Zimbabwe’s African Distillers Limited reports rise in sales volume triggered by surge in wine demand

ZIMBABWE – African Distillers Limited (Afdis), manufacture, distributor and marketer of branded wines, ciders and spirits in Zimbabwe, has reported 81% jump in revenue to ZW$8.7 billion in the nine months to March 31, 2022, compared to the same period the prior year, driven by increased sales volumes.

Its sales volumes increased by 36 percent, benefitting from stellar demand in the wines and ready to drink (RTDs) segments which rose 65 percent and 50 percent, respectively.

It is important to note that in the last quarter of the year, growth in the RTD segment was severely curtailed by the regional shortage of glass with the Hunters’ brand being the most affected.

“Covid-19 restrictions impacted negatively on glass supply from South Africa thereby affecting our ability to meet demand on some brands in the final quarter,” said chairman Matts Valela in an update for the period to March 31, 2022.

However, Afdis has highlighted that the group is making efforts to widen its glass supply base to minimise product shortages by turning to other markets as its source for the highly needed packaging and not solely rely on South Africa.

The strategic move is timely as the drinks maker is nearing completion of its new US$1m cider fermentation plant.

The business environment during the review period was generally stable, but foreign currency shortages remained a challenge.

Towards the end of the year, the economy experienced significant foreign exchange rate volatility which posed a negative impact on businesses across sectors.

“Resultantly, value chain costs increased necessitating frequent price reviews,” said Mr Valela.

Afdis, however, is benefiting from the foreign currency sales, which are boosting liquidity for the company making it easier to fund external supplies of raw materials and capital equipment.

“The ability of the business to continue trading in foreign currency helped in sustaining the company’s import requirement,” he stated.

While the business environment is expected to remain challenging, Afdis indicated various mitigatory measures had been put in place to keep the business sustainable.

Management says it will maintain its focus on revenue and profitability growth opportunities through product innovation, market share protection, production efficiencies and cost containment.

Afdis also seeks to focus on localising some of its brands, riding on a stable operating environment.

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