SABMiller boosts African beer operations
17 October 2012
SABMiller announced last week that it had expanded its African beer brand, Chibuku, into 10 countries across the continent, more than doubling the number of Chibuku markets from four at the start of 2011.
Chibuku is an opaque beer based on traditional African recipes using maize and/or sorghum, depending on local tastes.
"Following an investment of US$16-million over the last 18 months, it is expected that by the end of this financial year Chibuku volumes across new markets in Africa will total well over half-a-million hectolitres," the London- and Johannesburg-listed company said in a statement.
Market for smallholder farmers
The company added that the expansion was part of a strategy to make more affordable beers for lower-income consumers across Africa, "taking share from the often unsafe 'informal' alcohol market.
"It also provides a guaranteed market for the smallholder farmers through which SABMiller sources the maize and sorghum used in production. In the year ending March 2012, SABMiller sourced maize and sorghum from around 40 000 smallholder farmers across Africa."
SABMiller had four Chibuku markets - Botswana, Malawi, Zambia and Zimbabwe - at the start of 2011. Full-scale Chibuku production had now been launched following successful pilot schemes in Ghana, Mozambique, Swaziland and Tanzania.
"A Lesotho pilot has been launched, with commercial sales expected in the next few months, and in Uganda a brand new plant is being planned as part of the new brewery under construction in Mbarara," the company said.
Sold in one-litre cartons, Chibuku is a low-alcohol beer that ferments in the package, with alcohol strength increasing from 0.5% alcohol by volume (ABV) on day one up to 4% ABV on day five before expiry. Given its short shelf life, it must be brewed and consumed locally.
In September, SABMiller launched a new variant, "Chibuku Super" in Zambia. Chibuku Super is lightly carbonated, pasteurised - meaning it has a fixed alcohol content of 3.5% ABV - and sold in PET (polyethylene terephthalate) packaging. Its longer shelf life means the distribution model for Chibuku Super is closer to that of clear beer.
"Chibuku Super has been brewed successfully on a small commercial basis in Zambia for the past 12 months," SABMiller said. "A larger plant has been commissioned in the past few weeks at Kitwe, in the north of the country, to further grow this category. New 'Super' production lines will also be in place in Mozambique and Zimbabwe by the end of this year."
Mark Bowman, managing director of SABMiller Africa, said the company had been investing heavily to grow capacity and stay ahead of demand across Africa.
"The expansion of our Chibuku operations illustrates how we are driving our affordability strategy, product innovation and maintaining momentum behind our 'Farming Better Futures' programme through this continued investment."