beyondbrics

SABMiller has finally started selling the world’s first commercially-produced cassava beer. Nearly a year later than envisaged, bottles of Impala are available under a pilot scheme in northern Mozambique.

The delay highlights how even a big multinational with deep experience of emerging markets can still be held up by details such as sourcing fresh cassava from hundreds of  individual farmers. In EMs, implementation matters as much as strategy.

Cassava beer is part of the UK-listed brewer’s efforts to localise sourcing, which gives greater security of supply and control over pricing, while at the same time developing a more affordable beer for the local market.

The project was beset by problems starting with a squeeze in foreign currency, which forced the brewer to switch countries – decamping from Angola, where it had originally planned to launch,  to Mozambique.

Even in its new location it still had to struggle with organising a disparate and inexperienced supplier base: it currently buys from between 2,000 and 2,500 farmers.

And the final mile threw up its own challenges as the world’s second biggest brewer sought to manage the intricacies of a vegetable which starts deteriorating swiftly after being harvested.

The solution was a mobile processing unit, which roams around the farms to process the cassava, a potato-like root vegetable, within a few hours of harvesting. The unit has now been up and running in Mozambique for some three months.

Mark Bowman, SABMiller’s managing director for Africa, said the beer – named for the animal – would be more widely available throughout Northern Mozambique later this month.

SABMiller has big ambitions for its latest brew, which – apparently – has a sour, stronger taste than mainstream brands. It hopes the lower price, some 70 per cent of the price of regular beer, will entice local drinkers out of hooch and into ‘aspirational’ branded drinks.

“The idea is to create a new market,” said Bowman. “We have got a lower excise rate from the government, but we are convinced they will get more taxes because this will draw people out of the informal sector.”

The projects, like others by food and drink companies seeking to localise sourcing, has won the support – and help – of multilateral institutions and non-government organisations, who are attracted by prospects for job creation. That’s also why Mozambique agreed to cut the rate of excise tax.

IFDC, a public international group tackling issues including food security and poverty, is helping the subsistence farmers improve yields through technology and modern farming methods.

Meawhile, SABMiller has plenty to do developing the product and the brand. According to Bowman, farmers in the region now harvest five tonnes per hectare, or just one-quarter potential yields. “We want to improve the science so they become more efficient,” he said.

The brewer also wants to focus its sourcing, aiming is to buy from only 1,500 farmers and to to improve the rhythm of cooperation with farmers and third party suppliers. All told, Bowman reckons it would take another year to get to that stage.  and thirsty work, no doubt, for those involved.

Related reading
African group brews new customers, FT