From beer to soft drinks, corporate manoeuvres and major announcements are multiplying across Africa. Driven by the retreat of certain international giants and a powerful push from domestic players, the beverage market is undergoing a profound reconfiguration.
Africa’s highly fragmented landscape is marked by an underlying trend that grows stronger by the year: the steady rise of local producers. Acquisitions, alliances, new entries and strategic exits are unfolding within an increasingly competitive environment.
This is the current reality of the continent’s dynamic beverage market, which spans everything from beer and spirits to fruit juice and bottled water. The corporate buzz stems from a simple fact: Africa is considered the retail sector’s final frontier. Consumption, which remains low compared to the global average, is projected to surge under the twin pressures of rapid demographic growth and urbanisation.
In this market, conservatively valued at $50bn, a diverse array of players co-exist. They range from global heavyweights – AB InBev, Castel, Heineken, Coca-Cola and Pepsi – to modest local producers, regional bottlers and national champions. The landscape is one of stark contrasts, dominated by a few massive consumer hubs (South Africa, Egypt, Kenya and Nigeria) alongside a majority of much smaller national markets.
Following several major developments – including Diageo’s exit from East Africa, Heineken’s withdrawal from the DRC, and an aggressive offensive by Tanzanian conglomerate MeTL against Coca-Cola and Pepsi – we ask five pertinent questions about the shifting balance of power between international brands and local players.
1. Beer, soft drinks, juice: Which is the most lucrative segment?
Beer remains the undisputed locomotive of the sector. “These are large groups at work, backed by very well-established brands and often benefiting from a dominant position – it is the classic recipe for profitability,” says Trevor Stirling, an analyst at Bernstein. Having invested heavily in their production lines and distribution networks, brewers enjoy the highest margins in the industry.
While the core commercial battle relies on growing the volume of affordable beers, major players are also betting on premium brands to capture wealthier consumers, particularly in urban centres.
By comparison, the bottled water business is a far more modest affair. Indeed, the Castel Group has partially divested from this segment in favour of local operators, notably in Morocco and Côte d’Ivoire. The same limitations apply to soft drinks and fruit juices: though these segments are expanding, they offer tighter margins and are constrained by the logistical challenges of transport and shelf-life preservation.
2. Does Diageo’s withdrawal illustrate a wider trend of global giants?
Despite Diageo’s long-anticipated departure from East Africa, Heineken’s announced exit from the DRC, and that several multinational agrifood groups (including Unilever) have scaled back their regional operations, it is premature to speak of a wholesale retreat. Instead, companies are making case-by-case strategic choices to adopt an “asset-light” model. This involves transferring the responsibility of managing capital-intensive assets, such as factories and production lines, to local partners.
For instance, while Heineken is leaving the DRC – a country hampered by a challenging security environment and a tough business climate – it is doing so to concentrate resources on core markets like Nigeria and Ethiopia, where it is actively expanding capacity.
The continent’s two brewing giants, AB InBev in anglophone markets and Castel in francophone territories, continue to consolidate their footprints.
AB InBev deployed more than $600m between 2023 and 2025 in South Africa while expanding its footprint in Mozambique, Tanzania and Uganda. The company reported record market shares in 2025 across Mozambique and Zambia compared to the previous five years.
Castel entered its 22nd African market following the finalisation of its takeover of Guinness Ghana Breweries in September 2025. The French group has also boosted production capacity in Morocco and Cameroon, and recently inaugurated a distillery in Côte d’Ivoire.
This consolidation did not deter Danish brewer Carlsberg from partnering with Indian group Varun Beverages (Pepsi’s primary bottler on the continent) in late 2025 to distribute its products in Zimbabwe – a pilot partnership marking Carlsberg‘s formal arrival in Africa.
