The next frontier: opportunities and challenges in Sub-Saharan Africa

Sub-Saharan Africa represents one of the most compelling long-term growth opportunities for beverage alcohol, spearheaded by fast-growing, young and urbanising populations, and expanding middle classes. However, markets are far from homogeneous, and trading conditions can be complex and difficult, challenging even the industry’s most established players.

Total beverage alcohol (TBA) volumes in Sub-Saharan Africa increased by +1% in 2025, according to IWSR data, and they are forecast to expand at a CAGR of +2% between 2025 and 2035. All major categories are expected to grow over the next decade.

Regional standouts in 2025 included the performance of RTDs, which grew volumes by +11%, and spirits (+6%). Beer rose by +1%, but wine declined by -3%. Agave spirits were up by +8%, and are expected to grow at a CAGR of +5% to 2035.

“Africa is often cited as beverage alcohol’s next frontier – and the demographics justify the attention,” says Russell Menezes, Research Director – Africa and Middle East. “The population is young, fast-growing and rapidly urbanising – a structural tailwind for beverage alcohol demand across multiple markets.

“Aspirational consumption is a recurring motif – alcohol brands serve as symbols of social mobility for emerging middle classes, even during periods of economic strain. South African consumers demonstrably trade up selectively for special occasions, and the same is true for other African countries, such as Nigeria, Tanzania, Ghana and Ethiopia.”

However, these countries are also faced with economic challenges that are not temporary headwinds, but structural features of the trading landscape, and alcohol consumption is restricted or prohibited in some markets for religious or cultural reasons.

Downtrading – rather than premiumisation – is the dominant consumer behaviour, particularly in recent years, leading people to migrate from spirits to beer, from imports to local brands, and from commercial products to artisanal or informal alternatives. Smaller, cheaper pack formats are enjoying explosive growth for affordability reasons.

Across Sub-Saharan Africa, locally-produced products dominate, accounting for 97% of beer volumes in 2025, according to IWSR data, 80% of spirits, 87% of RTDs, 59% of wine and 71% of cider.

“There is no doubting the scale of the opportunity for beverage alcohol in Sub-Saharan Africa, but the path to capturing that opportunity is complicated by structural volatility, a persistent dominance of low-priced local and artisanal products, and route-to-market challenges,” explains Menezes.

IWSR analyses the opportunities presented by three key Sub-Saharan Africa markets: South Africa, Nigeria and Kenya:

South Africa: RTDs and spirits to the fore

“IWSR Bevtrac consumer research shows that South Africa is a stable but constrained market, with affordability pressures sustaining moderation and simplifying consumption, although the rising confidence of Gen Z offers an early positive sign of recovery,” says Menezes.

Against this backdrop, beer has emerged as the most resilient category, benefitting from its central role in social and at-home occasions. According to IWSR data, beer volumes in South Africa rose by +3% in 2025, and are predicted to expand at a CAGR of +2% between 2025 and 2035.

RTD volumes surged by +14% last year. “RTDs’ compact, affordable packaging resonates strongly with female and younger LDA+ consumers, and they match the trend towards more moderate consumption,” explains Menezes. “There has been a shift away from bottles of spirits and wine to easy-drinking RTDs as consumers look to manage their budgets.”

Within spirits, there are clear pockets of opportunity: Canadian and Irish whiskey are making inroads as emerging middle-class consumers perceive them as more affordable than Scotch, and better quality than South African whisky. Canadian whisky volumes grew by +8% in 2025, while Irish whiskey was up +2%. However, heavy promotions and discounting risk eroding equity of some spirit brands, especially in Scotch whisky.

Cognac/Armagnac volumes grew by +18% in 2025, with a CAGR of +5% forecast to 2035. “Cognac’s high-status reputation resonates strongly with the image-conscious middle and upper classes, and appeals to younger LDA drinkers,” says Menezes. “It is expected to sustain its strong growth trajectory, underpinned by growth across grades, deeper premiumisation and an increasingly competitive brand landscape.”

Tequila’s recent rapid growth (volumes +7% in 2025) is built on its go-to status for shots, alongside rising demand for sipping premium-and-above tequilas. As consumers become more discerning and knowledgeable about the category, this premiumisation trend is set to fuel higher value growth than volume growth in the years ahead.

Nigeria: Millennials hold the key

In Nigeria, Gen Z poses a long-term recruitment challenge as the cohort is substantially less engaged with alcohol than older groups and most Gen Z abstainers state little intention of starting. Millennials remain the crucial age cohort, representing the largest share of drinkers, and exhibiting the highest participation and heaviest drinking occasions, according to IWSR Bevtrac consumer research.

RTDs and spirits (mostly local) are growing strongly here: both expanded their volumes by +8% in 2025, with identical CAGR growth of +3% predicted for 2025-35. Gin, bitters, cream liqueurs and whisky saw some of the strongest growth.

“Downtrading is reshaping the whisky market in Nigeria, with Indian whisky gaining momentum and blended Scotch contracting as consumers seek stronger value propositions,” reports Menezes. “Indian whisky caters to Indian expats and aspirational Nigerian consumers, but blended Scotch retains a considerably larger consumer base.”

Meanwhile, the RTD category is dominated by FABs. Their convenience and appeal as sweeter alternatives to beer have made them popular, especially with female and younger LDA consumers.

Kenya: explosive growth for tequila, Irish whiskey

Local spirits (particularly flavoured local cane and brandy) and RTDs are the main growth categories in Kenya, with volumes up +13% and +14% respectively in 2025. Moderate growth is expected to 2035: IWSR forecasts predict that spirits volumes will rise at a CAGR of +2%, while RTDs at a CAGR of +4%.

“As in Nigeria, RTDs offer a sweeter alternative to beer and appeal to younger LDA consumers and women,” says Menezes. “The small cocktails and long drinks segment is expanding, with both local and imported brands growing.”

In spirits, Irish whiskey volumes grew by +35% in 2025, while tequila was up by +65%. Both are expected to record more moderate CAGR increases of +3% and +6% respectively between 2025 and 2035 as the country’s economy improves.

* IWSR’s Sub-Saharan Africa data covers Angola, Benin, Botswana, Cameroon, Congo, Democratic Republic of Congo, Djibouti, Equatorial Guinea, Ethiopia, Gabon, Ghana, Ivory Coast, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Reunion, Senegal, Seychelles, South Africa, Tanzania, Togo, Uganda, Zambia

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