SAB has phased out small cans for some of its alcohol brands as consumers increasingly switch to bigger containers.
The maker of beer brands such as Castle and Black Label, and Brutal Fruit, Redds and Flying Fish ciders, said more customers were buying their alcoholic brands in 440ml and 500ml cans as they offer more value at almost the same price as the smaller cans.
“We've definitely seen a significant shift into cans, especially the larger format cans. We believe they provide better value for the consumer, who has been under significant pressure for quite some time now, and so consumers are always looking for good quality liquid and good quality brands at better value. It is also convenient for consumers,” said SAB CEO Richard Rivett-Carnac.
According to SAB, the beer industry returned to volume growth in 2024 after a decline in 2023 as high interest rates and inflation impacted consumers’ disposable income
He said the company had stopped production of some of the smaller cans and would continue to evaluate the portfolio.
“The can market is undoubtedly bigger than the non-returnable glass market.”
In its 2024 annual report, Nampak, one of the producers of cans, said the trend to larger beverage cans remained robust supported by alcoholic and energy drinks. The company is investing in its plants to increase capacity to service expected future demand.
SAB’s parent company AB InBev said this week that volume from South African operations for the year to December grew by mid-single digits and was estimated to have outperformed the industry in both beer and ciders. Earnings before interest, tax, depreciation and amortisation increased by the high teens with margin expansion.
The performance was led by Corona and Stella Artois, while the core beer portfolio, including Castle and Black Label, continued to grow, delivering mid-single-digit volume increases. The Beyond Beer portfolio grew volumes by high-single digits, driven by Brutal Fruit, Flying Fish and Redds, said Rivett-Carnac.
“Our full portfolio, across all price points and across all different types of alcohol, delivered strong volume growth, which converts into a strong financial performance.”
He said the cider market was “highly competitive with lots of players, all innovating successfully and bringing new products to the market. Where we see an opportunity for growth that is something we can do that is very similar to our business model and doesn't require significant changes to the way we go to market. We will innovate to try to get some of the growth that we see happening in that segment”.
According to SAB, the beer industry returned to volume growth in 2024 after a decline in 2023 as high interest rates and inflation impacted consumers’ disposable income.
Rivett-Carnac said that with inflation and interest rates coming down, and lower fuel prices, additional money was making its way into consumers' pockets.
He said the beer industry grows by between 1% and 2% per year, typically in line with population growth and GDP per capita growth “So we see the beer market growing, and we need to ensure that our brands within that market are performing well and at least holding share, ideally taking share within a growing market.”
He expects the premium beer segment to grow faster than the overall beer category.
“This is a global trend, and it's also true in South Africa, especially when the consumer isn't under a lot of pressure. It's very important for us to be investing in our global brands. So that's Stella and Corona for us in South Africa, and we've seen really strong traction behind these brands. They are relatively new to the market, but they're very big for us at SAB. We have invested significantly in marketing to ensure that they perform well.”
Rivett-Carnac said the group would invest in increasing capacity at its Prospecton and Chamdor breweries in KZN and on the West Rand.
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