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An Irish Beer Finds Its Future in Africa

Is Guinness an Irish or African brand? In the last six months 2006, global sales of Diageo's Irish stout Guinness were down about 4 percent. They were even falling in Ireland, due to changes in consumption patterns as customers spent less time in pubs. But sales outside of Ireland were growing by 4 percent to 5 percent—especially in Africa. Chief executive Paul Walsh said in July 2007 that the company would expand sales in Africa to counter declines in its domestic market.10 It is clear its future may not lie in the Irish pub but in the small bars in Lagos.

Thanks to a long presence in Nigeria and astute advertising, many Nigerians don't even see Guinness as an Irish brand. It has been such a long and dominant presence that it is considered domestic. When an Irish beer has become African, and when the future growth of the brand rests on expanding sales on the African continent rather than in Ireland, there is clearly something shifting in the world. Not only that, but a Nigerian immigrant was elected as the first black mayor of an Irish town in 2007. Rotimi Adebare was named head of the town of Portlaoise, an hour outside of Dublin. This is a sign of the growing reach and prominence of the African diaspora. It is getting very hard to tell where Ireland ends and Africa begins.11

When I met Eric Frank of Saatchi and Saatchi in a small booth at a crowded restaurant at the airport in Cape Town, he said he was glad that someone from the United States was finally paying attention to what is happening in Africa. Frank and his colleagues had developed the legendary Michael Power advertising campaign, an action hero who helped build Guinness into a "Lovemark" in Nigeria and other countries. Saatchi and Diageo had recognized the potential in Africa long ago, which helps explain why Guinness has such a strong presence across sub-Saharan Africa now. Its fortunes have risen with Africa.

Other companies are stepping up their presence in Africa. Unilever, facing increased competition and declining profits in the United States and Europe (where sales growth fell from 5 percent in 1998 to 0.7 percent in 2004), announced plans to step up its business in the developing world, including Africa, where it is already firmly established.12 Nestlé, caught between forecasts of growth of only 1.5 percent annually in developed markets and its target of 5 percent to 6 percent organic growth, announced plans in 2006 to step up operations in West Africa and other developing markets to make up the difference.

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