Emerging beer markets - Africa and Tanzania.
MBAA TQ vol. 34, Number 3, Pages 208-211 VIEW ARTICLE
With the exception of South Africa (where the brewing industry and beer trade are more like those of Europe and North America than those of the rest of Africa), beer production and consumption in most African countries are on a very small scale, largely because of prevailing economic conditions which give much of the population little if any purchasing power once they have obtained the basic necessities of life. In the few countries where there is a higher degree of industrial development and more people have some disposable income not required for mere survival, beer consumption is higher and can be expected to grow if prosperity increases (as has happened in Asia and Latin America). However, there are also opportunities for profitable investment in countries where consumer purchasing power is relatively low if allowance is made for local conditions. For instance, instead of relying wholly on European style beer (mostly lager), which is expensive to produce under tropical conditions and thus difficult for poorer consumers to afford, a brewing company might also produce a commercial version of traditional African opaque beer (which can be profitably sold at a small fraction of the normal price of European style beer, and is already brewed on a large commercial scale in South Africa and a few other countries, although in most of Africa it is only made by home brewers). It is also possible to develop a profitable European style brewing operation if the initial funds are available for investments in modern efficient equipment, maintenance resources and supporting facilities, as production costs may then be reduced sufficiently to permit a profit to be made on a reduced sale price which more consumers can afford, as is shown by the example of Tanzania Breweries, which achieved a dramatic growth in sales volume following the acquisition of a substantial share in the company by South African Breweries, despite the fact that the economic situation in Tanzania changed little if at all between the share purchase and the time of writing.
Keywords : beer brewing industry consumer consumption costs economics investment market production sales