FDBusiness.com

SABMiller is targeting further beer volume growth and share gains in its Latin American division over the next 3-5 years. Latin America is SABMiller’s biggest contributor to group profitability and represented some 32% of group EBITA in the year to March, 2012. In the year ended March 2012 SABMIller reported EBITA of $5.6 billion and group revenue of $31.4 billion.

SABMiller has grown the beer category’s share of total alcohol consumed in its Latin American markets significantly. However, while beer consumption in its three largest markets – Colombia, Peru, Ecuador – has grown to an average rate of 42 litres of beer per person, consumption is still well below the levels reached in reference markets like Venezuela, Panama, Brazil and Mexico.

Beer also remains an expensive and aspirational product for many consumers, with around 80% of the population in SABMiller’s Latin American markets considered low income consumers. A key part of SABMiller’s strategy in the region is to attract these consumers away from low quality local spirits, often produced and sold illegally, by providing affordable alternatives in its portfolio.

Karl Lippert, President of SABMiller Latin America, says: “The outlook for our Latin American markets remains positive. The work across our markets in making products affordable and accessible, simultaneously premiumising our portfolios and exciting consumers with innovative new offerings, continues to drive our business. By targeting new consumer occasions and enabling real choice we are enriching the lives of consumers across the region. We believe we can continue to deliver mid-single digit volume growth and upper-single digit revenue growth for the foreseeable future.”

Bavaria, SABMiller’s subsidiary in Colombia, recently introduced larger bottles for Aguila variants, Poker and Pilsen, which sell at a discount of over 20% to mainstream beer retail prices. These larger packs are shared among friends and provide low income consumers an affordable alternative to cheaper local or illegal spirits. In Peru, making products more accessible in areas with poor infrastructure, such as Cono Sur outside Lima, has helped outlet owners to avoid expensive trips into the city, and supported important share gains.