Prospects of Ghana’s Beverage Industry Tied to National Economy

The burgeoning middle class in Ghana is directly affecting the country’s beverage industry, which is growing at about 10 to 15 per cent per annum. Still, the sector has to face some challenges, such as the import of raw materials, an opportunity for investors.

Kasapreko bottling plant

Prospects of Ghana’s Beverage Industry Tied to National Economy

Until recently, not many Ghanaians knew of and/or craved for beverages beyond their local gins, spirits and brews. That is because the beverage industry in the country was yet to open up to real competition. As a result, few drinks were retailed at the few drinking spots dotted across the country. Moreover, not many people took to drinking as it was considered a luxury beyond the reach of the ordinary people. The preoccupation of that majority ordinary populace did not include drinking; it had more to do with fending for a living.

Most of the materials needed to assist in the growth of Ghana’s beverage industry are not produced in the country. They are imported; a challenge that could serve as an investment haven to the outside businessman.

As a result, local alcoholic drinks such as akpeteshie, a local spirit brewed from sugar cane or palm wine, or pito, a Northern Ghana drink sourced from maize or millet, were the order of the day. They were a delight to most Ghanaians and, thus, dominated the few spots that retailed beverages. Pasteurized beer and modern day spirits, gin, whiskey, brandy, minerals and the now too popular wine and fruit drinks were completely nonexistent.

The Growing Middle Class and the Brewing Industry

Things have however changed, thanks in part to a burgeoning economy bolstered by a stable socio-political environment. As noted by Mr Richard Adjei, Deputy Managing Director of Kasapreko, lots of Ghanaians are now moving up into the middle income bracket and that means that the disposable income in the country is increasing.

These developments, together with modernisation and a new crave for beverages by the average Ghanaian, have spurred growth in the brewing industry, leading to the setting up of giant and modest companies to either import and distribute drinks ranging from non-alcoholic beverages to hard liquids such as gin, spirits and whiskey or locally manufacture them using a blend of local and foreign raw materials.

beverage industry ghana

There are multinationals such as South Africa’s SAB Miller, which operates as Accra Brewery Limited (ABL), the England-headquartered Diageo Plc, which operates as Guinness Ghana Breweries Limited (GGBL), The Coca Cola Bottling Company of Ghana Limited (TCCBCG) and Pepsi Cola Ghana Limited, both of which specialize in soft drinks, as well as established indigenous brewers and distillers such as Kasapreko and GIHOC Distilleries, among others.

There is also a quite yet rapidly growing market for champagne, wine, imported spirits and gins and that is attributed to the steady rise in the population of the middle class and their disposable income in the country. This means that the burgeoning brewing industry has every reason to rejoice, as current developments in the country show that there is a lot of resources to spread on traditionally ‘not too demanding areas’. Such areas include the beverage industry, a sector that local analysts say is growing at about 10 to 15 per cent per annum.

A Reason to Rejoice

Thus, for players like Kasapreko, a local manufacturer of gin and bitters, the future is bright, given that the means to pay for their products is there and the appetite for beverages continues to exist. According to its Deputy Managing Director, the market for the company’s flagship product Alomo Bitters, which is sourced from plants and herbs of medicinal value, is ever increasing as most of its customers continue to act as quality officers and sales persons for the product. “They drink and they tell their friends the benefits and quality of Alomo Bitters. “We do not only do commercials and adverts on the radio but we actually sell our products by the word of mouth – people go out and try the product and actually accept the benefits it gives. Our consumers are our sales men,” he said.

But there is a challenge in the sense that most of the materials needed to assist in the growth of Ghana’s beverage industry are not produced in the country; they are imported. To Mr Adjei, that challenge could serve as an investment haven to the outside businessman. Although the beverage industry and its allied services such as the bottling, glass manufacturing and raw materials for the brews are assured of constant market, given the positive developments in Ghana’s economy of late, he said players in the sector still have to content with the high costs of importing most of their products. That, he said can be avoided if businesses set up to locally wholesale such products. “Currently in Ghana, we have no companies manufacturing glass, so we have to import our glass and our cups from other countries, some from Asia, some from Europe. We also import our ethanol from Brazil and South Africa. So if there are other businessmen interested in Ghana who can invest in glass and other raw materials that directly or indirectly affects us , such investments would really help us and the country,” he said. He added that other investors could also look to exporting some of the country’s numerous herbs and plant-sourced beverages that are currently making waves in the subregion.

Kasapreko drinks

An Opportunity for Investors

In spite of the fact that the beverage industry in Ghana is dominated by imports, as is the case with most sectors in the country, authentic Ghanaian gins, whiskey and bitters are making it into foreign markets, especially after they have been able to break the first jinx – perception – associated with products from most African countries. “It is a challenge to sell our products, and especially bitters, to people who are not from Ghana – or who are not from Africa at all – because some of the people don’t know any African people or any Ghanaians or Nigerians who could introduce and recommend our products to them. But once anyone tries them, they will always ask for more,” Mr Adjei, who is one of the many young managers at one of Ghana’s finest indigenous companies, said.

The company also recently invested some US$30 million in a new plant, something occasioned by Kasapreko’s belief that “Ghana and Africa as a whole are awaiting a promising future.” Thus, there is demand for the company’s products as well as other beverages from Ghana in markets outside the country. Nosy investors can, therefore, take a cue by asking the relevant questions and that could possibly lead to bigger yields from one of West Africa’s stable markets.

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