SABMiller`s African strategy: halving the price of beer, doubling the price of beer

Africa’s beer industry is becoming increasingly competitive with multinational drinks companies such as SABMiller, Diageo and Heineken battling it out for market share. Rapid economic growth also creates the expectation that beer sales on the continent will only go up over the coming years. Nigeria is already the biggest market for Guinness stout after the UK.

SABMiller, the world’s second largest brewer by volume, is following an interesting strategy in Africa. It wants to drop the price of beer for lower-income consumers, while at the same time attracting more drinkers to its premium green bottle brands. The company’s brewing and beverage operations in Africa cover 15 countries. A further 21 are covered through a strategic alliance with the Castel group and it also has an associated undertaking in Zimbabwe.

A beer for less than two hours of work

SABMiller wants to make beer more affordable to the average African, a strategy it believes will boost sales volumes. “Beer is very expensive in Africa. We talk about an average of about US$1 a serve, which is anywhere between three and five hours of work for the average African,” said Mark Bowman, managing director for Africa at SABMiller, during a recent presentation in London. “The challenge for us is to try and find what we believe is a sweet spot area of below two hours of work, which will allow strong acceleration of beer growth above the rates that we’ve been used to.”