Thirsty ThoughtsMageu

Annual Market Quantification

August 2011

Setting the scene

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• Mageu is a popular traditional mealie malt-based beverage found in South Africa. This product has been manufactured by the local population for many years, and has become a favourite amongst working class citizens.

• Mageu is manufactured by fermenting a mixture of thin mealie pap and wheat flour. As the mixture ferments, the glucose found naturally in mealie pap turns into lactate, giving the product it’s dairy base and milky texturing and flavouring. Commercial producers pasteurise the product to extend it’s shelf life.

• Mageu is often flavoured for retail selling purposes, and comes in a variety of pack sizes, though liquid mageu is mainly found in cartons. The product is also legally required to have a less than 1.0% alcoholic level in order to classify as mageu.

• Mageu is primarily consumed by the middle to lower portion of the market mainly in Gauteng, KwaZulu-Natal and Eastern Cape.

• Recently a smooth version of the drink was introduced under the same brand label in a variety of flavours.

2010 Category Distribution

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Bottom end retail

23.1%

Garage forecourts

4.3%

On con-sumption

12.5%Top end retail

27.7%

Wholesale

28.1%

Rest of SADC4.3%

Annual Growth Rates

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2000 2005 2010-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

Volume Growth

Annual Moving Average

Mageu recovers volumes

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• The mageu market saw an increase during 2010, after a major drop in volume in 2009. This recent increase is attributed to a recovered customer base after 2009’s infamous economic recession. It is believed that the category may also have been assisted by a small price increase during 2010. This helped to bolster the category’s value, and production followed.

• Since 2009, garage forecourts, on-consumption and top end retail saw a decline in consumption, making way for bottom end retail, which is expanding its volumes.

• Several producers in other SADC countries have tried in the past year to expand into new countries and markets. Not all ventures were successful, as the markets are mostly local and brand loyal.

• Newer pack sizes which were introduced in 2007 and 2008 suffered volume erosion as the whole category declined to the point where they were no longer used. However, as the category itself recovered this year, some of these pack sizes saw reintroduction.

• New product development options remain high in an effort to build the consumer base as the traditional beverage user group is getting older.

Thirsty ThoughtsMageu

For more information, contact:

Jan Wegelin Research ManagerTel: (011) 615 7000 Mobile: 082 938 0744

www.bmi.co.za