Article by Dr. Harnet
Today, I had to share these amazing insights about African drinks that you can turn into profits – the post was written by my partner John-Paul Iwuoha of smallstarter.com. When we think about the African beverage industry we usually think ‘coffee, tea, and juice’, but Africa has traditional beverages (many of the alcoholic) that remain poorly developed, branded, and marketed. The fact that we rarely hear and read about them, is one indicator for that. I believe there is still great untapped potential in those drinks selling to African consumers, the hospitality industry, and even certain markets abroad. Here is the article !
I was bragging to a friend a couple of weeks ago about a report which revealed that Nigeria spends up to $50 million on imported Champagne every year. I also took pride in the new facts that Africa is now one of the fastest growing markets in the world for imported wine. He looked at me for a moment, shook his head and asked: “When will Africa export its own wines?” This question shattered my ego as I immediately realized that I should be ashamed we were spending and losing money on other peoples’ wines when we could be making money selling our own. But then, I thought to myself: Does Africa have its own wines and beverages that could be transformed into successful global brands? Are there any African businesses already producing or exporting indigenous African wines and beers (except for the internationally traded South African wines)? The information I found will amaze you. This article reveals the top five African local wine and beer brands with the highest lucrative potentials. I’ll also share with you three businesses I found that are already building promising brands from our local wines and beers. It’s a very detailed and eye-opening article. I’m sure you’ll enjoy it!
5 Strong Potential Brands – making the case for African wines and beverages
Before the introduction of European grape (fruit) wines to the continent, Africans had been enjoying several varieties of locally produced wines and beverages for centuries. However, while Western wines have become a global brand and multi-billion dollar industry, our local wines and beverages have remained ‘local’, ‘brandless’ and faceless.
Africa currently spends a fortune on foreign wines and beverages every year. Our continent has become quite an attractive destination for Italian, French, Spanish and American wine brands. In addition to wine, some of the world’s biggest beer makers (like SABMiller, Heineken, Diageo and Castel) are scrambling for a growing share of Africa’s increasing appetite for beer. Apart from South Africa, which is the world’s eighth largest producer of grape wine, our continent cannot boast of any internationally known wine or beer brand.
So, does Africa really have any wines or beverages to offer the world? Of course we do! We shall now look at Africa’s top 5 local wine and beer brands that have strong potentials both within and outside the continent.
1 – Banana beer
Banana beer is an alcoholic beverage that is heavily consumed in many parts of East Africa. Popularly known by many names, it’s commonly referred to as ‘Urwaga’ in Kenya, ‘Kasiksi’ in DR Congo, ‘Lubisi’ in Uganda and ‘Urwagwa’ in Rwanda and Burundi. Just in case you didn’t know, East Africa has the highest banana consumption density in the world! In Uganda, Rwanda and Burundi for example, people eat up to 550 pounds of bananas a year (per person).
Banana beer is made from the fermentation of mashed ripe bananas. During production, the mash is usually mixed with maize, sorghum or millet flour to provide the yeast that facilitates fermentation. Banana beer is often consumed as an everyday beverage and a favourite drink during festivals, ceremonies and cultural events. The alcohol content of this beer can range from slightly alcoholic to very alcoholic.
Communal sipping of banana beer is a common feature in engagements and marriages in parts of East Africa(image credit: dianabuja.wordpress.com)
Despite the huge local and export potential of banana beer, there is just very little commercial production of this product going on. A large volume of this beer consumed in East Africa is still homemade.
2 – Banana wine
Most wines are produced from grapes and other fruits but wines made from bananas are still a new and exotic concept on the international stage.
Like banana beer, banana wine is also made from mashed bananas and the production process for both beverages is quite similar. However, the fermentation process for banana wine takes much longer and gives the wine a longer shelf life than banana beer, which spoils easily and cannot be stored for long periods. This longer shelf life gives banana wine a better prospect for commercial production and makes it a good candidate for export to global markets.
