Sixty Years of Good Taste

SP Brewery

SP Brewery has been doing its job for more than 60 years since its founding in the Papua New Guinea capital of Port Moresby in 1951. The company has been through many changes in the intervening years but now feels firmly rooted in a solid future and a thirst for expansion.

SP was a multi-beverage company until 2001 – meaning a manufacturer of soft drinks and fruit juices as well as the liquid gold for which the company is better known. SP marketed the Pepsi and Schweppes brands until “we made a strategic decision to focus on beer only from there on in. It helped us to see the world differently,” in the words of SP’s General Manager, Stan Joyce.

The beer market in Papua New Guinea has been bubbling along very nicely, especially in the last eight years, and this has contributed to SP’s decision to invest what Stan describes as significant capital expenditure, in the region of AU$100 million in new plant and equipment to take it forward over the next decades. The investments are partly a matter of modernising the brewery and partly planning ahead for what is a steadily rising demand curve. Two new brew houses are being built, together with new packaging lines and distribution facilities for the two breweries – one in Lae and the other in the capital Port Moresby.

SP (standing for South Pacific) is today owned by Heineken, the result of a 2012 acquisition by the Dutch giant of Asia-Pacific Breweries (itself the major shareholder in SP) following an epic multi-billion dollar fight with a Thai billionaire. By the time you read this the brewery will have launched the Heineken brand in PNG, brewing it alongside its domestic brands and marketing it as its premium international lager.

The company’s staple product is its SP Lager. Production is essentially for domestic consumption and the brand is little known in Australia although there is some marketing of the brand in northern Queensland and in Brisbane, where a substantial number of PNG citizens reside. “We also market in Fiji,” says Stan. “To be honest, [export outside PNG] will always be a niche marketing exercise in a place like Australia. For a beer brand to become a worldwide phenomenon is a rare event.” A brand like Heineken is truly global, of course, but “sitting in Port Moresby and having that as a dream might be just that – a dream.” This is less an issue of quality than of marketing push – some of the world’s biggest-selling beers are among the least respected, while other less well-known products shine but only for a limited cognoscenti audience (one thinks of examples such as Beer Lao from Laos and Windhoek Lager from Namibia).

The PNG market for beer is largely a middle and upper class affair. Average consumption is a modest 10 litres per capita per year – for comparison purposes, Australians consume 79 litres, Germans 107 litres and the champions, the good people of the Czech Republic, put away a whopping 132 litres per year (generally 2011 figures). SP brews a lager-style beer (‘lager’, incidentally, is a very ancient Germanic word meaning a place where something is laid down, and more recently took the meaning of ‘storage’. A lager beer is one that is fermented and conditioned at low temperature) that Stan says conforms in general taste to international lagers; but, he says, “It’s a tropical lager,” subtly different in body and mouth feel to beers made for consumption in more temperate climates.

The middle and upper class public has a preference for a wider portfolio of brands and wants to experiment with a larger repertoire, says Stan, although he largely dismisses the idea that PNG’s nascent tourism industry could be a spur to more beer sales since so much needs to be done (not least in the area of security and law and order) before the region’s tremendous tourism potential can be realised – and this kind of action is not quite imminent.

However, certainly not everything about the locale is negative. “We are blessed in the region around Port Moresby with some of the best natural water in the world for brewing,” shares Stan. All cardboard packaging is made locally as well, although glass and cans are imported.

Nevertheless, upmarket establishments, especially in the capital, are offering a gradually greater number of internationally recognised beer brands and Stan expects that trend to continue. “We certainly believe that the future will be different to the past or present,” he says. “We need to consider the possibility that one day other international brewers or investors may seek to invest in the PNG market.” That is one of the reasons behind the Heineken brand’s launch. Heineken supervises all of SP Brewery’s activities already, so quality levels in both plants is at the standard of global best practice. There is no cost or corner-cutting just because of the PNG location, so the Dutch owners have no reservations about entrusting Stan’s team with its flagship product. Because of its positioning as a top premium brand, none of SP’s existing brands (there are Export Lager, Gold, Niugini Ice and Johnny Arrow cider to supplement the standard, multi-award winning SP Lager) needs repositioning.

Increasingly, not only PNG but many more developing and developed nations are changing their attitude to consumption of intoxicating liquor and Stan and his team are well aware of the social aspects of the products they make. Is there a problem in the country? His response is considered: “In PNG it is advisable that anyone marketing alcohol stands back and takes a good look at the social implications of what they are doing. They need to work with key stakeholders so as to minimise the potential harmful risk of excessive alcohol consumption here.”

Like many other countries, PNG these days is a ‘dark’ market with no overt product advertising allowed; SP Brewery is allowed to associate its brands with sports activities. Accordingly, the company came forward again with sponsorship support of 100,000 kini (AU$46,750) toward Team PNG for the Pacific Mini Games taking place in September; money for the Sepik River Crocodile Festival; and K200,000 for PNG’s own National Rugby League championship (the Digicel Cup). Beer and football somehow go together, Stan suggests.

In a place like PNG, it is an absolute necessity and a priority to operate a thorough and caring corporate social responsibility programme. The company’s official policy is that, although it is recognised that SP brews PNG’s ‘favourite beer’, “we also recognise that with that privilege comes responsibility. And it’s one we take very seriously. Which is why we have introduced a range of social initiatives.” Following broadly on from the global practices of its parent company through the worldwide ICAP responsible drinking programme, the brewery refines the topics to suit the local conditions. These initiatives include:

• Designated drivers – “a programme to educate locals about the benefits of nominating a designated driver, a foreign concept in PNG.”

• Anti drink-drive – “a hard-hitting campaign to encourage Papua New Guineans to think twice before getting behind the wheel.”

• Safety for women – “shining the light on a significant but often-overlooked issue in PNG by belittling its perpetrators.”

• Responsible serving of alcohol – “PNG has sufficient laws addressing the responsible service of alcohol. We create on-trade material to help train and empower bar staff about when to say no.”

• Responsible drinking for staff – “educating SP Brewery employees on the responsible consumption of alcohol starts internally before we can advocate to the public.”

Stan makes the point that SP’s marketing is aimed at the equivalent of an audience of some eight million Indigenous people, making a responsible drinking programme a “very sensible” proposition. “In everything we do, we link it, so it’s not just us saying something but the World Health Organisation also. We work wherever we can with organisations like that and we will work with any government that wants to improve the way in which alcohol is consumed in these types of communities.”

Despite the potential for excess and damage (which exists in any country or region), beer drinking remains largely a sociable and enjoyable activity and Stan believes the market will continue to grow in PNG as the economy continues its upward march. SP Brewery is looking into more and even better brews; but for the moment let’s just pause and say ‘cheers’!

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January 16, 2019, 3:57 PM AEDT