Beverage maker, African Distillers Limited (Afdis) will prioritise profitability and margins through brand mix optimisation, market efficiency, and cost control after a “relatively” stable first quarter ended June 30, 2025.
Last month, Afdis managing director Muchaneta Ndachena revealed to our sister paper, Zimbabwe Independent, that the beverage maker saw growth in portfolio expansion to cater for changing consumer trends.
This included the announcement of a US$5 million investment to scale up production of its total beverage capacity from 18 million litres to as high as 36 million litres over the next five years.
“Management remains committed to sustained business growth leveraging on opportunities arising from the stable operating environment,” Afdis said in its trading update for its first quarter ended June 30, 2025.
“A strong focus on profitability and margin enhancement through optimised brand and pack mix, route to market proficiencies and cost containment measures will continue to drive the business.”
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During the review period, the beverage maker revealed that stability came from slower inflation and a “stable” exchange rate.
Consequently, Afdis said turnover for the quarter at US$19 million was 51% above prior year as a result of improved product availability and the strong volume performance.
“Total volume for the quarter grew by 40% over prior year, benefiting from strong demand, driven by increased consumer spending from a record tobacco output, good summer crop harvest and increased gold production and prices,” Afdis said.
“The business also benefitted from ongoing interventions by authorities, that include the blitz against smuggled products and the banning of illicit ethanol-based cheap spirits.
“The Ready-to-Drink (RTD) category grew by 45%, with the recently introduced Hunters 660ml pack contributing positively to cider performance. The Spirit category increased by 36%, mainly driven by brown spirits while wines grew by 25% benefiting from good demand within the affordable segment.”
Last month, it was revealed that the company was investing in capacity in production and distribution (replacement and expansion programmes) and containers for the RTD category.
According to the firm, consumer demand has been strengthened by persistent recommended retail price compliance initiatives, the impact of the reduction in informal imports in response to the anti-smuggling campaign, and the expansion of the RTD portfolio.
Afdis said the trading environment for the quarter was relatively stable, with slower inflation and a steady ZiG exchange rate, providing a conducive operating environment for business.
“The monetary policy remains tight, resulting in local currency liquidity constraints and high borrowing costs,” Afdis said.
“Electricity supply challenges persisted, and businesses continue to incur high operating costs from alternative power sources.”