Banana wine is a clear, slightly sparkling alcoholic beverage and depending on the type of yeast and amount of sugar added, the sweetness and alcohol level in the final product can vary. Interestingly, India has already produced award-winning banana wines and is investing in research to expand its banana wine production. In fact, the Indians have developed an interesting technology that will make banana wines better tasting and up to 50 percent cheaper than grape wine. This presents a huge global advantage and opportunity for banana wine. (image credit: manoramaonline.com)
In East Africa, banana wine is still mostly produced at a small-scale level. Although attempts are being made to exploit its lucrative potentials as a commercial product, there is still a lot of work to be done. Later in this article, I’ll introduce you to a local company in Tanzania that’s already doing a good job of producing and promoting banana wine as strong African brand.
3 – Honey Wine
Honey wine (also known as ‘mead’ in Western countries) is a wine produced by fermentinghoney with water. It can also be produced in several interesting varieties by the addition of different fruits and spices.
Honey wine is arguably one of the oldest forms of wine (consumed before Christ) and has a rich history in Africa, Europe, and Asia. However, since the population of bees in Europe declined significantly, European honey has become scarce and honey wine is no longer produced on a large-scale in the West.
Africa’s abundant bee population and huge honey production potential gives it a big advantage in honey wine production. In Ethiopia, the world’s 10th largest honey producer, honey wine (locally known as ‘Tej’) is famous and widely enjoyed as the country’s national drink. It is also widely consumed in Eritrea (called ‘Mes’) and remains a popular beverage of the Xhosa and Tswana people of Southern Africa who refer to it as ‘iQhilika’ and ‘Khadi’ respectively. (image credit: keepingbee.org)
Honey wine has become a novelty drink in Europe and other developing regions of the world and remains a huge attraction for the growing number of people who want to try something different from grape wines. This market presents an interesting export opportunity for African made honey wines.
4 – Palm wine
Palm wine is a hugely popular beverage in many parts of West and Central Africa and consumed by millions of people in both regions. In my opinion, palm wine has a lovely presence and tastes like something between beer and grape wine. Known by several names, it is commonly referred to as ‘pami’, ‘emu’ and ‘nkwu’ in Nigeria, ‘nsamba’ in Congo, ‘nsfufuo’ in Ghana and ‘matango’ in Cameroun. Palm wine enjoys a strong cultural identity and significance in these countries and is usually the preferred drink during traditional ceremonies and events (such as weddings and funerals).
Image credit: galleryhip.com
Palm wine is a cloudy white drink produced from the sap of various species of palm trees which are abundant in Africa’s dense tropical rain forest regions. It is traditionally extracted by a ‘tapper’ and the quantity of sap that can be taken from one palm tree depends on the mode of extraction, the palm species, season and the fertility of the soil.
Freshly collected palm wine is very sweet and non-alcoholic. However, fermentation begins naturally and immediately after collection. As time progresses, the wine becomes more alcoholic and has some sourness and acidity to it. Palm wine is also used to produce a strong and highly alcoholic local gin popularly referred to as ‘ogogoro’ and ‘Sapele water’ in Nigeria and ‘akpeteshie’ in Ghana.
Despite its huge popularity in parts of the continent, very little progress has been made so far to exploit the lucrative potentials of producing palm wine on a commercial scale like beer (which is more widely available and consumed). Fortunately, I came across a company in Ghana that has successfully transformed palm wine into a commercial success and exports this product to customers in the US and Europe. I’ll tell you more about this success story a little later in this article.
5 – Millet, Sorghum and Corn beer
Beer brewed from millet, corn and sorghum (also known as ‘guinea corn’) are widely considered as African beer. For thousands of years, Africans have been brewing local and homemade beer made from fermented mixes of millet, sorghum and corn. Traditionally made by women, this beer is arguably one of the most popular and widely consumed local alcoholic beverage in Africa.
Though many different recipes exist, African beer is locally known as ‘dolo’ in Burkina Faso, ‘pito’ and ‘burukutu’ in Nigeria, ‘bili bili’ in Cameroun, ‘merissa’ in Sudan, ‘chibuku’ and ‘umqombothi’ in several parts of Southern Africa. (image credit: healingnumenor.wordpress.com)
Unlike foreign (barley-based) beers, most African beers are opaque beers; that is, they often contain sediments of partially fermented maize, sorghum or millet. Because millet, sorghum and corn are abundantly produced in Africa, this beer is much cheaper than foreign beers which are produced with imported barley and hops. A high proportion of corn usually produces a lighter-toned beer with a softer flavor while a high sorghum base produces a much darker beer.
