Now that the Belgian beer market is becoming increasingly saturated, companies in the beer sector are looking for potential new markets. The African continent escaped their attention for a long time, but the tide is gradually turning. And that creates opportunities for Africa too.
Nothing is as Belgian as beer. Yet the Belgians drink it less and less. AB Inbev and Brouwerij Haacht, among others, have noticed that beer consumption in Belgium is showing a downward trend. This is mainly due to the decreased demand for the classical glass of lager.
Owing to awareness campaigns such as Tournée Minérale, people drink remarkably less Stella and Jupiler in bars and restaurants. Lager has to give way to alcohol-free alternatives or to specialty beers such as Karmeliet, Kwak or Delirium Tremens. The Belgian beer market has become more diverse. Despite a declining total volume, the beer sector remains strong.
That strong position is also reflected in exports, where Belgian beers are doing well. The industry is constantly looking for new markets, also in sub-Saharan Africa. Investing in Africa pays off and that creates opportunities for the continent.
Boortmalt, a Belgian company with headquarters in Antwerp, has already found its way to Africa. It is one of the most important malt producers in the world. In Ethiopia, the company invested in a new malting plant that will be operational by 2020, creating around 300 extra jobs.
The African investment went without any major problems. Boortmalt was not confronted with corruption, only the choice of the exact location proved to be rather difficult. CEO Yvan Schaepman explains: 'Finding a suitable location was not so easy. The Oromia region would have been perfect for us, for logistical reasons and because we could easily use geothermal energy there. But due to political tensions, the process was too slow. That’s why we finally settled in the Amhara region, in an industrial area run by the Ethiopian government'.
Before Boortmalt moved to Africa, it examined the possibility of growing barley (the basis for malt and beer) locally. Studies even called for increasing barley production. ‘We work together with local associations and farmers' cooperatives. In doing so we reach up to 40,000 Ethiopian families. Together with the local authorities, we disseminate knowledge to stimulate barley production. This also leads to better harvests for other crops grown by the farmers, such as wheat or sorghum', Schaepman says.
We work together with local associations and farmers' cooperatives. In doing so we reach up to 40,000 Ethiopian families. Together with the local authorities, we disseminate knowledge to stimulate barley production. This also leads to better harvests for other crops grown by the farmers, such as wheat or sorghum
Sustainable Development Goals come first
The Leuven multinational AB Inbev also sees opportunities in Africa. The growing population and urbanisation create excellent growth conditions. In 2015, AB Inbev merged with the South African SABMiller to gain a foothold there. Three years later, the beer giant invested 100 million dollars in a new brewery in Tanzania.
AB Inbev links its African investments to the UN Sustainable Development Goals (SDGs). The multinational participates in projects for better water supply, responsible consumption, sustainable packaging, less carbon emissions and the fight against corruption, and supports the local production of a Zambian cassava drink.
Investing in sub-Saharan Africa does indeed contribute to the economic development of the region and creates extra employment. There are, however, a few comments in this respect.
AB Inbev participates in projects for better water supply, responsible consumption, sustainable packaging, less carbon emissions and the fight against corruption, and supports the local production of a Zambian cassava drink.
Opportunities versus risks
All in all, the increasing investments of the beer industry in Africa did not turn out to be that innocent. In South Africa, for example, a fierce debate is going on about alcohol. The "foetal alcohol syndrome" (a congenital disorder caused by alcohol abuse during pregnancy) is a major problem there. As many as 111 out of 1,000 newborns have the condition. Nowhere else in the world is that number so high. In addition, alcohol is responsible for about 56% of the fatal road accidents.
Critics emphasize that AB Inbev primarily wants to make profit by promoting cheaper beers and convincing new groups - especially women - to drink beer. Besides, the various projects to support the SDGs are of secondary importance.
The fact remains that Africa does offer economic opportunities for Belgian companies. Partly due to awareness campaigns from the beer sector, the risks are limited. The local population thus benefits from the investments.