Craft breweries, artisan breweries, micro-breweries – call them what you will – but many South Africans are refining their taste for beer away from the conventional commercial varieties.
In Durban, according to co-founder of the newest craft beer label, Poison City, Andre Schubert, the birth of craft beer is barely out of the starting blocks. Out of an estimated total of 150 craft breweries countrywide, Durban is home to just five but counting. However, that’s exciting for entrepreneurs coming in at ground level – especially if, nationally, the craft beer segment of the local market has grown by around 50% per annum over the past three years.
“We love beer but, until Brad Armitage and Rui Esteves from & UNION introduced craft beer to South Africa a few years ago, the only beers available in South Africa were commercial, industrial lagers,” says Schubert.
Ironically, even though their contribution to craft beer came from Cape Town, Armitage and Esteves met whilst surfing and living in Durban. They moved on to Cape Town where, in just five years, they changed coffee with their Vida e Caffè outlet which ultimately grew into a chain of eight. They sold it and turned to beer, creating & UNION, their beer salon and charcuterie, in Bree Street.
They have also put their weight behind the We Love Beer Movement. This stands for “Real beer. No additives. Just a few good ingredients and a lot of love.”
The growing popularity of craft beer is closely related to the growing demand for locally crafted goods and artisan bread and foods – a movement that is only just gaining momentum in Durban. In a world of mass produced goods and consumerism, information over load and high tech, there’s a definite counter shift towards individualism and authenticity which favours the growth of craft beer. Unfortunately, the city tends to lag other centres like Cape Town which has seen rapid growth of cottage industries, local art dealers and organic and homemade, unprocessed foods.
The move to craft beer in Durban is now being compared to the sudden surge in popularity of “real” coffee barista style – a culture that Durban has embraced spectacularly.
It comes as no surprise that almost all of the Durban craft brewers have associations with restaurants and food. Schubert owns Market, S43 grew out of Unity Café. Visitors to the Porcupine Quill Micro Brewery in Botha’s Hill can enjoy brew master John Little’s whole-hops, unfiltered, bottle-conditioned beer brands, Quills, Dam Wolf and African Moon alongside the farm’s handcrafted cheese and charcuterie. Gastro pubs such as Republik in Durban North and Unity Café are also furthering the love for craft beer.
The good thing about craft beer is that is more like a good wine than a Castle lager. It is best paired with food – and that means anything from a hamburger to haute cuisine.
Also in Durban craft brewers’ favour is the warm climate. Whereas beer is regarded as far more seasonal than wine in colder climates such as the Western Cape, mild winters make it a year round choice on the East Coast.
Also adding to the attraction of craft beer is the abundance of styles – ales, lagers, pilsners, porters, stouts, bitters, lambics and more – sometimes even brewed with some of the unlikeliest ingredients and characterised by cheeky and witty names and equally creative and amusing logos and labels. In effect, as beer drinkers drift towards the somewhat different side of beer, they are beginning to look for a product that is not only unique and made locally by a passionate brew master with a story, but a product that has tons of personality and with which they can share a sense of identity. Given the tendency for Durban to have its own laid back, surf centric culture, this could well be a marriage made on the Golden Mile.
But explaining why craft beer and Durban are a perfect match is one thing – seeing this take hold is another. To prove that theory is fast becoming reality, more and more beer festivals are making their way to Durban shores – starting with the first Consol Craft Revolution in March and the recent Durban Bierfest and including a visit from SA on Tap, a privately funded and organised series of festivals which aim to grow awareness of the craft beer industry in South Africa.
Tourism KwaZulu-Natal promotes a Brew Route that visits seven breweries in the province – with plenty of room for growth given that many of the newer craft breweries are not yet included.
With all that said about the burgeoning craft beer industry, South Africa still remains the domain of commercial brewers. The precise value of the beer industry in South Africa is hard to come by with some researchers suggesting that combined yearly turnover could top R35 billion. A study commissioned by South African Breweries (SAB) in 2009/10 noted that SAB’s economy-wide contribution to South Africa’s gross domestic product amounted to R66.2 billion in 2009 or 3.1% of the country’s GDP.
The perennial Wikipedia states that South Africa accounts for 34% of Africa’s formal beer market and is expected to grow by 8 to10% annually over the next five years. Beer consumption in the country was pegged at 60 litres per capita in 2012 which is greater than the 14.6 litre African average as well as the global average of 22 litres.
SAB holds as much as 90% of the South African beer market. Craft brewers account for just 1% of this –and Durban craft brewers less than 0.1% of this 1%!
But that doesn’t push craft beer off the radar and even some of the bigger financial institutions are beginning to sit up and take note of South Africa’s changing beer preferences and get in on the action.
Standard Bank expects the craft beer segment of the market to grow 30% this year and another 35% in 2016, reaching up to as much as 18 million litres by 2017 to give it a 2.1% share of the total premium and lite market – from just 0.3% in 2011.
Brendan Grundlingh, an executive from Standard Bank’s Global Consumer Sector team, believes that the market is growing so quickly because of increased demand driven by trends around authenticity and originality in the food and beverage space. “Consumers in this segment want locally made products with a story behind them rather than a mainstream produced product. We are in the early stages of growth, but super-premium is a beer category with potential,” he says.
Standard Bank wants to harness its research into the industry, advisory expertise and network across Africa to assist businesses to take advantage of the growth opportunities. “We want to support growth and partner with these businesses. We understand the issues in the market and can assist with working capital and funding needs,” he says.
Dirk van Vlaanderen, investment analyst for Kagiso Asset Management, recently told Finweek that the craft beer industry could be expected to continue to show strong growth ahead of mainstream beers.
Both believe that South Africa will mimic trends in the US where the craft beer market has rocketed. Again, according to Standard Bank, in the US, the retail value share for super-premium beer is 14%, with a 20% growth rate since 2012.
Van Vlaanderen quotes statistics taken from the Brewers Association, a not-for-profit trade association representing most American brewers. These, he says, indicate an 18% growth in craft beer production volume wise during the first half of 2014. Craft breweries hold a 10% share of the market. Noting that South Africa is probably 10 to 15 years behind America, he says that growth in craft beer is likely to persist.
Schubert is one of many who also believe that, ultimately, the rise of craft beer in South Africa will mimic that of the States. Craft beer took off in America during the eighties and nineties. Whereas there were just 20 craft breweries in 1980, there are now around 3 700 craft beer brands in America.
Even SAB itself is backing the growth of craft beer in South Africa, it seems. Drawing on its global experience in markets worldwide, it is taking ‘an if you can’t beat them join them’ approach, supporting and sponsoring local beer festivals as well as helping up skill craft brewers and help them source raw materials. It has also joined what it calls the premium beer market with the launch of its own small-batch beer brand, called No3 Fransen Street, in Johannesburg. This follows successes in the United States, China and Latin America.
But, as more brewers enter the market, competition will come to a head in much the same way as a good draft. It will be the quality brands that will make their marks in Durban and beyond. As many of the top craft beer brands sold in Gauteng actually originate in the Western Cape, there’s also no reason why Durban entrepreneurs are confined to supplying just locals with a taste for the good stuff.