Multinational drinks companies continue to invest in Africa
Multinational alcoholic beverage companies are continuing to increase their exposure to sub-Saharan Africa’s rapidly growing economies.
Diageo, owner of brands such as Johnnie Walker, Smirnoff and Guinness, recently bought Ethiopia’s Meta Brewery for US$225 million.
Meta Brewery is Ethiopia’s second largest beer producer, with a volume share of around 15%. From its brewery close to the capital Addis Ababa, Meta Brewery produces lager brands Meta and Meta Premium.
Diageo said in a statement that the acquisition will give it access to Ethiopia’s fast growing beer market, while complementing the company’s existing premium spirits business in the country.
Driven by strong GDP growth and greater disposable incomes, the Ethiopian beer market is expected to grow by more than 10% every year until 2015.
Ethiopia is attracting increasing attention as a business destination, so much so that Addis Ababa has been selected as the location for the 2012 World Economic Forum on Africa. “We know that many of our members from Africa and around the world are extremely interested in the opportunity to get a view of what is going on in that exciting country,” commented Robert Greenhill, managing director and chief business officer of the World Economic Forum.
Diageo’s competitors Heineken and SABMiller have also recently made investments in Ethiopia.
Commenting on the deal, Nick Blazquez, president of Diageo Africa, said: “I am delighted that we are able to announce the completion of this acquisition which represents a key milestone in achieving our strategy of participating at scale in beer and spirits in growth markets in Africa. Meta is a strong national brand that has great heritage in Ethiopia. We will invest behind the long-term growth of the brand, the Meta business, and the wider communities in Ethiopia.”
“Over the past five years, Diageo has invested more than £1 billion in building its businesses in Africa, and we will continue to look at opportunities to expand our footprint, grow our brands and secure strong routes to market,” he added.
In other news, SABMiller, the world’s second-largest brewer by volume, said in a management statement that beer sales in Africa grew by 11% during the third quarter that ended 31 December 2011.
Lager volumes in countries such as Tanzania, Uganda and Zambia grew by more than 10%.
In Mozambique, lager sales increased by 8%, benefiting from the launch of SABMiller’s Impala brand, the group’s first cassava-based beer. Cassava, which looks like a large sweet potato, is one of the most widely grown crops in Africa, planted largely by subsistence farmers. “We believe that we can make it commercially viable and expand the cassava industry on that basis,” Gerry van den Houten, SABMiller Africa supply chain and enterprise development director, told How we made it in Africa in an earlier interview.
Market conditions in South Africa, the continent’s most developed economy, however, proved challenging for SABMiller. Lager volumes grew by only 2%, driven largely by momentum from brands such as Castle Lite and Castle Lager.