The arrival of a new premium beer and spirits distributor in South Africa may give SABMiller some grey hairs on the yuppie beer front.
This week saw the launch of Brandhouse, a three-way joint venture between Diageo, Heineken and Namibian Breweries. The company will distribute premium beer brands including Heineken, Windhoek and Guinness, and whiskies Johnnie Walker, J&B and Bells.
Cape Town-based Brandhouse was formed after Diageo and Heineken bought 29% of Namibian Breweries early last year. Before it came into being, its brands were distributed separately by Diageo SA, Namibian Breweries and for Heineken SA, which gave a distribution licence to SABMiller.
Simon Litherland, Brandhouse MD, told the Mail & Guardian the company was in a position to exploit economies of scale and synergies in its wider distribution network.
Premium beer is the fastest-growing segment of the local and world beer market, with growth in South Africa of up to 20% a year. It currently accounts for 6% of the beer market, which is growing at just more than 3% a year. Litherland estimates that Brandhouse currently has 35% of the premium beer market.
Brandhouse’s first move was to recall its Heineken distribution licence. SABMiller launched Miller Genuine Draft (MGD) last April to “replace” Heineken in its portfolio, a move one analyst believes to have been highly successful. Now Brandhouse has launched a slick TV advertising campaign for Windhoek Lager.
SABMiller’s most established premium brand, Amstel, is brewed under licence from Dutch brewer Amstel Brouwerij BV. MGD originated in the United States and is now brewed in South Africa.
On the spirits front, Brandhouse will take on Distell, which is 30% owned by SABMiller. Distell has brandies such as Fish Eagle and Klipdrift in its broad portfolio, as well as Glenfiddich and the popular liqueur, Amarula.
Brandhouse expects annual sales in South Africa of R 3-billion.