South Africa

SAB making more beer than ever – while competitors suffer

South African Breweries (SAB) is making more beer than ever from its local operations, with it saying its core beer portfolio is outperforming expectations and global brands are growing strongly. 

This was revealed in SAB’s parent company, AB InBev’s full-year results for 2023. The global beer giant grew revenue by 7.8% despite declining sales volumes in the US market. 

AB InBev purchased SABMiller for $107 billion in 2016, uniting the world’s two largest brewers to form the largest beer company. Combined, they control roughly half of the entire industry’s profit.

SAB owns some of the most valuable brands in the country, including the country’s most valuable brand – Carling Black Label. 

The South African unit was one of the standout performers for AB InBev, managing to report double-digit revenue growth and high single-digit profit growth. 

Its core beer portfolio, including brands such as Black Label and Castle, continued to outperform. Its global brands grew volumes by more than 30%, driven by Corona and Stella Artois.

SAB also said that beer’s share of the alcoholic beverage market had grown to above pre-pandemic levels in South Africa. 

SAB currently operates multiple breweries, malt plants, and agricultural operations in South Africa. 

In 2022, the company invested R920 million into its Prospecton and Ibhayi breweries, supporting over 24,000 jobs throughout the beer-making process. 

This is a part of SAB’s total investment in the South African economy of R4.5 billion, with the overall goal of creating 10,000 jobs in the country. 

Currently, SAB directly employs 5,657 people in South Africa. The total value chain is estimated to support over 140,000 jobs among its 3,739 suppliers and 1,277 farmers in South Africa. 

From farm to bottle, SAB beers are 97% locally sourced.

SAB’s performance stands in stark contrast to that of its largest competitor in South Africa, Heineken Beverages. 

While SAB produced record volumes of beer last year, Heineken wrote down the value of its local business, €491 million (R10 billion), due to higher inflation and lower sales in the country. 

On 26 April 2023, Heineken completed the acquisition of Distell and Namibia Breweries, which have been combined with Heineken South Africa into Heineken Beverages. 

The Dutch giant said the reason for this acquisition was to access significant future growth opportunities in southern Africa and expand its non-beer business. 

Buying Distell gave Heineken ownership of some of the largest ready-to-drink brands in the world, including Savanna and Hunter’s, as well as other brands such as Amarula. 

The purchase of Distell boosted Heineken’s cider business substantially, with this unit producing over 7 million hectolitres. 

Heineken said its cider portfolio outperformed in South Africa, and Savanana’s position as a market leader was enhanced. 

However, this was insufficient to make up for declining beer volumes in the country. The new Heineken Beverages unit saw its revenue decline by low single digits. 

The declining sales of its beer brands in South Africa were part of the reason for Heineken significantly writing down the value of the Heineken Beverages business. 

As of 31 December 2023, the company said an impairment of €491 million (R10 billion) had been recorded in relation to Heineken Beverages or 16% of the total value of the business. 

The lower current valuation of the business reflects an increase in the cost of capital used for impairment testing over this time period due to high interest rates in South Africa. 

Inflationary pressures and higher promotional activity to address a more challenging competitive environment also played a part, Heineken said. 


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