Branded beer sales grow in Africa

16 April 2013

ABUJA: SABMiller, the brewer, is seeking to take advantage of the growing demand for branded products in Africa by rolling out low-cost beers adapted for local tastes.

SABMiller, which already gets around one fifth of its sales from the continent, has raised money to build more breweries and bottling facilities in the region.

At the same time it plans to develop cheaper alternative brands, cut prices and use more local grains such as sorghum and cassava, as well as using cheaper packaging, including greater use of draft beer.

Jonathan Kirby, SABMiller Africa's finance director, observed that price was a key area. "The African consumer will pay on average about $1 a serve and if you benchmark that against the rest of the globe that is at the top end," he told the told Reuters Africa Investment Summit in Abuja.

The company estimates that cheap, locally-made home brew makes up around three quarters of category consumption in the region, but hitting the right price point could change all that.

"If we could make beer, say, 80-85 cents a serve, I think the volume opportunity would just jump at you," argued Kirby.

One of the ways in which costs can be reduced is through greater use of local ingredients, such as cassava, so obviating the need for expensive imported materials.

The extent of possible savings are significant. When SABMiller launched a beer made from cassava in Mozambique, it was able to produce a brew 75% cheaper than other mainstream beers. Kirby noted that this beer now made up 8% of the beer consumed in Mozambique.

Beer volumes in Africa are estimated to have risen more than 10% in 2012, if the mature South African market is excluded.

Data sourced from Business Day; additional content by Warc staff