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<p data-beyondwords-marker="f96fa3bf-fb0e-47fa-86f3-cd7a15f3f57b">Despite the harsh economic realities currently being experienced in Nigeria, alcohol intake appears to be on the rise. According to a new report titled the <em><a href="https://www.linkedin.com/posts/joeaito_alcohol-nigeria-consumergoods-activity-7138814460189724672-FOII?utm_source=share&amp;utm_medium=member_desktop" target="_blank" rel="noopener noreferrer nofollow">Nigerian Alcoholic Beverages Industry Report, 2022</a></em>, Nigerians consumed liquor worth about N2.18 trillion in 2022. This represents 13.3 per cent of the country’s entire budget in that year.</p>
<p data-beyondwords-marker="0203fdd9-138d-44ad-8299-a423b193f307">Driving this growth are online alcohol vendors like<a href="https://drinks.ng/" target="_blank" rel="noopener noreferrer nofollow"> drinks.ng</a> and<a href="https://naijaliquor.com/" target="_blank" rel="noopener noreferrer nofollow"> naijaliquor.com</a>. These startups have focused on digitally connecting buyers and sellers in the alcohol industry by exploring an alcohol-focused vendor platform model.&nbsp;They also include Trade Depot’s Shop-Top-Up, Seta, Vendease, MyMiniBar, MyLiquorhub, Cubed-by-Drinks, and BarrelsDotNg, etc.</p>
<p data-beyondwords-marker="cb3ac188-e746-45fa-bee6-091e79b02671">Per the report, the activities of these digital distributors saw them record impressive growth numbers, with nearly 200 per cent value growth recorded in the beer distribution segment. This impressive growth number details the value these online vendors are bringing into the alcohol distribution and e-commerce space.</p>
<p data-beyondwords-marker="07659862-f3f1-4632-a89f-899397238de5">“These are newer players in the industry who have brought in significant capital, technology capacity and Buy Now Pay Later (BNPL) options into wines and spirits redistribution, targeting retailers, lounges and clubs, and even wholesalers,” the reports stated.</p>
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<p data-beyondwords-marker="00f6bda1-f69a-48bb-b88c-43336347a8e8">One of the new alcohol distribution startups makes use of a purchasing history credit-rating approach for its BNPL offering rather than the typical banking history approach. Others like Shop-Top-Up and Cubed-by-Drinks, use an in-house developed order-aggregation algorithm to optimally service customers.</p>
<p data-beyondwords-marker="5a7f7e62-b21c-4b27-97f3-37049bce7562">These new online players, due to their nature as tech startups, have been able to attract foreign funding to the tune of over N500 billion into the alcoholic beverage industry in Nigeria within the last 2 years. This further validates the growth opportunities within the industry.</p>
<h4 id="more-on-alcohol-consumption-in-nigeria-2022" data-beyondwords-marker="953ccbc3-9560-4a51-9854-c2ffe4b5489a">More on alcohol consumption in Nigeria 2022</h4>
<p data-beyondwords-marker="327191ee-bc40-4768-b3b4-ea28ffcd32eb">In light of the uncertainty that came with election preparations, Naira notes revamp, and insecurity issues that rocked 2022 and severely hampered spending power, one would expect the overall spending on liquor to suffer a decline. However, this industry has recorded consistent overall year-on-year value growth.</p>
<p data-beyondwords-marker="a32cb9c8-4b64-4170-8006-fb0722107075">As earlier mentioned, the sector raked in a revenue of N2.18 trillion. Breaking it down to the number of alcohol consumed in 2022, the report noted that if the liquor consumed in Nigeria last year was shared equally amongst ALL Nigerians, each person would have had 16 bottles.</p>
<p data-beyondwords-marker="25338e19-a2b5-42ea-86ad-a491f91844a8">Compared to previous years, it is plain to see that the sector has witnessed tremendous growth year-over-year. In 2018, the total revenue accrued by the industry was $2.86 billion. 2019 witnessed a 10.1 per cent increase as total revenue rose to $3.15 billion.</p>
