Diageo eyes African expansion as sales grow

Johnnie Walker-owner Diageo, the world’s biggest spirits group, should see sales growth in Africa accelerate as it expands into new markets such as Angola and Ethiopia, while rising incomes enable traditional beer drinkers to try spirits.

Nick Blazquez expects sales growth to continue in Africa. Picture: Colin Hattersley

Africa currently generates £1.4 billion in annual sales for the group, accounting for 12 per cent of total revenues, and sales have been growing at a compound annual rate of 13 per cent over the past decade.

Nick Blazquez, Diageo’s president for Africa, Turkey, Russia and central and eastern Europe, said yesterday: “I fully expect that, over the long term, to be the same – if not accelerate.”

The lion’s share of Diageo’s sales in Africa come from Kenya, Nigeria and South Africa, but as it expands in places such as Angola, Ethiopia and Mozambique, the rate of growth should increase, Blazquez said ahead of a meeting with investors in London. The meeting was meant to be in Nairobi, but Diageo moved it to its home city after last month’s shopping centre siege in which Islamist gunmen killed 67 people in the Kenyan capital.

Most of what Diageo sells in Africa is beer, both local brands such as Tusker and Serengeti, and its global brand Guinness.

The bigger opportunity, therefore, lies in spirits, which the firm is pushing at many of the locations it already sells beer. In addition to its premium, international brands such as Johnnie Walker Scotch and Smirnoff vodka, Diageo sells value-priced brands such as Jebel gin.

Africa has become a key battleground for consumer companies hoping to offset weakness in Europe and North America.