While higher costs, supply chain glitches and restricted trading have underpinned a tough two years, the head of Heineken-owned SP Brewery foresees better times in Papua New Guinea.

SP Brewery’s mainstream brand SP Lager, celebrates 70 years in PNG this year. The brewer employs 450 staff and has two breweries, one in Lae and the other in Port Moresby (pictured). Credit: BAI

According to Managing Director Ed Weggemans, Papua New Guinea’s largest brewer, SP Brewery, witnessed a notable pick-up in 2022, with production volumes up 16 per cent and revenues rising even higher.

As well as consumers having more money in their pockets to spend, courtesy of higher global prices for agricultural commodities like coffee, vanilla and palm oil, Weggemans also attributes heightened demand to the 2022 national elections.

He expects the market to remain buoyant in 2023 but, in the absence of major upcoming events, he expects recent growth to cool somewhat. ‘Inflation is there, and global pricing is coming down, so we expect to be back on 2019 levels on a monthly basis early this year,’ he tells Business Advantage PNG.

Meanwhile, Weggemans expects increased costs entrenched within international supply chains, due to higher freight costs and the inflated costs of raw ingredients, to start trending downward over the next 12 months.

Economy brands

Weggemans attributes the lion’s share of growth to the success of SP Brewery’s mainstream brand, SP Lager, which has benefited from activities around the brand’s 70th anniversary and an upswing from the elections.

On the other hand, premium brands such as South Pacific Export lager were more directly impacted by lingering pandemic-era trading restrictions and liquor bans.

To celebrate the 70th anniversary of the company’s mainstream beer, SP Lager, in 2023, SP Brewery expects to put a lot of effort into promoting the brand this year.

‘We are encouraged to keep investing in the brand image and the brand quality.’

While recent marketing initiatives have pushed SP Lager’s growth higher, Weggemans notes this is the brand people favour when money is less tight.

Volumes are also up for the economy brand, Kundu Lager.

Brand power

SP Brewery’s Ed Weggemans.

Meanwhile, there are plans to introduce a new flavour to SP’s Chiller range of fruit-based beers.

To offer consumers also a non-alcoholic beer choice, SP Brewery has also launched Heineken 0.0 into the PNG market. ‘From [parent company] Heineken’s side, it is important to keep investing, so we are encouraged to keep investing in the brand image and the brand quality and will be increasing our market presence through ads and promotions,’ Weggemans says.

While SP continues to support the PNG Golf Open and the PNG Olympic Committee, it is directing more advertising spend to sports that appeal to its target market, notably rugby league. It recently recommitted to naming rights sponsorship of the PNG Hunters, which play in the Queensland Rugby League competition in Australia, and will continue to sponsor PNG’s national competition.

The article ‘SP Brewery toast a brighter outlook’ was first published in the 2023 edition of Business Advantage PNG, Papua New Guinea’s premier business magazine. Read the emag here.