- Title: NIGERIA: Africa's taste for a top tipple draws in luxury brands
- Date: 18th June 2013
- Summary: LAGOS, NIGERIA (RECENT) (REUTERS) PAN STREET
- Embargoed: 3rd July 2013 13:00
- Keywords:
- Location: Nigeria
- Country: Nigeria
- Topics: General,Economy
- Reuters ID: LVAAH0ND62RGJS6W9NAEVKAFDTH1
- Story Text: Makers of high-end products are cashing in on Africa's roaring economic growth as it continues to enable big spending elites with a taste for luxury brands. But unlike designer watches or fast cars - out of reach of all but the very wealthy, showing off with an expensive drink is a way for middle income earners to signal membership of the elite club.
With its rows of wooden shacks, Lagos Island's McCarthy Street is not the kind of place you would think to raise a glass of bubbly, but turn into a side door on one of its ramshackle buildings, and there is a small bar stocking Moet & Chandon, along with Hennessy brandy, Johnnie Walker whisky and Bailey's liqueur.
The regulars at the Corner Lounge, which on a recent night included a bar worker and a fitness instructor, do not have money to burn like Nigeria's oil-rich elite, but they might still splash out now and then on a 110 US dollar bottle of champagne, says Isaac Okona a fitness consultant and a regular face at this bar.
"I come to this bar because it has a fantastic ambience and it's a place where I want to chill from the hectic day and maybe come and do a bottle of champagne or stuff, relax with friends and just get around and also prices here are affordable because there are some other bars and places you go and then a bottle of champagne goes for 150 (thousand naira) or a 120 (thousand naira) (Approx: 922 US dollars)," he said.
"When you come to a bar, like you come to my place and you're ordering for a hennessy, I'll be like what's up, hey my waitress, you give that guy an attention, I think he deserves more than the regular guys that buy normal beer, stuffs and the rest," Peter Ode, Corner Lounge bar manager said.
Not so long ago, for luxury goods retailers the African market boiled down to a tiny elite, in some cases just a corrupt ruling clique.
Not any more. Although millions of Africans remain stuck in crushing poverty, disposable incomes are on the up.
As economies boom, the elite circles are widening and a growing middle class is aspiring to finer things.
Luxury firms like LVMH, which makes Moet and Hennessy as well as Louis Vuitton handbags, are targeting the burgeoning ranks of what South African retailers call "black diamonds", or affluent African professionals.
Africa's population of "high net worth individuals" grew at 4 percent in 2010 to 2011, the fastest after Latin America, according to a report on global wealth by consultancy Capgemini.
But unlike diamond watches or flashy cars, still out of reach to all but a few, luxury alcohol is a display of prosperity even middle-income earners can afford from time to time, giving retailers access to a larger chunk of the African pyramid.
As in most regions, Africa's rich remain the prime target.
Top-end Nigerian fashion designer Alexander Amosu this month brought out the world's most expensive champagne, 'Gout de Diamants' (taste of diamonds), selling at 1.8 million US dollars a bottle.
On a Friday night at Rhapsody night club in Lagos' Victoria Island, a sliver of sand between a lagoon and the Atlantic housing one of the world's highest concentrations of millionaires, waiters bearing ice buckets bustle among the well dressed.
At a VIP table, Jide Adenuga, from one of Nigeria's wealthiest families, sips Montaudon champagne.
His company last year secured exclusive import rights for the brand.
"Champagne is the most prestigious form of alcohol and you know Nigerians love to celebrate, you know when they are successful, when they are having a good time, they like to have the best of the best you know and I think that's what it is, it goes hand in hand you know. When it comes to celebrating whether it's someone's wedding, the birth of a newborn, a naming ceremony, you will always find champagne there," Jide said.
Nigeria's super rich are no strangers to conspicuous consumption. German carmaker Porsche opened a new car dealership in the heart of Lagos last year. There are already dealerships specializing in Aston Martin and Lamborghini.
But it is not just Africa's wealthy who have a taste for expensive alcohol.
Diageo's spirit general manager, Felix Enwemadu, in charge of labels like Johnnie Walker, puts Nigeria's imported spirits market currently at 125 million to 160 million US dollars a year, and growing at a rate of 19 percent annually.
"If you take just that emerging middle class and the top end consumer base, you have over 25 to 30 percent of the population who can afford premium spirits even if it means... for some of them it means consuming those spirit brands maybe once a month or twice a month but the fact still remains that a lot of the spirit consumption is being driven by status and aspiration, people want to be seen with it. So you have, the trend we've seen in the market is the emerging consumer, yeah, when he wants to show off, he will spend more money behind spirits brands and you know when there's a bit of a challenge with his disposable income, he will invest behind beer," Enwemadu said.
As the market grows, so does competition. For years French, distilled beverage company Pernod Ricard's only toehold in Africa was South Africa. Last November, the owner of Absolut vodka and Perrier-Jouet champagne said Africa was a key growth market. It now has subsidiaries in Nigeria, Kenya and Angola, with plans to open up in Ghana and Namibia. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2013. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None
