In common with trends observed in USA, UK and Australia, South Africa has witnessed the appearance and growth of a craft beer sector of microbreweries (see Corne and Reyneke, 2013, Van Zyl, 2014a). It can be argued that following global trends and triggered by the enormous consolidation of SABMiller and with its the production of increasingly standardized lager and light beers, there has emerged a counter movement in South Africa’s beer industry which took place in the past 30 years and closely resembles the trends which occurred in other countries. This reaction against consolidation and lack of variety offered to consumers essentially resulted in an interest by South African consumers in ‘older’ beer styles, such as pale ales, porter, brown cask ales, stout and bitters (Corne and Reyneke, 2013). In this respect the development and growth of the South African microbrewing and craft beer industry is not dissimilar to that experienced in countries such as the UK and the USA during the early 1970s and 1980s. Some noticeable differences though are that it initially occurred much later and on a much smaller scale than in USA or the UK and that until recently the rate of microbrewery formation was relatively gradual (Corne and Reyneke, 2013).
The documented beginning of microbrewing in South Africa is 1983 with the establishment of Mitchell’s Brewery in Knysna. Since 1983 a variety of structural changes and a new geography of craft beer production emerged as many local beer consumers (many of them Millennials) turned towards the more artisanal crafted beer product which is produced locally. This is in preference to the conventional mass-produced beer products offered by the multi-nationals such as SABMiller and Brandhouse. Hedley (2014) ascertains that the ambiguous and emerging nature of the South African craft beer industry justifies its total market share which is estimated to be about 1% of South Africa’s beer market. The trivial nature of this statistic may well be over-looked by many industry observers, yet it is of considerable appeal when drawing comparisons with North American beer market. Specifically in the case of the USA’s craft beer market which had market share that stood at a humble 2.6% in 1998. However, over a 15 year period gradually encroached towards a 7.8% market share of the total domestic beer market (Molla, 2014). Inevitably this sharp increase in growth within the broader market share of beer, Weissmann (2014) states that the USA’s
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craft beer industry in the year 2014 as a combined group began to challenge the stereotypical notions that have forever encircled “Big Beer Companies”, which was typified when it outsold one of the USA’s largest beer brands ‘Budweiser’.
Figure 4.1: Development and Growth of Microbreweries in South Africa 1983-2016 (Source: Author).
An influential role in craft beer industry development in South Africa has been played by the presence of a long existing and fairly large homebrewing community and of a small amount of homebrewing clubs most of which are situated in the country’s major cities. The most notable are the Wort Hog Brewers in Gauteng, South Yeasters in Cape Town and East Coast
9 9 12 14 18 25 26 30 36 58 83 124 158 187 1 3 4 5 9 12 18 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 1983 - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NUM BER O F M ICR O BR EW ERIE S YEAR
The Historical Growth of Microbreweries in South Africa
(1983-2016)
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Brewers in KwaZulu-Natal and more recently the birth of others such Port Elizabeth Homebrewers Association, Sedibeng Home Brewers in Gauteng, Durban Homebrewers in KwaZulu-Natal and Bloemfontein Home Brewing Club (see Corne and Reyneke, 2013; Swanepoel, 2014b; Van Zyl, 2014: 149). The activities of these different homebrewing clubs have been described as the foundation for incubating several of the country’s more recently established craft microbreweries.
Figure 4.1 shows the result of the audit of craft micro-breweries in South Africa. It reveals a steady expansion to the point that the 2016 national audit revealed a total of 187 licensed microbrewers (see Appendix A for full list). Figure 4.1 shows that the tempo of growth has been uneven and it is evident that growth in microbreweries was slow during the 1980s. Throughout the 1990s and 2000s a small number of microbreweries began to establish themselves throughout the country; by 2003 there were nine microbreweries. In terms of spatial distribution, new developments in this period mainly were in and around Cape Town and KwaZulu-Natal rather than in Gauteng commonly associated with the major national market for beer consumption. The growth in the Cape Town area has been suggested as a ‘natural’ development following the appearance and proliferation of boutique wineries there from the 1990s. Figure 4.1 documents the emergence and growth of this industry and illustrates how ‘microbrewery numbers’ increased steadily from 1983-2003.
