South African Breweries

COMPANY PROFILE

2015

South African Breweries

+27 11 881 8111 | www.sab.co.za

company profile

Leading a positive change Editorial: Harriet Pattison

Operating seven breweries and 40 depots across South Africa, SAB continues to stand as the country’s premier brewer and leading distributor of soft drinks and beers. There is so much more to this company than just beer however – and through numerous investments, development and sustainable programs, SAB is hoping to use its 100 years’ worth of reputable expertise and economic standing to make and build a stronger and more influential South Africa.

With more than 200 established, popular brands under its belt, South African Breweries (SAB), the subsidiary of SABMiller plc, was founded well over a century ago in 1895. Today, SABMiller stands as one of the largest brewers by volume in the world with brewing and distribution agreements spread across 75 countries.

Playing an integral role in the national economy 115 years since its inception – for every R1 in sales revenue generated by SAB during 2009, a total of R2.02 was added to South Africa’s GDP – SAB continues to maintain its position as the country’s premier brewer and a leading distributor of beer and soft drinks.

With an annual brewing capacity of 3.1 billion

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litres, SAB operates seven breweries and 40 depots in South Africa alone, with a portfolio including five of the country’s favourite beer brands – Castle Lager, Carling Black Label, Hansa Pilsener, Castle Lite and Castle Milk Stout, not to mention the increasingly popular market of flavoured beers headed up by the Flying Fish brand.

One of the country’s most well-loved beers, Carling Black Label, first emerged into the South African Market in 1966 and began winning awards from the offset – honoured twice at the World’s Best Bottled Larger competition – it has a total of 25 international awards now under its cap for taste and quality. More recently, it was awarded a 3 Star Gold Superior Taste Award at the International Taste and Quality Institute held in Belgium in 2012.

Through the years, Carling Black Label – the Champion Beer - has established its market,

South African Breweries

representing the hardworking men of South Africa, appreciating them as ‘champions’ for their drive and commitment to South Africa and consistent hardwork.

A brand under SAB aimed at the younger generation and created in the summer of 2012, is Flying Fish - combining the traditional flavours of malted barley and hops, the twist is the addition of real fruit juice, creating a truly refreshing fruit flavoured beer.

Speaking to SAB’s Market Development Manager, Hilary Jamieson last year, she explained: “Flying Fish is aimed at younger adult consumers aged 1824. Amongst these consumers are beer rejecters so we asked how we could make beer more appealing.

They suggested adding some lemonade, so the lemon variant appealed.

“Our biggest challenge is getting it into the hands

of beer rejecters and convincing them that this is a product which doesn’t smell like a beer or taste like a beer. An increasing number of consumers are now adopting Flying Fish as part of their regular repertoire.”

Earlier this year, SAB announced it had acquired the London based craft beer company, Meantime, for an undisclosed sum. Looking to capitalise on the growing international popularity of craft beers, SAB said in a statement: “Meantime is a pioneer in British modern craft beer, giving SABMiller an entry point into the fastest-growing segment of the UK beer market.”

From its fairly recent establishment in the Greenwich suburb in London in 1999, Meantime has highlighted its popularity within the market, with the volume rising by 58% in 2014, despite the overall growth within the British beer market rising by just 1% during the same year.

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company profile

A NAMIBIAN MILESTONE

“We believe there is strong potential for profitable growth in both beer and total beverages in Africa” PAGE 4

In September last year, SABMiller’s very first Namibian brewery began operations with bottles of Carling Black Label. With a capacity of 260,000 hectolitre, the new $33.3 million brewery in Okahandja was finalised in the final quarter of last year.

Previously exporting all its beer from South Africa, this marks a significant milestone for the company with its investments in the country starting to pay off. This milestone also highlights the potential Namibia holds and with SABMiller’s investment, it will help to promote long-term growth, corresponding with the national government’s 2030 Vision for an industrial nation.

With a focus on sustainability, the Namibian brewery will be one of SABMiller’s most environmentally friendly breweries of its size in the world. Using just 3.25 litres of water per litre of beer in the brewing process, the additional green statistics are impressive – with at least 30

South African Breweries million non-returnable glass bottles converted into returnable bottles and previously used cardboard packaging replaced with plastic crates. A significant reduction in carbon and landfill emissions are also largely due to the benefits of local production and distribution.

Newly appointed Managing Director of SAB, Mauricio Leyva, explained: “We expect the new Okahandja brewery to contribute to the creation of a vibrant manufacturing sector through which we will accelerate the emergence of small and medium sized Namibian businesses and help create a growing population of skilled employees by supporting education and providing training.”

