In modern urban culture, consumption of carbonated soft drinks (CSD), particularly among young people, has become very popular. Soft drinks in various flavours and tastes are patronised by all and sundry on various occasions. Children of all ages and groups are especially excited by the mere mention of the phrase “soft drinks”.
The CSD market commands a unique hold in the food and beverage sector in Nigeria’s economy. Despite the popularity of the juice and still drink market, the unique appeal of carbonated drinks in their various flavours has always been a selling point other drinks cannot match.
With the growing popularity of soft drinks, the technology of production, preservation, transportation and marketing in recent years has witnessed phenomenal changes.
The competition in the CSD market is driven by different brands. Mass media, particularly television, have contributed to the ever-growing demand for soft drinks; the attractive jingles and sports make the larger audience remember these products at all times.
All over the globe, major players have been battling for a bigger chunk of the boming CSD market, and this battle exists in Nigeria too with the presence of major players in the cola and apple flavour segments.
In the ever-expanding soft drinks industry, ultimately, there is only one group of people who will determine the fortunes of the players: the Nigerian consumer.
The real war to quench thirst has just begun!!
Nigeria’s big market
International brands, especially in the CSD segment, have in recent times found Nigeria an investment delight. This is due to the country’s huge market size with its estimated population of over 170 million (comprising about 90 million youths), growing middle class and improving purchasing power.
Nigeria’s economy, with such intimidating market statistics and abundance of human and material resources, is yet to be tapped and is hard to be ignored by international investors.
Market-intelligence firm, Euromonitor International, was reported in Market Realist Website as saying that consumer-expenditure growth in emerging markets has surpassed that in developed markets every year since 2000, and it is expected to continue doing so.
In spite of infrastructure challenges, Nigeria retains the top position as the market favourable to international investors because of high yield, cheap labour and consumer demand.
Overview of the CSD market
The Nigerian carbonated drinks market has been dominated since the 1950s by two big international cola drink makers and their brands have been a toast for consumers of all ages; 1953 saw the introduction of The Atlanta-based Coca-Cola in Nigeria, while in 1960; New York-based Pepsi Company Inc. 7up, managed by PepsiCo was established.
The Coca-Cola brands and the ever strong-willed Pepsi brands dominated the Nigerian market for a long time, when they were packaged only in glass bottles, with consumers being cautious of not breaking the bottles accidentally, or used as a weapon in streetfights, not to mention the hassles of mobility and leaving your balance as deposit pending your return of the bottle to the retailer. Even when other brands tried to muscle up their unique selling strength to the consumers, the Cola-Cola and Pepsi brands have weathered different storms of competition from year to year.
•To be continued next week
Noah’s Ark, Dentsu Aegis begin walk to greatness
Progressive businesses always want to be ahead of their competition. This desire to be the preferred brand or service provider has often inspired thriving organisations to opt for geographical expansion. Some of them have achieved this goal by going for mergers and acquisitions, which has proven consistently to be a smart move.
Today, mergers or acquisitions have become an integral part of business around the globe, irrespective of the business category or sphere involved. This is particularly so for firms that seek to have competitive advantage, increased profitability and economies of scale.
Such commercial dealings also provide advantages to businesses like the opportunity to diversify, expand business operations, increase market share and acquire some specific expertise of other companies, which otherwise the acquiring company would have taken a lot of time to attain.
Until lately, mergers and acquisitions common to Nigeria were limited to the financial sub-sector. Those outside the banking industry were solely those that happened as a result of merger or acquisition between parent companies abroad and other concerns, which by default led to the assimilation of the supposed foreign extensions into the new union.
However, in recent times, the bug seems to have bitten the creative industry and one of the first agencies to begin the process is Nigeria’s fastest growing creative agency and a full member of the Association of Advertising Agencies of Nigeria (AAAN), Noah’s Ark Communications Limited.
Noah’s Ark, after a negotiation that lasted for over one year, has finally begun the process to become a part of the global Dentsu Aegis network.
This relationship, which starts as an affiliation, according to the promoters, in 12 to 18 months’ time,b will see both organisations become one and have their processes integrated.
Speaking at the signing ceremony last Thursday, the CEO and Chief Creative Officer of Noah’s Ark, Lanre Adisa, told journalists that his agency started out about eight years ago as a local agency with global aspirations and the deal with Dentsu Aegis Network takes Noah’s Ark close to that global vision.
“Those who know me know that I have always relished our independence. But they also know that I have always been a great advocate of collaboration. I believe that to go far we have to seek out like-minded people from other parts of the world to raise our game.
“Though now an affiliation, the relationship is bound to become even deeper in the nearest future as both parties have agreed to a clause that makes Dentsu Aegis eligible for equity holdings in Noah’s Ark in another 12 to 18 months,” Adisa said.
Representing Dentsu Aegis at the ceremony was Dawn Rowlands, who is the CEO of Dentsu Aegis in Sub-Saharan Africa, she said that the relationship with Noah’s Ark was part of her agency’s plan to grow its business in Nigeria despite the many challenges the economy was facing.
“When we were looking for an agency to partner with in Nigeria, every one we asked recommended Noah’s Ark,” Rowlands said.
She noted that the Nigerian market was very strategic to Dentsu Aegis’ growth plan for Africa because of its growth capability and the high level of education and abundance of talent in the country.
Rowlands added the giving the amazing return on its investment in Media Fuse, the Nigerian market is going to be even more strategic for the global agency in the coming years. This makes Nigeria a more exciting investment prospect than other African markets, Rowlands said.
Now, stakeholders can only wait to see what becomes of Noah’s Ark going forward. The agency has so far demonstrated a lot of creative clout and has earned rave reviews as a result. And observers have said that it is likely to do even more with support coming from a global powerhouse like DAN.
The agency has won several awards locally and internationally. Last years, Noah’s Ark emerged the ‘de facto’ agency of the year at LAIF, after it won the elusive grand prix, the first given by the award in five years, alongside 10 other awards.
Also recently, the agency won one Silver and two Bronze awards at the just concluded Loeries held in Durban, South Africa, in August 2016.