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Zim favours traditional beer as economy sinks

Harare - Zimbabweans have turned to traditional beer consumption as the country’s economic situation continues to head south.

According to Delta Corporation which is owned by SABMiller [JSE:SAB], Zimbabweans consumed 2 037 000 hectolitres of the company’s traditional chibuku beer for the six months ended September 30 2014. This is a 14% increase from the 1 794 000 hectolitres consumed during the prior comparative year.

In contrast, lager beer consumption declined 25% to 695 000 hectolitres against 925 000 hectolitres consumed prior year comparative.

Volume contribution by beer category shows traditional sorghum beer now contributes 75%, up from 66% prior year comparative. On the other hand, lager beer volume contribution has declined to 25% from 34%.

Commenting on the results, the company’s management said the decline in lager beer volume was on the back of depressed consumer spend as the economy continues to decline.

“The period under review was characterised by consumers searching for value, and switching to affordable sorghum beer,” said the company’s management at its results briefing held on Wednesday.

Middle class on the wane

Analysts said the decline in mainstream lager volumes and the apparent switch to affordable traditional beer is also indicative of the declining middle class in the country.

“If you look at the trend, premium and expensive brands have been resilient while the main stream brands such as your Castle and Lion Lager have given way to cheaper and affordable traditional beer.

“This is an indication that the middle class is falling and the country is now left with two categories, the rich and the poor,” said analysts.

According to Delta the consumption of premium brands grew to 26% from a share of 19% prior year, while the consumption of mainstream lagers fell to 68% from 73% prior year comparative.

While Zimbabwe's middle class is in decline, more than one in three Africans have entered the middle class over the past decade, with their numbers set to increase due to rapid economic growth.

At least 370 million Africans, or 34% of the continent's 1.1 billion people, are described as members of the middle class, according to a survey by the African Development Bank.

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