Booze for Africa is the plan as Distell sets out to lift elbows, profits
Distell has operations in 11 African countries
Reward over risk is what Distell - the maker of wine brands such as Nederburg and Two Oceans, whisky Scottish Leader and Three Ships and cider Hunter's and Savanna - wants from its ventures into Africa.
Since April, it has scaled up operations in Africa despite economic pressures, falling consumer spending and fierce competition among global drinks companies - all factors that have made navigation of the continent trickier.
Distell MD Richard Rushton told Business Times this week that the continent had "huge untapped potential" and included markets with among the fastest growth for alcoholic beverages.
"Consumers in these markets are also trading up from unbranded, mostly homebrewed alcoholic beverages into branded products, which presents a major opportunity for Distell," he said.
"Our portfolio of brands is uniquely structured to offer consumers choice, from affordable to premium brands, across the wine, spirits and ready-to-drink categories. Very few alcoholic beverage players have the capability to offer consumers such a wide portfolio."
The push into Africa is one answer to intensifying competition in the South African market, where Distell's cider and ready-to-drink dominance is under pressure.
Anheuser-Busch InBev's cider brands are chipping away at Distell's 95% market share in South Africa. In its second-quarter results, ABInBev said its Redd's cider had achieved 20% sales growth. Another rival is Heineken's Strongbow cider.
"Diversification of our geographic footprint reduces our exposure to one single market," said Rushton.
"Adding scale to our platforms in Africa reduces Distell's dependence on South Africa, a more mature and stable alcoholic-beverage market. Africa, although generally volatile, still offers substantial growth opportunities and forms a key part of our long-term growth strategy."
Outside South Africa, Distell has operations in 11 countries on the continent, including Angola, the Democratic Republic of Congo, Nigeria, Ghana, Kenya, Mozambique and Zambia.
An industry commentator, who asked not to be named, said Distell had been "moving quite strongly" into the wider African market, with "acquisitions in East Africa and growing volumes" elsewhere.
According to International Wine and Spirits Research in London, South Africa, Nigeria and Angola account for about 50% of Africa's total alcohol consumption.
Daniel Mettyear, a senior analyst at the research body, said Africa was seen as the "final frontier" by drinks companies.
"Nigeria is a big focus; it is Africa's biggest economy and has the biggest population. The alcoholic drinks market there has been growing very fast, although it has been faced with economic challenges.
"Angola, with a population of about 20million, is also a big alcohol consumer, but the import business has slumped due to economic pressures.
"But these two African countries will be back on their feet sooner than we know it," he said.
Market research provider Euromonitor International said Angola was among the markets in which a significant increase in customs and import duties had led to rising prices for Distell's products.
"In 2014, Distell announced that it had purchased land in Angola and in Nigeria to set up greenfield production facilities. In addition, that year saw the company open a new bottling facility in Ghana," it said.
"Distell offers an extremely wide range of brands and products which helps to cushion it against sales fluctuations ... Within wine, the company offers 34 of the top 50 brands."
It has been a busy first half for Distell, which will announce its preliminary annual results this month.
In April it bought a 75% stake in Cruz Vodka from Blue Sky Brand Company. It has also increased its stake in KWA Holdings East Africa, Kenya's largest wine and spirits manufacturer and distributor, to 56.43%.
Last month, Distell announced that it had bought a 26% stake in Best Global Brands, a pan-African brand with operations in Angola, Nigeria, Kenya and Zambia, for $54.6-million (about R730-million).
Rushton said Angola's alcohol market was very important and the acquisition of Best Global "fits perfectly well with our strategy and shows our confidence in the African continent".
Distell will acquire the remaining 74% in 2019, once operational targets are achieved.
Sidharth Saboo, an equity research analyst at Arqaam Capital, said the acquisition of the initial stake would strengthen its Africa portfolio, which currently contributes 13% to group revenue.
"Distell is likely to extract synergies in terms of procurement, route-to-market and production efficiencies," Saboo said.
Distell's growing portfolio in Africa and its wide range of products make it a serious competitor to its peers in the sector - where it is ranked fifth among the top 10 drinks companies in the Middle East and Africa.
The top four companies are ABInBev, Heineken, Diageo, and Castel Group.
As Distell stakes its claim among Africa's alcohol producers, its largest shareholders, Remgro and the Public Investment Corporation, must be rubbing their hands with glee as they watch a new giant in the spirits business being stitched together - with rich pickings on the horizon.