Using the case study below to provide the CUSTOMER BENEFITS (bulleted points below) for Distell: Functional benefits

Fantastic news! We've Found the answer you've been seeking!

Question:

Using the case study below to provide the CUSTOMER BENEFITS (bulleted points below) for Distell:

Functional benefits

Emotional benefits

Image benefits

Social benefits

Service benefits

Experimental benefits

DISTELL'S ROADMAP TO SUCCESS WITHIN THE COMPETITIVE BEER AND CIDER MARKET OF SOUTH AFRICA

Distell is South Africa and Africa's one of the leading producers and marketers of alcoholic beverages (e.g., spirits, ciders and other ready-to-drink (RTD) beverages) across the world. With a diverse portfolio of brands with rich provenance and authenticity, the products of Distell are priced across the pricing continuum to cater to a broad spectrum of consumers. The business employs approximately 4,400 employees and has an annual turnover of R26,1 billion. Distell is thus aimed at crafting distinctive alcoholic beverage brands, enhancing memorable moments and inspiring responsible enjoyment by offering:

A differentiated brand and product portfolio straddling all key occasions
Sub-brands with rich provenance and authenticity
A Portfolio ideally suited to intermediate premiumization in developing markets
A strong balance sheet position
Impressive agricultural asset base with potential to unlock value
Organisational culture that thrives on innovation
A diverse pool of talented professionals

Notably, the business classifies its product portfolio into three categories: Ciders and RTDs, Wines and Spirits. Under the Ciders and RTDs beverages category, Distell offers flavoured alcoholic beverage products with low alcoholic content. The ciders are then marketed under

Burchell, Hunters and Savanna brands. Its RTDs are further marketed under the brands of Bacardi, Bernini, Esprit, Klippies & Cola and Vawter. The business' wine category comprises of ultra and super premium wines, premium wines, wine apéritifs, basic wines, perlé wines, sparkling wines and Méthode Cap Classique wines. These wines are then marketed under the brands of Brandyale, Cellar Cask, 5th Avenue, Alto, Place in the Sun, Fleur Du Cap,Tassenberg, Nederburg, Durbanville Hills, Graca, Grunberger, and Multana, among others. Lastly, Distell's spirits category includes premium and super premium brandies, cognacs, white spirits, gins, digestives, liqueurs and whiskies. These products are therefore marketed under the brands of Klipdrift, Richelieu, Viceroy, Arnarula, Mellow-Wood, Three Ships Bourbon, Oude Meester VSOB, Commando, Gordons, Mainstay, Count Pushkin Premium Imperial Vodka, Romanoff, Seven Seas and Bacardi.

The business distributes its products through a network of 37 trading depots in South Africa and five in Botswana, Lesotho, Namibia and Swaziland (BLNS). It operates regional offices in France, Germany, the UK, Taiwan, the US, Brazil, Singapore, Kenya and Tanzania, and sale staffs in Angola, Mozambique, Ghana, Nigeria, Zambia and Uganda. Distell operates subsidiaries in Namibia, Botswana and Swaziland and joint ventures and investments in Tanzania, Mauritius, Kenya and Zimbabwe. Conversely, Distell classifies its geographic operations into six regions: South Africa, BLNS, Rest of Africa, Europe, Rest of International, and Corporate. In 2021, South Africa region accounted for 74.3% of the company's total revenue, followed by BLNS (8.2%), Rest of International (6.8%), Europe (6%) and rest of Africa (4.6%).

The competitive nature of the beer and cider market in South Africa

The beer and cider market in South Africa is highly concentrated with four leading players dominating the market. These players include Anheuser-Busch InBev, Distell, Heineken and Namibia Breweries, all of which control 99.4% of the market. For this reason, Anheuser-Busch InBev NV/SA is the dominant player in the South African beer and cider market, as it generates a 71.5% share of the market's value. This is followed by Distell (accounts for 16.3% of the market), Heineken (contributes to 9% share of the market) and Namibian breweries (accounts for 2.7% of the market). The four main players focus on authenticity, competitive pricing and innovation as part of addressing the current and future needs of consumers. As a result, the precedence of low switching costs and a wide variety of beers contributes to high levels of competition among the existing players.

The key trends within the beer and cider market of South Africa

The beer category is the largest segment of the beer and cider market in South Africa, accounting for 80% of the market's total value. The cider category accounts for the remaining 20% of the market. The total volume sales of beer and cider increased by 26% in 2021 leading to 3.4 billion litters of consumption and more than R5.5 billion revenues. This growth in alcohol consumption in South Africa has made the country the largest consumer of alcohol in the African region. This is due to the country having one of the most affordable average beer prices in the world. The beer category witnessed a significant recovery in total volume terms in 2021, primarily due to the easing of COVID-19 restrictions on alcohol sales in terms of both duration and severity. This allowed on- trade establishments to operate closer to normal market conditions, thereby being able to service the demand for beer, which did not decline throughout the pandemic (despite a drop in actual sales in 2020) and remained one of the most popular alcoholic drinks to consume during social occasions. In terms of craft beer, the alcoholic beverage continues to struggle in 2021 due to market uncertainty caused by COVID-19 restrictions and regulations, along with the price positioning of this segment. However, craft beer category saw improvements in terms of consumer sentiment compared to 2020, but uncertainty remained, which directly impacted how consumers decided which beer brands to purchase.

Despite beer being one of the most mature categories in South African alcoholic drinks, there is still much room for growth, as evident by the increased interest in non-alcoholic and flavoured/mixed lager options. This indicates a consumer preference shift, where South Africans are increasingly moving away from the standard beer flavour offerings. This suggests that beer drinkers are increasingly considering lower alcohol and calorie beer offerings, including Castle Lite. This is linked directly to the health and wellness movement, where beer drinkers are becoming increasingly aware of the high levels of carbohydrates and sugars found in standard beer, which results in them opting for a lighter option that effectively allows them to consume greater volumes relative to the number of calories and sugar found in standard beer. Furthermore, much of the growth in flavoured/mixed lager is derived from millennials, who have demanded new and innovative offerings, which provides a long-term basis for sales. An indicator of this trend is evident in the success of Flying Fish, a local flavoured lager that has been well-received by both male and female millennials, which also stresses the value of such products in terms of appealing to a larger target audience.

List of References

Distell. (2022). Our Business Philosophy. Retrieved online https://www.distell.co.za/home/about/ (Accessed 7 August 2022).

Euromonitor. (2022). Beer in South Africa. Retrieved online https://www.portal.euromonitor.com/portal/Analysis/Tab (Accessed 7 August 2022).

Marketline. (2020). South Africa - Beer & Cider. Retrieved online from: https://advantage- marketline-com.eu1.proxy.openathens.net/Analysis/ViewasPDF/south-africa-beer-cider-75874 (Accessed 7 August 2022).