26 Mar 2012 Beer in Africa: The race to slake a continent’s thirst
The Economist looks at how brewers are racing to capture beer drinkers among Africa’s growing middle class.
STATISTICS seldom do justice to Africa. Take beer consumption. The average African sips a mere eight litres of commercially produced beer a year. Compared with the 70 litres or so quaffed by the average American, it sounds like Africans are bunch of party-poopers. But this is not so.
Africans chug admirable quantities of homebrew, made from sorghum, millet or more or less anything fermentable (see picture). A survey by SABMiller, a London-listed brewer, found that Africa’s homebrew market is four times bigger than the formal market, measured by volume.
Brewers are betting that Africa’s fast-growing middle class will want to trade up. Homebrew can be excellent, but it is highly variable, sometimes lumpy and lacks a certain cachet. SABMiller, which operates in 37 African countries, is trying to woo homebrew-lovers with sorghum and cassava beers that are consistently good. They are slightly sweeter and fuller-bodied than a mainstream lager, and cost a third less (though still far more than untaxed homebrew).
SABMiller’s Eagle, the world’s first clear sorghum lager, launched in 2002 and brewed in Uganda, is already one of east Africa’s best-selling beers. Demand for SAB’s Impala, the world’s first commercially produced cassava beer, brewed in Mozambique, is already outstripping supply after its launch four months ago.
SAB (formerly South African Breweries) was founded in 1895 to quench the thirst of gold prospectors around Johannesburg. Though now a global firm, it is pouring investment into Africa. Before its acquisition of Foster’s of Australia in December, Africa (excepting South Africa) accounted for only 12% of SABMiller’s sales, including soft drinks and bottling.
Yet Africa attracts nearly a third of the group’s total investments — $1.75 billion in the past four years, most of it on beer. The group’s lager revenue on the continent, excluding South Africa, is growing by double digits.
With its French joint-venture partner, Castel, SABMiller has 60% of Africa’s commercial beer market in volume terms, including a near-monopoly in South Africa. But other global brewers are keen to expand in Africa too, as they seek growth markets to compensate for flat or falling beer sales in the rich world…..