Delta records growth across all segments Packaging of Chibuku at Fairbridge plant in Bulawayo

Sikhulekelani Moyo, Business Reporter
DELTA Beverages recorded significant volumes growth across all its segments in the third quarter and nine months ended December 31, 2021 on the back of improved social and economic activity.

The beverages producer operates segments that include Lager beer, Sorghum beer, Sparkling beverages, Wines and spirits.

In a trading update for the third quarter and nine months period released last week, Delta said: “The trading environment during the quarter under review was characterised by increased social and economic activity as the regional countries relaxed lockdowns before the onset of the fourth wave of Covid-19 towards the end of the calendar year.”

In Zimbabwe, the economy continues to benefit from slower inflation and increased use of foreign currency for domestic transactions which provides industry with better access to imported raw materials and inputs.

Consumer spending was spurred by increased mining activity, improved agricultural output, infrastructure projects and payments of bonuses and salaries in foreign currency.

“The lager beer volume grew by 6 percent for the quarter and 33 percent for the nine months compared to the same period last year (2020).

“Product supply improved, benefitting from the injection of returnable glass and improved plant reliability.

“There were, however, supply gaps on some brands due to global supply chain disruptions induced by Covid-19,” said Delta.

In Zimbabwe, the manufacturing concern said volumes for its Sorghum beer segment grew by 25 percent for the quarter and 50 percent for the nine months compared to the previous year.

“Chibuku Super contributed 77 percent in the quarter. There are ongoing interventions to unlock the capacity constraints on Chibuku Super in addition to the efforts to invigorate the standard Chibuku (Scud) product,” said the beverages producer.

On the Sparkling beverages, the business registered a robust volume recovery to grow by 34 percent for the quarter and 62 percent for the nine months compared to 2020.

Delta said this reflects market share gains driven by affordability, consistent product supply and an expanded pack and flavour offering.

However, the company said there were some supply gaps in convenience packs arising from value chain challenges, currency related pricing distortions and outages of some key inputs.

During the period under review, African Distillers Limited (Afdis), which falls under the wines and spirits segments recorded volumes’ growth of 32 percent for the quarter and 48 percent for the nine months, driven by improved supply of ciders and other locally produced brands, on the back of better access to imported inputs.

On associate entities, Delta said Schweppes Holdings recorded a beverages volume growth of 15 percent for the quarter, benefitting from the increased economic activity and consistent product supply.

“The 2021 intake of juicing fruit was below target due to higher exports of fresh fruit.”

Nampak Zimbabwe, another associate business for Delta was yet to report their results to September 30,2021. The sector benefits from the recovery in beverages volumes.

In terms of financial performance, the group’s revenue grew by 34 percent for the quarter and 51 percent for the nine months in inflation adjusted terms compared to growth of 120 percent for the quarter and 149 percent for the nine months in historical cost terms.

“This reflects the volume recovery and replacement cost-based pricing.

The group continues to leverage on the increased access to foreign currency through domestic nostro sales to contain input costs, which allows for competitive pricing,” said Delta. — @SikhulekelaniM1

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