The recipe for brewing many of the varieties of African beer is passed from one generation to another. In the next section, we’ll look at an innovative move by an international beer giant to exploit the lucrative potentials of local African beer.
My Top Favourite Businesses Promoting African Wine And Beverage Brands
Thankfully, not everybody has jumped on the bandwagon of foreign wines, beers and beverages that is sweeping across Africa. In this section, we shall look at three of my top favourite businesses that are already taking advantage of potentials in Africa’s local wines and beers. All the businesses I’m about to reveal have successfully found a way to brand these local products in a fashion that appeals to both African and export markets. Let’s meet them…
#1 – Nkulenu Industries Ghana, a promising exporter of African Palm wine
Before I found out about Nkulenu’s Palm Drink, I never believed palm wine could be bottled without going bad or losing its amazing taste. It turns out it’s possible afterall!
Based in Madina (Ghana), Nkulenu is a fast growing family business that started exporting its brand of bottled palm wine to the West about 15 years ago. Today, its top export markets are in the United States and several countries in Europe.
With its distinct green bottles, the Nkulenu Palm Drink product is sold in 315ml and 625ml volumes. The business exports over 250,000 bottles of palm drink to international markets every year. Its top consumers are mostly West Africans in the Diaspora and a growing number of non-Africans who want to try something different.
Like everything new and exotic, many non-Africans who taste palm wine for the first time say it’s like an old indigenous drink they are familiar with; it’s definitely a taste you have to get used to. According to the company, Ghanaian Palm Wine, compared to other West African types, is unique because of the method of preparation. Those who have tasted Nkulenu’s brand of Palm Wine (the only Ghanaian brand worldwide) consider it the best when properly chilled and shaken thoroughly to blend the yeast.
#2 – Banana Investments Tanzania, Africa’s banana beverage champion!
From its base in Arusha (Tanzania) and several depots across the country, Banana Investments started producing and bottling banana wine since 1993 and was probably the first to transform this locally produced beverage into a recognizable brand.
The company’s banana wine product is available in three main brands: Raha,Meru and Malkia. Bottled in 330ml bottles, the wine has an attractive golden colour, a sweet flavor and an alcohol content that stands at 11 percent. Priced at about $0.20 per bottle, its target consumers are mostly low and middle income earners who cannot always afford to drink normal malt beers and grape wines.
Interestingly, the company acknowledges that it doesn’t face any serious competition in the market since the concept of bottled banana wine is still fairly new in the country. And business is booming because many of its consumers are hooked to the product.
The existing and potential future demand for commercially produced banana wine within the East Africa region is huge and largely unexploited. By increasing its production capacity and marketing efforts, this business will continue to succeed in both local and export markets.
#3 – SABMiller, the global giant that’s leading the expansion of African beer
SABMiller is one of the world’s oldest and largest beer makers whose origins dates back to the South African Breweries (SAB) founded in 1895. Today, the company (now headquartered in London), is present in over 70 countries around the world and sells more than 20 billion litres of beer every year. Some of its famous brands in Africa include Castle Milk Stout, Eagle, Fosters, Impala, Kilimanjaro and Hero.
Over the past few years, SABMiller has introduced its traditional African beer brand into 10 African countries. This brand, popularly known as ‘Chibuku’ in many parts of East and Southern Africa, is a traditional African beer made from corn and sorghum according to varying local recipes.
This low-alcohol beer is packaged and sold in one-litre cartons. However, because the beer continues to ferment in the package, the alcohol content of this beverage increases from about 0.5 to 4 percent after just a few days. As a result, Chibuku beer has a short shelf life and must be produced and consumed locally since it cannot be transported across long distances without going bad.
In response to this challenge, SABMiller has introduced ‘Chibuku Super’, a variant of this traditional beer that is carbonated and pasteurized to give it a fixed alcohol content and longer shelf life. (image credit: zncc.co.zw)
Following the successful release of ‘Chibuku Super’, SABMiller is rolling out this fast-rising brand to several African countries including Ghana, Mozambique, Swaziland and Tanzania. The company’s strategy is to provide Chibuku as an affordable beer for lower-income consumers across Africa. By focusing on millet, maize and sorghum (the raw materials for African beer), SABMiller is creating a guaranteed market for thousands of farmers on the continent.
