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CastleLite

SAB reclaiming its local turf

Local beermaker SAB has clawed back some of the market share it lost over the past two years. Having revitalised operations, cut costs and invested savings in promoting its core brands, SAB’s market share has stabilised over the past 10 months.

It is now estimated at between 88% and 89% of the local beer market, up from its lowest point two years ago of about 86%.

These few percentage points are significant in an industry valued at about R33-billion a year.

SAB’s initial decline followed the loss of its leading premium-beer brand, Amstel, which accounted for more than 9% of SAB’s volumes before April 2007. Heineken won back the right to brew and distribute its Amstel brand in SA. At the time SAB held between 97% and 98% of the SA beer market.

Brandhouse, a venture owned by Dutch brewer Heineken, British Diageo and Namibian Breweries, took on SAB with an attractive suite of premium brands, and made inroads into the beer market. Heineken and Diageo built the first non-SAB brewery in SA and SAB faced real competition.

“After a period of initial success, Brandhouse is reeling at the pace and success of the fight-back of SAB,” says Julian Wentzel, EMEA head of research at Macquarie First South Securities.

“The business under Norman’s [Adami, the South African CEO] stewardship is leaner, meaner and more strategically aggressive,” says Wentzel.

Adami has extracted cost savings totalling R1-billion over the past two-and-a-half years, which have been ploughed back into marketing and brand promotion.

Castle Lite is the country’s largest and fastest-growing premium brand with an annual growth rate of more than 20% and about 6% of the market….

TimesLive: Read more

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