Beer Market Not Performing at its Best: Alkhtib

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May 22 (Bloomberg) –- Euromonitor Alcoholic Drinks Analyst Amin Alkhtib discusses earnings for SABMiller, the world’s second-biggest brewer, what the numbers mean for the company and why he thinks the earnings were a bit disappointing. He speaks to Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Thank you for joining us.

The numbers in line with estimates but you were a bit disappointed by them.

You set a tough target.

The industry was expecting higher everything because they were expecting higher returns from the developing markets.

What had happened was that the currency, there was headwind that had reduced lots of net sales and revenue returns for the company.

They end up facing up to smaller growth rates in terms of their net revenues within latin america and africa which are two of the key regions for that company.

They managed to reduce the growth rate from what was originally estimated.

Something towards a lower single-digit growth rate.

What did the underlying growth raw specs look like?

They pretty much have to rely on volumes.

It is the key to driving those markets.

Yet they get a lot of high margins in latin america and in africa.

Mostly because cost cutting is one of the key initiatives in those areas.

It is one of those companies that utilizes local resources.

A sorghum beer is sold locally in africa and it is actually created for low income consumers in africa and this is one of the things they try to apply on the rest of the brand.

The trend we're seeing in the industry is product premium is asian.

When companies try to charge more for a product by giving the customer something different or something new.

Are they protesting how much they can charge?

They do it in an interesting way.

They take the ideas of the craft beer industry.

They have their own brands.

It is considered to be a premium beer, a brand which they try to expand on globally.

Because of definitions, they can't qualify as a craft beer.

It does have the look and the positioning that requires it or allows it to have a premium pricing to it.

They can enter the superpremium side of the beer market.

What sets a craft beer away from other beers?

Many have a history and the story.

What defined something is craft?

There isn't a strict definition but you are right.

Being small is one of the things.

I think they set a limit of 6 million liters or 6 million barrels a year.

There has to be a degree of independence.

It must not be owned by a multinational company.

It's basically that issue but if you look at what is happening in the u.k., it is a different structure.

It changes by country.

And where are people more experimental in their beer drinking habits?

I know flavored beers have been introduced in other parts of the world and eastern europe seems to be doing very well.

We are seeing quite a big interest in what we call spirit beers which fixes that lets parents and so on.

We are seeing the same thing happening in the u.s. in the miller and coors company.

They are introducing higher alcohol drinks to cookie with the spirit market and the wine market.

They have been either stagnant or declining in the last few years.

Spirit and beers together, spear.

When we say spirit beer, some people assumed there are spirits in it.

How are they doing convincing women to drink more beer?

They are releasing some of the flavors in south africa, kenya, south africa.

They will be doing something that has a lot of potential in africa.

Bringing in things like rattlers or beer mixes.

They have to deal with loads of invasions coming in.

We have seen them develop their bud lite brand as well which is not specifically female centric but it does compete against spirits and wines as i mentioned before.

It does bring in a sweeter flavor.

Great to hear from you and

This text has been automatically generated. It may not be 100% accurate.


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