South African Breweries There Are a Few

South African Breweries

There are a few important trends in the international brewing industry. The first is consolidation (Fletcher, 2011). With slowing demand in major markets, many large brewers are seeking to do two things: improve their economies of scale and gain access to new markets. This has led to successive rounds of consolidation in the industry, with most of the world's largest brewing companies now global conglomerates of strong regional brands. For SAB, this has meant not only consolidating the firm's home territory of Africa, but exploring options outside the continent as well.

The second major trend in the international beer industry is that growth has shifted to emerging markets. In the major beer-drinking markets, consumption is either stagnant or shrinking, and this has led to a quest for growth elsewhere. Many emerging markets have large populations and as these markets become more attuned to beer drinking, some of emerging not only as strong sources of growth but as major beer markets in their own right. China is a perfect example of this -- per capita consumption is low but there is growth and a large population.

SAB has generally performed well in the internationalization of the brewing business. With a listing on the London Stock Exchange it is able to raise capital, and this has given it the ability to pursue opportunities around the world. SAB has properties on most continents and in most major markets. As a result, the company has been able to transcend the South African market to become a major player in the international brewing industry. It has also been able to match the moves of competitors, for example in acquiring Pilsner Urquell to give the company a premium brand. Being a fairly early mover in China was also a major step in the successful internationalization of South African Breweries.

4. SAB has enjoyed success in China with CRB. There are a number of factors for success. The first is access to brewing facilities in multiple provinces, which has given CRB access to hundreds of millions of potential customers. This move was crucial for SAB to gain a strong market share in the heavily fragmented Chinese market. The company envisioned a China that featured only a handful of brewing companies, each with mainly a national presence and meeting this demand with dozens of local breweries, and has made moves to position itself as one of those firms (China Daily, 2002).

SAB's success in China also owes to its ability to create a brand that resonates with Chinese consumers. There are dozens are variations of Snow Beer, but each has fairly consistent labeling and brand appeal. This allows each variant to piggyback on the marketing of the brand in general -- especially as there are few material differences between the different Snows.