HomeBusiness DigestBoom Goes the Scud..!

Boom Goes the Scud..!

EARLY this year, Delta CEO Joe Mutizwa spoke of sexing up the company’s products. But cynical market analysts felt that there was no need to pimp any of his products. Customers did not care whether beer came in white bottles or blue ones, they felt.

The market had not remotely considered a return to the plastic-coated shake-shake in place of the brown recyclable plastic containers, known as “scuds”, for traditional beer. The “shake-shake”, once a famous brand among Delta’s low-end consumers, had been replaced by the scud.
The revolutionary scud packaging came in 1991 at about the time of America’s Operation Desert Storm in Iraq.
Scud missiles, along with much of the rest of Iraqi military equipment, came from the former Soviet Union. There is a huge difference between a warhead and packaging for an African brew although their potency can be compared — so whichever consumer coined the name, which stuck on the product immediately, must have had one drink too many.
And that is not something Delta will complain too much about; the game now clearly is to drive volumes.
After a decade and half without the shake-shake, it needs a good shake before consumption, the legendary cardboard carton is back, and it’s coming with a relatively lower price that will help drive more sorghum volumes for Delta.
Despite an apparent lack of packaging appeal of the local bottled beer, Delta has managed to keep some of its loyal brand customers, who are seemingly not opting for more appealing foreign brands.
“People care less for the packaging and would prefer to buy four cokes for a dollar rather than a pretty can. People would rather pay a dollar for a litre of tonic, than get a can and half of the imported stuff (300ml) for the same price,” an analyst said in April.
But the shake-shake has the right price and could see all low-end consumers opting for it compared to the scud which often explodes like its name and is slightly more expensive and not very handy.
Already there is a strong demand for opaque beer judging by Delta’s consumption numbers.
By April, boozing Zimbabweans had consumed 249 000 hectolitres of sorghum (opaque) beer. This was the best month since September 2007, as maize supplies improved at Delta’s 14 breweries.
Delta’s former rival in the opaque brews — Rufaro Marketing — is almost out of business.
Zimbabweans have rather conservative beer and carbonated drink buying habits, according to Mutizwa.
Contrary to popular belief that Zimbabweans are now drinking more canned beer, Mutizwa said returnables (bottled beer) constituted 96% of lager beer volumes in March, although this had eased to 86% in April.
Delta itself and the launch very seriously and says it will not comment on matters that will influence the company share price.
But the bulk of Delta’s bottom line earnings do not come from Chibuku — Delta’s opaque beer maker.
Delta spokesperson George Mutendadzamera said: “We are in closed period until mid November 2009. Accordingly we cannot respond to any of the questions which are (share) price sensitive.”
He could not answer whether this was the end of a scud era like its warhead namesake and why the company had brought back the shake shake after a decade and a half.
Delta could not say whether its other products such as beer and carbonated drinks would get a makeover as well. The market is not expecting much anyhow.
According to Mutizwa earlier this year, statistics show that Zimbabweans prefer returnable glass to canned beer which has a sexier appeal that the conservative brown and green bottles associated with local beers.
He said returnables (bottled beer) constituted 96% of lager beer volumes in March, although this eased to 86% in April. Low-end Zimbabweans consume more opaque brew compared to lagers.
In April, Delta sold 76 000 hectolitres of lager beer in April, a rare sales feat for Delta that is traditionally achieved in the last quarter of the year.
In February a total 55 000 hectolitres worth US$16 million were consumed but sales remained steady the following month as the company achieved sales of US$16 million in March while 60 000 hectolitres were consumed in the same period.
But according to Mutizwa, the numbers do not mean Zimbabweans are alcoholics as they drink far less than other countries.
Zimbabweans are still drinking an average conservative 10 litres of beer a year compared with 60 litres in South Africa and 250 litres in the Czech Republic.

Chris Muronzi

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