Beer tasters, pricing, distribution: Innscor’s game plan to take a big sip of the beer market

By Tonderai Maruke

A year after launching the Nyathi brand of sorghum beer, Innscor is recruiting an army of “beer testers” and banking on its distribution channel to chip away at Delta’s dominance of the market.

Through the Buffalo Brewing Company, Innscor aims to convince drinkers to put down the Super and switch to Nyathi, its 1.25-litre beer. According to the company, “volume growth has steadily increased month-on-month driven by key customer and consumer strategies”.

What is in Innscor’s beer game plan?

Give customers a taste

Innscor wants more drinkers to taste their beer. The company has targeted groups of drinkers, who have the somewhat enviable job of being “tasters”. Buffalo is reaching up to 7,000 of these drinkers each month. According to Innscor, this is “one of the largest consumer awareness initiatives the group has embarked on.”

Says the company: “These taste test trials take place in various outlets and key consumption points, namely in bars and bottle stores.”

Make it last, add flavour

The company says “work is underway to extend the shelf life of the product”. This will help the company to send out the beer to more places around the country. Just as Delta added the banana variety to its Super line, Innscor is also looking at adding new favours to Nyathi.

Wide distribution, better price

Distribution is one of Innscor’s strengths, and it plans to use its network to get Nyathi farther into the market. It is sending out vans to “key consumption points”. The company is also pushing more “aggressive pricing” – meaning selling its beer at a cheaper price than Delta.

Says Innscor: “The company has supported the initiative through a country-wide 90-route van sales distribution network that targets the key consumption points through direct sales. Of the estimated bar and bottle store universe of over 8,500 outlets, (Buffalo) is currently reaching around 40%. The success of this deeper distribution is further enabled by aggressive pricing, point of sale (POS) materials and a dedicated team of van salesmen.” The company targets to reach 50 stores a day at the primary sale level (formal and informal wholesale and retail). Innscor is also offering retailers what it calls a “Profit Story” – a promise of a bigger margin on sales.

New Projects

The company has opened a new malting plant, which was commissioned in August. A new water reservoir and pipeline are under construction.

Is Delta scared? Not yet.

Delta sees no threat from Nyathi, at least not yet. The company has a 93% market share of the masese market and sold a record 217.3 million litres in the six months to September.

Matlhogonolo Valela, Delta CEO, has drawn parallels with the soft drinks market, where his company competes with Varun Beverages.

“We welcome competition. When we were alone in the soft drinks business, we sold about 1.6-1.7 million hectolitres per year. And the consumers and ourselves were happy going home. That market has almost doubled with the arrival of competition. So, you become more intense, and the consumers have choice, and everyone is happy,” Valela says.

He reckons Innscor are not too worried right now about market share. However, Delta can see what Innscor is trying to do – targeting specific outlets, especially those where Delta has had problems stocking with Super.  

“We have seen in some areas where they haven’t taken the Harare market, but taken some outlets, where you can see 15-20% of consumption (of Nyathi) in those outlets because they are doing launches and promos in specific outlets. We think it will manifest over time, who has what market share,” Valela says. “There are some retail outlets who have had problems with us because of credit control issues, who have opened their doors to new competition. It looks like they are dominant, but it’s because we are not supplying to those outlets.

The margin in production capacity between the two is still big, he points out. “We estimate – because we use common suppliers in some instances – that their capacity is plus or minus 30 000 hectolitres per month. We are selling around 350-400 000 hectolitres per month. I don’t think they’ve fully utilised their capacity, but you can see where these things are.”

Delta commissioned a new Chibuku Super plant in September to increase volumes and close down any supply gaps that Nyathi may spot and take advantage of.

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