Beverage companies to experience lower growth in 2016 as headwinds hit consumers
With the myriad of macro-economic challenges facing businesses in Nigeria, particularly, the Fast Moving Consumer Goods companies (FMCG), alcoholic beverage brands and to a lesser extent non-alcoholic beverage brands will feel the pinch more with lower profits as consumers look for cheaper brands. This was the assessment of analysts at Moody’s Investors Service, a global country and market rating company.
“In Nigeria (B1 stable) we expect alcoholic beverage volumes, and to lesser extent soft drink volumes, to remain under pressure and for consumers to trade down to cheaper brands. Nigeria is one of the largest markets for Heineken. It is the Nigerian market leader with 66.5% market share ahead of Diageo subsidiary Guinness which had a 24.7% market share at the end of 2014.
“In contrast with the brewers, Coca-Cola HBC AG’s 2015 performance in Nigeria, the company’s third largest market by revenues, has been strong, with double-digit volume growth thanks to increasing trade activation, additional PET production capacity and greater focus on product availability. However this positive trend is unlikely to continue and we expect currency volatility to affect its profit generation in the region,” analyst said.