Since 2003 there has been a surge of new microbreweries established throughout all provinces within the country. By 2008 the number of breweries had more than doubled to 25 microbreweries in operation and articulated by strong industry growth rate of 64 percent. An even more rapid pace of expansion is observed in the following five year period from 2008 to 2013 when an additional 58 licensed microbreweries came into operation with an even higher growth rate of 70 percent. A more than tripling in the numbers of microbreweries during this period accounts for 44 percent of the existing population of microbreweries in the country in the 2016. It must be noted the cut-off date for inclusion in this national audit was the 31st October 2016. In terms of the analyzing Figure 4.1 it must be noted the peak period of growth within the South African microbrewery industry is evident between 2013 and 2016 when it is clearly observed that the greatest surge of new microbreweries entrants occurred with a 55 percent increase in market share.
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As well as new craft brewery openings it is evident that there has been a churning of enterprises as a number of breweries have proven short-lived and have experienced closure. Figure 4.1 documents the number of microbreweries from 2010 which closed down as a result of several encompassing factors. The amount of microbreweries which closed in relation to the overall industry in 2016 reflected just under 10 percent. Some recognized examples of microbrewery closures which have been highlighted by many local public media sources includes that of the Bavarian-themed Paulaner Bräuhaus and microbrewery which had been situated at Cape Town V&A Waterfront for almost 10 years. Closure was speculated to be an outcome of an apparent leasing disagreement due to the high rental costs (Williams, 2012). Other breweries closed because of the more highly competitive environment and some because of poor quality of product.
Figure 4.2: The Location of Craft Breweries in South Africa: Provincial Scale 2013 (Source: Author)
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Figure 4.3: The Location of Craft Breweries in South Africa: Provincial Scale 2016 (Source: Author)
The current spatial distribution of microbreweries at the provincial scale of analysis is shown on Figure 4.2 for 2013 and Figure 4.3 for 2016. At the provincial scale of analysis it is evident that the largest clusters of breweries are in the country’s most developed provinces (see Appendix A). Of the national total (2016) of 187 licensed microbreweries the greatest number are found in the Western Cape (85 in total) followed by Gauteng and Kwa-Zulu- Natal with a combined total of 55 licensed and operational microbreweries. Taken together these three metropolitan provinces account for a 140 or 75 percent of all the licensed breweries. Another important finding relates to the exceptional recent growth of craft brewing in the Eastern Cape. Smaller numbers of microbreweries are situated in parts of the North West, closely followed by the Free State and then Mpumalanga. Limpopo and the
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Northern Cape have gradually followed suit and have only recently begun to be represented in terms of microbreweries.
The dominance of the Western Cape is attributable to a number of considerations. First, is its first mover status as the location of the growth of microbreweries built in the 1990s and early 2000s. Other potential factors are a heritage associated with boutique craft wineries, tourism, and hipster-driven, anti-mainstream trends which may reflect certain neolocal characteristics. KwaZulu-Natal has for a long time also played a significant role on the craft brewing scene with the presence of ‘Nottingham Road Brewery’ and ‘Zululand Brewing Company’ both been established relatively early in 1996 and 1997 respectively (Corne and Reyneke, 2013). In more recent times with a rapid surge of new players, the growth of microbreweries in KwaZulu-Natal has been encouraged by the establishment of a tourism beer-route as is discussed in Chapter 5. By contrast, Gauteng until recently has lagged behind these other two provinces in terms of microbreweries. Nevertheless, the province is rapidly catching up with a surge of new microbreweries within the province, most of which have only taken root in the past three to five years. This is supported by the fact that 24 or 69 percent out of the total number of 35 microbreweries in Gauteng were established in the two year period of 2014- 2016.
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Figure 4.4: The Location of Craft Breweries in South Africa: Urban Scale 2016 (Source: Author)
Figure 4.4 shows at the urban scale on the existing location of all microbreweries in South Africa for 2016. It is evident that the greatest numbers of microbreweries are situated in the metropolitan areas and major market centres of Cape Town, Johannesburg, Pretoria, Durban and more recently Port Elizabeth. These five centres together account for 66 microbreweries or 35 percent of the national total. Within Johannesburg and Cape Town a trend was observed at the micro-scale of location for the establishment of microbreweries in inner-city areas which are experiencing economic regeneration and transformation. In Johannesburg the case of Maboneng is a good example where one licensed brewer is operating and two other breweries have established operations. The entrepreneur who was interviewed and
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established the Smack! Republic Brewery in Maboneng stated the reasons for selecting the location: “We were attracted to the urban rejuvenation taking place in the CBD (Maboneng), which seemed like a fitting backdrop to start Joburg’s only microbrewery in the city”. Beyond Johannesburg, Pretoria and the local surrounding areas such as Centurion also have seen strong growth since 2014 with six microbreweries establishing themselves within its hub. In Cape Town the areas of Woodstock and Salt River have seen a parallel growth of microbreweries in formerly ‘declining urban spaces’. By 2016 a total of eleven craft breweries were in operation in these two parts of Cape Town.
