Company Reports - Accra Brewery Ltd
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Accra Brewery Ltd
Accra Brewery is brewing up a success
Gregory Metcalf, Managing Director of Accra Brewery Ltd (ABL), believes there has been no single reason for the growing success of the Ghanaian company - rather a combination of strategies all working together.
Metcalf would be the first to admit the company, which was the first brewery to be founded in West Africa, has been through difficult times. But now, he said, the future is looking much firmer.
“When I’m asked what has turned the company around I’ve said it’s not a silver bullet solution,” said Metcalf. “It’s about a number of elements coming together; a focus on quality, improved production and availability in our trade so our customer can access our beer when he expects to.
“It is also about investing in cold refrigeration and improving our distribution efforts. There really has been a combination of a number of different factors - and that is what continuous improvement is to me, bringing every element of the business and working out how to do it better so the overall package is better.”
ABL, which celebrated its 80th anniversary last year, was founded as the Overseas Breweries Ltd in 1931. Purchased by global brewer SABMiller Plc in 1997, it now produces both alcoholic and non-alcoholic beverages, with its bottled mineral water, Voltic, holding 80 percent of the market in Ghana.
Today, ABL is a public company. Its flagship brand is the iconic Club Premium Lager, which has been a part of its product portfolio since 1931.
Its other brands include Club Gold Export Lager, Castle Milk Stout, Stone Strong Lager, Chairman Malt Liquor, Club Shandy, Redd’s Fruit Fusion and Peroni Nastro Azzurro. It also supplies Chibuku Shake Shake, a product brewed with only locally sourced ingredients; as well as a range of non-alcoholic drinks including Castle Milk Malt, Club Cola, Club Muscatella, Club Orange, Club Soda and Club Quinine Tonic.
The backing of SABMiller has undoubtedly given ABL the strength to build its business and the ability to bring together the different factors to which Metcalf attributes the company’s increasing success.
SABMiller is one of the world’s leading brewers, with more than 200 beer brands and some 70,000 employees in over 75 countries. It also has growing businesses in soft drinks and is one of the world’s largest bottlers of Coca-Cola products.
Flexibility to operate
Up until about four years ago, said Metcalf, ABL was “not in very good financial straits.” It was struggling to make money, was very heavily indebted, and held a 25 to 27 percent market share in a market that was already one of the smallest in Africa.
“Some strategies to turn the business around, including an investment to deliver new packaging lines, had not delivered dividends. It was not working very well so the business was not in terribly good shape,” he said.
“ABL was a listed company on the Ghanaian Stock Exchange until two years ago. The reason we delisted was because of the indebtedness of the company. We had to clear that debt and that involved quite a substantial equity injection.
“SABMiller was happy to put up that capital but smaller minorities were not - so we went with the delisting route and subsequent to that we had an equity injection, which relieved our debt position. That was quite important to us, because it allowed us a flexibility to operate that we hadn’t enjoyed in the past.”
Investing and upgrading
From that point on, he continued, ABL had to find ways to gain market share. This included taking a number of smaller steps, such as investing in display fridges, but the main thrust of the recovery came from an emphasis on production, rendering it more efficient and improving levels of output.
“We have upgraded our production line; we have three elements of production - brewing the beer, storage and fermentation, and packaging - and we are upgrading all three of these elements, plus investing in our Voltic water plant, representing an investment of around $30 million this year.
“We are replacing and upgrading some old equipment along with increasing our capacity. Our sales have gone up and capacity is at a stretch so now we are adding new capacity at the same time as putting in some new systems.”
Once ABL started focusing on manufacturing, he said, a range of other business improvement initiatives become possible. The company began to invest heavily in its quality systems, for example, to ensure it was brewing a consistently good beer.
It also looked at its supply chain management. Through a new Supply Chain Director and effective software it now runs a smoother operation where malt can be procured either centrally through SABMiller or locally as required.
Investment in people
ABL has also ensured there has been an emphasis on people and training. Today it employs some 450 workers on a permanent basis, with another 200 taken on seasonally. At Voltic, there are around 1,000 permanent and flexible employees.
“People and skills are among the biggest challenges we have faced as a business which was not making money,” Metcalf said. “As key people left the business there was always the temptation not to replace them because we could save a bit of money so we found ourselves very short of skills.
“We were also paying below market rates so when we went to recruit people it was on an affordability model rather than looking to attract the best talent.”
In recent years, however, ABL has managed to bring its pay scales more in line with the market, allowing it to attract talent. It has also aggressively attracted skilled people into the business and filled the key skilled positions that had been left vacant.
“That was quite a risk at the time. When we started doing it we were not making huge amounts of money but we recognised that improvement required skills and with the improvements we were making with manufacturing we had to have the right people in place. It was a bit of a gamble but it was a gamble that paid off.”
Today, not only does ABL bring people in who have been trained at SABMiller academies but it has also signed a memorandum of understanding with the local polytechnic, offering internships to those who might want to work in the industry.
“Ghana also has a system for national service. So, after you’ve finished your degree you have a year working with national industries, and you get posted into various companies.
“We bring on average around 50 people into our business every year, working on this cadet programme, and then we will put these people into various areas within the business and look for talent that we might like to employ.”
Heritage and quality
Over the past four years, ABL has also turned itself around through its marketing. It has cleverly positioned Club as the only true Ghanaian beer, promoting national pride in the product alongside an emphasis on its heritage through the 80th birthday celebrations.
“We’ve been very focused on the way we have managed to market our brand,” admitted Metcalf. “We (very creatively in the trade) made our product more visible and available in the market where we operate.”
He added: “Understanding that quality underpins everything you do with a brand is also absolutely crucial. Get the quality right, and get it consistent; that’s been huge for us.
“Then it’s about taking that brand and marketing it very effectively. It has been a very consistent and powerful message that we have put across to consumers and it has resonated with them.”