Nigerians Toast to a Spirited Year: Alcohol Consumption Hits $2.68 Billion, Surpassing 13.3% of National Budget in 2022
Nigerians consumed alcohol worth about N2.18 trillion in 2022. This represents 13.3 per cent of the country’s entire budget in that year.
In the face of Nigeria’s economic challenges, a recent report reveals a surprising surge in alcohol consumption, with Nigerians collectively spending N2.18 trillion on liquor in 2022, accounting for 13.3% of the national budget. This unexpected trend is attributed to the growth of online alcohol vendors, such as drinks.ng and naijaliquor.com, transforming the industry through digital connectivity.
The report highlights the remarkable success of these startups, such as Trade Depot’s Shop-Top-Up, Seta, Vendease, MyMiniBar, MyLiquorhub, Cubed-by-Drinks, and BarrelsDotNg, which have recorded nearly 200% value growth in beer distribution.
“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.
Utilizing unique credit-rating approaches and in-house order-aggregation algorithms, these tech-driven startups have attracted over N500 billion in foreign funding to the Nigerian alcoholic beverage industry over the past two years. This influx of capital underscores the industry’s growth potential and validates the appeal of these innovative platforms.
Despite the challenges posed by election preparations, Naira revamp, and security issues in 2022, the alcohol industry consistently demonstrated year-on-year value growth. The sector’s revenue reached an impressive N2.18 trillion, with each Nigerian theoretically consuming 16 bottles of alcohol throughout the year.
Analyzing the historical growth of the industry, the report notes a substantial increase in revenue from $2.86 billion in 2018 to $5.29 billion in 2023. Notably, the alcohol industry outpaced growth in other sectors such as salt and spices, milk, cereals, and bread, with an 18.4% increase.
The report attributes this growth to the diverse offerings and budget-friendly products available in the alcohol space, ranging from premium whiskeys and champagnes to sachet bitters, PET-bottle gins, and local brews. The industry’s resilience and adaptability to various consumer preferences are acknowledged as key drivers of its sustained success.
Looking ahead, beer remains the most popular alcohol category, constituting 54% of the total consumed value. While local breweries face challenges, including a N67 billion loss before tax by Nigerian Breweries in H1 2023, the report is optimistic about the future. Online alcohol vendors, with their enticing features like cash backs and BNPL models, are expected to emerge as major influencers, driving the industry forward despite potential challenges in 2023.
