E-Malt.com News article: South Africa: South African Breweries bears the palm in local beer launches in 2008

South African Breweries (SAB) dominated launches in the South African beer market in 2008, The Business Day reported on January, 13.

SAB, a division of global brewer SABMiller, launched four new brands last year. Of these, two were in the premium beer category, says communications manager Janine van Stolk.

Brandhouse, SABMiller’s local competition in the alcoholic beverage segment, has not launched anything since Foundry Premium Cider in August 2007, says Priscilla Singh, corporate and brand public relations manager.

While growth in the premium sector slowed recently, the group is “confident of long-term prospects”. From the late 1990s to 2007, the premium market grew 25%, Janine van Stolk says. Premium beers remain a growth area.

“Growth in the premium sector beer market is a global trend, but has been most pronounced in developing markets where the trend aligns to growing disposable incomes and affluence as in South Africa,” says Van Stolk.

The beer market is growing increasingly competitive since Heineken pulled SAB’s right to brew Amstel. SAB’s market share is now about 93%, down from 97% before Amstel, a premium brand, was pulled in March 2007.

Coronation Fund Managers analyst Dirk Kotze says the beer market became highly competitive after Heineken took back the licence to brew Amstel. The industry is preparing itself for the launch of the brewery later this year. SAB has been rolling out premium beers in what seems to be a bid to flood the high end of market ahead of the brewery’s opening, he asserts.

Kotze says that as the beer market becomes more diverse, Heineken’s share will shrink as it will be represented by only two major premium brands.

“It will be increasingly difficult for Heineken to succeed with their characteristic one size fits all strategy." Internationally, Heineken is the company’s drive brand.

SAB says South Africa is the first country outside Europe to launch Dutch beer Grolsch Premier Lager after the acquisition of Royal Grolsch by SABMiller four months previously.

Last year, SABMiller announced its intention to move Grolsch into South Africa as part of its strategy to build on premium sector growth in key emerging beer markets. “The South African market stood out as an obvious first choice to launch the brand for SABMiller,” former MD Tony van Kralingen said last year. “South Africa has one of the fastest-growing consumer markets for premium beer.”

In September, the company launched premium brand Dreher Premium Lager. SABMiller bought the rights to the Dreher brand in 1993 as part of its European expansion. SAB brews the beer locally under licence.


14 January, 2009