Bottles of Heineken beer. Picture: Reuters.

Harare - Zimbabwe might be in the midst of an economic slowdown but the country’s populace still boasts of being top beer guzzlers.

But their thirst for beer, which continues to bloat because of low disposable incomes, now has to be quenched by cheaper beverage alternatives.

And for Delta Corporation, the SABMiller Zimbabwean associate unit, the numbers are telling: a steep decline in lager beer volumes in the past two quarters has seen the Chibuku opaque beer segment rise.

Delta enjoys a dominant position in the Zimbabwean beer market.

It only faces competition from imports and brewers of traditional beer in the country.

But Chibuku has particularly come to the rescue of the company, with a new variation, the Chibuku Super, providing a longer shelf life and increased portability.

Delta has a diverse product portfolio mix, even beyond the beer segment, as the company is also into sparkling beverages, the non-alcoholic opaque and nutritious maheu, as well as juice and dairy-based soft drinks.

Some are clearly aimed for the top end of the market and others for low earners, a strategy that has works well for the company.

The premium lager beer market faces competition from imports such as Heineken, Amstel and Carlsberg.

There is also a sizeable portion of the market that has turned to spirits.

But with Zimbabwe’s economic problems mounting, a greater percentage of the market in the country has now shifted to Chibuku, development officials at the company have acknowledged.

“Consumption of beer in Zimbabwe is very high, with 12.9 percent of total annual consumption and 10 percent of consumers incomes being spent on beer, per annum,” according to an IH Securities research report on the consumer market in Zimbabwe.

Maxen Karombo, an executive director at Delta, said beer consumption patterns in the country were shifting towards affordable brands as a tough economic environment eroded disposable incomes.

“There is general slowdown across all beverages, not necessarily moving to Chibuku and spirits but shifting towards cheaper beverage alternatives,” said Karombo.

Anymore Taruvinga, an economic analyst at AfrAsia Bank in Zimbabwe, said: “People are now consuming less lagers. Among those who had switched to lagers, were others who were on middle income but because people are losing jobs, they have had to revert to Chibuku.”

Analysts at IH Securities said in a report on Delta this month that: “While lager volumes fell [in the half year to March], premium brands helped to mitigate volume loss on revenue and overall market share remained consistent.”

In the three months to the March, lager beer volumes declined 26 percent, a situation attributed to high excise duties and declining disposable incomes.

This translated to an overall 6 percent fall in total beverage volumes for the quarter despite Chibuku sales volumes rising 10 percent.

The subdued lager beer sales volumes “reflects both softening demand and the impact of high consumer prices driven by the high levels of excise duties”, Delta – due to release its full year earnings next month – said in a recent trading update.

There is also great potential for further growth if the country – considered the 12th highest consumer of alcohol in Africa – re-emerges from its current economic slowdown which has seen the country sink into deflation.

The World Bank on Friday reduced this year growth projection for Zimbabwe from 4.2 percent to 3 percent against ambitious government projections of 6.1 percent, which economists say are unrealistic.

However, most brokerage firms in Zimbabwe are maintaining bullish sentiment on Delta’s listing on the Zimbabwe Stock Exchange (ZSE).

Delta’s stock on the ZSE eased to close Friday’s trading session at $1.11 (approximately R11.80).

Foreign investors appear more interested in buying stock in the company.