SA Breweries' big plans for African beer market
AN AFRICAN has to work three hours on average to afford a beer, compared with 12 minutes for a European, and yet the continent is the global hot spot for beer growth to the extent that the world's big brewers are struggling to keep pace.
A booming population and above-average economic performance, backed by buoyant mining and energy industries, are behind the growth, which is running hotter than in Latin America and Asia.
"Africa remains an attractive place for consumer goods companies. From a macro perspective it has a growing population and is enjoying GDP (gross domestic product) growth across most markets," Africa boss for global brewer SABMiller Mark Bowman told Reuters.
His African beer volumes, minus the relatively mature South African market, rose in excess of 10% for the last two years. Four big brewers - SABMiller, Heineken, privately owned Castel and Diageo - control more than 90% of the R92-billion African market, and they are ploughing in millions.
Beer is the drink of choice in the up-market suburban areas of Johannesburg and also in the townships that circle the city, whether it is SABMiller's top brews Castle and Carling Black Label or Heineken's eponymous brew and Amstel, but price is a challenge for less well off drinkers.
The unlicensed shebeens in Alexandra township provide a beer for those returning from work, such as 31-year-old Amstel drinker Siphiwe Dlamini, a part-time film industry worker.
"It's not busy today because it's Monday. People like to take it easy on Monday, and, besides, the beer is not cheap. A lot of people between now and the weekend drink home brew beer. It's much cheaper," he said.
Buyers not only get consistent quality but a price tag that is a third less than mainstream beers.
SABMiller is building new breweries in Nigeria, Uganda and Zambia this year and expanding those in a string of other nations. SABMiller's Bowman is hoping to woo home brew drinkers with its own beers made from local crops sorghum and cassava.
The brewer plans to spend R3343-million to R4179-million a year for three to five years to build two or three breweries a year and revamp others in Africa, while he also increases production of its own "home brewed" sorghum-based cloudy chibuku beer.
Analysts estimate African beer volumes rose around 7% in 2011, but stripping out the mature South African market, which accounts for over a quarter of the continent's beer, then growth was well over 10%.
"Africa is likely to be one of the key long-term growth drivers for the global beer category," said industry analyst Trevor Stirling at brokers Bernstein Research.
With annual African per capita beer consumption only 8 litres, compared with a global average of 35 litres - stepping up to around 70 litres in western Europe and North America - there is a huge pool of potential to be tapped. - Reuters