Competition amongst alcohol brands in Africa is on the rise as larger companies like Diageo and Pernod Ricard continue to invest in the emerging market according to the chief executive of Distell Vineyards & Estates (DVE), Carina Gous.
Competition amongst alcohol brands in Africa is on the rise as larger companies like Diageo and Pernod Ricard continue to invest in the emerging market the chief executive of Distell Vineyards & Estates (DVE), Carina Gous said at Prowein 2015.
Gous was recently appointed to the executive role of overseeing the premium wine portfolio for Distell, a major wine and spirits producer in South Africa.
"We realise Africa is a big opportunity for us and we are on the continent, so we really do need to capitalise on that," said Gous.
Although companies like Pernod Ricard and Diageo are investing in growing their African business they are leading with their spirits offer, more than with their wine offer.
Gous said: "Diageo is really strong in Africa, but their strength is with spirits. So that is for Distell a challenge for our spirits portfolio. All the big beer companies are quite powerful in Africa as well. We are looking to expand our cider portfolio in Africa at the moment."
"Pernod is more strong on the spirits side as well. You don't really see their wine in Africa at all," said Gous.
The competition among wine producers is largely from old world producers like Spain, Portugal and France which have a strong hold in regions that have historical ties.
"Spain, Portugal and France have been there for a long time. Castel, for example, is really big in Africa. More so with their beer business than their wine business, but that makes them quite strong in most markets. It is more difficult to enter areas like the Ivory Coast because it is so French dominated," said Gous.
Wines from Spain and Portugal are competing for the lower end of the market, which is not where DVE brands are looking to compete. Goes said: "Portugal and Spain are able to compete at the lower end and get price points that are unbelievably low, but we are not necessarily going after that segment of the market."
New World wine companies are making in roads into Africa as well according to Gous. "Conch Y Toro is a really active wine company that is coming in from the new world, with really great distribution in Angola and great distribution in Kenya. You really see visibly the product more. Gallo is also really strong in Nigeria for example. The Carlo Rossi brand is seen in Kenya, Angola and Nigeria, but again these are not premium wines," said Gous.
But growing market share in Africa is not without it challenges, said Gous. She said:
"It is more challenging. We are not targeting the informal market. We are a huge portion of alcohol in Africa. You have to find partners that actually have facilities and warehouses with cooling. But they also need to have the teams that can sell you products into the on-trade and formal retail. The last thing you want is your premium wine to sit int he sun for a few months and then it gets sold," said Gous.
Despite the challenges though Distell is very much committed and focused on growing their wine business in Africa.
Gous said: "It is tough but we see it as a big opportunity."