As one of SABMiller's largest businesses, Bavaria in Colombia has been at the forefront of the group's rapid progress in the region. Against the backdrop of SABMiller's work to transform the image of the beer market, its operational improvements have steadily lifted its performance to new levels.
Having carefully segmented the market and created a full portfolio of renovated and differentiated brands, the business was able to focus on the quality of its service and developing its relationship with customers. It has expanded its pre-selling operation and now provides a single point of service to each retailer, agreeing in each case which brands, presentations and point-of-sale material will best meet the consumer needs and beer-drinking occasions served by the outlet in question.
Another important step was to increase control over the distribution network and the number of direct deliveries, and optimise the network for maximum efficiency. This included rationalising distribution centres, consolidating a fragmented distributor network and introducing and standardising performance incentives for distributors. The business has also increased its vehicle utilisation by replacing the ageing, overloaded, fuel-inefficient trucks of the past with new, palletised vehicles using modern loading techniques and working to planned routes and schedules. All these initiatives have reduced distribution costs and made delivery more effective and reliable with a consequent leap in customer satisfaction.
Colombia felt the effects of the global downturn relatively early. Bavaria responded swiftly to worsening conditions, carrying out a detailed review of its costs and organisation. This, along with the work on its brands, sales and distribution operations, has enabled the business to deliver an impressive year-on-year rise of 270 basis points in EBITA margin. The double digit compound annual growth in EBITA since 2007 underlines the resilience and flexibility of the business and its strong position as the economy recovers.
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