With a presence in more than 60 countries, we aim to use our scale to generate maximum value and competitive advantage for the group. We also intend that each operation should benefit fully from the skills, resources and experience of SABMiller as a whole.
Beer tends to be a local business, subject to local tastes and legislation. Leveraging scale, therefore, is not simply a case of putting two or more businesses together and saving costs. While some such synergies are possible, the real benefits arise in driving sales using our scale to grow the business.
Scale helps us, first of all, to develop our brands. Our global reach provides a valuable platform for distributing and selling our international premium brands – Peroni Nastro Azzurro, Miller Genuine Draft and Pilsner Urquell. It also helps as we develop regional brands such as Kozel in Europe and Eagle in Africa. In addition, with 200 brands available, it's possible for individual businesses to select particular beers from our global portfolio and apply them in their own markets as Miller is doing with a number of our Latin American brands. Also, our global scale allows us to share brand innovation. Redd's, for example, originated in South Africa, moved to Poland, where it benefited from further innovation, and is now doing well in Russia.
The second way we use our scale to help us grow is by transferring skills, methods and technologies around the group. This clearly applies when we buy a new business. In South America, for instance, the rigorous application of SABMiller tools and techniques, and the infusion of talent from around the group, is generating tremendous growth and transforming the beer market in the region.
But the transfer of skills is not confined to new acquisitions. We've examined those elements of our management and processes that have made us successful and codified them to ensure they are transferable. The result is a series of SABMiller 'Ways' that set out how we do things in key areas of our business. This knowledge is not static but is constantly refreshed through the knowledge and experience of the entire group, ensuring that we remain a learning, self-refreshing organisation.
Our businesses learn from each other's responses to international trends in their markets. Retailer consolidation, for example, is most advanced in the USA and Europe, and our businesses in these regions are now sharing their experience with colleagues in South Africa and India.
Our global scale also provides opportunities for cost savings and efficiencies. Procurement is a case in point. In recent years, raw materials such as malt, glass and aluminium have been rising in price and it is important that we mitigate these effects. One way we're responding is by using our global scale to purchase more efficiently.
Our Europe division, for example, has been buying malt on a regional basis rather than country by country for a number of years and made considerable savings in the process. More recently, we've capitalised on this expertise by having Europe purchase all the malt for the group. Other divisions have taken responsibility in the same way for other raw materials.
When SABMiller bought Birra Peroni in 2003, it acquired not just a well established business in Italy but a brand with global potential. Research showed that Italy and all things Italian were admired around the world, embodying both passion and effortless style. And with international premium beers growing faster than any other segment, we believed that Peroni's premium brand, Nastro Azzurro, could become a strong international contender.
Peroni Nastro Azzurro was repackaged and relaunched with an elegant new design. Aimed at upmarket consumers, the communication campaign strikes the stylish Italian note that is known to resonate with the target audience. Such is the strength of the concept that each national launch has been able to use the same positioning and communications. Capitalising on our global footprint, the brand has now been launched with appropriate style in ten new countries including the UK, the USA, South Africa and Colombia. More countries will follow.
Like other international premium brands, Peroni Nastro Azzurro is being seeded and nurtured carefully. We've seen growth of 47% in the period, albeit from a low base.
Peroni Nastro Azzurro, one of our international premium brands.
Kozel (translated as 'The Goat') is one of our Czech brands, dating back to the 1870s and also popular in Slovakia. Within the Czech Republic, it has a market share of over 5.1%.
Czech beer has always been highly regarded outside the country, especially in eastern Europe. Capitalising on our regional scale in Europe, we launched Kozel in Russia in 2002 and in Hungary three years later. It's now the leading international licensed brand in Russia and one of the top ten beers in Hungary. We also export it to over 25 other markets in Europe and beyond.
Thanks to this regional expansion, Kozel is now our fourth largest brand in Europe, with a compound annual growth rate of over 27% in the last five years. Margins have also increased as we've benefited from economies of scale.
The case of Kozel shows the group's ability to take a brand that's doing well in one market and move it across borders to enhance the portfolio in other markets. Kozel is now being managed on a regional scale – another indication of greater cohesiveness and collaboration across our European markets.
This map highlights Kozel’s expansion across our Europe market.
Kozel has been brewed for over 130 years.
To help support the learning and development of our own employees and the global standardisation of brewing qualifications, techniques and processes, we announced, in June 2006, our sponsorship of a new Chair of Brewing Science at The University of Nottingham in the UK.
The first scientist to have taken up the position is Professor Katherine Smart, one of the UK's leading experts in the fermentation processes that determine the quality and flavour of beer.
This sponsorship also marked the launch of a new postgraduate programme, an MSc in Brewing Science. The pioneering, interdisciplinary MSc programme has been developed for individuals working in the brewing industry. It has been designed not only to provide a key pathway for continuing professional development but as a part-time distance learning course so that students can acquire and practise skills in their work environment.
In September 2006, 12 students commenced the three-year part-time course, including 11 employees from SABMiller's operations in the Canary Islands, Czech Republic, Italy, Panama, Poland, Russia and South Africa.
Professor Katherine Smart, Chair of Brewing Science, University of Nottingham, UK.