E-Malt.com News article: Africa: SABMiller tempts the home-brew consumer

The African home-brew market is highly lucrative. According to Trevor Stirling, drinks analyst at Sanford C Bernstein, it is valued at US$10 bln per annum and comprises a quarter of the beer market. And it is this market that SABMiller, one of the largest brewers in the world, has targeted for many years, Ho We Made It In Africa reported on June, 26.

Beer drinking is very much part of African culture. Home-brewing is the traditional way of producing it and this practice continues today not only in rural areas, but also in townships and informal settlements all over Africa. Home-brewing provides beer that is very cheap since local produce like sorghum or maize is used with an added grain malt to start the fermentation process.

To lead the home-brew consumer and also the rising middle class into the formal beer market a gentle approach was required – SABMiller had to provide cheaper beer. The brewer could only do it by engaging local governments and by using local produce.

The advantages for local governments are obvious. Beer sales increase tax revenue and the production process in more breweries provide employment. SABMiller admits that it has negotiated reduced duties with local governments. One would assume that for local governments the cut-price tax deals would be balanced by the increase in revenue.

Costs are reduced by buying the inputs for brewing from local farmers. This leads to the economic empowerment of farmers; from subsistence farming to planting cash crops (maize, sorghum, cassava) that is bought by SABMiller.

In 1999 SABMiller acquired Zambia’s National Breweries and started to produce Chibuku, a traditional opaque beer. It is made from locally grown sorghum and maize. Because of its resemblance to home-brews it resonates with the home-brew consumer.

Chibuku continues to ferment after it has been packaged due to the presence of yeast in the beer. Chibuku starts off as 0.5% alcohol by volume (ABV) and reaches 5% ABV after a few days. Mainstream Chibuku is packaged in a 1 litre carton.

SABMiller sees Chibuku as the entry point for low income consumers with the hope that they would later move up to more premium beers.

Due to the short shelf life of Chibuku, not more than seven days, Super Chibuku has been developed and comes in a 600 ml plastic bottle with a 21-day shelf life.

In 2011 SABMiller launched Impala, the first commercial-scale cassava-based clear beer in Mozambique. Cassava is a root vegetable that grows in tropical and subtropical Africa. After it has been identified as a possible base for beer-brewing it took years of research and innovation to overcome the challenges of processing cassava, which is a highly perishable root.

Impala is sold at between 25% to 30% less than mainstream lagers. Chibuku is even cheaper.

By producing cheaper beers that look like home-brews and lagers from familiar grains and roots, SABMiller has managed to swing many consumers to the formal market.


27 June, 2012