In the dynamic alcoholic beverage industry, one man is trying to redefine how business is done. The Managing Director of drinks.ng, Lanre Akinlagun, talked to Beverage Industry News (NG) recently on the state of the alcoholic beverage industry in Nigeria
Let us start by you giving us a brief background about yourself, where you started, where you went to school and how you got into this business?
I went to school in the U.K. I went to London Metropolitan University, studied Marketing and Advertising (Mass Media). From there, I always worked in Digital Marketing, Universal Pictures, IBM, and Digital Marketing Agencies.
Through that time, I always invested in a lot of wine. I also drank a lot of alcohol.
When you say you invested in wine, what do you mean?
You can buy wine when they are still grapes. That is the earliest stage of wine purchasing, when they are still grapes. Those wines that I bought, they are not ready to be drank for about 15 to 20 years. Before they get to that stage, they increase in value. It all depends on which one you buy, when you buy them, where you buy them. Wine is probably one of the best secured investments you can make. So wine, gold, and metals. If you read anything, it would tell you. I don’t know this guy’s name again, the guy in the Phantom of the Opera, What’s his name?
Yes he was married to the Opera Singer.
Yes, he was. Well, he started investing in wine when he was 15 years old. Now he has a wine collection worth over $50 million. He sold some of his wine collection the other day worth $35 million. And that’s some of it. Yeah, it’s all mature. So wine is a secure investment.
So when I came to Nigeria, a friend of mine was getting married. I had to get drinks and I had to go to Balogun market, and I said why?
Too much stress?
And at that point in time, I was in the Tech Industry with Iroko.
Tell us, who are your customers? Who do you sell to, consumers or businesses?
You guys are my customers. You just bought a Star Radler. So everyone is our customer. We use to do business-to-business. We still do some but we slowed down on that. Our main focus is customer facing. We do a lot of hotels and bars.
And the main reason for stopping business-to-business is because, they don’t pay?
No, that wasn’t the reason. Business-to-business was never our core business we tried to solve a problem to. Our core business is to stop people from going into the market to buy drinks.
What other services do you provide to people that buy drinks. Maybe someone is having a party, do you provide drinks?
Yes we have a party service. We can deliver drinks to your party. We can come and serve at your party. And we are adding additional services as well. We are going to start a 24-hr service soon. It would be a segment of the Islands and we’ll see how it scales through.
Do you have other locations?
As contradictory as it sounds, we have a store in Lagos Island, but that’s there for two reasons. Get your feet wet and see what’s happening. But more importantly, it is there for us to understand how the market operates and how these people do what they do.
What is your opinion of the alcoholic beverage industry?
To me, it is still early days. It is infant for so many reasons. One, logistics is not even in the right place in Nigeria for alcohol to get to where it needs to get. As much as you read reports that say that alcohol consumption is growing rapidly in Nigeria, I don’t think it is that rapid. If you go to places like Ibadan, Osun, go to places in the South and South-South, it is a very much beer culture. A lot of spirits haven’t reached there. Maybe a few like McDowells get there. It is still very early. If you look at products like Campari, do you see a lot of Campari in Lagos?
I honestly haven’t looked
Do you see a lot of Hennessey?
Do you see a lot of Remy Martin?
Do you see a lot of McDowells? If someone told you that Hennessey is the number one selling drink in Nigeria and Campari is the second highest, will you believe that?
How did that happen?
Most of them are sold in the East. That is why I say the market is still young. People pick their trends from what they see happening in Lagos. People assume that 90 percent of the alcohol consumption is in Lagos, but it isn’t. A lot of it happens in the East. That proves to you that alcohol market is not just what’s happening in Lagos. A lot of it happens in the East. There is still a lot that can be done.
Another reason is that if you look at the beer market as well, a lot of people will tell you that Nigerian Breweries and Guinness are the biggest breweries in Nigeria. They are by size but every year in the last three years; their market share has been diminishing because of SABMiller. SABMiller hasn’t come to Lagos. What SABMiller has done is that they went to the different regions and built a local drink and a story around those drinks with the indigenous tribes and those tribes have been consuming their drinks and less of the rival. They are not here in Lagos yet but they are coming. They are coming from the outside. They are coming from the easier markets, the cheaper markets and they are drawing their way in.
They are like the second largest alcoholic beverage company by volume in the world.
And Heineken is number three. SABMiller was trying to buy Heineken. It couldn’t because the heiress that controls Heineken is married to a billionaire guy.
So who are your competitors?
At the moment, anyone that sells drinks. In my humble opinion, we are not at the size that we can say the big guys are our competitors. The mallam selling drinks out there is our competitor. Anyone that sells drinks right now is my competitor. Until we take everyone out and create a real core value, everybody stands as our competitor.
I was going to ask you if you sell outside of Lagos but you don’t do much of business-to-business.
No we do sell outside of Lagos. We deliver to Abuja; we deliver to a lot of places. Because of our partnership with Konga and our own website, we deliver large quantities of drinks outside of Lagos.
And how do your prices compare to what’s out there in the market?
I generally don’t like looking at comparing things like that because, I would say we are generally competitive, but then, the question I have to ask myself is are my going to compare our prices to a guy selling fake drinks? Are my going to compare my prices to a guy that has little to no overhead. If you look at Shoprite, we are 25 percent cheaper than Shoprite. If you look at the open market, we are about 5 – 10 percent more expensive than them. So everybody has their positioning in the market. It is about which one you are sticking to. There is a service we provide. We deliver, Shoprite doesn’t. I would say we are competitive with our service and our pricing.
Do you advertise your company?
We don’t advertise our company too much. Everything we have done so far has been organic. But we are going to start advertising more through partnerships and the brands.
Is there anything else you would want to tell someone looking to buy drinks, maybe for an event (party, birthday, Christmas)?
With us, if you go on our website, we have an event calculator. So you can literally go on the site, put your name and address and the date of your party and how many people are coming. Then you can name the categories of drinks you want and we can automatically calculate how many drinks you need. So we have easy things like that.
This interview was conducted a few months ago. Since then, a lot has happened in the global alcoholic beverage industry. For one, SABMiller has been acquired by Anhueser-Bush InBev to form the largest beer company in the world by volume. While the details are still being hashed out by the companies, its impact would be felt here in Nigeria.
Also, drinks.ng now offers 24/7 service in Lekki, Ikoyi and Victoria Island with 30 minutes delivery. Contact drinks.ng for your drinks needs at 0700 882 9996 or through their website.