SABMiller Cleans Up South Africa's Bars to Attract Women

Renovations, including new bathrooms, attract women

To get more women to drink at her pub, Susan Mathane is sprucing up her ladies’ room. The South African entrepreneur worked with brewer SABMiller on a face-lift for her bar, Susan’s Place, in Tembisa, east of Johannesburg. Last year she updated the space, adding couches and a thatched roof and renovating the bathroom—changes Mathane expects will bring women through the door and encourage them to stay a while.

SABMiller is betting that financing bar renovations, part of a roughly $5 million program in South Africa, will boost stagnant sales in the country by appealing to more of the 17 million women of legal drinking age, especially those who are younger and employed. The interior rehab work includes painting and adding or updating bathrooms; the company is also buying supplies such as beer glasses, because many women don’t like drinking from bottles. “We come here because Susan keeps improving this place—it’s safe, and the toilets are very clean,” says Kgomotso Mbatha, 19.

For decades the prevalence of Christianity and Islam kept most South African women out of bars. In the early years of apartheid in the 1950s and 1960s, blacks were prohibited from buying commercial, malt-based beers and full-strength brews, which they could purchase only at illegal shebeens, informal bars often with just a few plastic chairs set up in the proprietor’s front room. Most of the shebeens had no toilets, and their ramshackle condition didn’t appeal to respectable women.

With the end of apartheid, many shebeens were licensed, and new bars have opened as the country’s black middle class has grown to about 4.2 million. SABMiller, the world’s second-largest brewer, is working with 6,000 tavern keepers such as Mathane to make their establishments more attractive.

Flying Fish Premium Flavored Beer

The company controls about 90 percent of the market in South Africa, where it was founded and first sold beer to thirsty miners more than a century ago. Now based in the U.K., the beverage maker struggled to grow in South Africa last year amid rising inflation and increased competition from Heineken and Diageo. The amount of beer it sold in the fiscal year ended on March 31 was unchanged from the previous year. “With demand being weak, the aim will be to recover market-share losses,” says Wynand Van Zyl, an analyst at Macquarie Group. Says De Wet Schutte, an analyst in Cape Town at Avior Research, “As abstinence levels in South Africa drop closer to global averages, much of the change [in drinking patterns] is being driven by women.”

On the ground, business is picking up. Instead of gossiping over a cup of tea at home, Mbatha and a friend spend the afternoon at Susan’s Place drinking SABMiller’s Brutal Fruit Mango-Goji beer or Flying Fish Premium Flavored Beer—slightly sweeter drinks preferred by female customers. They sometimes leave in the late afternoon and return in the evening with more friends. Since making the changes 10 months ago, Mathane says sales are up 20 percent. Apart from improving the looks of bars, SABMiller is advising owners on how to talk with customers and suppliers and even how to arrange seating. The company is equipping many bars with refrigerators to emphasize the importance of serving cold beer.

SABMiller’s shares have gained 6.7 percent since Jan. 1, outpacing its major competitors. It sells beer in more than 75 markets across the world but is protective of its turf in South Africa, which accounts for almost $5 billion in annual revenue from beverages, including soft drinks, and is its second-biggest profit center after Colombia. “We’ll continue to gain share and protect our territory,” says Mauricio Leyva, managing director in Johannesburg. “Their relationship with trade customers is very important,” says Chris Wickham, an analyst at Oriel Securities in London. “What SAB’s consistently demonstrated is that they’re very strong and adept with the distribution system, and it helps them maintain share.”

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