High uptake for AfDIS’ gin flavours
LIVINGSTONE MARUFU
African Distillers (AfDIS), a producer of wines and spirits, says increased demand for its brand-new spirits products led to a 500% increase in production over the course of just two months.
Stanley Muchenje, the company’s MD, said AfDIS was now producing 12 000 liters of gin flavours, including classic, pineapple, strawberry, and blackcurrant, from the 2000 litres produced at the products’ launch last month.
He told Business Times the flavours are expected to become a mainstay of the spirits business.
“When we launched new Gin flavours a month ago, we were producing around 2 000 litres per month but we have increased production by 500% to 12 000 litres due to the high acceptance level of the products resulting in the company increasing production.
“Given the high uptake of the Gin flavours, we will certainly make them the leading brand in the spirits category,” Muchenje told Business Times.
He said AfDIS increased production by taking advantage of opportunities that already existed in the market.
As the company continues to see growth opportunities despite the current economic challenges, AfDIS anticipates the release of more innovative and exciting brands this year.
Gins are positioned to compete favourably with any regional and international brands on quality and accessible pricing, Muchenje said.
He said AfDIS is set to increase profitability in the new financial year following a 29% profit decline to ZWL$1.55bn in the 12 months to March 31, 2023, from ZWL$2.19bn reported in the prior comparative period, largely due to high-cost pressures.
The company, Muchenje said, would want to put cost containment measures in the wake of cost pressures the market is experiencing in distribution, fuel and power, payroll, and maintenance.
Revenue for the company, however, increased by 56% to ZWL$41bn while operating income increased by 15% to ZWL$5.4bn in the period under review.
The top-line’s growth was driven by increased volumes.
Volume growth was strong at 18% above the prior year mainly driven by the Ready to drink segment, which grew by 23%.
Wines and spirits volumes grew by 16% and 14% respectively and the increase in volume was due to improved product availability, increased market penetration, and promotional activity.
AfDIS said the acquisition of its major shareholder and partner, Distell Ltd, by Heineken BV has been approved and implemented with effect from April 26, 2023.
The company continues to receive support from Distell in line with the existing franchise and technical arrangements.
The management anticipated that no adverse changes would arise from the acquisition.
AfDIS anticipates the trading environment to remain challenging and uncertain but expects to capitalise on opportunities that will arise to grow the business.
