BEVERAGES: Brandhouse Bruises Breweries
Recent Western Cape Business News
BRANDHOUSE Beverages, the Cape Town-based liquor company, has seemingly achieved what the combined might of the old Rembrandt Group and Louis Luyt could not.
Brandhouse - proba-bly better known for its spirits brand range (including Johnnie Walker, Jose Cuervo, Smirnhoff, Captain Morgan and J&B) appears to be successfully challenging the dominance of SABMiller in the local beer market.
Although Brand-house – which distributes and markets beers like Amstel, Heineken and Windhoek under licence – is mainly making inroads in the so-called ‘premium’ beer category, the latest advertising war in the beer sector suggests SABMiller is taking the challenge very seriously.
Around five years ago no-none would have contemplated that a serious challenger in the local beer market would emerge with SABMiller holding over 95% of the total beer market.
But the latest beer sales statistics suggest Brandhouse’s trio of brands are all gaining market share while SABMiller – in most categories – is losing ground.
Figures from AC Nielsen for the year ending March 2010 showed Brandhouse growing its beer sales by an average of 8.3% in the premium beer sector. SABMiller’s premium beer sales declined by 4.6% over the same period.
Perhaps more impressive is that Brandhouse has grown its share of the total beer market in the year to end March 2010 to 12.1% from 9.9% last year. That means SABMiller’s market share of the total beer market has dropped below 90%.
Brandhouse’s share of the premium beer market over the same period grew from 52.2% to 58.2%, suggesting that Amstel, Windhoek and Heineken are increasing their dominance of this segment.
At the end of March Amstel held 6.1% of the total beer market and 29.2% of the premium beer market. Heineken held 2.8% and 13.7% and Windhoek 2.6% and 14.5%.
SABMiller sales in the premium category make for scary reading. Castle Lite’s market share for the 12 months ending march 2010 dropped to 30.1% (previously 31.7%), Hansa Marzen Gold plunged to 3.6% (6.7%), Peroni slipped to 1.8% (2.5%) and Millers dipped to 3.7% (4.1%).
What the last three months AC Nielsen sales data shows is that the premium beer market (sales up by 18%) is growing much faster than the mainstream beer market (where volumes were only up 0.5%).
So it would not be surprising to see Brandhouse consolidating its market share gains.
The market share gains by the three Brandhouse beer brands also justifies a decision to build a new brewery in Sedibeng (which allows Brandhouse to produce locally in returnable bottles).
“It’s not only consumers who benefit from greater choice in beer. So does the trade. Growth in volumes means growth for our customers, especially those running township taverns, most of which are small and medium sized businesses which are driving growth in the South African economy,” says Brandhouse marketing director Gavin Pike.
Brandhouse Beverages was formed in July 2004 as a joint venture between Diageo, Heineken International and Namibia Breweries.
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