The soft drink market in Nigeria

The Soft Drink Market in Nigeria

Nigeria is one of the world’s biggest soft drink markets, ranked fourth according to Statista. Though its large population is a major contributor to this ranking, the demand for soft drinks is generally high. Soft drink is almost a staple in the diet of most Nigerians whether they are out or at home. The average Nigerian drinks about 6 Bottles each week spending about ₦2,554. Nigerian consumers are spoilt for choice in the soft drink market. In both carbonated and non-carbonated markets, there are over 100 brands, from budget drinks to exotic/imported brands. Further, a huge homemade drinks market exists, especially in the non-carbonated category.

The study found that the carbonated drink category dominated the soft drinks market with 81%, while the non-carbonated category constituted 19%. The carbonated market is saturated with several brands and dominant players with entrenched positions. As a result, new entrants are forced to compete on price and volume. Although the non-carbonated market is beginning to see an influx of brands, there is relatively more room for new entrants as there is larger room for product differentiation, whether in packaging or product quality.

How much is a bottle of Soft Drink in Nigeria, and how much do Nigerians spend on Soft Drinks?

A 33cl bottle of soft drink can cost as low as ₦ 300 to as high as ₦ 2400, depending on the brand and drink type. Typically, non-carbonated soft drinks are more expensive than carbonated soft drinks due to their relatively richer ingredient make-up. Top brands of carbonated soft drinks such as Coca-Cola, Fanta, and Pepsi sell for around ₦ 430 while relatively new brands sell for about 13% to 26% lower. More interesting is that new brands not only sell at a discount to the top brands, they also provide more in quantity, as much as twice the volume for less the price. For instance, the Bigi range of drinks sells the 60cl bottle for ₦ 315.

While the pattern for pricing is clear for new entrants to the carbonated soft drinks market (‘more for less’), the pattern of prices in the non-carbonated market is not as clear-cut. A big selling point in the non-carbonated soft drink market is the perception of ‘healthiness’ and the ingredient makeup of a drink. As a result, manufacturers have more flexibility in the market depending on the ingredients used and how well a beverage is projected. For instance, the 85 cl bottle of 5 Alive, the most popular non-carbonated soft drink in the market sells for about 10% less than the 50 cl of Utterly Yum, a relatively new brand.

Figure 6a: Prices of Soft Drinks in Nigeria

Source: Supermart.ng

Generally, the average Nigerian spends less than ₦ 5,000 per week on soft drinks, though different demographics spend differently. There are no significant differences in the average spending for various education levels. The study found adults with children spent significantly more than those without children – as high as twice the spend for adults without children – arguably because children drink more soft drinks than adults. Overall, the average spend on soft drinks in the market was ₦2554 with 87.5% of consumers spending below ₦ 5,000.

Figure 6b: Spending Pattern in Nigeria’s Soft Drink Market

Source: Firmus Research

What Soft Drink Brands Do Nigerians Drink the Most and Why?

Two bottling companies, Nigerian Bottling Company and Seven-Up Bottling Company, dominate the carbonated soft drink market with their iconic brands. Based on consumer preference, the iconic Coca-Cola, Fanta, and Pepsi are Nigeria’s top 3 carbonated soft drinks in 2024. These 3 brands account for 70% of total demand in the market. Aside from these two companies, companies like Mamuda Beverages, Planet Bottling, and Rite Food are also key players. There are also the likes of Nigeria Breweries Plc, Guinness Breweries Plc, and International Breweries, all giants in the beer space, dipping their toes in the soft drink market with brands like Fayrouz, Guinness Malt, Maltina, Amstel Malt, and Beta Malt. Other brands in the top 20 categories include Sprite, Smoov Chapman, Amstel Malt, Mirinda, Bigi Cola, and American Cola. Altogether, the top 20 carbonated soft drinks

account for about 98% of total demand. The chart below highlights the top 10 brands.

Figure 6c: Top Carbonated Soft Drink Brands in Nigeria

Source: Firmus Research

Though not as big as the carbonated market, the non-carbonated soft drinks market is quickly

evolving with several brands and product types constantly being introduced. The top brand in this category is the 5 Alive brands by Nigerian Bottling Company which controls about 21.6% of market demand. Also, milk drinks have been trending in this market with top brands like Viju Milk (3.6%), Hollandia (11%), and Nutrimilk (12.6%) contributing significantly to market demand. Some dominant companies in this space are C-Way Group, Chivita Hollandia International, and Viju Industries Nigeria Ltd. The table below highlights the top 10 brands in this market.

Source: Firmus Research

Like drinks in other categories, taste drives brand selection in this market influencing consumer choices about 48% to 69% of the time. This is more pronounced in the carbonated soft drinks market, which is all about taste and product availability. Some key descriptors of taste provided by consumers in the survey include “refreshing”, “appealing flavor”, “milky” and “creaminess”. In the non-carbonated section, consumers emphasize the makeup of healthy ingredients in a drink, accounting for 29% of consumer choices. The table below compares the factors that drive consumer demand and brand selection in the carbonated and non-carbonated soft drinks market.

Source: Firmus Research

Do Nigerians Always Stick to the Same Brand of Soft Drinks?

Yes, about 55% of the time. These consumers consistently buy the same soft drink brand, whether carbonated or non-carbonated. Of the remaining customers, 19% are not committed to any brand. They pick and choose brands based on the desire to explore varieties. Though the average brand loyalty is 55% in the soft drink market, different brands command differing levels of loyalty. For instance, Fanta (62%) and Pepsi (60%) have brand loyalties well above the market average. In the non-carbonated soft drink category, the Hollandia brand (56%) has brand loyalty slightly above the market average. Generally, brand loyalty is stronger in the carbonated category.

Where Do Consumers Mostly Buy Soft Drinks in Nigeria?

The 3 top places to buy a variety of soft drinks in Nigeria are the supermarket (36%), the open market (26%), and on the streets from hawkers (16%). Like wine, off-trade routes dominate sales and distribution of soft drinks in the Nigerian market.

Source: Firmus Research

What to Expect in the Nigerian Soft Drinks Market

The soft drink market in Nigeria is expected to grow in volume alongside the growing population, disposable incomes, and greater access to other African markets. New entrants will join the market to capture a piece of Africa’s largest soft drink market. However, more investment is expected in the non-carbonated sector due to lower competition and growing health consciousness. Several home-based operations in the non-carbonated market are expected to scale creating opportunities for joint ventures and acquisitions. In the carbonated drink segment, some new entrants will explore the possibility of localization to improve distribution efficiency and capture a decent market share as competition rises.

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