• Zambian Breweries has returned to profitability after two years of losses, reporting revenue growth to K6.11 billion in FY2025
• The brewer’s recovery has been supported by a dual strategy of premiumisation and affordable cassava-based beer, with higher-margin international brands boosting profitability while Eagle Lager helps compete with informal alcohol and grey imports
• Despite the rebound, structural pressures remain, including weak consumer purchasing power, competition from informal alcohol and regional grey-market imports, raising questions about the long-term sustainability of the recovery

Harare - Zambian Breweries Plc has returned to profitability after two difficult years, posting a sharp turnaround in its latest results as revenue growth, product mix shifts and cost normalisation restored momentum to Zambia’s dominant beer producer. The recovery offers a glimpse of stabilisation in the country’s formal alcohol market, though questions remain about how durable the rebound will be in the face of informal competition and grey imports.

For the year ended December 2025, Zambrew reported revenue of K6.11 billion, up from K5.34 billion the previous year, reflecting strong demand across its beer portfolio and continued expansion of its distribution footprint. The company also delivered a dramatic improvement in profitability, swinging from an operating loss of K376 million in 2024 to an operating profit of K1.0 billion in 2025.

At the bottom line, the brewer recorded a net profit of K294.8 million, compared with a loss of K672.7 million the previous year, marking a significant recovery for a company that had struggled through a period of margin pressure, currency volatility and shifting consumer dynamics.

The improvement suggests the brewer’s pricing, portfolio strategy and operational adjustments are beginning to bear fruit. But the results also raise a broader question facing brewers across Africa: whether premiumisation and product innovation can offset structural competition from informal alcohol and grey-market imports.

Rebound after two difficult years

The past two years have been challenging for Zambia’s formal beer industry. Rising inflation, pressure on household incomes and currency fluctuations increased production costs while limiting consumers’ ability to absorb price increases.

For Zambrew, part of global brewing giant Anheuser-Busch InBev, these pressures translated into declining profitability and negative operating margins. The 2025 results therefore mark the first clear evidence that the brewer’s recovery strategy is gaining traction.

Revenue growth has been the first pillar of that rebound. The company continues to dominate Zambia’s clear beer segment through flagship brands such as Mosi Lager, Castle Lager and Eagle Lager, while also distributing international labels like Budweiser and Stella Artois.

The second pillar has been improved cost discipline. After absorbing significant cost shocks in prior periods, including higher input costs and operational disruptions, the company appears to have stabilised its expense base.

Premiumisation strategy

A central feature of the brewer’s strategy has been premiumisation, the industry term for encouraging consumers to shift toward higher-value brands and products.

Across many African markets, brewers have been pushing consumers up the price ladder toward premium lagers and international brands. The logic is straightforward: higher-priced products carry stronger margins and help offset rising production costs.

For Zambrew, this approach has also been a defensive strategy against a persistent challenge in the region: grey imports.

Beer imported informally from neighbouring markets often bypasses taxes and distribution costs, allowing it to be sold at lower prices than locally produced brands. Premiumisation attempts to move the competition away from price alone by emphasising brand strength, quality and aspirational consumption.

Yet premiumisation alone cannot solve the biggest threat to formal brewers: the large informal alcohol market.

Cassava beer as a strategic weapon

In this context, Zambrew’s Eagle Lager, brewed partly from locally sourced cassava, has become a critical strategic product.

Cassava beer allows brewers to lower production costs while supporting local agriculture, enabling them to offer a competitively priced product within the formal sector. In many African markets, cassava-based beer has become an effective tool for reclaiming consumers from informal alcohol.

By using local raw materials and benefiting from tax incentives designed to support agricultural value chains, cassava beer can narrow the price gap between formal beer and home-brewed alcohol.

For Zambrew, Eagle Lager therefore represents more than just another brand. It is a structural response to informal competition that dominates large segments of the alcohol market across Africa.

Competitive landscape: Natbrew and Delta

While Zambrew dominates Zambia’s clear beer segment, the company faces competition from National Breweries Plc, commonly known as Natbrew.

Natbrew focuses primarily on traditional sorghum-based beers such as Chibuku, targeting lower-income consumers and rural markets. The company is controlled by Delta Corporation, Zimbabwe’s largest beverage group.

Delta’s involvement has historically provided Natbrew with operational expertise and regional brewing scale. However, Natbrew has struggled in recent years with profitability and market dynamics similar to those facing brewers across the region.

Traditional beer remains popular among lower-income consumers, but margins in the segment are thin, and production costs have risen significantly due to inflation and agricultural supply volatility.

Natbrew’s long-term recovery will likely depend on its ability to modernise distribution and strengthen operational efficiency while maintaining its strong position in traditional beer.

Industry-wide trends

The themes emerging from Zambrew’s results are not unique to Zambia. Across Africa, brewers are grappling with three structural forces:

premiumisation and brand segmentation

competition from informal alcohol

volatile consumer purchasing power

Large multinational brewers have increasingly responded with a dual strategy: premium brands for higher-income consumers and locally sourced affordable beers to compete with informal alternatives.

Zambrew’s portfolio reflects exactly this approach.

Is the recovery sustainable?

The return to profitability suggests that Zambrew has successfully stabilised its operations after a difficult period. Revenue growth, improved margins and stronger operating performance all point to a company regaining its footing.

Yet sustainability will depend on several factors.

Consumer incomes remain fragile across much of the region, meaning price sensitivity will continue to shape demand. Informal alcohol and grey imports also remain entrenched competitors.

The brewer’s long-term prospects therefore hinge on maintaining a careful balance: strengthening premium brands while ensuring affordable products like cassava-based beer remain competitive against informal alternatives.

For now, the 2025 results mark an important milestone. After two years of losses, Zambia’s dominant brewer has returned to profit. Whether that recovery evolves into sustained growth will depend on how effectively Zambrew continues to navigate one of the most complex consumer markets in Africa.