AB-InBev wants to make consumers trade up from homebrew

Nothing new under the African sun, really. Like SABMiller before, AB-InBev hopes to drive African sales with cheaper beer to lure more drinkers to commercial beer, AB-InBev’s Africa head Ricardo Tadeu said on 13 April 2017.

“In many (African) countries people drink between nine to eleven litres (of commercially produced beer) per person a year, so there’s lots of room for growth,” Mr Tadeu said.

“We need to develop our mainstream beer, make it affordable enough to tap into the informal beer market, not only informal beer but informal alcohol in general that you have in those markets.”

Informal alcohol is estimated to be four to ten times the continent's commercial market, due to tradition and Africans’ spending power.

Despite an economic slowdown in most countries, including South Africa and Nigeria, Africa’s thirst for beer shows no signs of being sated. Analysts estimate the market will grow on average by five percent until 2020, faster than Asia's projected three percent.

To boost sales, AB-InBev has already launched its global brands Stella Artois and Corona in South Africa in January this year and plans to introduce Budweiser there later this year.

There is also talk that AB-InBev will invest USD 400 million to build a new brewery in Nigeria, a market dominated by Heineken and Diageo/Guinness.