E-Malt.com News article: Zimbabwe: Delta Corporation plans to invest in new line for sorghum beer

Delta Corporation says it will invest in the new line for sorghum beer and expand its portfolio of alternative beverages to “capture consumer spend” in the wake of declining lager beer consumption, The Zimbabwe Standard reported on November 17.

Lager beer volumes dipped 10% in the wake of a review in excise duty that saw some retailers increasing prices by over 30%.

The company is pushing for excise duty reduction to drive lager beer growth.

However sales were down 4% to US$164 million driven by premium lagers which mitigated some of the losses despite a decline in volume.

Sparkling beverages and Chibuku grew by 9% and 8% respectively.

Announcing the group’s financial results for the half year ended September 30, Delta’s executive director in charge of finance, Matts Valela said the first half of the year had been tough and challenging.

He said the consumer was stretched and spending was generally soft across the market. “Consumers are looking for value. We are seeing some trending down as they search for value packs,” Valela said.

“We are trying to sweat our portfolio to deliver value.”

The growth in sparkling beverages was spurred by the rollout in PET where the company has flexibility in introducing various sizes, according to chief executive officer Pearson Gowero.

“The rollout of the 350ml PET packs for sparkling beverages helped to reduce price of convenience packs from US$1 to US$0,70. This makes it a lot more affordable and accessible and this should drive volume,” Gowero said.

Gowero said the company was failing to keep with Chibuku demand and Delta will invest in a new line to increase production.

“We will try to cover all the price points and capture consumer spend as much as we can.”

Gowero said Delta will expand in alternative beverages to deliver a wider choice to the consumer.

“We believe that these alternatives should see us maintain momentum hoping that there will be less turbulence,” Gowero said.


20 November, 2013