Mega beer merger bets on the rise of African drinkers

Charles Kwara and his friends sit around an earthenware pot, sipping a frothy gray drink through long straws as laughter fills the Charismatic Club in the slums of Kampala, Uganda's capital.
The men joke that the crude brew of fermented millet known as "malwa" makes them feel both high and as if they'd just eaten. It's also what they can afford: they can drink malwa all evening for the cost of a single bottle of branded beer.
"This is cheap," says Kwara, a 47-year-old marketing manager who heads a drinking club. While they'd like bottled beer, home brew is the only option if they want a full night out. "Drinking is also a way of socializing for us," Kwara says.

The Charismatic Club, and brewers like it from Uganda to Ghana to South Africa, have something the makers of Budweiser want: potential customers.
With beer sales slowing in North America and Europe, Anheuser-Busch InBev has agreed to pay more than USD 100 billion for rival SABMiller, in large part to tap burgeoning growth in Africa, where many people still buy their beer from small neighborhood brewers.
SABMiller, the descendant of South African Breweries, has stretched its tentacles across the continent, betting that Africans will shift to higher quality beers as economic development increases disposable income. It now has operations in 17 countries on the continent, with another 21 covered by Castel Group, in which it has a stake.

That foresight made SABMiller attractive to AB InBev, already the world's biggest beer maker, as it joins the list of international companies seeking to cash in on the newest growth frontier.

"Everyone is looking for the next big golden egg: It comes down to Africa," said Robert Besseling, a principal analyst on Africa at IHS, a global research firm. "Everyone is anticipating a boom even though it hasn't happened yet."
The continent, with its 1.1 billion people, can no longer be dismissed as an economic backwater.
Four of the five fastest-growing economies last year were in sub-Saharan Africa, and the region as a whole grew 4.6 per cent, compared with 2.4 per cent in the United States and 1.3 per cent in the European Union, the World Bank reported.

AB InBev's bid for SABMiller comes at a time when the growth of big brands such as Bud Lite and Stella Artois has stalled in the US and Western Europe. Craft beers, wine and spirits are eating into profits.
Those demographics are set to drive growth. With more than half its population now under 25, the highest percentage in the world, the continent will have a larger workforce than China or India by 2040, according to BCG.
"While most of the world is growing older, Africa will have a young workforce for decades to come," BCG said.