SABMiller Plans Future Growth in Latin America
SABMiller plans to make its portfolio of beers and soft drinks relevant to more consumers on a broader range of occasions in Latin America. In the year ended 31 March 2015, Latin America generated the largest proportion of SABMiller’s EBITA, at $2.22 billion, representing 35% of the group’s total. EBITA for the region has grown at a compound annual growth rate of 11% from 2011 to 2015. Per capita consumption of beer currently sits at around 43 litres per year in SABMiller’s key markets of Colombia, Peru and Ecuador, and is less than half this rate in Honduras and El Salvador. In comparison with other markets in the region, such as Panama, Brazil and Mexico, where PCC sits between 65 and 70 litres, there is still considerable room for growth.
SABMiller believes the key to unlocking this growth is making beer the drink of choice on more occasions and for a wider group of consumers, and innovation plays an important role here. This is in line with the company’s strategy to drive superior topline growth through expanding the beer category and strengthening its brand portfolios.
For the year ended 31 March 2015, 12% of Latin American net producer revenue was generated by product innovation such as affordable bulk packs, additional light beer brands, new variants and SABMiller’s first non-alcoholic beer in the region, Aguila Cero in Colombia.
Karl Lippert, president of SABMiller Latin America, comments: “We have grown beer’s share of total alcohol in our Latin American markets from 55% to 59% in the past four years. This has been achieved primarily by taking share from cheaper spirits, and untaxed and inexpensive illegal alcohol. Our beers provide a safe, attractive and affordable alternative to illegal alcohol, which represents more than a fifth of the total alcohol market in some Latin American countries.”
He continues: “As we look to expand the beer category in Latin America, we plan to have an attractive beer choice for everyone, for men and for women, while having dinner with friends, relaxing at home, or out in a sophisticated high-end club. One of our greatest opportunities is to reach consumers when they’re at home. We estimate that annual consumption of packaged beverages at home sits at around 100 million hectolitres in our core Latin American markets. We can do more to grow beer’s appeal in this setting and the opportunity for us to grow the overall size, and the value of our beverage share of it is significant.”
