Brewers shift focus to value brands

As consumers increasingly adjust spending from premium to value brands, Nigerian brewery companies are also redirecting attention and production to suit their preferences.

Premium brands are products that carry tangible or imaginary surplus value in the upper-mid to high-price range. They often target high income customer group, who are often referred to as “premium.” They are designed to convey an impression of exclusiveness, especially in the mass markets. On the other hand, value or low-cost brands are cheaper and can be afforded by all the classes of consumers, particularly low-income persons.

The Nigerian brewery industry is made up of key players such as the Nigerian Breweries (NB) plc, which is a subsidiary of Heineken; Consolidated Breweries plc, which will soon begin a combination with NB plc; Guinness Nigeria plc, Champion Breweries, and SABMiller, which acquired an interest in Pabod Breweries and took operational control of the Castel Nigerian business and International Breweries.

Unlike before when brewers were only focused on premium products, the industry is currently trending towards unveiling low-cost brands to accommodate low-income earners, analysts have observed.

NB has value brands such as Life and Goldberg, unlike Heineken and Legend that are considered premium brands. Guinness, on the other hand, has two low-cost brands – Dubic and Snapp -, unlike Guinness Stout and Harp lager beer often considered as premium. Consolidated Breweries is equally a big player in the value brands market, as almost all of its products, especially ‘’33’’ Export and Williams, fall into this class.

SABMiller’s Intafact Beverages brewery in Onitsha is also a key player with its local beer, Hero, consumed mostly in the South East and South South parts of the country.

Real Sector Watch’s checks reveal that consumers are adjusting their consumption patterns to low-cost brands owing to shrink in their incomes due to economic lull, thus making them focus mainly on basic needs such as food, shelter and clothing.

“There is a bit of down-trading in the industry whereby you see the consumers moving away from the premium or mainstream brands to the lower price brands. Our previous brands have been Guinness and Harp. So, we now have a new brand – Dubic brand – in the value segment to allow us compete favourably against our competitors within that segment,’’ according to Seni Adetu, managing director, Guinness Nigeria, in an interview with BusinessDay.

“We are not trying to be brand-centric, but more consumer-centric. In other words, we give consumers what they really want,’’ he said, stating that some competitors were able to have impressive top-line performances due to value brands.

Currently, NB is pushing Life and Goldberg to Nigerian consumers, though not to the sheer detriment of its premium brands, say industry watchers.