DRAFT Magazine

No one knows how good the soccer will be at the 2010 World Cup, but SABMiller is making sure they won’t run out of beer. In anticipation of the nearly half million visitors who will descend upon the country, the officials beer sponsor of the tournament is ramping up production in seven of its in-country breweries.

“Although we are expecting fewer visitors to South Africa than Germany did, we are expecting South Africans and tourists to get behind their team as well as African teams and enjoy themselves,” Alastair Hewitt, the company’s 2010 marketing manager, told The Wall Street Journal. “Football fans can relax, there will be plenty of beer.”

Strangely, SAB only anticipates a four to six percent rise in consumption during the five-week tournament.

SABMiller reported disappointing third quarter results as beer sales worldwide were flat. Analysts expected an increase of one percent.

Although the company posted good showings in Russia (where sales jumped 34 percent before a January 1 tax takes effect), four percent growth in Latin America, and healthy growth in Africa, struggles in the European and United States markets doomed the report.

In America, consumers are drinking less Miller Lite and Coors Light, and although MGD 64 is selling well, it wasn’t enough to offset the losses. The arrival of Bud Light 55 will presumably only further hurt SAB’s business.

It’s Miller time… to make some moves.

In the first half of 2008, SABMiller made a profit of $1.42 billion. During that same time period just 12 months later, the company only reported a profit of $973 million. That’s a whole lot of millions, 31 percent to be exact.

Revenue dropped 21 percent to $8.85 billion — that is an awful lot of Miller Lite — while the volume of beer sold fell one percent.

Company officials partially blamed the losses on the strength of the American dollar.

“The weakness of our major operating currencies against the U.S. dollar has affected reported results, but we have continued to generate a strong underlying performance,” said CEO Graham Mackay.

Of course, the company’s stock jumped four percent and is up 48 percent on the year. Color us confused.

Anyone else think they need a new company logo? That current one is totally lame.

For all the talk of craft breweries increasing their market share, the major brands would like you to know they are doing just fine. Specifically, Heineken N.V. and SABMiller are seeing improved revenue despite the difficult economic climate worldwide.

Heineken released a report announcing that it is raising its profit forecast because “strong pricing, improved sales mix, and aggressive cost cutting, [are offsetting] lower volume due to the global recession.” Revenue decreased 3.9 percent, but that’s an improvement over the previous quarter. Meanwhile, SABMiller expects strong growth in Africa and will commit $200 million to the area in 2011.

SABMiller, which continues to pour cash into Angola despite having trouble making money in Africa, isn’t done expanding its footprint on the continent.

According to Bloomberg, the global brewing conglomerate won a license to open a brewery in Namibia. SAB will compete with Namibia Breweries Ltd., owned in part by Diageo Plc. and Heineken NV.

“The Namibian government’s decision to grant us this license is a milestone,” Cobus Bruwer, managing director of SAB’s Namibia unit, said in the statement. “When the plant is operational, we expect to contribute significantly to the Namibian economy.”

Also, one would imagine, to SAB’s bottom line.

No one in Europe or South Africa wants to drink SABMiller’s products but the company will be fine thanks to growing demand in China.

According to sources within the company, while demand in Europe fell seven percent — much higher than the three percent anticipated across the industry — growth in China was 17 percent.

“China is propping up SAB to some degree, but if margins don’t build along with volumes there’s no real benefit,” Andy Blain, an analyst at Shore Capital Group Plc in Liverpool, said in an interview with Bloomberg. “The performance in Europe and South Africa is disappointing, but not out of kilter with the macro picture.”

That’s good, because there’s nothing worse than an out of kilter macro picture.

SABMiller might be cutting costs on a worldwide scale, but the beer conglomerate will continue its African invasion. It will open a new $125 million brewery and drinks plant in Angola, bringing its total investment in the country during the past 18 months to $250 million.

“Angola’s economy has held up well during the global economic crisis and our team on the ground has risen to the challenges posed by supply chain and infrastructural constraints,” Mark Bowman, managing director of SABMiller Africa, said in defense of the investment.

Angola, which unlike Ethiopia doesn’t suffer from power outages that disturb the brewing process, has a population with a growing taste for beer. The new plant will have a capacity of 200,000 hectoliters a year. That should help satiate the appetite.

Apparently, beer isn’t selling well in Russia and Hungary. (Who knew?)

SABMiller, the second-largest brewer in the world, cut forecasts for beer growth on the Continent from four to six percent a year through 2013 to two to four percent. According to the company, sales in Western Europe are decreasing while growth in Eastern Europe has slowed.

“For years we have been outperforming our four to six percent volume targets, and we’ve seen consumption growth moderation coming for a while,” Alan Clark, the brewer’s managing director for Europe, told Bloomberg. “When markets mature then the focus has to be on share. If we do not gain share this year we won’t achieve flat volumes.”

That’s corporate for “sorry dudes, we’re probably going to lose money.”