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<p data-beyondwords-marker="18078c12-ca67-4cee-b3a6-80a6ed664467">2020 witnessed a slowdown in revenue growth possibly due to the COVID-19 pandemic that saw lockdown measures put in place across the world. That notwithstanding, the industry still witnessed a 3.1 per cent increase to record a revenue of $3.25 billion.</p>
<p data-beyondwords-marker="b6b3ebb4-7b73-4578-bb7d-352ad1862e3c">2021 came with an explosion in revenue for the industry as Nigerians proceeded to drink $4.47 billion worth of alcohol. This represents a whopping 37.5 per cent increase from the previous year. And the growth didn’t slow down in the following year as revenue from alcohol rose to $5.29 billion. This is an 18.4 per cent increase from the preceding year.</p>
<p data-beyondwords-marker="8b52c424-d661-43f6-ba10-b3e9f204747c">Put in proper context, the industry (18.4%) recorded more growth than salt and spices (3.42%), milk (9.58%), cereals (9.94%), and bread (0.48%). The report explained that the range of offerings and budget-friendly products available in the alcohol space are major drivers of this growth recorded year over year.</p>
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 <figure class="aligncenter size-full" data-beyondwords-marker="2f5b1b81-a155-4084-8050-4119a98dc927"><img width="587" height="319" src="https://technext24.com/wp-content/uploads/2023/12/Industry-comparison.jpeg" alt="Online alcohol vendors record growth as Nigerians consumed N2.18t worth of alcohol in 2022" class="wp-image-222753">
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<p data-beyondwords-marker="b1095fa5-e7f0-4f35-8eff-b627561d789b">“The Nigerian alcohol industry is resilient and adaptable, offering a wide range of products to suit all budgets. From premium whiskeys and champagnes to affordable sachet bitters, PET-bottle gins, and local brews, there is something for everyone,” the report reads.</p>
<h4 id="going-forward" data-beyondwords-marker="aea6ef0e-b1ef-4299-b0b4-dfeec26aaa1c">Going forward</h4>
<p data-beyondwords-marker="d5e9bc54-e140-4f16-b139-9c38d7ec400b">Beer is the most popular alcohol category and responsible for 54 per cent of total consumed value. While revenue continues to increase, it seems the local breweries are operating at a loss. Nigeria’s largest brewery and makers of the more popular Nigerian beer brands, Nigerian Breweries<a href="https://businessday.ng/companies/article/nigerian-breweries-reports-n67-8bn-loss-before-tax-in-h1/" target="_blank" rel="noopener noreferrer nofollow"> announced a N67 billion loss before tax</a> in the first half of 2023. This was despite recording a 1.27 per cent growth in revenue.</p>
<p data-beyondwords-marker="58b1f4e0-b2f2-4f36-ba83-596402e5b8c9">The foremost brewer attributed this decline to the effect of fuel subsidy removal on consumers, naira devaluation and its effect on input cost, and mostly the revaluation of foreign exchange obligations. These factors are expected to impact alcohol consumption in 2023.</p>
<p data-beyondwords-marker="857b1f83-5ef7-4710-97d7-92683b3c6e8c">The report is however optimistic that online alcohol vendors, with their unique selling propositions like cash backs, and their inclusion of buy now pay later (BNPL) models in their operations, will become major drivers in the space.</p>
<p data-beyondwords-marker="3134d175-b176-4a72-812b-04bc421efa4c"><strong>See also: <em><a href="https://technext24.com/2023/05/24/uber-eats-deliver-alcohol-medicine-kenya/" data-type="post" data-id="194171" rel="noopener noreferrer nofollow">Uber Eats Kenya now delivers alcohol and medicine amid growing competition from rivals</a></em></strong></p>

Online liquor distributors record growth as Nigerians consumed N2.18 trillion worth of alcohol in 2022

Technext.ng

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