African Distillers Limited (Afdis) recorded strong first-quarter growth, driven by soaring demand for wine and ready-to-drink (RTD) beverages, with wine volumes surging 80% as Zimbabwean consumers increasingly opted for affordable brands.
In its trading update for the quarter ended 30 June 2026, the beverages manufacturer said overall sales volumes rose 43% compared to the same period last year, supported by stable exchange rates, buoyant consumer spending, improved product availability and a crackdown on counterfeit and smuggled alcohol.
Company secretary, Lydia Mutamuko, said wine was the standout performer during the quarter, with strong growth recorded across the affordable segment.
“Wine volumes increased by 80%, supported by strong performance from the affordable segment, particularly the 4th Street, Montello and Green Valley brands,” she said.
Ready-to-drink (RTD) beverages also posted robust growth, with volumes rising 48 percent on the back of sustained demand for ciders, while spirits volumes increased 32%, driven by strong sales of brown spirits, particularly Star Brandy, and improved availability across key brands and pack sizes.
The strong volume growth pushed quarterly revenue up 47% to US$27.9 million from the corresponding period last year.
Mutamuko attributed the performance to stronger route-to-market execution, improved product availability and a favourable sales mix, adding that reduced grey market activity helped channel more consumers into the formal retail sector.
“The revenue growth reflected sustained demand in the formal trade, supported by the stable operating environment and reduced grey market activity,” she said.
Despite the strong top-line performance, Afdis said profitability remained under pressure from rising production costs. Margins benefited from improved operating leverage and disciplined revenue management, but these gains were partly offset by higher fuel and packaging costs, as well as stronger regional currencies that increased the cost of imported raw materials.
To support growing demand, the company is investing US$8 million in an additional packaging line, building on the US$4.4 million invested in plant and equipment during the previous financial year.
Looking ahead, Mutamuko said the company remained confident about its prospects for the remainder of the financial year, citing favourable macroeconomic conditions and continued Government efforts to curb illicit trade.
“The operating environment continues to present growth opportunities, supported by stable exchange rates, sustained economic activity across key sectors, buoyant consumer spending and continued regulatory action against smuggled and counterfeit products,” she said.
She added that management would continue to monitor input cost pressures, including fluctuations in regional currencies, fuel and packaging costs, as well as the impact of tax adjustments on margins.
