Rites Foods, Coca-Cola Drag the Battle for the N415trn Energy Drink Market Share in Nigeria

Rites Foods, Coca-Cola Drag the Battle for the N415trn Energy Drink Market Share in Nigeria

  • Coca-Cola and Rite Foods, two dominant players in the energy drink market, are engaged in a fight for who controls the market in Nigeria
  • Rite Foods is feuding with Coca-Cola over an infringement on its logo on the Fearless energy drink launched in 2017
  • Coca-Cola said it did nothing wrong and asked the court to quash Rites Foods suit and allow it to run its energy drink, Predator

Early this year, Rite Foods, makers of Fearless energy drink took soft drinks giant, Coca-Cola, to court over infringement on its brand identity for the energy drink.

Rite Foods said Coca-Cola has committed an infraction by using similar lion insignia on its label.

In a two-page advertorial in major newspapers, Rite Foods contended that Coca-Cola intends to confuse the market by latching onto its successful brand, Fearless Energy drink by using a similar image as its logo.

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Coca Cola and Rite Foods energy drinks
Coca Cola and Rite Foods energy drinks Credit: Sunnews
Source: UGC

Fearless Energy drink was introduced into the Nigerian market in 2017 while the Coca Cola brand, The Predator made its entry in 2021.

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The beginning of the war

The Predator has continued to lurk in the shadows of major players like Bullet, Fearless, Monster and Lucozade Boost, all popular brands and big players in the segment.

In suit No FHC/L/ CS/92/2021, the plaintiff, Rite Foods Limited, had filed a motion ex parte for an interim injunction against the defendant, NBC, restraining it from further promoting or using any sales promotion material for its Predator energy drink in a manner that infringes or passes off or that is capable of infringing or passing off as the plaintiff’s Fearless energy drink, until the interlocutory application for an injunction is determined.

Rite Foods said that the infringement violates the common law of property right in the goodwill of its product, “Fearless” energy drinks and Trade Marks Act, Cap T 13, Laws of the Federation of Nigeria 2004, which offers exclusive rights to get ups and designs of products already in use by a proprietor.

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Market encroachers take a bite

But while these market leaders are engaged in a war of recognition, the other smaller but yet effective energy drinks are picking up and biting strong and hard at the enormous market share in Nigeria.

The war is no longer between the giants and the smaller brands, but between who gets to get a larger chunk of the market share.

Having successfully pushed aside the likes of Red Bull and Monster, Fearless has taken over 45 per cent of the market share in Nigeria, experts say.

Other lesser-known energy drinks masquerading as bitters have also encroached into the market and are seriously taking a large chunk of the market share.

The energy drink is worth close to 415 trillion, according to Euromonitor International, a London based market research firm.

In its report, the market research analysis firm said Rite Foods is the fastest-growing player in the Energy drink market.

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The report said:

“Rite Foods has seen by far the strongest increase in off-trade volume and value sales in energy drinks in 2020. Its Fearless brand has maintained a dynamic performance through ensuring ubiquity, good pricing and a strong route to market, and uses catchphrases to advertise the brand via social media platforms.”

Who leads the market in the East?

However, the report said that in the southeastern part of the country, Suntory beverage is holding sway in the energy drink segment.

Suntory, makers of the Lucozade Boost and the Ribena brands have remained the leading player in energy drinks in off-trade value terms in 2020.

The company is strongest in southeast Nigeria, where it has built a strong presence and share for its Bullet brand via competitive pricing and wide distribution.

Research by Nairametrics shows that energy drink production is expected to grow among the young demography because of the perception that they boost sexual performance and enhance energy.

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What the consumers want

In a new market survey, consumers expressed their desire for different energy drink brands. Many of the consumers based their preferences on smoothness, taste, smell, and the presence or absence of caffeine.

It was also discovered that prices are not a significant factor to the consumers since they are relatively close.

The National Bureau of Statistics (NBS), Nigeria's data agency, says Nigerians spend up to N208bn on energy drinks annually and this is expected to increase as the years go on.

The quest for energy drinks will spur growth in production and labour, especially among the young demography that is mainly unemployed, experts believe.

Price war the beverage industry

However, Legit.ng reported that Beverage companies are beginning to increase their product price in the Nigerian market in response to rising inflation within the country.

Since the disruption in global trade by COVID-19 in 2020, companies have been pushing cost burden on their customers. They have been seeking ways to recover revenue lost to the pandemic between the second quarter and fourth quarter of last year.

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Their most effective strategy is increasing the price of their product while also reducing the quality.

Source: Legit.ng

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