Beer : The First Choice In Africa
January 31st, 2009
Beer consumption has been experiencing impressive growth in Africa in recent years, as discussed in BMI’s new Beer In Africa Report . Many of the world’s major brewers have been increasing their operational activities in this fast emerging market, attracted to the vast long-term potential. In this report, we outline the business activities and expansion strategies of SABMiller, Heineken and East African Breweries, three of the key players in this market.
Beer consumption is rising rapidly across Africa, driven a number of social and economic factors. Beer produced by traditional methods has long been a popular drink throughout the continent and has also been produced commercially for a number of years. Generally speaking, beer has been the fastest-growing alcoholic drink in terms of total volume in recent years, benefiting from foreign investment and rising disposable incomes, a trend which BMI expects will continue in coming years.
While consumption levels are undoubtedly rising, a part of this impressive growth is not just that people are drinking more beer, but that they are drinking more mass produced beer, that is to say, beer brewed by the companies mentioned above. While in the past many people would drink home-brewed beer or other traditional drinks, they are now turning to commercially produced brews. This is due to a number of factors, including aggressive advertising campaigns by major brewers, rising urbanisation, and the growing prevalence of drinking as a social activity.
Along with economic expansion, it has also been the emergence of a burgeoning middle class that is driving growth in the alcoholic drinks sector, and it is the aspirational segment of this new middle class that many brewers have been targeting with their premium beer ranges. However, it is not just economic factors that are examined in this report. A variety of other factors behind the growth of the beer sector are examined, from the changing role of women in society and the acceptance of their drinking beer, to the role of Islam and the varying role this can play in alcohol consumption levels. In sum, there are a number of factors that make the African beer market very attractive to foreign investors. Essentially, the attraction is the massive size of the market, which is still unsaturated, paired with the rapidly rising GDP and a fast-emerging middle class.
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