SABMiller doubles its traditional African beer operations

SABMiller plc [SAB:LSE/SAB:JNB] today announces that it has expanded its African beer brand, Chibuku, into ten countries across the continent. Chibuku is an opaque beer based on traditional African recipes using maize and/or sorghum, depending on local tastes. The expansion of the brand more than doubles the number of Chibuku markets from four (Botswana, Malawi, Zambia and Zimbabwe) at the start of 2011.

Following an investment of US$16m 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 brand’s expansion has also created 200 new direct jobs, supporting a further 1,500 jobs indirectly in the supply chain and distribution network.

Sold in one litre cartons, Chibuku is a low-alcohol beer that ferments in the package with alcohol strength increasing from 0.5%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. A new variant, ‘Chibuku Super’ has been launched in Zambia in September. Chibuku Super is lightly carbonated, pasteurised – meaning it has a fixed alcohol content of 3.5%ABV – and sold in PET packaging. Its longer shelf life means the distribution model for ‘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. 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.

Following successful pilot schemes in Ghana, Mozambique, Swaziland and Tanzania, full-scale Chibuku production has now been launched in each of these countries. 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.

SABMiller’s expansion of Chibuku is part of its 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.

Mark Bowman, Managing Director of SABMiller Africa, said: “We have 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.”