14 March 2019

Nigerian Soft Drink Market May Experience Growth in 2019

interview

Managing Director of The La Casera Company Plc, Mr Chinedum Okereke, has over 28 years' experience in the drink industry spanning 28 countries of the world. In this interview, Okereke, who joined the company in 2018, speaks to Raheem Akingbolu on the trend and dynamics of the soft drink market. Excerpts:

How will you assess the soft drink market in Nigeria?

The soft drink market in Nigeria has been an interesting one. The Nigerian soft drink market has big players and the market has witnessed quite some growth. In 2016 and 2017, there was a decline in growth, but last year, there was a nine per cent growth in the market. Another interesting dynamic to the soft drink market is that we have begun to see a very strong shift from traditional returnable glass bottles (RGBs) to PET bottles. You will recall in the last 60 years, RGBs have been in Nigeria. But we have seen a very significant shift in Nigeria where people have moved away from RGBs to PET bottles. So, PET bottles today drive a big chunk of the market.

With what you have seen on ground in the drink market, is Nigeria likely to witness a double-digit growth in that sub-sector this year?

Projections are showing a low double digit growth, which will be slightly higher than what we had last year. We are looking at about 15 per cent growth. We should also take into cognisance the socio-political environment in the country. Invariably, there are a couple of variables we need to consider, such as the elections. We also need to consider government policies in terms of devaluation. But all other things being equal and if there is no significant impact from these socio-political indices, agencies have projected a low double digit growth, which is quite good for players in the industry.

Let us come to your brand, La Casera Apple. How is it doing in the market?

La Casera is actually on a journey. The good news for La Casera Apple is that in 2018, we saw a slow but steady monthly improvement in our market share. We have La Casera Apple as our flagship brand. We have also seen our second brand, Smoov Chapman, equally becoming a household name.

We ended last year with a decent market share. We have very aggressive plans for this year. We believe that consumers should feel the strong presence of La Casera Apple in the market. Our growth is improving and we are very happy about it, because our improvement has been above our expectations.

Promoters of your brand often say every bottle of La Casera Apple has five per cent real apple content in it. How important is that in the soft drink market?

The Nigerian soft drink market is very clustered. We have about four players in the apple category and people are making all kinds of claims. La Casera Apple is a brand that wants to establish a point in the area of differentiation. So, we are not just offering concentrates or extracts, but we are offering real apple content.

Obviously, that can be detected from the taste of La Casera Apple when consumers consume it. We want to continue to maintain our leadership position in that category. For us, being consistent with our commitment in terms of liquid chemistry and liquid premium vale to consumers is very important to us. So, we are at that point of leadership and differentiation where a taste of La Casera Apple will convince any consumer that we offer real apple drink. To the best of our knowledge, no other brand offers close to five per cent in the apple soft drink market. Our brand health checks and information we receive from different sources show that La Casera Apple still remains the drink to beat when consumers are looking for the real taste of apple satisfaction in a soft drink. La Casera Apple is a premium brand, which is built on trust and commitment.

What plans do you have for the La Casera brand in 2019, taking into consideration the interest of the consumer and socio-political issues you earlier mentioned?

Our business plan is very close to our heart. One thing is very sure: we will continue to give our consumers and trade partners the desired attention and experience they deserve from a premium brand like La Casera Apple. We are ready to excite the market and take what belongs to us. In 2019, we want to ensure that we drive commercial aggressiveness, by ensuring that we have La Casera Apple and other brands from the house of La Casera acceptable, available, affordable and accessible to all our consumers. We can only urge our trade partners and consumers to just enjoy the brand as we take them through the 2019 experience. We have a lot of plans as a business, and will deploy them in the course of the year.

Some research indicates that two of your SKUs (35cl and 50cl) La Casera Apple are not readily available in some parts of Lagos, as against the 60cl. Is this part of the business strategy for the brand?

Of course, when a brand is experiencing growth, one needs to ensure that the brand is available at the right place, at the right price and time. One of our strategic levers is to ensure the availability of La Casera Apple everywhere. We have strong indicators to track that. We are mindful where we are in terms of availability. We are equally mindful of how we ended last year and also how we intend to end 2019. We have put plans in place to ensure that we have a much more positive outing this year. This plan includes a very robust end-to-end business outlook, which includes forecasting our demand plans, looking at our capacity and material planning, ensuring that we have very strong logistic partners to ensure that our products get to all 36 states of the federation. As a matter of fact, we have footprint in the 36 states of the federation, ensuring that we are able to overcome the challenges of road networks in the country.

In The La Casera Company, we have several brands, such as La Casera Apple, Smoov Chapman, Bold Bitter Lemon, Nirvana Tonic Water, Nirvana Soda Water and Nirvana Table Water, which is one of the top in the country. Again, we focus on regions. In our entire portfolio in The La Casera Company, we ensure that our brands are available in all the regions at the right time, right price and conditions.

Talking about those SKUs, we are mindful of availabilities. However, what is important for us is strategic direction. We are actually pushing some of our SKUs more in some regions. We intentionally play with certain SKUs in certain regions of the country. So, you may not actually be seeing a particular pack size, let us say 35 cl, in Lagos region. But when you begin to get to certain areas of the country, it tends to be the preferred pack size.

What processes have you put in place to ensure that your brands meet international standards?

As someone with strong background in supply chain and manufacturing, I have had the privilege of visiting top class manufacturing sites across the globe in Europe, North America and Asia. I must say that when I compared the practices in those manufacturing sites with what I met in La Casera when I resumed as MD, I was very impressed. I am talking about hygiene standards and key best practice processes, good manufacturing practice, quality standards, asset care management, maintenance programme, safety standards among others. I must say that what I met on ground, which I am building upon, is quite encouraging. We are a reference site of what excellent manufacturing practice is all about. The La Casera Company has entered competitions on best kept sites, which we have won on several occasions. We have our processes well documented.

The La Casera Company has routine visits from regulatory agencies, such as NAFDAC and SON for certifications and endorsements. We have ISO Certifications on quality, Food safety amongst others. For us as a company, we hold the trust of our consumers and are assuring our consumers that every bottle of La Casera Apple they open, they are opening a trust. La Casera apple soft drink is one consumers can also consume with the assurance that it is well endorsed. For us, quality and safety come first before productivity and cost. We have put processes in place and we are continually improving the process to ensure that those standards are maintained and surpassed. Our equipment are procured from the best equipment manufacturers you can think of and we have a policy as a business to ensure that our equipment are maintained by only the original equipment manufacturers (OEMs).

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