Top Performing Drink Producers: Nigerians spend N900 billion On Beer, Soft Drinks
Top Performing Drink Producers: Nigerians spend N900 billion On Beer, Soft Drinks. Photo Credit: Business Post Nigeria

Top Performing Drink Producers: Nigerians Spend N900 billion On Beer, Soft Drinks

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How many drinks do you have in a day, a week, a month or better still, in a year? When you finally arrive at a number, know that thanks to you and your drinking buddies across the country, drink producers in Nigeria generated over N900 billion in 2022.

This is N161.76 billion more than the annual turnover reported in 12 months of the preceding year, when the industry leaders, Nigerian Breweries, International Breweries, Guinness Nigeria and Champion Brew grossed N738.26 billion in revenue. 

According to financial statements analysed by Prime Business Africa, this means consumption of alcoholic and soft drinks increased by 22 per cent year-on-year. 

However, the increase in consumption wasn’t enough for the industry to grow its net profit which fell by 17 per cent when the N22.56 billion profit after tax reported in 2021 is compared to the N18.79 billion posted in 2022. 

Guinness and International Breweries dragged the industry’s bottom line down, as the former recorded a decline in profit after tax, while the latter suffered a loss last year. 

Breakdown of how drink producers performed in Nigeria

Note that this article seeks to disclose how the drink producers performed financially and which company ended 2022 as the best performer, which is determined by revenue growth during the review period. 

Champion Brew 

Believe it or not, Champion Brew closed last year as the best-performing brewer despite its products; Champion Lager Beer and Champ Malta, not being household brands when compared to those of its market rivals. 

  • Analysis of Champion Brew’s earnings showed that its revenue grew by 28.56 per cent year-on-year after grossing N12.28 billion turnover in 2022, surpassing the N9.55 billion revenue generated in 2021. 
  • Champion Brew spent N7.51 billion to produce its products last year, but the year before, the company recorded N6.02 billion cost of production. 
  • However, the 25 per cent growth in the cost of sales didn’t impede growth in Champion Brew’s net profit, as the brewer closed 2022 with N1.58 billion. This is a 48 per cent growth in PAT, considering its net profit was N1.07 billion in 2021. 
  • The growth in revenue did enough to increase Champion Brew’s industry market share to 1.37 per cent last year, from 1.29 per cent. It has the fourth-largest market share. 
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Nigerian Breweries 

At the end of the year, Nigerian Breweries customers spent N550.63 billion to purchase the firm’s products in 2022. This is a 25.92 per cent growth when compared to the N437.28 billion revenue generated from sales of its brands in 2021. 

  • To make its products; Star, Hi Malt, Maltina, Turbo, “33” and Goldberg, amongst others available in the market last year, it cost Nigerian Breweries N337.31 billion. This is above the N276.87 billion cost of sales recorded the preceding year. 
  • After the cost of sales, tax and other expenses were removed from Nigerian Breweries’ revenue, the company ended last year with N13.18 billion profit after tax, which indicates 4.06 per cent growth in et profit that was N12.67 billion in 2021. 
  • Despite occupying the second spot on the best-performing list, Nigerian Breweries retained its spot as the market leader with 61.18 per cent market share, which grew from 59.23 per cent in 2021. 
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Guinness Nigeria 

Guinness Nigeria took the third spot despite not growing its revenue as high as International Breweries because the latter reported a loss after tax. 

  • During the period in review, Guinness’ revenue rose by 8.55 per cent year-on-year, from N109.12 billion generated in 2021 to N118.45 billion grossed from selling Guinness brands, Harp Lager, Smirnoff Ice, Dubic Malt, Orijin brands, Smirnoff, among others. 
  • The company managed to prevent a significant rise in the cost of producing these products when compared to its market rivals, as its cost of sales was up by 5 per cent, as Guinness expended N76.16 billion in 2022, compared to N72.61 billion in 2021. 
  • This, however, didn’t stop a decline in Guinness’ profit after tax, as the company reported N4.02 billion as PAT last year, failing to surpass the N8.82 billion net profit posted in 2021. 
  • At the end of 2022, Guinness finished as the third largest market share holder in the brewery industry, accounting for 13.16 per cent of the market share based on revenue, dropping from 14.78 per cent.

International Breweries 

Although International Breweries’ management grew the firm’s revenue by 20 per cent, it wasn’t enough to occupy the third spot, as the firm reported a loss in its bottom line, hence, the fourth position it was placed in. 

  • The revenue generated by International Breweries within the 12 months of last year was N218.65 billion. This means the firm’s customers spent N36.35 billion more than the N182.29 billion used to consume the company’s brands. 
  • Prime Business Africa learnt that it cost International Breweries N175.01 billion to produce its products in 2022, in contrast to the N135.99 billion spent on producing them the year before. 
  • This is a 29 per cent increase in the cost of sales, indicating International Breweries’ production cost grew faster than the company’s revenue last year.
  • Consequently, International Breweries suffered a N21.62 billion loss after tax in 2022. This is more than the N17.65 billion loss the company recorded in 2021.
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