Heineken investing in Nigeria to tap future volume growth

Heineken NV, the world’s third-biggest brewer, is investing in Nigeria on bets that economic expansion will increase consumption in Africa’s second-largest beer market, helping to boost profits.

Heineken, which is the majority owner of Nigerian Breweries (NB), Nigeria’s largest brewer by volume and market value, is confident in the Nigerian market based on its potential, population growth and rising urbanisation, Jean-Francois van Boxmeer, chief executive officer of Heineken, said in an interview with BusinessDay on the sidelines of the World Economic Forum on Africa.

“Nigeria is our largest brewery operation in Africa and second-largest in the world after Mexico,” van Boxmeer said. “We are the market leader for decades and have been investing ahead of the curve. If you are too cautious, you can miss the boat.”

Nigeria’s beer market has been expanding at about 10 percent per annum over the past decade. Even so, average per capita beer consumption is still only 10 litres a year, a sixth of the rate in South Africa, meaning the potential for growth remains huge.

Analysts say that as Nigeria’s middle class grows, they are becoming more brand conscious and are targeting aspirational brands such as Heineken, which costs between N500 ($3.1) and N2,000 ($12) per bottle in trendy bars across Nigeria’s major cities.

http://businessdayonline.com/2014/05/heineken-investing-in-nigeria-to-tap-future-volume-growth/#.U2u9BlcVcRQ