Breweries of all sizes know that stainless steel is the best material of choice for fermentation vessels, however, price can seem prohibitive if a full analysis is not done before investing
Growth in the hand-crafted beer market is making an impact on the local stainless steel vessels industry, with craft beer volumes poised for growth and opportunities for the manufacture of local microbrewing kits.
Research and Markets’ April 2017 report stated that the global craft beer market is expected to reach $502.9 billion by 2025, with the Middle East and Africa poised to grow at a compound annual growth rate of 28.9% owing to the increasing penetration in South Africa.
BREWING CULTURE
Over the past 50 years, beer drinkers in many countries that have high beer per capita consumptions, such as the US, UK and Australia, have been offered alternatives to the national brands, breweries which mainly consist of lager type beers brewed with similar taste and aroma characteristics.
This rising trend of “real ale” or “craft beers” around the world is seeing many smaller players entering the market to offer cleaner, less commercialised tastes. It has also has attracted many larger brewers to change their brand beer styles to incorporate these offerings.
Africa also has a long history of home-made beer, with evidence showing that ajon (millet beer), chang’aa (distillate), ebikweete (maize beer) and enguli (distillate) have been produced here for over 3 000 years. There remains a huge spectrum of artisanal alcohol in Africa, from palm wine through various fermented products, to the illicit stills producing spirits of varying levels of potency, often meeting an ongoing demand for low cost alcohol.
Craft beer is seen by many beer drinkers as an opportunity to choose a beer that suits their taste and style. The wine industry has marketed their products as being different and so satisfying the discerning taster to take wine in different situations where their life style takes them. Choice, age and location of the wine are strong attributes of this beverage.
To a growing number of people, the current scenario paints a picture of the larger brewers having lost some of the beer culture that they had when they first started.
Many of the larger brewers have taken this opportunity to bring back that beer culture that had given them their heritage and fame in the market place by integrating established craft breweries into their portfolios.
MICROBREWERIES IN SOUTH AFRICA
A decade ago, there were six craft beer makers in South Africa. Now, there are estimated to be almost 200, with the artisanal sector having captured almost one-percent of the nation’s massive beer market.
According to comments from Craft Beer South Africa to National Treasury in July 2014, there were about 80 craft brewers and brand owners who were eligible for full membership of Craft Beer South Africa. However, according to research done in 2017 by independent brew mistress Lucy Corne of www.brewmistress.co.za, this figure is growing substantially.
“There aren’t any statistics as to how many breweries there are or how much craft beer is being produced,” says Corne “So I attempted to put together my own set of stats. I emailed every brewery I could find that was licenced and selling – 156 of them at the time (August 2016).”
Corne believes this number has grown even further in the past year. “Of the 156 breweries, 86 responded and the 86 represented a perfect cross-section of the SA beer scene – from the nano, garagestyle setups to the larger outfits.” “Getting info on volumes was difficult,” says Corne. “Answers varied from 50 litres per month to ‘Enough’”. However, with the results garnered, Corne believes she has put together some semblance of statistics for the South African craft/microbrewed beer industry.
The results showed that there are craft breweries in every province, with the bulk found in the Western Cape (72 of the 156). In the past two years, there has been immense growth nationwide – about 50% from 2014 to 2015 and again from 2015 to 2016.
The average brew length is 888 litres – that is, the amount of beer brewed per batch, while the median brew length is 600 litres. “Pretty small amounts,” says Corne. “Of course, it’s not all about the size of your kettle – it’s also about how often you brew and what your fermentation capacity is.”
The results showed that the average monthly output for a South African microbrewery is 10 250 litres per month. “Of course, some breweries produce way more and many produce even less, but this figure is fairly low, with some business minds suggesting that 12 000 to 15 000 litres per month is the bare minimum for a production facility to start making a profit,” says Corne.
Figures suggest that the total annual production of microbrewed beer in South Africa is around 20 million litres, which means it still accounts for less than 1% of the beer market in South Africa.
THE LARGE INTERNATIONAL PLAYERS AND UNIVERSITIES
SAB and IBD Africa Section have promoted brewing in the South African university community for a number of years. Microbreweries have been opened in the universities of KwaZulu-Natal, Cape Town, Pretoria, Potchefstroom, Witwatersrand and Rhodes.
SABMILLER – AB INBEV MERGER
Many international microbreweries have raised concerns about last year’s takeover of SABMiller by Anheuser- Busch InBev, which has created an
international behemoth in a deal valued at more than $100 billion. The new company will account for 27 percent of beer sales worldwide.
However, as a condition of the merger, the new entity has been banned from anti-competitive practices, such as buying up significant amounts of hops or barley, or pressuring distributors to stop selling smaller brands.
The SA Competition Commission aims to protect the industry with various conditions, such as:
- Anheuser-Busch InBev has undertaken that it will offer employment to employees of distributor DGB who may be retrenched in the event that AB InBev terminates its distribution agreement.
- The Commission has recommended a condition that AB InBev continues to supply input products, such as hops and malt that are currently supplied by SAB to small beer producers for a five year period.
- AB InBev has undertaken that it will continue SAB’s policy and practice of maximizing local production of beer and cider. In this regard, it will
ensure that South Africa maintains at least the same ratio of local production.
Restraints have also been put in place to address any potential impact that the merger may have on the South African suppliers of input products such as glass bottles, cans, ends, crowns, etc.… required for beer production. These measures will go some way to alleviating microbrewers concerns about their market growth.
