SABMiller has launched a cassava beer in Ghana, the global brewing giant said on Thursday, and this will bolster its strategy of wooing low-income home-brew drinkers in African markets.
It also builds on the success of the world’s first commercially made cassava beer‚ Impala‚ which SABMiller unveiled in Mozambique 18 months ago.
Producers of alcoholic beverages stand to benefit from the growing consumer market in Africa as more people on the continent move out of poverty, according to Moody’s Investors Service.
"We see strong growth potential in the African market as more people move from home-brewed beer and spirits to commercially produced alcohol," Knut Slatten, an analyst at Moody’s, said in a report released in May last year.
The beer will be brewed by SABMiller’s local subsidiary Accra Brewery under the brand name Eagle. The launch of Eagle will provide an opportunity to turn locally grown cassava into a cash crop‚ for farmers to generate income.
Much of the cassava in Ghana is grown by subsistence farmers and there is an estimated 40% surplus each year, partly because there is little opportunity for farmers to sell it in commercial markets.
Drought-resistant cassava, a starch-rich root vegetable, grows widely across Africa but degrades almost immediately after it is harvested. This‚ together with its high water content‚ makes it unsuitable for transport over long distances.
Absa Investments analyst Chris Gilmour said: "Up until recently, the limiting factor with cassava, which is the most widely grown crop in the whole of Africa, has been that it goes off within about 24 hours. SABMiller has the technology that allows for the harvesting and the subsequent treatment of the cassava pretty much on site.
"Eagle is aimed at attracting low-income consumers away from illicit alcohol. This is a virtuous circle: smallholder cassava farmers have a guaranteed market for their crop‚ which is then used to make consistently high quality‚ affordable beer for consumers; and the government realises increased revenues as people trade up into formal‚ taxable alcohol consumption‚" SABMiller Africa MD Mark Bowman said.
Eagle will be sold in 375ml bottles at a price point equal to 70% of mainstream lager. This is made possible by a reduced excise rate agreed with the Ghanaian government in recognition of the use of locally sourced commodities and the long-term contribution that Eagle is expected to make to agricultural and economic development in the country.
"In Africa, the big competition at the very low end of the market is from rather toxic home-brews that don’t have any kind of regulation. In Africa you have to go for a very cheap beer and cassava fits the bill, it makes an awful lot of sense.
"Over time it will start gaining traction. It is a high-quality, affordable beer," Mr Gilmour said.