By Chinwendu Obienyi
Nigeria’s leading brewers may be celebrating impressive first-quarter revenues in 2025, but behind the rising figures lies a sobering reality: beer consumption is steadily dwindling.
Despite International Breweries, Nigerian Breweries (NB) Plc and Guinness Nigeria recording strong double-digit revenue growth, Daily Sun’s analysis reveals that actual profitability took a hit in Q1 2025.
Collectively, the trio posted revenues of N683.16 billion, buoyed by multiple price increases, an expanded premium product range and aggressive marketing campaigns to defend market share in a fragile economy. Yet, net profits for the quarter dropped to N86.1 billion, down from N112.48 billion in the same period last year.
Beneath the surface, the industry is grappling with significant volume declines, as rising inflation, a weakened naira, and shrinking disposable incomes dampen consumer demand. Even heavy marketing expenditure has done little to reverse the trend. In 2018, the big three spent nearly N60 billion on marketing, with Nigerian Breweries alone accounting for N24 billion.
In early 2024, Nigerian Breweries implemented a series of price hikes in response to surging input costs and currency depreciation. However, the move has been met with dwindling demand as economic headwinds tighten household budgets.
“Beer volume remains under pressure. The increased revenue is not driven by more people drinking beer, it is the result of higher prices compensating for falling sales,” a market analyst explained.
Recent data from ReportLinker supports this view, revealing a decline in beer consumption per capita, from 8.36 kilograms in 2023 to a projected 7.56 kilograms by 2025. That’s a drop of over 5 percent, with further declines forecast through 2028.
“The compound annual growth rate (CAGR) for beer consumption is expected to fall by approximately 5.17 per cent annually over the next five years,” the report noted.
A growing health-conscious segment, combined with rising interest in non-alcoholic alternatives, is also reshaping consumer preferences, contributing to the industry’s struggle. Meanwhile, cost of sales for the brewers reportedly dropped by 102.8 per cent during the quarter, reflecting broader operational adjustments.
While strategic pricing and cost optimisation may support short-term profitability, analysts warn that long-term growth remains uncertain without a rebound in consumer demand.
“Whilst Q1 2025 earnings lay a solid foundation for a more sustainable earnings path, maintaining profitability will depend on the sector’s ability to navigate cost pressures amid a still challenging macroeconomic environment,” analysts at Cordros Research noted.
Often seen as a litmus test for middle-class spending, Nigeria’s beer industry is now at a crossroads, challenged to evolve with a more frugal, health-aware, and financially constrained consumer base, or risk stagnation in the years ahead.