Consumers are turning to products from multinational companies – in particular SABMiller, Heineken, Castel Group and Diageo – and interest in premium offers is expected to rise, according to Canadean.
However, the continent is not without challenges, such as a lack of infrastructure and political unrest in some countries.
A highly consolidated market – but competitors are emerging
Beer consumption growth in Africa is set to continue at a similar rate to previous years. Year-on-year growth was around 4% during 2012-2014, and is expected to register 5% for 2015.
Canadean predicts this will remain at 5% from 2015-2020. This puts it ahead of growth in Asia (3%), the Middle East and North Africa (also 3%), and way ahead of more mature markets such as Western and Eastern Europe and North America (1% or less).
Growth is being driven by increased GDP growth, economic development, and urbanization.
Most importantly, the population is rising (Nigeria, for example, is set to become the world’s third largest population by 2050, according to the UN). In particular, the population with a working age demographic is set to surpass that of China and India.
There is also a move away from traditional homebrews towards the safety and reliability of commercially brewed beers.
“90% of the African beer market is highly consolidated with four global companies; SABMiller, Heineken, Castel and Diageo, and the markets have been effective monopolies,” Piyumika Jayasena, analyst at Canadean, told BeverageDaily.
“However, these monopolies have been challenged by the emergence of new competitors in several African markets such as Ivory Coast, Kenya, Madagascar, Rwanda, South Africa and Tanzania.
“Africa is known for local unregulated ‘homebrews’ and due to its associated health risks, major international brewers are now actively engaged in producing similar products that could compete with the unregulated alcohol market.
“For instance, Kenya Breweries’ Senator Keg and Eagle brand by SABMiller are brewed from sorghum. In Ghana, the Eagle brand is brewed using cassava root. Furthermore, SABMiller’s Impala brand in Mozambique and Ruut by Diageo in Ghana are also brewed from cassava.”
The path to premium… and craft?
Africa is expected to see an incremental volume increase of more than 37,000 hectoliters by 2020.
Jayasena believes the African market will evolve in a similar way to Asia: “Rapid growth driven by mainstream and economy, and then later undergoing premiumization – we are already seeing the first signs of this.”
Craft beer will probably appear in larger urban centers, predicts Jayasena, and particularly those with large tourist or business economies such as South Africa and Kenya. However, with the exception of South Africa, the segment is unlikely to become more than a niche.
South Africa is by far the biggest beer market by volume, followed by Nigeria and Angola. Per capita, the Seychelles, Equatorial Guinea and Gabon take the lead.
Ethiopia, Kenya, and Zambia are big growers in terms of consumption volume, with Zambia expected to surpass Mozambique, Congo (Brazzaville), Ivory Coast, Zimbabwe and Burundi by 2020.
However, challenges in the African beer market come from a lack of infrastructure, political unrest in some countries, the outbreak of epidemics like Ebola in 2014, and heavy excise duties.
The big picture: Asia still tops consumption by far
While Africa may be seeing impressive growth, Asia continues to hold the highest consumption level. Asia is forecast to record 900,000 hectoliters in 2020, compared to 164,000 in Africa, according to Canadean.
The second largest region for 2020 is predicted to be Latin America, at 380,000 hectroliters.
North America and Western Europe are each expected to record 270,000 hectoliters.