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Whisky soars in South Africa

Makers of beverages have turned their sights to Africa and in some instances are winning. From Sandton to Soweto whisky has become popular with the aspirational middle class, and it is the fastest-growing spirit in South Africa, with its growth outpacing even cider and beer.

For the organisers of the annual Whisky Live Festival in Johannesburg and Cape Town, demand has been so great they have added Durban to the list of exhibition venues.

There has been growing interest from females and the 25-35 year-old age group, co-organiser of the festival, Sian Neubert said. “The festival enjoyed a footfall of more than 18 000 patrons last year,” she said. Even more are expected to attend this October and November.

Last month the world’s biggest spirits group, Diageo, increased its payout to shareholders, confident that buoyant demand for whisky and spirits in Asia and Africa will help it achieve medium-term targets.

The maker of Johnnie Walker whisky and Smirnoff vodka raised its full-year dividend 8% to 43.5p per share, following an increase in sales and profit driven by emerging markets.

Johnnie Walker is the top selling whisky brand in South Africa, while the country is also one of Diageo’s best whisky markets.

So much so that it has launched a brand new whisky — Johnnie Walker Platinum Label.

The new brand has been rolled out in Asia and in some parts of Europe but is not fully available around the world.

“As it is an 18-year old whisky we needed the right amount of stock. It has been so successful we can’t make enough,” head of brown spirits portfolio at Brandhouse Nyimpini Mabunda said.

Brandhouse is a joint venture between Heineken, London-listed Diageo and Namibian Breweries.

Mabunda says there are plans to take the whisky to parts of West and East Africa.

“There is lots of activity in certain markets in Africa, such as Angola, and there are plans to extend Johnnie Walker Platinum Label’s footprint.”

“In South Africa, whisky is growing at three times the total market that is about four-million 9-litre cases sold a year,” Mabunda said.

Citing market research company Nielsen’s figures, Mabunda says Brandhouse has a 50% share of the whisky market. “One of every two bottles of whisky sold come from Brandhouse,” he said.

Pernod Ricard also competes in this space with its Jameson Irish Whiskey, Chivas Regal Scotch Whisky and The Glenlivet Single Malt Scotch Whisky among others.

According to Mabunda there are four sectors or tiers in whisky in South Africa: the value sector with a retail price under R120, the standard sector with retail prices up to R170, the premium sector where products retail for more than R200 and the super premium sector which could include Johnnie Walkers’ Blue Label which retails at about R1,700.

Although every tier has shown growth, it is the premium sector which has shown the most impressive growth. “There has been a premiumisation trend in this market,” he said.

He attributes the rise in consumption to a few factors: the rise of the middle class and whisky’s aspirational status and the industry investment in education.

The new Johnnie Walker Platinum Label will be available at the beginning of October. The retail price is yet to be determined.

Source: Business Day