Company Trend Analysis - Diageo Increases Commitment To Africa - OCT 2017

BMI View: One of Diageo's key strengths is its strong presence in Sub-Saharan Africa. The company's strategy in Africa is to focus on rolling out affordable beer and to use this as a springboard for the promotion and distribution of spirits as incomes rise and formalisation takes hold. Illustrating the company's commitment to the region, Diageo announced in June 2017 that it would invest USD144mn in a state-of-the-art production facility in Kenya.

While there are reasons to challenge the narrative that all consumer sectors will generate real momentum across key African markets ( s ee ' As sessing Our Africa Consumer View ' , June 26 2017), the alcoholic drinks sector continues to offer tremendous growth opportunities by global standards. Diageo's Africa division has been a key driver of organic growth in recent years, and we still see strong growth ahead.

While Diageo is facing some challenges in the region, including a slowdown in commodity-exporting countries such as Nigeria, we still believe that the group is well-positioned to experience robust growth over our five-year forecast period.

High Volume Growth In SSA
Total Alcohol Consumption, Litres mn, % y-o-y
e/f = BMI estimate/forecast. Source: National sources, BMI

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