In the soft drinks sector, giants Pepsi and Coca-Cola are consolidating their operations through partnerships with local bottlers under the same asset-light strategy. In late 2025, Coca-Cola HBC – the flagship bottler for the brand across Europe, Egypt and Nigeria – announced it was acquiring Coca-Cola Beverages Africa (CCBA), the US group’s primary bottler across the continent. For Pepsi, expansion is being driven primarily by Varun Beverages, which acquired Pepsi’s production units in Ghana and Tanzania and handles distribution across southern Africa.
In the water and juice categories, international brands are maintaining their positions despite breakthroughs by local competitors. Alongside Coca-Cola (Bonaqua and Dasani for water; Minute Maid for juice) and Pepsi (Aquafina and Ceres), Nestlé (PureLife) and Danone (Evian and Volvic) remain dominant in water, while US firm Tampico and Portugal’s Compal hold strong positions in the juice market.
3. Are we witnessing consolidation or increased competition?
The market is experiencing both simultaneously. Recent years have seen significant consolidation around three heavyweights in the beer segment (AB InBev, Castel and Heineken) and two behemoths in the soft drinks sector (Coca-Cola/Coca-Cola HBC vs Pepsi/Varun Beverages).
This highly consolidated structure makes the emergence of a major new pan-African challenger virtually impossible, but it guarantees fiercer competition between the existing operators within each category. For example, a Bernstein study published in March found that while AB InBev leads in terms of volume, revenue and EBIT (earnings before interest and tax), Castel commands the best selling prices and profit margins.
However, Africa’s highly fragmented landscape is far from static. It is shaped by a structural trend that deepens every year: the emergence across all countries and segments of local producers, launching either independently or via joint ventures with international operators. These local players face steep challenges, including accessing finance, maintaining consistent manufacturing quality and volumes, and securing their domestic market share before embarking on regional expansion.
While local competition is fierce, their presence acts as a powerful spur for multinationals, forcing the ecosystem to invest and innovate.
4. Are any local champions standing out?
On the one hand, the regional subsidiaries of multinational corporations function as powerful local champions in their own right. In Kenya, East African Breweries PLC (EABL) – which is transitioning from Diageo’s portfolio to that of Japan’s Asahi – benefits from a deep historical presence, powerful brand equity and a dominant position across both beer and spirits.
Castel maintains formidable strongholds in Morocco (Société des Boissons du Maroc), Cameroon (Boissons du Cameroun) and Angola (Castel Angola); each entity dominates its domestic market and has integrated vertically by investing in local maize production and glassware manufacturing. The same applies to South African Breweries (SAB), AB InBev’s regional powerhouse. In soft drinks, Coca-Cola has made Nigeria a primary corporate focus, while Pepsi treats Egypt as its exclusive stronghold.
On the other hand, genuinely independent local success stories are gaining ground. In Kenya, craft brewer African Originals, founded in 2016, continues to expand and post solid growth, even in the shadow of EABL. In Nigeria, the CHI group, acquired in 2025 from Coca-Cola by the conglomerate UAC of Nigeria, has established itself as a leader in fruit juices. Rite Foods, launched some 20 years ago, has become an indispensable market player in soft drinks, water and energy drinks, primarily through its flagship Bigi brand.
“There are plenty of local champions and, above all, there is room for everyone, both local and international,” says the head of a subsidiary of one of the continent’s major brewing groups.
5. Who is best prepared for the future?
In the short term, as pressure on household purchasing power remains relentless and beverages remain a volume-driven market, commercial success hinges on a triple daily challenge: ensuring flagship products are consistently available, sold at a competitive price point and delivered in attractive packaging formats.
We should expect to see more and more creative partnerships
In an ecosystem built on relationships between global brands and local operators, the capacity to forge strategic alliances will be crucial.
Although they are direct competitors, AB InBev and Castel have long maintained a cross-shareholding agreement, while Castel also served as Coca-Cola’s primary bottler on the continent for decades. This history, combined with the alliance between Carlsberg and Varun Beverages, suggests a clear trajectory for the market.
“We should expect to see more and more creative partnerships in the future,” says Ben Longman, founder and managing director of the African market analysis firm Trendtype.