Africa drinks expensive champagne

The champagne and expensive liquor market is booming.

14 Jun 2013

LAGOS/JOHANNESBURG, June 14 - With its rows of wooden shacks selling street food and cut-price haircuts, Lagos island's McCarthy Street isn't the kind of place you'd think to raise a glass of bubbly.

But turn into a side door on one of its ramshackle buildings, and there's a small bar stocking Moët & 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, don't have money to burn like Nigeria's oil-rich elite, but they might still splash out now and then on a $110 bottle of champagne, says manager Peter Ode.

Expensive means you're a big deal

'When you do champagne or expensive brandy it shows you're a big deal,' said 27-year-old Ode, flanked by back-lit bottles of expensive bubbly and spirits lined along mirrored shelves.

'You deserve more attention than the guys who buy beer.'

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.

Black diamonds

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 Hennessey 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 2010-2011, 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.

'Everybody buys'

As in most regions, Africa's rich remain the prime target.

"Everybody buys, black or white," said Martin Moyo, the manager of Cafe Della Salute, a restaurant and bar in Johannesburg's upscale suburb of Sandton.

Even on weeknights the sleek bar is crowded with young men in designer jeans and Italian sneakers and women in impossibly high heels.

Spirits are particularly popular, Moyo said, with west African expats tending to favour Remy Martin and Hennessy, while locals opt for Johnnie Walker and Jameson.

The menu would exhaust the most serious whisky drinker: 9 types of Glenfiddich, 7 of Johnnie Walker and 6 of Jameson.

It would also test the deepest of pockets, with a rare 64-year-old Glenfiddich going for R150,000  ($15,100) a shot. Although that has yet to be opened, a 40-year-old bottle, still a hefty R2,700  a shot, is half empty.

On Friday night at Rhapsody night club in Lagos's 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.

Champagne most prestigious

At the VIP table, Jide Adenuga, from one of Nigeria's wealthiest families, sips pink Montaudon Champagne next to a bucket of five bottles. His company last year secured exclusive import rights for the brand. "Nigerians love champagne. It's the most prestigious form of alcohol," he said.

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 a bottle.


But it isn't just Africa's wealthy who have a taste for expensive alcohol. Pricey bottles of Johnnie Walker are a familiar sight even in 'shebeens', the informal taverns common in South Africa's black townships, where drinkers sometimes mix expensive spirits with soft drinks like Fanta.

Moët next to fast food

In the Nigerian capital Abuja, a fast-food joint called Southern Fried Chicken selling meals for 1,200 Nigerian naira ($7.45) also has Moët in its fridge for seven times that sum.

"A lot of our spirits consumption is driven by status and aspiration," said Diageo's spirit brand manager Felix Enwemadu, in charge of labels like Johnnie Walker, who puts Nigeria's imported spirits market currently at $125-$160 million a year, and growing at a rate of 19% annually.

"The emerging consumer, when he wants to show off, he will buy spirits ... and when there's a challenge with his income he'll return to beer."

As the market grows, so does competition. For years 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.

"Africans in the big cities seek big international brands, and for us that means double-digit growth," said Laurent Pillet, the firm's managing director for sub Saharan Africa.

- Reuters


- Reuters

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