Entrepreneurship Zone: 27 February 2025 : Producing beverages in West Africa: Businessman reveals his success strategies

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Entrepreneurship Zone: 27 February  2025 :  Producing beverages in West
Africa: Businessman reveals his success strategies

 


 

 


 <https://www.firstcapitalbank.co.zw/> 

 


 

 


 

 

 



In Niger’s capital Niamey, Belvie operates its own fleet of distribution
trucks.

 

Belvie is a Niger-based non-alcoholic beverages manufacturing and bottling
group founded in 2014. This article looks at how, in a relatively short
period, Belvie captured significant market share from the incumbent local
beverages companies through product innovation, effective route-to-market
strategies and successfully contending with the various challenges facing
fast-moving consumer goods (FMCG) companies in nascent African markets.


Background


In 2013, Indian-born entrepreneur Rohan Garg first set foot in Niger, a
landlocked country, situated north of Nigeria, with a population of about 24
million. At the time, Garg, then 23 years old, was working for his family’s
pharmaceutical and engineering business in Delhi, which he joined after a
stint with Deloitte in the United States. But Garg was eager to carve out
his own entrepreneurial path, and particularly interested in the business
opportunities presented by Africa’s fast-growing economies, which he had
read about in the media. So, when a family friend, who exported products to
Africa, invited him along for a trip, he jumped at the opportunity.

Garg’s initial idea was to find opportunities for his family’s
pharmaceutical business, but after studying the Nigerien market, it was
decided that a pharma factory would be too risky. He therefore started
exploring simpler industries and eventually settled on bottled mineral
water.

“I spent some time in the capital Niamey talking to the local and expat
community and looked at the various products in the market. There were about
three bottled water companies, but people didn’t know much about the quality
of the water they were drinking. They didn’t know about these companies’
quality processes and certifications – they were simply drinking the water.
The only alternative was imported Evian, which was five times more
expensive. I therefore spotted a gap for a water brand focused on quality
and transparency,” he explains.

 

Towards the end of 2014, his newly formed company, called Belvie, launched
the Belvie Eau Minerale Naturelle water brand. The water is sourced from an
underground aquifer on the outskirts of Niamey. The bet has since paid off
as Belvie currently has about 45-50% share of the local bottled water
market, according to Garg.

However, despite the product’s success, Garg discovered the growth
opportunities for bottled water are somewhat restricted because it is almost
exclusively consumed by affluent consumers, which accounts for only a tiny
proportion of Niger’s population.

To tap into the mass market, Belvie, in mid-2018, introduced the Nuvo brand
of carbonated beverages, available in flavours such as orange, cola,
pineapple, tamarind and tonic. “If you are looking for scale, volumes and a
bigger business, going into mass-market products is important,” says Garg.
“A product only targeting the affluent part of the population will not allow
you to reach scale in a country such as Niger, where a large part of the
population has a very limited disposable income.”

Niger has experienced a robust average annual GDP growth of 6.2% from 2010
until 2019 (IMF, 2020). The African Development Bank says the country’s
economic outlook is favourable, mostly due to ongoing infrastructure
spending and strong expected performance from the agricultural sector, which
is benefiting from the development of irrigation schemes.



Rohan Garg, founder of Belvie

 

While the business environment remains demanding, Niger has undertaken
several reforms and gained several places on the World Bank’s Doing Business
ranking over recent years. But pervasive poverty (42.2% of the population in
2017) and a lack of access to basic services such as health and education,
remain considerable challenges.

“There is a lot of development happening here,” notes Garg. “Many investors
are coming in, and one can see growth in the consumer markets. However, the
business environment and policies remain challenging for investment.”

 


Focus on quality: Crafting a unique value proposition


When Belvie entered Niger with its bottled water brand, there were already
a handful of local players in the market. Instead of competing on price, the
company focused on winning over customers through a higher quality product.
>From the get-go, it implemented rigorous physical and chemical testing to
ensure the safety and consistency of the water. Its factory is also ISO
22000 certified. The message of quality and wellness is communicated through
the brand name; belle vie means ‘beautiful life’ in French.

By differentiating itself in terms of perceived quality, Belvie has been
able to price its water at about 7% higher than the closest local
competitor. Even though one of its rivals later responded by also becoming
ISO 22000 certified, Garg says this didn’t have a material impact on
Belvie’s market share.

Bottled water is consumed mostly by affluent locals and expats, while the
mass market buys informally-produced water sachets, which are significantly
cheaper. But, according to Garg, even some consumers in lower income
brackets are prepared to dig a bit deeper into their wallets for quality.
“We have seen more people now actually spending on bottled water instead of
sachet water, especially pregnant ladies or mothers buying for their young
children. A lot of people are buying it as a health product,” he says.

He adds that the acceptance of Belvie’s bottled water debunks the notion
that consumers in frontier markets don’t recognise the importance of quality
assurance and certifications.

For its Nuvo carbonated drinks brand, which is aimed at the highly
price-sensitive mass market, Belvie doesn’t have much room to move in terms
of pricing. These products therefore retail for about the same amount as its
local competitors’. But, as with the bottled water, Belvie tries to set
itself apart in terms of quality.



Bottled water is consumed mostly by affluent locals and expats.

 

“In less than 24 months, we are already the number two soft drinks brand
here, from a total of four local companies. That’s how great the response
was to a better tasting and higher-quality product,” says Garg.