SABMiller’s support and promotion of African local beer is a big boost for the continent. With its deep pockets, experience and global presence, it may only be a matter of time before African beer is exported beyond the continent.
The 5 Major Opportunities and Challenges for Africa’s local brands
For Africa’s local beverage brands to truly succeed, entrepreneurs and businesses interested in this area will have to take advantage of the continent’s strengths and opportunities. In this section, we’ll look at five important factors to be strongly considered for Africa’s wines and beers to become successful. Here they are…
#1 – Africa has a ready and promising market for local wine and beer
According to a March 2014 report released by Rabobank, Africa will be the fastest growing beer market in the world over the next five years. With a population of over one people, brewers and wine makers are looking to Africa where growth is expected to be driven by rapid economic growth and a growing population of young people, millions of who have reached the legal drinking age.
If international brands see a huge potential for their beverages in Africa, why shouldn’t this be the same for our local wines and beers? The data and facts on the ground prove that the continent’s wine and beer market is on the move. This is the best time for Africa’s local brands to rise to the occasion and target a larger share of this promising market.
#2 – We have an abundant supply of raw materials for beer and wine production
The raw materials for the production of Africa’s local brews and wines are abundantly available on the continent. Africa is one of world’s top producers of sorghum, millet and corn, the main ingredients for brewing local African beer.
The tropical forest belts of West and Central Africa are home to a dense population of palm trees from which palm wine is tapped. East Africa remains one of the world’s largest producers of banana, the single most important raw material for the hugely popular banana wine and beer. In addition to these, the potential for beekeeping and honey production is high on the continent thereby improving the prospects for honey wine. (image credit: waitingroomusa.com)
Surprisingly, most of the foreign beer brands that are gaining ground in Africa are made from barley and wheat, two cereals the continent produces in low quantities. No African country is in the top-10 list of wheat or barleyproducers in the world. Is there any reason why Africa has to import these cereals for beer production when it has an abundant supply of suitable alternatives (ie. sorghum, millet and corn)?
#3 – We have the Skills, Craft and Know-how
For centuries, Africa has produced its own beers and wines from locally available foods and materials. Although the recipes may vary across tribes, cultures and regions across Africa, the masterful art and craft of wine making and beer brewing has always been passed from one generation to the next. Africa has the talents and skills to continue and expand the tradition of its beers.
However, despite its rich craft in producing local brews, the continent will need to lean on modern technology if we plan to successfully compete in today’s beer and wine market. More so, the need for adopting a more technological angle has become important in order to address the short shelf life of local beverages and the health and safety fears of the market.
#4 – African beer and wine needs to be better branded, packaged and marketed
Despite its high potential for success, there is still a low awareness and under-appreciation of Africa’s beer and wine in both the local and international markets. Our beer and wine brands suffer from a low image and are only supported by weak marketing efforts and poor packaging. A significant improvement in these areas will surely lead to greater market acceptance locally and internationally.
There is a huge opportunity for African beers and wines to position itself as an exotic and ‘non-mainstream’ product for people who want to try something different from ‘mainstream’ grape wines. However, due to low market awareness, poor product image and wide suspicion of low quality and safety standards, these brands are still unable to exploit the lucrative market opportunities out there.
#5 – Africa’s beer and wine industry needs more investment
It is indeed a very good sign that small and big players are already exploiting the huge potential of local beer and wine. However, like most young and growing ventures, this sector still needs a lot of investment to take on the established wine importers and foreign beer giants on the continent. It’s time for entrepreneurs, local and foreign investors, and governments to directly invest in this market.
As I have shown throughout this article, the fundaments prove that local African beer and wine have a strong competitive advantage in both local and global markets.
When will Africa export its own beer and wine?
I placed a phone call to my friend as soon as I finished writing this article to let him know I now had an answer to his question: “When will Africa export its own wines?” I proudly informed him that we already have a few companies successfully producing and exporting beer and wine. Expectedly, he was shocked at the ‘good’ news.
However, I quickly had to remind him that Africa is still behind in the race for a greater share of its own local beer and wine market. In addition, the continent also has some strong advantages and opportunities that are not being exploited and a couple of challenges we need to watch out for.
In summary, there is still hope for African wine and beer brands! Only the future will determine if we win or lose more ground to foreign tastes and preferences in beer and wine.
By John-Paul Iwuoha
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