A CHANGE IN MANAGEMENT The first non-South African to head up this local company with origins tracing back to 1895, Mauricio Leyva took over as Managing Director of SAB in January 2013, after joining the SABMiller group in 2005.

Alan Clark, Chief Executive said in a statement: “Mauricio Leyva has done an excellent job in South Africa since his appointment last year, in very challenging economic conditions. His skills, leadership and track record make him a great choice to lead our South African business and I am confident that it will continue to thrive under his leadership.”

The last few years have certainly seen many significant changes at management level with Norman Adami, Chairman of SABMiller Beverages South Africa, standing down in July last year before retirement and a consolidation of SABMiller’s South African and African regions into one for management purposes taking effect with Mark Bowman at the helm.

Serving with the Group since 1979, Adami successfully led SAB as Managing Director for nine years and enjoyed over two decades as a member of the SABMiller Executive Committee.

“For the past 35 years, I have considered it a unique privilege to be part of the SABMiller team, and am truly grateful to have worked alongside such passionate, dedicated people. I am especially proud of everything that has been accomplished in the past five years.

“SAB’s future is bright and the leaders of SAB, ABI and Appletiser are in a great position to lead their teams forward. I have every confidence these strong

leaders will continue to build on our proud heritage as one of South Africa’s most admired and respected companies,” said Adami.

Speaking of Norman Adami’s retirement and the potential of SAB with these new changes, Clark said: “Norman has made an enduring contribution to the SABMiller group over many years and in many roles, and his passion, commitment, and deep business insights will be sorely missed. He has been a stalwart of our business for 35 years, and on behalf of all of my colleagues and our shareholders, I would like to thank Norman for his support, friendship and inspirational leadership, both in South Africa and as a member of the SABMiller’s executive leadership team, and to wish him and his family every happiness on his retirement.

“As we look to capitalise on our global scale and presence, we see significant advantages in managing all of our African businesses as one region. We believe there is strong potential for profitable growth in both beer and total beverages in Africa, and, by harnessing the skills of our South African

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and African business in a combined Africa region, we believe that we will be better placed to access growth prospects across the entire continent.”

A SOCIAL CHANGE Actively looking to lead a real social change, SAB, as the prominent and leading alcohol beverage company in South Africa, is looking to influence this positive change and lead by example. Across South Africa, irresponsible alcohol consumption and abuse remains high by global standards, resulting in a serious influence on society, subsequently leading to a negative impact on the SAB business.

In helping to counteract these adverse effects, SAB’s strategy is focusing primarily on its employees – ensuring an understanding of the company’s approach and of the issues surrounding alcohol abuse, leading to a zero-tolerance approach and a responsible and effective marketing scheme.

SAB is also looking to build upon existing relationships with key industry leaders and government, ensuring a combined effort in the fight against alcohol abuse, further helping in its drive to advance normalisation of the liquor industry.

Lastly, is the company’s investment in real impact programmes, primarily aimed at changing behaviours and attitudes towards Foetal Alcohol Syndrome (FAS), drink driving, Responsible Trading and underage drinking.

Through the implementation of these strategies, SAB wants to go beyond the education of alcohol abuse and look at amending the behaviour – providing accounts of the serious effects and impact that it can have – it hopes to provide a support system, inspiring people to change.

With greener initiatives and sustainability such a growing force in South Africa, especially amongst businesses, SAB is doing its bit. With water usage relatively high in the brewing process, the company hopes that, by 2020, it will achieve a world-class water efficiency target across its operations, using on average 3.0 litres of water for 1 litre of beer. And with each brewery it manages across the country, SAB is building its understanding of water resourcefulness and efficiency and the benefits this can bring to communities.

‘A productive land, a productive world’ – SAB is working to create secure and sustainable

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South African Breweries

“SAB’s future is bright and the leaders of SAB, ABI and Appletiser are in a great position to lead their teams forward”

supply chains for malting barley, (the main brewing crop), and more local brewing crops.

Helping to support its farmers, the company wants to ensure in sourcing the crops, it helps to improve food security and resource productivity for local communities with the aim to source 90% of its barley locally.

Employing close to 9,500 people – 75% of which are from previously disadvantaged backgrounds – SAB’s operations support a further 37,000 jobs at its first round suppliers.

And with every individual job offered by SAB, an average of 6.7 additional jobs are supported across the South African economy – accounting for 355,000 full time jobs in the country, all of which can be attributed to SAB and its productions.

Through its various social responsibility programmes and continued investments – SAB is implementing a positive and influential change for South Africa and its people which will, no doubt, be seen and felt for many more years yet

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