Globe clamouring for Amarula, Savanna after Distell tie-up

Nick Wilson - Heineken's tie-up with Distell is seemingly paying dividends, with the Dutch brewing giant’s local unit reporting surging global demand for products such as Amarula cream liqueur and Savanna cider from new markets like Brazil, South Korea and Vietnam.

These local products, typically grouped under what is called the "beyond beer" segment by liquor companies, previously had a smaller route-to-market. As part of the much larger 150-year-old Heineken company, however, they are enjoying a much-expanded potential marketplace.

The result of this, according to Jordi Borrut, MD of local unit Heineken Beverages, is that the group is fielding numerous inquiries from new consumers clamouring to get a taste of these quintessential South African beverages.

Borrut, who was speaking at an event in Johannesburg this week to celebrate the merger of Distell, Namibian Breweries and Heineken South Africa under the Heineken Beverages banner, said the Distell portfolio, which included a host of ciders, liqueurs, wines and spirits, fitted in perfectly with this developing trend.

Potential

"Now, which is the company in the Heineken world that has all the beyond beer products, which one is it?"

He said: “It's us. So, to our delight today, we are being contacted by many of the countries, in Korea, in Brazil, in Germany, in Vietnam, enquiring about our brands. Bernini, and Savanna and Amarula ... and there's a lot of potential.”

Amarula’s biggest market after South Africa was now Brazil, with Germany also becoming an important market, he added. Bernini is also expected to launch in Germany in the near future, while the popular South African wines owned by Distell are also finding ready markets in the UK.

At the same time, said Borrut, this brought an opportunity for the group to also export South African talent to grow these businesses in other overseas markets.

"We’re retaining them saying, we need you to stay with us for some time because we need to build this business here."

A good marriage

As far as the merger was concerned, he said that the "marriage has gone very well" and that there was a great deal of "complementarity" between three companies which all trace their roots to family-run businesses.

And with this emphasis on "family", he said the Heineken group always thought in terms of "generation" rather than short-term gains, adding that the group was here to stay in South Africa for the long haul.

He said: “So, we will stay here for many, many generations, and that shapes the kind of company values and behaviours, we are as a company and together with Distell and Namibian Breweries, we found a very good connection.”

With the family values in front of mind, the group had also wanted to make a positive impact on South African citizens.

This was why it had made such a big public interest commitment to invest R10 billion over the next five years in South Africa. Additionally, it was also spending R5.5 billion on building a new brewery in South Africa, as well as making sure that more than 80% of raw materials were sourced locally.

Development

Furthermore, it had committed R400 million to a supplier development fund as well as R200 million for a localisation fund. It was also going to be spending R175 million in improving the township economy by helping 1 000 taverns secure better sanitation and food facilities.

The group had gone through a protracted process of approval from competition authorities.

Borrut said there had also been no retrenchments at the combined entity since the merger was announced.

He said that one of the commitments made by Heineken to South African’s Competition Tribunal was that there would be a maximum of 166 retrenchments affecting the 5 000-strong workforce of Heineken Beverages. While 57 employees opted for voluntary severance packages, the company had since found it did not need to retrench any other workers.

Heineken Beverages has also committed to keeping the 5 000-workforce number stable for at least five years. – Fin24