Your analysis misses a key point that Varun is riding on massive tax exemptions, so the investment is funded by Zimbabweans, they got free forex from RBZ, the allocations are on public record. That’s what they have asked for to enter the beer market, fact. That will be vigorously opposed. They are faltering in CSD without the forex benefits and a dollarised economy.
Delta's 7.5% annual volume growth despite Varun's soft drinks entry shows the market expansion thesis over cannibalization. The 96% beer market share makes this a fortress but Carlsberg's global brand equity and Varun's distribution infrastruture could create a viable premium segment challenger. The key varable will be whether they pursue volume through pricing or margin through positioning, given the forex constraints and competitive dynamics you highlighted.
Your analysis misses a key point that Varun is riding on massive tax exemptions, so the investment is funded by Zimbabweans, they got free forex from RBZ, the allocations are on public record. That’s what they have asked for to enter the beer market, fact. That will be vigorously opposed. They are faltering in CSD without the forex benefits and a dollarised economy.
Thanks Alex, this is a good point and fair critique. Will look into that and publish a follow-up.
Delta's 7.5% annual volume growth despite Varun's soft drinks entry shows the market expansion thesis over cannibalization. The 96% beer market share makes this a fortress but Carlsberg's global brand equity and Varun's distribution infrastruture could create a viable premium segment challenger. The key varable will be whether they pursue volume through pricing or margin through positioning, given the forex constraints and competitive dynamics you highlighted.
Superb work, Tinashe!