Business Stockmarket: SABMiller favours flavoured alcohol

SABMiller is focusing more resources on flavoured alcohol (alcopops), bottled water and energy drinks in its core South African market. The brewing group holds 98% of the South African beer market, and this move is in response to a slowdown in beer sales.

SABMiller reports sales volume growth of only 1% for the 2006 financial year, compared to 4% a year earlier. The company recently bought Sparks, the alcoholic energy drink, in the US, and its strategy is to create new products along with the brand’s developer, McKenzie River. SABMiller’s flavoured alcohol products include Brutal Fruit (pictured above), a mixture of vodka and fruit juice, and Redd’s Cold, a malt-based apple drink. Sales of flavoured alcohol account for 5% of South Africa’s total liquor market, nearly double the level of ten years ago.

Meanwhile, SABMiller’s Italian beer brand Peroni Nastro Azzurro has clinched a £1m sponsorship deal with Nautor, the yacht-maker. The brewing giant will become the global sponsor of Nautor’s Swan 45 Class fleet.

© db September 2006