HARARE: Delta Beverages’ total volumes were down 2% for the six months ended September 30 due to the challenging environment attributed to depressed aggregate demand, the company said yesterday.
In a trading update for the second quarter ended September 30, Delta said revenue was down 6% in the quarter and down 8% for the six months, reflecting changes in the portfolio mix and the recent price moderations.
“In the short term, there will be pressure on operating margins as we adopt strategies to address affordability and stimulate volume through price reductions and streamlining value chain costs,” it said. “The benefits of these initiatives should start filtering through in the medium term.” Delta reported contrasting volume performance across beverage categories for the second quarter.
Sparkling beverages were down 14% compared to the same quarter last year and down 15% for the six months attributed to increased competition “particularly from imported lower priced alternative offerings”.
“The maheu and dairy mix beverages recorded a growth of 4% for the quarter on the back of improved product supply and the expansion of flavours. The sorghum beer category recorded a volume decline of 12% for both the quarter and the six months,” Delta said.
It said there had been a marked shift to Chibuku Super, which “benefited from the additional production capacity from the Fairbridge Brewery”.
Delta has been reducing the price of its products to stimulate demand. Last week, Delta reduced the price of its mainstream brands Castle Lager, Lion Lager and Carling Black Label to stimulate demand in the wake of waning disposal income.
