Booze brands up their game in the rush for African market

2014-05-11 15:00

The rapidly increasing middle class across the African continent has prompted alcohol brands to up their marketing game.

A 2012 report by ratings group Moody’s highlighted the strong growth potential in Africa as more people moved from home-brewed beer and spirits to commercially produced alcohol.

According to the report, the beer market in Africa represented only 5% of worldwide volumes, and four players controlled more than 80% of the market: SABMiller, Diageo, Heineken and Castel Group.

“They have all obtained a first-mover advantage among brewers on the continent. Nigeria is one of the largest Guinness markets for Diageo, and sub-Saharan Africa is SABMiller’s fastest-growing region.

“In the premium segment, the Heineken brand is showing a higher rate of organic growth in Africa and the Middle East than the company’s total volume growth in the region,” the report said.

Retailer Shoprite reported in 2013 its seven Nigerian stores sold more Moët & Chandon Champagne than its 600 South African stores combined. This provides some insight into the appetite for high-end liquor among Africa’s growing middle class.

Oude Meester, a brandy owned by beverage company Distell, has teamed up with international superstars such as Jamie Foxx and Idris Elba to enhance its image and tap into this market to grow its presence on the continent.

Genius Mnywabe, brand manager for Oude Meester, said it did not focus on local stars in its campaign because it was trying to compete with other international brands on the continent.

“The campaign definitely positions Oude Meester as a premium brand that can compete with many in the world. We do already have a presence in other African markets and plan to grow the brand further on the continent over the next few years,” said Mnywabe.

According to media and marketing analyst Chris Moerdyk, there is no better way to promote a product than through a third party testimonial.

“Even though the majority of consumers will know Oude Meester is paying Idris Elba a lot of money for this commercial, it does show he approves of the brand and is happy to be associated with it.

“The choice of Elba is great because of his role as Madiba recently, and it enhances the potential for success in marketing terms,” said Moerdyk.

He said one does not necessarily need to have an African theme or African celebrity to sell something to Africans.

Stars like Elba don’t come cheap. Mnywabe would not reveal how much Oude Meester was spending on Elba, but said: “If the early signs are an indicator, then it has been absolutely worth it.”

However, Moerdyk warned that celebrity endorsements can hit snags.

“Take Lance Armstrong, Tiger Woods and Oscar Pistorius – all endorsed global brands and all caused considerable embarrassment to those brands,” he said.

However, as alcohol consumption rises, so concerns grow about the effects of alcohol abuse on the social fabric of the continent. Last year, Time magazine named Africa the “drunk continent”.

Locally, authorities and alcohol companies have been in a tussle about how better to deal with alcohol abuse, and measures such as banning advertising and restricted sales have been discussed.

This week, Treasury released a proposal for public comment reviewing the alcohol excise tax regime.

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