Hot Drinks Business Tough In Nigeria

Hot Drinks Business Tough In Nigeria

Marketing Director, Euro Global Foods and Distilleries Limited, Bharat Vaswani tells how the company is faring in the business of making alcoholic beverages and other drinks.

Hot Drinks Business Tough In Nigeria

Tell us about what you do at Euro Global?

Euro Global Foods and Distilleries Limited is part of the Sona Group, which used to be the owner of Sona Breweries that has been bought over by Nigerian Breweries. Euro Global is almost five years old, we started officially in April 2008.

We launched our first product and flagship, Sabrina Gin, in May 2009. Sabrina is one of the market leaders in the gin segment. It’s in several sizes – 75cl and 20cl bottles; 12cl pet bottle, and 3cl sachet.

Our other brands are Seaking Premium Schnapps, Brave Heart Rum, Czar Vodka, Czar Ice, Amphora range of wines, Julius Tonic Wine, Sona Pineapple and Apple drinks, and Aqua Euro table water in pet bottles and dispensed jar. We are an ISO 9001 2008-certified company.

We have a state-of-the-art factory in Ota Ogun State, where we produce about 200,000 cases of the 20cl pet bottles of the Sabrina Gin per month – that’s about 11 million bottles per month.

We employ over 300 staff in our factory, and about 99.9 per cent of them are Nigerians. There are just a few expatriates who are mainly for guidance and training. We have an industrial training scheme where we train our people.

How much of local content is involved in your production, aside from the mainly Nigerian staff that you employ?

Virtually all the raw materials we use for our beverages are sourced from Nigeria. The only exception is the wines. That’s because there is too much of competition and influx of foreign wines into the country, especially from South Africa, Spain, Italy, USA and Australia. We realise if you do a 100 per cent Nigerian wine, it’s not going to be easy. So, we bring some wines from Europe, from Italy basically.

But we do the fermentation, treatment and the bottling all here in our wine tanks in the factory. It’s not easy to ferment wine – it’s a specialised process. But the Nigerian staff and technicians are being trained to handle everything. The last few years have seen a proliferation of many hot drinks, especially in small pet bottles and sachets.

How have you coped with the competition?

We spend a lot of time on market research so as to stay competitive. We try to stay ahead of the competition though it’s not easy because we are barely five years old in the market. Some brands have been around for more than 20 years. There are challenges in the industry but at the same time, we are not disregarding competition, which we know is very stiff.

It’s a matter of giving the best quality, at the best price, in the best packaging. That’s what we are keen on. We are also focusing on expanding our distribution network. About two, three years ago, we were present in only four states.

Today, we are in 16 states of Nigeria. We hope to expand to other states, because we realise there is a good demand for beverages in this country. We also hope to expand our range to non-alcoholic wines and other kinds of spirits in the near future. Whatever the market demands, we offer.

How do you describe the experience in the five years since you came into the market?

The experience has not been easy, there are lots of infrastructure challenges. First is power. You depend on generators which gulps diesel and obviously your production cost increases. Also, you don’t get the best quality of raw materials and labels here most times.

You got to rigorously select from a large range for your best supplier. There is also a shortage of skilled manpower. So you have to continually train the Nigerians. When we buy a new machine, the expatriate engineer comes over here to train the Nigerians on how to man the facility. It’s been a tough experience.

There has been an increase in cost over the years but we have not allowed our end customers to be affected. We try to price our products very reasonably so they can affordable to consumers. Electricity supply, you said, has been a huge headache.

How big an impact would the ongoing process to privatise power supply in the country have on your business?

We hope for the best. If power is more stable and you no longer depend on generators, the impact will be phenomenal on the growth of industries. Needless to say costs would drop and we can employ many more Nigerians.

There are hundreds of factories around this Ota-Idi Iroko axis where we are located. You can imagine what improvement in a key component of their operations like power will mean. The government has to consciously support the industries. We need more support in terms of stable power and good road infrastructure.

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