 

Vying with other local competitors is, however, not Belvie’s only headache.
Nigerien manufacturers face significant competition from soft drinks brought
into the country from neighbouring Nigeria. The companies exporting these
beverages to Niger face a lower tax burden. Moreover, products are often
brought in illegally. In certain outlying areas, the imported products sell
for considerably less than locally produced brands. For instance, one of
Belvie’s soft drink bottles retails for 200 CFA franc in a city close to the
border, but the product from Nigeria sells for 150 CFA franc. According to
Garg, the only way to deal with this challenge is to compete on quality and
to count on customers staying loyal to its brand.


Distribution: A two-pronged approach


Throughout sub-Saharan Africa, the majority of FMCG products are sold
through informal channels, such as markets, kiosks and street hawkers. This
makes distribution a complex exercise. However, those who ignore the
informal markets are missing out on a significant share of potential
revenue. Due to the high costs associated with calling on thousands of small
shop owners, FMCG companies typically work through distributors that take
their products closer to the end consumer.

Despite mineral water and soft drinks being similar products, in Belvie’s
case, they require considerably different distribution strategies. The
market for bottled water is mostly limited to the capital Niamey, which
accounts for a majority of the sales. This relatively concentrated area
makes it viable for Belvie to handle its own distribution. It has a fleet of
trucks that deliver directly to retailers, hotels, military bases,
restaurants and corporate customers.

But to get its mass-market soft drink brands into the hands of consumers
throughout the country, Belvie relies on multi-product beverages
distributors, which disseminate it to informal retailers. “We have
distributors in all major cities outside of Niamey, who further distribute
in their local areas. For water, it is feasible to do it on your own in
Niamey, but for soft drinks, which has a market of at least six times as big
as the water – this is not feasible. It would just be a very complex and
costly operation for us to do that on our own.”


Sales and marketing: Becoming part of the community


Garg attributes much of the company’s success to thorough on-the-ground
market research. “I invested a lot of time talking with shopkeepers and
gaining an understanding of what is motivating them to sell to consumers and
what is motivating consumers to buy water from them. Being on the ground has
been really useful. There are a lot of expat investors who are not on the
ground as much.”

In the company’s early days, when there was little marketing budget, Garg
and his team personally visited potential bottled-water customers. “I sat
down with the restaurant and hotel owners and just explained to them why
they should consider stocking this product. Slowly but surely some of them
signed up, which increased the visibility of the product. This is a very
effective marketing strategy that doesn’t require a big budget.”

Currently, a big part of Belvie’s marketing strategy is the sponsorship of
traditional festivals, school events and football matches. “At these events,
our representatives share the products’ unique selling points with the
people and we try to make people feel that we are part of their important
community events,” says Garg.

In addition, Belvie actively works with each distributor to devise sales
targets and marketing plans for their respective territories. It supports
these distributors with product training and marketing material such as
posters, caps, T-shirts and product samples.

According to the GSMA, mobile network subscriber penetration in Niger
remains low compared to other African countries. Due to this situation,
digital marketing is currently not a viable avenue to reach the bulk of the
population. Garg does, however, highlight successes with Facebook campaigns
promoting its water brand to the target market of well-off consumers, who
generally have smartphones.



Belvie creates brand awareness through posters, clothing and product
samples.

 

Corporate customers are also an important market for Belvie’s mineral
water. To reach these buyers, the company has a dedicated B2B business
development employee who makes sales calls to corporate clients such as
hotels and banks.

In 2018, shortly after it launched its carbonated drinks brands, Belvie
faced an unusual challenge in the form of a smear campaign seeded by its
competitors. They spread rumours through the media that Belvie fills its
bottles with regular tap water. “This was really new and unexpected for me,”
notes Garg. “It shows how important the mass market is – incumbents really
want to guard their market share.”

Belvie responded by inviting the media and authorities to its factory and
showing its certifications and infrastructure. “At the end of the day, it
actually gave us a boost. People had more trust in our brand and it helped
pull some consumers from the competitor. Consumers were like, ‘Okay, this
company is willing to show us their factory, certifications and lab results,
while no other company is prepared to do that,’” explains Garg.


Human resources: training and patience required


It is estimated that 70% of Niger’s population is illiterate and there is a
dearth of skills in many industries. For the Belvie group, which has around
70 employees, human resources is a constant challenge. “We have been
fortunate to have developed a very strong team over the years. However, it
has been a struggle. Manufacturing talent, with an understanding of
international standards, is tough to find here; so you have to train people
and be very patient with them.”

Although expats currently account for a minority of its employees, Belvie
had to rely on foreigners for positions requiring high technical knowledge.


Conclusion


Belvie’s accomplishments in the Nigerien market demonstrates that in many
sub-Saharan African countries, there remain opportunities to introduce
simple products that offer consumers an improved value proposition to what
is already available. This, however, has to be accompanied with efficient
distribution, results-driven marketing and the ability to operate in
challenging business environments.

Garg also attributes soft factors, such as the fact that as a foreigner he
immersed himself into the local community, as key to the company’s success.
“In the early days, I literally went from shop to shop to talk to our
potential customers. I visited hundreds of shops in the Niger summer heat,
talking broken French. I just introduced myself to local shop owners and
sometimes shared a meal. I made so many friends and fondly remember that
time. It helped with people accepting me and I gained such a good
understanding of the market in a short time.”

—Howwemadeitinafrica

 

 


 


 


 

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