DECLINE in beer volumes in the country could be an indication that the ‘waters of freedom’ are not making people as happy as they used to do. 
A decade ago, Friday nights and Saturdays were drinking beer slots, just as much as Sundays were reserved for worship.
According to a trading update released by Delta Corporation on Monday, the brewer reported a 10 percent decline in revenue in the quarter to December 31, 2016 on depressed demand and reduced production.
In the nine months to December 31, 2016, revenue was down nine percent compared to the previous year.
Quarterly lager beer volumes were down one percent on the prior year and eight percent lower over the comparable nine month period. Delta is an economic bellwether and its lukewarm performance over the festive season, which traditionally is characterised by heavy drinking, reflects the extent of Zimbabwe’s economic troubles.
Government said the economy registered a 0,6 percent growth in 2016. Sparkling beverages volumes were down 11 percent for the quarter and six percent below prior year for the nine months to December.
Delta said this category was adversely impacted by increased imports from neighbouring countries. Sorghum beer volumes decreased by four percent for the quarter but were up two percent for the nine months. Delta said the decline in the quarter reflects the disruption to production due to water cuts affecting the Chibuku Super plants in Chitungwiza and Bulawayo.
The new Chibuku Super plant in Kwekwe was commissioned in December while the Masvingo one is expected to start production next month. Apart from the supply disruptions during the period under review, could the decline in light beer sales be attributed to the growing sophistication of Zimbabwe beer drinkers, who are increasingly opting for more flavourful craft-brewed offerings, imports, and ciders?
Or are more people now offering their lives to Jesus Christ, as evidenced by the mushrooming of churches, and consequently ditching the brown bottle? Or could it be a matter of changing priorities due to the unstable economic environment and dwindling disposable incomes? Or is it that imbibers are now more health-conscious?
Lagers seem to have now become some form of a status symbol as few now afford them. Not so long ago most people would avoid being seen holding and drinking opaque beers as they were considered a brew for loafers and the less enterprising, but now for many it is what their pockets can afford.
The beverage giant should consider production of the affordable traditional beers as mainstream lager volumes are declining due to shrinkage in disposable incomes as the country’s economic environment is not showing signs of improvement.
Delta, has market capitalisation of US$1,145 billion and is the Zimbabwe Stock Exchange’s biggest stock.
Analysts say the decline in main stream lager volumes and the apparent switch to affordable traditional beer was also indicative of the declining middle class and reduced disposable incomes. The trend has shown that premium and expensive brands have been resilient while the mainstream brands such as Castle and Lion Lager have given way to cheaper and affordable traditional beer.
Delta is currently trading under caution with respect to the notice received from The Coca-Cola Company (TCCC) advising of an intention to terminate the Bottler’s Agreements with the group entities following the merger of AB Inbev and SabMiller and the joint Statement by TCCC and AB InBev indicating an agreement in principle that TCCC will purchase AB InBev’s interests in bottling operations in various markets.
Delta said the joint statement pronounced their strategic intent with no specific position having been reached with respect to Zimbabwe. “The board and the parties remain engaged on the matter. Shareholders will be advised timeously of any significant developments.-Fingaz
