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.
‘Aspiration’
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