ZIMBABWE – Delta Corporation, Zimbabwe’s largest beverage company has announced a 51% growth in revenue in the nine months ended December 2021, with earnings jumping by 34% in the quarter.
The positive performance is attributed to Zimbabwe benefiting from slower inflation and increased use of foreign currency for domestic transactions, which triggered improved access to imported raw materials and inputs.
The trading environment was also characterised by increased social and economic activity as most regional countries relaxed the lockdown restrictions towards the end of the calendar year.
During the period under review, the beverage maker recorded significant volumes growth across all its segments.
The lager beer volume grew by 6% for the quarter and 33% for the nine months compared to the same period last year driven by product supply improved, benefiting from the injection of returnable glass and improved plant reliability.
There were, however, supply gaps on some brands due to global supply chain disruptions induced by COVID-19.
Meanwhile, the sorghum beer volume grew by 25% for the quarter and 50% for the nine months compared to prior year with Chibuku Super brand contributing 77% in the quarter.
Delta has indicated that there are ongoing interventions to unlock the capacity constraints on its Chibuku Super brand, in addition to the efforts to invigorate the standard Chibuku (Scud) product.
Other than registering growth in the beer category, its subsidiary manufacturer of branded wines, ciders and spirits, African Distillers Limited (Afdis), grew volumes by 32% for the quarter and 48% for the nine months.
This was driven by improved supply of ciders and other locally produced brands, on the back of better access to imported inputs.
Shifting focus to the soft beverage segment, Schweppes Holdings recorded a beverages volume growth of 15% for the quarter, benefiting from the increased economic activity and consistent product supply.
However, the 2021 intake of juicing fruit was below target due to higher exports of fresh fruit.
Crossing borders to Zambia, volumes at Natbrew grew by 2% for the quarter and was down 16% for the nine months.
The business continues to face competition from the non-excise compliant bulk beer players. There is concern that the increase in excise duty implemented in January 2022 will favour the illicit trade, further entrenching the uneven playing field.
Meanwhile, United National Breweries in South Africa recorded a volume growth of 2% for the quarter and grew by 49% for the nine months in comparison to prior year. The focus on this market is on expanding the trade channels and reach.
Zimbabwean economy is expected to continue registering growth in spite of the challenges related to an unstable exchange rate, high inflation and adverse impacts of COVID-19.
The Zimbawean business will continue to benefit from the growth in consumer spending driven by agricultural, mining, infrastructural development and general commerce.
The improved access to foreign currency will enable the company to undertake critical capital investments.
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