Online Reporter
Nelson Gahadza
DELTA Corporation’s strong volume growth across its key lager beer and sorghum beer segments in the group’s financial year ended March 31, 2026 (FY26) reflects the strength of its brands despite mounting pressure from counterfeit beverages, illicit imports and intensifying competition in Zimbabwe’s beer segments, analysts say.
This comes after the beverages giant’s revenue crossed the US$1 billion revenue mark for the first time, a milestone analysts say was built on the strength of its brands, route-to-market efficient execution and ability to defend market share in a difficult operating environment.
The achievement underscores the growing resilience of Zimbabwe’s formal beverages market, where established players are increasingly being forced to compete not only with legitimate rivals, but also with informal and counterfeit products that have proliferated in the market.
In an interview after the group’s analyst briefing for the period under review, group chief executive Mr Matlhogonolo Valela said Delta had recorded historic volumes across its three core categories: lager beer, sorghum beer and sparkling beverages.
“We have been on a journey for the last five years to try and exceed US$1 billion, to try and exceed US$200 million in EBIT (earnings before interest and taxes),” Mr Valela said.
“Across our three main categories, lagers, sorghum and sparkling beverages, we have had record volumes and we have done so consistently in the last five years in terms of growth.”
In lager beer, Delta has also continued to benefit from rising consumer demand, although production capacity constraints resulted in stockouts during parts of the financial year.
“In the lager beer space, we have had stockout situations, meaning that we have had a lot of demand and we are investing behind that demand,” Mr Valela said.
The company expects to increase lager beer production capacity by between 30 percent and 35 percent by November through ongoing capital expenditure programmes.
Mr Valela indicated that the investment would be staggered to preserve cash flows while ensuring production infrastructure keeps pace with rising demand.
“We are very clear that the ancillary associated processes in maltings are going to run out of capacity,” he said.
“We will drive that capex expansion of over US$100 million, but fast, to allow our cash flows.”
Analysts said the standout performance was particularly evident in sorghum beer and lager beer categories, which have become increasingly competitive due to the influx of cheaper alternatives and counterfeit alcohol products.
For the period under review, lager beer volumes rose by 19 percent year on year to 3,15 million hectolitres, with demand consistently exceeding available supply.
Sorghum beer also surged by 19 percent year on year to 4,62 million hectolitres, surpassing the historical peak of 4,58 million hectolitres achieved in FY98, driven by improved rural incomes, enhanced marketing activations and stable pricing.
Sparkling beverages grew by 14 percent year on year to 2,24 million hectolitres, supported by price moderation achieved through absorbing the sugar surtax and the successful “Share A Coke” promotional campaign.
Shumba Maheu volumes doubled, driven by the successful November 2024 relaunch, with an expanded flavour range, though slowed by supply chain bottlenecks in the second half.
“Delta’s biggest strength remains its scale and distribution capability,” said Mr Tinevimbo Shava, an equities analyst.
He added that even with cheaper products entering the market, consumers continued to trust the core brands, hence volumes continued rising despite pricing pressures and informal competition.
Mr Shava noted that Delta’s sorghum beer segment had become one of the company’s most important defensive businesses during periods of economic stress because of its affordability and extensive distribution footprint.
Analysts say the growth demonstrates the enduring relevance of traditional beer products in low-income consumer markets, particularly as disposable incomes remain constrained.
“The informal market has grown but Delta has managed to remain embedded in the mass market,” said economist Mr Walter Mapfumo.
“The sorghum beer business speaks directly to lower-income consumers, and the volumes show that the company still commands significant consumer loyalty.”
Analysts view the expansion plans as critical to sustaining growth momentum, especially as beer consumption continues recovering alongside increased economic activity and diaspora-driven spending.
“The stockouts are actually a signal of demand strength,” noted Mr Mapfumo.
He added that very few manufacturers in Zimbabwe are currently talking about insufficient capacity because demand is generally weak in most sectors, hence Delta is in a unique position where demand is exceeding supply.”
The group is planning capital expenditure exceeding US$120 million to support future growth, particularly in brewing and malting operations.
Beyond Zimbabwe, Delta’s regional operations produced mixed outcomes, reflecting the complexity of expanding African beverage markets.
In South Africa, the group recorded volume growth and commissioned a brewery in KwaZulu-Natal to reduce distribution costs and improve efficiencies in the traditional beer segment.
However, operations in Zambia remained under pressure due to electricity shortages and the rapid spread of illicit alcohol products.
Even so, analysts believe Delta’s long-term regional strategy remains sound, particularly as formal retail channels begin accepting sorghum beer products previously excluded from mainstream shelves.
Stockbroking firm IH Securities, in its Delta earnings review, said the beverage maker’s FY26 results are robust, as shown by the record US$1 billion revenue reached for the first time in its history and surpassing the sorghum beer historical volume peak last achieved in FY98, while delivering a 42 percent jump in earnings before interest, taxes, depreciation and amortisation (EBITDA).
“This outcome speaks to genuine operational momentum rather than mere base effects. The Schweppes consolidation was well-timed and attractively priced as it was acquired at 0.9x book against a peer median of 4.0x Pk and positions Delta as a near-complete beverages platform,” IH said.
IH noted that the FY27 capex programme of US$120 million, which is approximately 27 times the US$43,9 million spent in FY26, is the group’s response to capacity constraints.