Outside of the major market offered by the leading cities there is a clear trend for micro- breweries to have been established in tourism destinations. Examples include Stellenbosch, Knysna, Mossel Bay, Cullinan and the Kwazulu-Natal Midlands. The “recreational periphery” of Gauteng also extends into the Free State and includes Clarens, another vibrant hub for micro-brewing. In interviews with entrepreneurs the importance of tourism was emphasized by several interviewees as a factor in location choice. For example, the owner of the ‘Cockpit brewery’ stated: “I identified Cullinan as a fast developing tourist destination” (Interview, Cockpit Brewery). Likewise, the owner of the Oudtshoorn brewery highlighted its location on “a main tourism route with high percentage of Europeans that understand beer” (Interview, Karusa Premium Wines & Craft Brewery). This was further supported by the owner of ‘Bassett Breweries’ located in Pennington on the South Coast of Kwa-Zulu-Natal whereby he stated the following motivating factors for establishing a Microbrewery in the respective location ~“A number of things, firstly my love of beer but different beer, secondly the fact that I’ve lived in this part of the coast [Kwa-Zulu-Natal South Coast] for just over thirteen years and use to travel hundred kilometres to work every morning and hundred kilometres back home again because there is no real development taking place down this part of the coast. Industry here is very slow, so anything you going to do - has to be tied into other the sugar industry or tourism industry because that’s all we really got. So that’s why I decided to go into the beer brewing side, more from a tourism perspective than anything else” (Interview, Bassett Breweries). Additionally the entrepreneur of ‘Long Beach’ brewery stated the reasoning behind their location was “partly to do with the fact that it was close to home but also we knew there’s a good market of beer drinkers in our area and also an established market of people that are into craft related industries in the ‘Noordhoek’ area –
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so we knew that the local residents would be quite supportive” (Interview, Long Beach Brewery). Porcupine Quill Brewery situated in Botha’s Hill, Kwa-Zulu-Natal is another microbrewery brewery whose current location is classified as tourism zone – ‘1000 Hills Tourism’ according to its founder.
The secondary city of Stellenbosch in the heart of the Cape Winelands also represents another expanding location for craft brewers. Its entrepreneurs again identified its value in attracting both local and international tourists. This is exemplified by the following interview responses from Stellenbosch craft beer entrepreneurs:
*“Well one of the main reasons was we always wanted to have a restaurant where we focus purely on authentic South African cuisine and craft beers and this venue already had the space to facilitate that. Secondly there was a lot of outdoor space on the farm which we saw as a big opportunity to potentially host rock concerts and music festivals and being situated in Stellenbosch there is obviously a huge student community who are continuously looking to be entertained... and our location is within a 2km radius from one of the biggest student accommodation areas which is ‘Welgevonden’. Then thirdly from tourism perspective we are located on one of the busiest roads between Paarl and Stellenbosch and it gives us access to the very popular ‘Cape Spice Route’ which has begun attracting many tourists to the region.”(Interview, Sir Thomas Brewery).
*“The original vision for operating the microbrewery out of Stellenbosch is because – well number one, it already has a big tourism market and we wanted to try draw upon some of the beer travellers which as you know globally - beer tourism is much bigger outside of South Africa... number two Stellenbosch has huge student market and students drink a lot of beer... number three the people who live here are very proud of the heritage and history of the town and that’s why all are beers are named after icons and legends etc... Lastly Stellenbosch has a big culinary following and association – I mean currently at the moment four out of the top ten restaurants in South Africa are found here and people love wining and dining which is great because it creates a trend and people become more open to new types of tastes, especially for example food and craft beer pairing.” (Interview, Stellenbrau Brewery).
Finally, in terms of appreciating the geographical distribution of microbreweries in 2016, it should be noted that the Figure 4.4 is reflection of only successful enterprises; it does not map out the geography of closures.