Bloomberg News

Diageo Targets Africa’s Women Drinking to Independence

June 12, 2012

Three glamorous women stroll past the bouncers into the VIP lounge. Rejecting the offer of a beer, they reach for a sparkling drink in a fluted glass before hitting the stage to sing to an adoring audience.

It’s not a scene from a music video, but Diageo Plc (DGE)’s sales pitch to Kenyan women. The world’s biggest distiller introduced Snapp, an apple-flavored drink, to target female consumers as a more profitable alternative to beer, the predominant alcoholic beverage across Africa. The “Snapp Sisters” in the ads represent a wave of independent women, Diageo says, with their own money to spend and decisions to make.

“Women are thinking about themselves in a new light,” Cristina Diezhandino, Diageo’s head of marketing in Africa, said in an interview in London. With an estimated 100 million women above legal purchase age, there’s a growing sense of empowerment, she said, allowing women to choose what to drink and how. “They’re relying on their own means.”

Diageo, better known for Smirnoff vodka and Johnnie Walker whisky, already sells spirits, Tusker and Serengeti beers and Guinness stout in Africa, where it got almost 14 percent of sales last year. It created Snapp as a cocktail-like option for female drinkers as booming economic growth across the continent elevates more people into the middle class and allows women to be fiscally independent. Kenya, East Africa’s largest economy, is targeting annual economic growth of 10 percent by 2030.

Leaves on Label

Snapp, which London-based Diageo started selling in Kenya in April, has an alcohol content of approximately 5 percent and costs about the same as mainstream beer in the country. Translucent and fizzy, it comes in a bottle similar to Smirnoff Ice with a label decorated with leaves. Diageo suggests serving the drink in tall Champagne-style flutes, as in the ad, adding to the visual cues of glamour and luxury.

Tapping a female market effectively has been “the holy grail for the alcohol industry forever,” said Spiros Malandrakis, an analyst at Euromonitor International. “Most advertising campaigns in the past have had a very masculine approach. However, I’m a bit skeptical about female-only launches.”

Diageo said it’s possible to create a “bilingual” campaign to appeal to men as well, though a push focused on women isn’t an issue. Africa is a “big market, but this idea of strong women making decisions is universal,” Diezhandino said. “I have high hopes for Snapp.”

The company’s African net sales rose to 1.36 billion pounds ($2.1 billion) in fiscal 2011, almost equal to the Asia-Pacific region, while revenue fell in Latin America and the Caribbean.

Nigeria Next

Diageo declined to discuss how much it has invested in the brand, which is being rolled out to thousands of bars across Kenya. Nigeria may be next, it said. Aside from Smirnoff Ice, which isn’t aimed specifically at women, the company says there aren’t other products like Snapp on the market in Africa.

SABMiller Plc (SAB), though, is selling Redd’s, a malt-based, apple-flavored drink, in Kenya after introducing it in neighboring Tanzania in 2005. It’s a “premium” product in Africa, the company said, compared with Diageo’s mainstream pricing, and comes in different fruit flavors. The brand sponsors the Miss Tanzania contest and is pitched as a stylish drink in a green, beer-like bottle.

Mozambique’s Laurentina Preta beer is SABMiller’s fastest growing brand in Africa and is increasingly favored by female drinkers, the brewer’s head of Africa Mark Bowman said in March.

Smirnoff Ice has been suffering in Africa, contributing to a 17 percent drop in ready-to-drink volumes across the continent in the second half of 2011, Diageo said. Diezhandino attributed that to a decline in the more mature market of South Africa, saying the drink is “quite successful” in other countries.

New Drinkers

Marketing and recruiting new drinkers is a priority for beverage makers as sales growth wanes in the U.S. and Europe thanks to economic turmoil, maturing tastes and competition. Diageo has targeted different demographics in the U.S., creating products like Qream for African American women and Nuvo, a sparkling vodka liqueur popular in Venezuela and Mexico. Diageo also says it needs to win business from a growing Hispanic population in the U.S. Now it’s applying the same sophisticated marketing to the less developed yet faster-growing countries of sub-Saharan Africa.

“I’m surprised they think it’s a big enough” market in emerging middle-class female consumers in Africa, said Jonny Forsyth, an analyst at Mintel. Diageo may have the opportunity to develop its own audience, he said, though it could run into cultural resistance to women drinking on a continent where many consumers shun alcohol for religious reasons.

Still, the introduction “makes sense as, although the beer category is really massive, you can get women drinking more sophisticated products,” Forsyth said. “We also know from research that women like much sweeter tastes.”

Mixing Your Own

Ready-to-drink products have tended to come later to market in developed countries, where consumers are accustomed to mixing their own drinks, according to Euromonitor. Winemakers also offer an alternative to spirits, Malandrakis said, with Chile’s Vina Concha & Toro SA opening an office in South Africa to corner more international sales.

“In Europe, we’ve gone through this transformation into cocktails in a can and it worked to the benefit of distillers,” Malandrakis said. “In Africa, they could use them as introductory steps to people getting into their international spirits.”

To contact the reporter on this story: Clementine Fletcher in London cfletcher5@bloomberg.net.

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net


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