Why Diageo, PZ Cussons, and Atlas Mara are betting big on Africa

A Diageo factory in Accra, Ghana, produces Orijin Bitters. Credit: wsj.com

As growth in China slows after two decades of breakneck economic development, Western companies are increasingly turning towards India and Africa as the next great untapped opportunities. While Africa’s 54 disparate countries and innumerable languages make it a far cry from China’s reasonably cohesive single market, there are several simple reasons so many companies are rushing to expand on the continent.

Economic growth has continued unabated despite collapsing commodities prices and fast-growing populations are becoming increasingly wealthy thanks to this. So, how are companies going to profit from a growing consumer class?

Spirits maker Diageo’s plan is twofold. First, the company is pushing for increased sales of Guinness and local beer brands to build links with distributors and consumers alike. The hope is it will be easier in the future to sell the higher margin spirits Diageo is famous for, such as Smirnoff and Johnnie Walker.

Read more: Why Diageo plc, PZ Cussons plc and Atlas Mara Ltd are betting big on Africa | The Motley Fool UK