Localization Drives Market Penetration
Diageo, the world’s largest producer of spirits and a major player in beer and wine, continues to showcase its ability to not just target and establish strong positions in new markets but to invest in ways that allow it to dominate them. Guinness Nigeria’s Orijin brand is a prime example.
Over the years, Diageo seeded Nigeria and Africa, more broadly, with many of their well-known global brands. But, true to what they have done in other markets and categories, Diageo also knew that, to win, they needed to continue to invest in the market with an offering uniquely suited for this region of the world – one connected to the Nigerian identity and one that would create strong pull. Launched in 2013, Orijin represents a clear example of Diageo’s commitment to the region.
Considered a premium brand in Nigeria, Orijin is a bittersweet RTD beverage made with local herbs and fruits often found in West African herbal remedies, and, the sister product, Orijin Bitters, is a beverage with higher alcohol content. In that sense, Diageo has created a brand that plays on the culture and tradition of a major local market--one that evokes a sense of familiarity and comfort for its consumers. However, this brand comes in contemporary and premium packaging and, because it is backed by a multinational, it is free of the safety concerns that appear to plague local players producing similar beverages. As a result, Diageo is able to charge a price premium relative to other local herbal drinks. Providing consumers looking to trade-up with a comfortable and safe access-point to Diageo’s broader portfolio.
Launched in 2013, Orijin represents a clear example of Diageo’s commitment to the region. Too many companies attempt to compete at a local market level using the same approach that works in their home markets, but that is exceptionally difficult to do for a variety of reasons.
How successful is Orijin?
Since entering the market, Orijin has gained more than 50% market share of bottled drinks with a similar ABV.* And, in comparing it to the other Guinness product offerings in-region, it’s faster growing than their Guinness Stout flagship beverage. The ramification on Diageo’s success within the region extends beyond Nigeria. Already, because of Orijin’s success, the brand is now available in Ghana and Kenya, and Diageo just launched (March 2016) Orijin Zero, a non-alcoholic soda to capitalize on and extend their success.
What can we learn from Diageo’s success with the new Orijin brand?
Too many companies attempt to compete at a local market level using the same approach that works in their home markets, but that is exceptionally difficult to do for a variety of reasons. Not the least of which is that tastes, preferences and cultural relevance of brands can vary dramatically from one market to the next. Cookie cutter approaches don’t work. But time and time again we see examples of companies trying to shoehorn their products into these markets and those companies are then left scratching their heads about why they’re falling short.
Diageo and its Guinness Nigeria unit took a dramatically different approach. One that we see replicated across other companies whose international revenue represents a substantial proportion of their revenue mix – i.e., ones that have been successful at leading international expansion within their respective categories.
Specifically, these companies realize that, to succeed, they must spend the time and resources necessary to:
• Develop a deep understanding of their target markets, acknowledging that while there may be overlap, leadership opportunities exist in surfacing what is distinct and unique about these new regions
• Innovate and produce a quality product that hits those market needs dead center; a product that they feel confident charging a price premium for because it provides clear advantages relative to substitutes
• Equip that newly launched product with the support necessary to drive awareness and consumer pull, allowing for acceleration into the market
• Quickly capitalize on the success from their initial launch market to expand into new regions post-incubation, striking while the iron is hot
If you would like additional insight into which players in your space have been most successful in tapping into international markets, the best practices they’ve employed in doing so, and how you can adapt those practices to your own organization, we’d welcome the conversation.
*Nielsen Nigeria
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