Cheers to Zimbabwe Beer For Spurring Consumer Confidence

  • AB InBev-affiliated Delta Corp revenue increased to $572 million in the last year
  • Zimbabwe’s economy shrunk 50% from 2000 -2017

A new tasty measurement tool for consumer confidence is pointing up for Zimbabwe. The largest brewer in the country Delta Corporation reported a 27% jump in full-year profit to $89 million. What makes the consumption of lager beer an accurate assessment of consumer confidence in Zimbabwe?

Why This Matters: Zimbabweans are still in a celebratory mode after the ascension to power of President Emmerson Mnangagwa. In November he replaced Robert Mugabe, who saw the economy shrink 50% from 2000 until he was ousted. When consumers are drained politically, economically and emotionally they tend to drink liquor. On the other hand, when people are in jubilation the drink of choice is more likely to be wine, beer and champagne.

Delta, which is 40% owned by Anheuser-Busch Inbev (BUD+0.44%), said revenue increased to $572 million during the year that ended in March. Lager beer sales, which accounted for the most revenue, were at their strongest since 2014. The company was able to increase its final dividend payment by 32%, its highest since Zimbabwe dumped its own currency for the U.S. dollar in 2009. AB InBev-affiliated Delta Corp has noted before that the consumption of lager beer is tied to consumer confidence.

Situational Awareness: While confidence levels are on the rise in Zimbabwe the country is till going through a currency struggle. Zimbabwe is in the throws of U.S. dollar shortages which have put pressure on imports. These currency headwinds have also seen some companies, including mines, unable to pay for imports on time.

CBx Vibe:Cheers (Drink to That)” Rihanna