Trade Resources Industry Views Africans to Enter The Beer Market From The Home Brew Sector

Africans to Enter The Beer Market From The Home Brew Sector

A new report by Canadean expects more Africans to enter the beer market from the home brew sector, while commercial beer and premium brands forge ahead in the exploding African beer market.

According to the report, the African beer market is the fastest growing global beer market with an annual average growth rate of 5% between 2013 and 2017. This means the African beer market will outstrip growth in the Asian and Latin American markets, which are projected to witness a growth rate of 4% and 3%, respectively. South Africa is by far the biggest market in Africa, with an expected total volume of 30,921th hl in 2014, followed by Nigeria with 15,200th hl and Angola with 12,790th hl. Kevin Baker, Account Director at Canadean, says: "Africa has seen inflation fall, foreign debt shrink and GDP rise in the last few years. Moreover, population growth - once feared as a major contributor to poverty - is now perceived as an asset, with the working age population set to outgrow that of China and India."

Commercial beers oust dangerous 'home brews'

Canadean finds that more African consumers will change their home brewed drinks for commercially brewed ones over the coming years. "At the moment homemade alcohol products still dominate the African market, but they pose a significant health risk. This is an incentive for consumers to move away from 'home brews' and instead turn to commercial beer," says Baker. Major international brewers have been working to create products that can compete with the unregulated alcohol market. Kenya Breweries' Senator Keg, a beer brewed from sorghum but with the look and taste of malt beer, was the first brand specifically created to target this market.

Major players challenged by premium brands

African markets are highly consolidated and four brewers - SABMiller, Heineken, Castel and Diageo - account for 90% of the market. However, their monopoly is being challenged by new, emerging brands. For example, Solibra, a licence partner of Carslberg, was effectively controlling the market in Ivory Coast until 2013, when the new competitor 'Les Brasseries Ivoriennes' entered the beer market and managed to claim 12% of the market share in its first year.

The market's dynamic is further changed by premium brands, which witnessed an average annual growth rate of almost 12% between 2008 and 2013, compared to 6% for mainstream beer and 6% for African beer overall. "The growth of premium beers is a result of the growing middle class In Africa, who drink premium beer as a display of social status," adds Baker.

Source: http://www.drinks-business-review.com/news/africa-to-become-fastest-growing-beer-market-050315-4525673
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Africa to Become Fastest Growing Beer Market