinness Nigeria in size. In 2019, AB InBev had a market share of about 23%, while Guinness had only 22%. The company plans to spend another USD 150 million in the coming years to extend capacity in stages. (inside beer, 19.2.2019)
“Nigeria (is) becoming a more and more important market as we grow in that market,” AB InBev’s former Chief Executive Officer Carlos Brito, said in 2019. “I mean we’re growing double digits, we didn’t grow in the past as fast because we were lacking capacity and now that we have capacity, strong brands and (a) great group of people we’re challenging the status quo there” (inside.beer, 22.5.2019).
Nigeria has a young and growing population of more than 200 million people and an average beer consumption of 10 to12 liters per year. Despite the fact that this is one of the highest consumption rates in Africa, it is still tiny compared to other regions in the world.
In view of the market potential, it is clearly understandable that Guinness also wants to increase production. The business already manufactures and sells drinks across all categories of alcoholic and non-alcoholic beverages including iconic local and international brands like Guinness, Orijin and Johnnie Walker whisky.
Guinness Nigeria is a public company listed on the Nigeria Stock Exchange. Majority shareholder is Diageo, which is listed on the London Stock Exchange and New York Stock Exchange.
