SABMiller has about 200 brands, and operates in 15 African countries. Within that big picture, where does Zambia fit in and how important is it?
Zambia fits into the African stable, as one of the top four or five focus countries for Africa, because of the opportunities for growth that we have seen that the Zambian economy presents. Zambia fits in the same perspective as Tanzania, Mozambique, and Nigeria, so Zambia is in there as one of the key markets for SABMiller in Africa.
What trends are you seeing in consumption?
I think the underlying thing is that Zambia is still fundamentally underdeveloped. I am sure you read the statistics; about 60% of people are living below the poverty line. So, we still see affordability as a key issue in terms of being relevant to Zambian consumers. However, in that area, Zambian consumers are like all other consumers; they are looking for choice, so even in the area of affordable beverages, there is quite a bit of competition and fragmentation, and that is why you see spirits being reasonably strong. We are not talking about premium spirits, but more mainstream and cheap spirits, especially at the lower end where affordability is key. However, we are seeing the impact of a growing middle class. As the economy grows, you see this emergence, and you can see that the middle class is growing quite strongly just from residential construction in areas like Lusaka. So we are obviously seeing a preference for more premium products, with which one can differentiate. We are trying to make sure that we stay relevant to this consumer with the global brands that we have here, such as Miller Genuine Draft and Peroni. Also, we have re-launched Mosi Gold, and we are really excited about the initial reactions to that.
How do you source your raw materials, and how do you see that sector advancing?
Agriculture is central to our strategy going forward. In fact, we have a new global sustainable development vision that we launched a few months ago called “Prosper." We are looking to articulate agriculture there as one of the key imperatives that underpin the success of our business going forward. For example, supporting productivity in brewing crops also improves productivity in agriculture generally. For five seasons now we have had a program where we source all of our barley locally in Zambia. We started this as a pilot program five seasons ago, and we were actually quite blown away by the success we had. The barley grain is very successful in Zambia and it is a commercial undertaking because of the nature of the crop. It is a winter crop, and it requires irrigation and is quite technical, a bit like wheat. We achieve incredible yields here; our best farmers achieve yields of over 10.5 tons per hectare, which is actually quite staggering. The other area we have been involved in agriculture is the sorghum that we use for our Eagle Lager. We have not had a direct relationship with the growers in the same way as we have with the barley growers, but it is an area where we continue to progress and we have been trying to work out the kinks in the technical area. There is another one that I have not mentioned and that is our relationship with Zambia Sugar for its input into our soft drinks. Of course, there is maize, which you can over look because it is such a widely available crop in Zambia. However, maize is obviously the main ingredient of our opaque beer, Chibuku.