BEVERAGE giant Delta Corporation says its sorghum beer segment in Zimbabwe is benefiting from increased social activities following the easing of Covid-19 restrictions, which allowed the movement of people.
Delta, which is celebrating its 60th anniversary, said the resumption of social gatherings that had been banned as part of measures to contain Covid 19, subsequently led to 14% volume growth for the first quarter through April. June 30, 2022.
“The volume of sorghum beer in Zimbabwe increased by 14% for the quarter compared to the previous year, thanks to the standard product Chibuku (Scud).
“The category continues to benefit from increased social activities as we celebrate the 60th anniversary of the Chibuku brand,” Delta said in a business update for the quarter.
Consumer spending in Zimbabwe remains high, reflecting the faster velocity of the local currency, boosted by increased mining activity, infrastructure projects, marketing of cash crops and payment of wages and salaries in foreign currency foreign.
But demand is being constrained, however, by falling disposable incomes in some consumer groups, with inflation wreaking havoc on workers’ incomes.
Chibuku Super is however limited by the limited production capacity. To meet the challenge, a new Chibuku Super plant is being installed at the Harare brewery for commissioning in early 2023, according to the group.
The beverage group also said it has once again focused on expanding consumer choice.
The Chibuku Super Banana flavor was launched in June 2022 and is “exciting the market”.
United National Breweries South Africa delivered 13% volume growth for the quarter despite weather setbacks in some markets.
Says Delta: “Progress is being made in accessing additional market channels, new product and packaging innovations and winning over homebrew consumers.”
At Natbrew Zambia, volumes remained under pressure, down 9% for the quarter, following price increases implemented in January 2022 in response to higher excise duties.
Delta says there are signs of recovery in this market, which will be helped by expanding product offerings, revamping the route to market and Chibuku Super exports to the region.
Other Segments – Lager volume increased 19% for the quarter compared to the prior year driven by improved brand and pack offerings which benefited from the injection of returnable glass.
The segment has experienced intermittent supply shortages due to limited packaging capacity ahead of the installation of a new plant in early 2023.
The recently launched Sable lager has generated excitement in the market due to its “mild taste and ease of drinking”.
Sparkling beverage volume increased 32% for the quarter and continues to reclaim market share as the category benefited from a steady supply of product and an expanded packaging and flavor offering.
Volumes at wine and spirits maker Afdis jumped 18% in the quarter. According to the group, the supply of ciders has since stabilized, after the rupture of glass bottles in the last quarter and the activity continues to benefit from the local production of a few major brands.
At partner Schweppes, volume increased 9% for the quarter, which was limited by a shortage of fruit juice for flagship Mazoe Orange Crush.
The local fruit juice supply has resumed with the start of the harvest season in June 2022.
In terms of financial performance, Group revenue increased 55% for the quarter in inflation-adjusted terms, compared to growth of 283% in historical cost terms, reflecting volume growth and pricing based on replacement costs.
For the future, the company remains optimistic even if the disparities of the exchange rate in force in Zimbabwe and the lack of clarity of the legislation relating to the payment in foreign currency of certain taxes create uncertainties and important commercial risks.
“The company remains ready to exploit opportunities from activities that generate aggregate demand such as infrastructure development projects, mining activities and diaspora remittances,” Delta said.