But to many Africans, hops and barley are foreign ingredients in beer. SABMiller, determined to grow its market share, has wised up and products like sorghum and cassava are increasingly part of the brewer's strategy.
It hopes this will be a creative solution to a big problem: high quality clear beers are too expensive for the majority of the African population. Instead many people choose to drink moonshine that is brewed by themselves or by small tavern owners — and of course quality control is weak or nonexistent.
In Kenya in 2000, 128 Kenyans died and 400 were hospitalised, many suffering blindness, after drinking an illegal home brew known as “kill me quick”. The batch of local brew chang'aa was laced with methanol, usually used in anti-freeze or as a car fuel.
SABMiller saw an opportunity. “We wanted to grow our market in a region where our products were unaffordable,” says supply chain and enterprise development director Gerry van den Houten. “We started exploring ways to bring down the cost of our product, to make it more accessible.”
The brewer has done extensive research in the nine African countries where it operates. It estimates that the total informal market has a value of more than $3bn. This is roughly four times the value of SABMiller's current volumes.
A big contributor to costs is raw materials. “Imported products are expensive — transport alone adds 15 - 20% to the cost of our imported raw materials,” says Van den Houten. “These are then processed in-country to make a product that is sold to a consumer with limited buying power.”
SABMiller did look at growing barley and maize locally. It also considered bananas and grains like millet, which is used in Rwanda. But it was cassava, a starchy root vegetable that grows in moist, warm environments, that really attracted attention.
A typical beer recipe for SA will use 70% barley malt and 30% maize. “Initially, the idea is to replace the maize with the cassava,” says Van den Houten.
“This will allow us to brew pilsener-style lager, using 60% barley and 40% cassava.”
The company's first move into cassava-based beer will be in Angola, where SABMiller is building a brewery that will produce 500000hl of beer and 2mhl of soft drinks annually. “We will brew our local brand N'Gola and replace the maize component as the supply of cassava increases,” says Van den Houten.
Van den Houten is confident the project will prove viable, though there will be “trials and tribulations along the way”. For instance, there are challenges to growing cassava commercially. It can grow in the ground for years, but it starts to deteriorate as soon as it's harvested. This means farmers need to be within a 30km radius of the brewery and the crop needs to be collected daily. Van den Houten estimates that 300-500 farmers will be needed.
SAB is not a rookie at this. Its 100%-sorghum beer in Uganda, Eagle, is the biggest beer brand in that country.
In 2002 SABMiller faced tough competition from East Africa Breweries. “We wanted to improve the viability of our business there, grow the category and steal a march on our competitors,” says the technical director of SAB's Zambian brewery, Ian Macintosh.
The brewer engaged with government and its research institutes to find and develop a cash crop that could be used in the brewing of a premium beer. A particular strain of sorghum was found and seeds were developed jointly with the government. “We supported farmers to grow the sorghum for us commercially.”
Initially sceptical, the farmers grew enthusiastic with each harvest and subsequent sale of their product to SAB. “We saw a profound effect on the population. Within a couple of years there were visible signs of change: people were using bicycles, children were back in school, and people could afford primary health care,” says Mackintosh.
The beer, sold at 80% of the price of the mainstream product, has been a success since its launch in 2002.
In the past 12 months, sales of Eagle Lager & Eagle Extra (launched following the success of Eagle) exceeded 400000hl, accounting for 50% of SABMiller's sales in Uganda.
Source: Financial Mail
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