INDuSTRY NEWS

DISTELL SEES 15% REvENuE GROWTH

2012 Cape Wine Guild Proteges - Chandre Petersen, Heinrich Kulsen, Philani Shongwe, Tamsyn Jeftha, Sacha Claassen, Elmarie Botes.

NEDBANK uPS INvESTmENTFOR TRANSFORmATION INTHE WINE INDuSTRY

Over the past six years, Nedbank has invested more than R1.3 million to transform the wine industry and has almost trebled its annual contribution for 2012 to enable more aspirant winemakers to join the Cape Winemakers Guild Protégé Programme. The bank has been a keen supporter of the Guild, which celebrates its 30th anniversary this year, for almost two decades. Nedbank’s R684 000 investment to the Cape Winemakers Guild Development Trust will boost the Guild’s Protégé Programme which currently supports six young qualified winemakers completing their three-year internships under the mentorship of some of the country’s finest winemakers. “To create a flourishing wine industry, we need a corporate investment to make things happen. And through the support of the Nedbank Foundation we are able to implement our Protégé Programme by giving these winemakers the ability to one day plough back their knowledge and expertise, and thereby help to create a sustainable wine industry,” says Louis Strydom, Chairman of the Cape Winemakers Guild. The Cape Winemakers Guild Protégé Programme, a first for the wine industry, was launched in 2006 with the goal of encouraging transformation by cultivating, nurturing and empowering promising individuals to become winemakers of excellence.

“Education and skills development are part of our Corporate Social Responsibility focus areas. Our involvement in this project is inspired by the realisation that education and skills development play a key role in growing the economy. We are pleased to see how the Cape Winemakers Guild Protégé Programme continues to make things happen,” said Kone Gugushe, Nedbank’s Divisional Executive for Corporate Social Responsibility. Students interested in applying for the Protégé Programme can visit the Guild’s website at www.capewinemakersguild.com Distell has posted an impressive 15% growth in revenue for the year to June 2012, despite subdued consumer spending in many of the markets where it trades. This growth has been bolstered by a 9.9% increase in sales volumes across its portfolio of wines, spirits and ready-to-drink (RTD) brands in both domestic and international markets and favourable exchange rate revenue rose to R14.2 billion. Earnings were impacted, however, by a once-off extraordinary excise duty provision amounting to R297.8 million as a result of a reclassification of wine aperitifs by the South African Revenue Service.

Referring to the increased sales volumes in all product categories, Distell Group Managing Director, Jan Scannell, says RTD brands and ciders have performed exceptionally well. “A suite of strong brands across the portfolio also meant revenue growth could be achieved without sacrificing margins. Gross margin improved to 34.7% from 32.7% a year ago.” He said the company was on track with its goal to increase the year-onyear contribution of export sales to revenue. The revenue derived outside South Africa, on a non-duty paid basis, comprised 27.5% of the total, up from last year’s 26.4%. In the domestic market, Distell had outpaced the rate of growth achieved in the national retail alcoholic beverage sector for the reporting period, Scannell said. The company had grown local sales volumes by 9.6%, while revenue had risen by 13.8% to R10.6 billion. Strong growth within the company’s spirits division came from brand leader Amarula, cognac brand Bisquit and the Three Ships whisky range. All three brands achieved double-digit growth. Nederburg had performed extremely well in the premium sector. Paarl Perlé and Autumn Harvest Crackling had also delivered excellent results in the popularly priced category. The company’s sparkling wines had marginally outperformed the industry average, while fortified wines had shown an exceptional growth in volume and value, led by Sedgwick’s Old Brown Sherry. Wine sales growth had been slightly below the national average of 4.3% but Scannell said that there had been some significant highlights.

CHIBuKuExPANDS ACROSS AFRICA LIquOR TRADERS DONATE uNIFORmSTOpupILS

SABMiller is expanding its African beer brand, Chibuku, into 10 countries across the continent. Chibuku is an opaque beer based on traditional African recipes using maize and/or sorghum, depending on local tastes.

The expansion of the brand more than doubles the number of Chibuku markets to four (Botswana, Malawi, Zambia and Zimbabwe) at the beginning of 2011.

Sold in one litre cartons, Chibuku is a low-alcohol beer that ferments in the package with alcohol strength increasing from 0.5% Alcohol by Volume (ABV) on day one up to 4% ABV on day five before expiry. Given its short shelf life it must be brewed and consumed locally. A new variant, ‘Chibuku Super’ was launched in Zambia in September. Chibuku Super is lightly carbonated, pasteurised - meaning it has a fixed alcohol content of 3.5% ABV - and is sold in Polyethylene Terephthalate packaging. Its longer shelf life means the distribution model for ‘Super’ is closer to that of a clear beer.

Chibuku Super has been brewed successfully on a small commercial basis in Zambia for the past 12 months. A larger plant has been commissioned at Kitwe, in the north of the country, to further grow this category. New ‘Super’ production lines will also be in place in Mozambique and Zimbabwe by the end of this year. Following successful pilot schemes in Ghana, Mozambique, Swaziland and Tanzania, full-scale Chibuku production has now been launched in each of these countries. A Lesotho pilot has been launched with commercial sales expected in the next few months and in Uganda a brand new plant is being planned as part of the new brewery under construction in Mbarara.

SABMiller’s expansion of Chibuku is part of its strategy to make more affordable beers for lower-income consumers across Africa, taking a share from the often unsafe ‘informal’ alcohol market. It also provides a guaranteed market for smallholder farmers through which SABMiller sources the maize and sorghum used in production. In the year ending March 2012, SABMiller sourced maize and sorghum from approximately 40 000 smallholding farmers across Africa. The National Tourism and Hospitality Association (NTHA) in Meadowlands have recently donated school uniforms to more than 170 underprivileged pupils from various schools in the area.

The NTHA was launched in 2000 and is an affiliate of the Gauteng Liquor Forum (GLF) which consists of shebeen and tavern owners. President of the NTHA, Fanny Mokoena, said this was part of their social responsibility initiative to give back to the community. “As responsible business people, we take it upon ourselves to help our community in any way that we can and where we see there is a dire need,” Mokoena said.

She said this was one of many social initiatives that the NTHA has undertaken to uplift the community and they were working with local Ward Councillors and Community Development Workers (CDW) to identify needy pupils from various schools in Meadowlands. Mokoena said after the CDW had conducted a thorough assessment at least three pupils, whose parents or guardians could not afford to buy them school uniforms, were identified and given uniforms. In addition Mokoena who’s also the chairperson of the GLF said that NTHA wanted to take the initiative to other areas in Soweto and make it an annual project. They realise that as a result of poverty and unemployment, and as local businesses, that they need to intervene and help needy members of their community. NTHA was instrumental in the establishment of the GLF and Meadowlands Tourism Development Centre which is a non-profit tourism development organisation.

Managing Director of SABMiller Africa, Mark Bowman said, “We have been investing heavily to grow capacity and stay ahead of demand across Africa. The expansion of our Chibuku operations illustrates how we are driving our affordability strategy, product innovation and maintaining momentum behind our ‘Farming Better Futures’ programme through this continued investment.”