Heineken introduces Sol to SA to boost market share

SOUTH AFRICA – Heineken’s recent introduction of Sol Mexican lager to SA forms part of a plan to boost its market share in a market dominated by soon-to-be-acquired SABMiller.

The Dutch brewer brought Sol to SA in September and planned to add more premium brands here, country head Ruud van den Eijnden said on Tuesday.

Growth would also be achieved through established brands such as Heineken, Amstel and Windhoek, he said.

“South Africans love premium beers, with 39% drinking them on a regular basis,” Van den Eijnden said.

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South Africans spent more than R103bn buying beer in 2015, an increase of 9.1% from a year earlier, according to researcher Euromonitor International.

Heineken took full control of its South African operations in April after dissolving a joint venture with Diageo.

Its share of SA’s beer market had remained at about 10% over the past five years, dwarfed by SABMiller’s 80%.

SAB’s imminent takeover by Anheuser-Busch InBev would give the brewer access to more global brands and make competition even more intense, Van den Eijnden said.

“SABMiller is already a formidable competitor,” he said. “Its new parent company has even more financial firepower than SAB, so in that sense I think competition will intensify.”

Heineken added 300 jobs in SA this year, with 95% of these in its sales department, doubling its local sales team, Van den Eijnden said.

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That improved its ability to stock shelves and increase product sold, he said.

“It’s probably helpful that the market leader will increase its focus on premium brands as that will pull more customers up the ladder to buy these higher-value beers,” said Jonathan Fyfe, an analyst at Mirabaud Securities in London.

For Heineken, bringing in more premium beers was “stepping up its focus on these brands and a defensive move”.

Bloomberg

September 14, 2016; http://www.bdlive.co.za/business/retail/2016/09/14/introduction-of-sol-to-sa-part-of-heinekens-plan-to-boost-market-share

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