Schweppes Zimbabwe Limited is a manufacturer and distributor of non-carbonated still beverages with a product portfolio that includes renowned brands such as Mazoe Crushes. The company recently announced it would undertake a US$35 million investment for the next 10 years into a 2 700 hectare citrus plantation. The investment will boost value addition and enhance production at its Beitbridge Juicing Company which currently is processing 20 000 tonnes of fruit against an annual capacity of at least 40 000 tonnes. Apart from supplying fruit juice concentrate to local markets, the group also exports oils and frozen juice to Israel, Europe, and other markets. But since the outbreak of the novel coronavirus (Covid-19) pandemic in December 2019, businesses have suffered supply chain disruptions although the food and beverages industry has been identified as an essential service provider. This has forced businesses to accelerate digitalisation in order to stay abreast with the changing environment and growing demand for online shopping. Schweppes has not been left behind. Our business reporter Enacy Mapakame (EM) had a question and answer with Schweppes managing director Mr Charles Msipa (CM) on their adoption of e-commerce and plans. Below is an extract of the interview.
EM: What has been the impact of COVID -19 and lockdowns on operations and what measures have you put in place to tackle the challenges?
CM: The lockdown has without doubt severely impacted many businesses and we have not been spared. We however are thankful that as an essential service provider, we have been able to keep our plants running even during times of hard lockdowns. However, the reduced shopping times for our customers have impacted our revenue-generating capabilities.
EM: In what ways has the Covid-19 pandemic pushed Schweppes towards e-commerce models, if there has been any move in that regard?
CM: Luckily for us, our Schweppes online store was birthed before the pandemic hit us and now that we are in this sad situation, we have dedicated more resources towards e-commerce given the lockdowns.
EM: Global e-commerce’s share of retail sales jumped to 19 percent in 2020 from 16 percent due to Covid 19. What is the situation at Schweppes with regards to digital sales?
CM: Without a doubt, the global share of e-commerce has significantly gone up and even locally, we have seen many companies going in this direction. For us at Schweppes, we are witnessing encouraging progress from our e-commerce platform, and mind you, we are still in the infant stages and more and more benefits will be realized going into the future.
EM: In what ways have national lockdowns within the region, and perhaps globally affected the consumption of your products?
CM: As stated prior, the limited shopping times have impacted negatively on our ability to generate more sales. We have pivoted through our online store and other initiatives we have put in place. The appetite for our products, however, remains undiminished.
EM: To what extend have your markets embraced e-commerce, especially the local market? Is this enough to maintain sustainability in the “new normal”?
CM: The pandemic situation created a consumer demand-driven scenario where consumers have demanded e-commerce models where they can shop from anywhere and get home deliveries. So this natural market acceptance of e-commerce, which again was not a new phenomenon to our customers will continue to spur demand now and into the future. We strongly believe that as long as there’s effective demand for our products, this channel can only but self-sustain for posterity.
EM: What can you say are the major setbacks in adopting e-commerce in a Zimbabwe market and where do you see opportunities?
CM: Over the last few years, we have seen massive appetite for online shopping signifying a huge shift in consumer behaviour. This is a key primary ingredient for the adoption of e-commerce business models hence all businesses should take advantage. Opportunities are abundant for businesses that can adopt end-to-end models like we are doing in offering home deliveries. Lately, we have witnessed the growth of intermediaries in the form of aggregators who are assisting in the last mile delivery. Our hope is that as many players enter the market, this will significantly lower the transaction and overall cost structures of e-commerce business models.
EM: What are your prospects say in the next two to five years?
CM: Product development, innovation and route to market optimisation will be key for us going forward.
We are projecting to still be in the covid-19 environment for the foreseeable future and hence the importance of availing more platforms and channels for customers to access our products.
EM: What is your general overview of the manufacturing sector in Zimbabwe especially food beneficiation? What are the challenges and what needs to be done?
CM: The resurgence of our agricultural (sector) is expected to provide the backbone for the overall growth of the economy (7,8 percent) as projected by Treasury.
As players in the manufacturing sector and particularly our industry, we see this playing a catalytic role in the broader sectorial benefits we are poised to realise. Challenges exist in access to forex as we import most of our raw materials and we are expectant that the work being done by the RBZ through the auction system will yield more benefits to companies like ourselves.