Women key to SABMiller’s SA salesComment on this story
Johannesburg - To get women to drink more at her pub, Susan Mathane is starting in the toilet.
The South African entrepreneur is working with SABMiller to give her bar -- Susan’s Place in Tembisa -- a facelift.
Last year she added niceties including extra couches, drinking glasses, a thatched roof and a pristine ladies toilet -- moves meant to transform her tavern into a place women would want to drop in and stay awhile.
Despite controlling about 90 percent of the South African market, where it first sold beer to thirsty miners more than a century ago, the world’s second-largest brewer struggled to grow last year amid rising inflation and increased competition from Heineken and Diageo.
So it’s working with 6,000 pub owners like Mathane, giving advice and sometimes funds to improve bars from the informal shebeens of apartheid to legal, safe taverns -- that happen to serve mostly SABMiller beer.
The brewer gets much of its revenue from emerging markets, making it both vulnerable to economic busts and well-placed to benefit from the booms.
In South Africa, a weakening rand and an unemployment rate hovering around 25 percent led the company to narrow its profit forecast in March.
“With demand being weak, the aim will be to recover market-share losses,” said Wynand Van Zyl, an analyst at Macquarie Group Svc.
“There is certainly opportunity to develop segments like female sales and drinking occasions in South Africa.”
Creating an environment where women feel comfortable gives the company more access to the 17 million South African women of drinking age.
At her pub, sales are up 20 percent since Mathane made the changes, including hiring a regular toilet cleaner in August.
She’s selling more of SABMiller’s Flying Fish, a citrus-flavoured beer, and Castle Lite, drinks preferred by the women who visit.
“We come here because Susan keeps improving this place, it’s safe and the toilets are very clean,” said Kgomotso Mbatha, 19.
Instead of meeting her friend for a bit of gossip and cup of tea at home, the two woman were whiling away the afternoon over a Brutal Fruit Mango-Goji beer and a Flying Fish, and planned to come back later with more friends.
While SABMiller now sells beer in more than 75 markets across the world, the country it once called home is still the second-biggest profit provider after Colombia and generates almost $5 billion in annual revenue.
With lager volume stagnant in the most recent quarter, SABMiller is fighting back by investing in retail, Managing Director Mauricio Leyva said.
“We’ll continue to gain share and protect our territory,” Leyva said in a May 8 interview.
“When growth comes in, we will be two steps ahead.”
For many, drinking legally at all in Tembisa, which means “to promise” in Zulu, is a relatively recent act.
The township was founded in 1957 as black people were evicted from Johannesburg under the apartheid plan to separate black and white South Africans.
During apartheid, black people weren’t allowed to buy clear or full-strength beer, leading to the emergence of illegal bars known as shebeens.
The makeshift bars -- sometimes no more than a couple of plastic chairs in the proprietors’ front room with no public toilet at all, never mind a private ladies stall -- became a cornerstone of South Africa’s drinking culture.
Their unregulated status made them dangerous by nature in a country where the murder rate is six times that of the US.
That and a high rate of devoutly religious people made South African women less likely to drink.
Today, almost half of the nation abstains, compared to a global average of 35 percent.
Bringing that total closer to the international figure mostly depends on women taking up drinking, Leyva said.
As South Africa’s black middle class of about 4.2 million grows, more taverns have opened and many illegal shebeens have become licensed.
SABMiller plans to spend about $5 million this year on the campaign to improve them.
Already, the company has painted the walls in the red of the Castle label or the green of Castle Lite.
Owners have tiled toilets and mirrors have been added.
“Their relationship with trade is very important,” said Chris Wickham, an analyst at Oriel Securities in London.
“What SAB’s consistently demonstrated is that they’re very strong and adept with the distribution system and it helps them maintain share.”
That share has been under increasing pressure for the past decade after Amsterdam-based Heineken and Diageo, the world’s biggest spirits maker, joined forces with their Brandhouse venture.
The business has grown sales at a rate of about 18 percent a year, selling a wider portfolio of products, including Johnnie Walker whiskey and Guinness beer, across the nation.
Bent on reversing that, SABMiller is also paying bar owners to buy from them.
The brewer runs two trade loyalty programs for smaller taverns via which owners can earns points for buying the company’s products.
The points can be exchanged for catalogue items ranging from grillers to hair clipper sets to children’s computer courses.
To get more women into the fold, the company has also been creating products that have a slightly sweeter skew, as well as providing glasses since many women don’t like drinking from bottles, Leyva said.
Still, Mbatha is hoping the company doesn’t attract too many women.
Part of the attraction of Susan’s for her is knowing she wouldn’t bump into her mother here -- the older women in her community still don’t often drink in public. - Bloomberg News