Diageo’s Orijin herbs help Guinness maker beat Nigerian woes

At the noisy Lascofis bar in the Nigerian commercial hub of Lagos, Elvis Nnanna sips from a bottle of Orijin and dreams of his home village about 600 kilometers (373 miles) to the South East.

“It’s just like I’m taking my local tea,” Nnanna, a 35-year-old photographer from Abia State, says alongside his friend, Agnes Okoli, who is also drinking a bottle of the fruity, herbal, 6 percent-alcoholic drink. “When I go home there are certain roots my parents pour in their gin before they can drink it. I always shared that with them.”

Orijin is made by Diageo Plc, the world’s biggest distiller, and is seen by the London-based company as a faster-growing addition in Nigeria to its flagship Guinness stout. Since its introduction in Africa’s biggest economy in 2013, Orijin has more than 50 percent of the market for non-beer bottled drinks with a similar alcohol strength, according to data tracker Nielsen Nigeria. Competitors including Heineken NV have raced to create similar beverages.

“Orijin has been hugely successful for us in Nigeria,” Chris Stagg, Diageo’s general manager for innovation, said by phone from London on May 1, declining to give sales figures as it isn’t company policy. “That’s caused us to look aggressively at how we bring this particular brand to other consumers in Africa.” The drink is now also being sold in Ghana and Kenya, he said.
A 40 percent slump in oil prices since June is expected to curb economic growth in Nigeria to 4.8 percent this year from 6.3 percent in 2014, the International Monetary Fund said on April 28. That’s had an impact on disposable incomes in Africa’s largest crude producer, with drinkers switching from Guinness to cheaper brands of beer and lager, Diageo’s Lagos-based unit Guinness Nigeria Plc said last year.

Guinness Nigeria’s net income declined to N5.2 billion ($26.4 million) in the nine months through March, compared with N5.9 billion in the same period in 2014, the company said April 24. The shares gained 3.2 percent to N160 as of 1.08 p.m. in Lagos, paring the year’s decline to 4.9 percent. That compares with a 0.9 percent fall on the Nigerian Stock Exchange All Share Index.
About 44 percent of Nigeria’s 177 million population are under 15, compared with 28 percent in South Africa, the continent’s second-biggest economy, according to U.S. Census Bureau data. That presents an investment opportunity for consumer-focused companies such as Diageo, South African wireless carrier MTN Group Ltd. and U.S. retailer Wal-Mart Stores Inc.

“With Nigerian consumers being surrounded by such rapid change in a global culture, it’s really important to be modern and progressive and stay connected with a Nigerian identity,” Stagg said.