“Given the economic recession in Nigeria … the company plans to deepen its participation in the value beer segment and increase beer product offerings in the lower end of the market,” read an excerpt from Guinness Nigeria’s prospectus.
Guinness Nigeria has confirmed that it is in a losing battle for market share as it struggles to compete with its popular black beer brand, Guinness Stout.
An analysis by Nairametrics listed the reasons for such dwindling sales forecasts. “The tough economic conditions means people have less money to spend and are thus switching to cheaper brands. The younger demography seems to prefer lighter beer and spirits compared to the stout or higher branded beers Guinness has traditionally focused on. The change in strategy means the company the company believes will help it to sell more volumes and return to profitability.
A foreign exchange crisis last year caused by a fall in oil prices and production volumes made it difficult for companies to get fx to buy raw materials. Guinness Nigeria was forced to take a dollar loan from Diageo its parent company. Guinness is raising a rights issue to pay back the loan.”
It, therefore, seems Guinness Nigeria has given up on the premium beer market and will rather concentrate more on value beers like its closest competitor Nigerian Breweries has done in recent years.