Craft beer:

Finweek English Edition - - INSIGHT -

n South Africa more t han 50 mi­cro­brew­eries have found an op­por­tu­nity i n t he shadow of mar­ket l eader South African Brew­eries (SAB) to cater for a new mar­ket of beer drinkers, but com­pared to in­ter­na­tional coun­ter­parts, SA’s craft in­dus­try is still rel­a­tively un­tapped.

Although SA has long been a na­tion of beer lovers with con­sumers that tra­di­tion­ally opted for mass-pro­duced beer prod­ucts, Dirk van Vlaan­deren, in­vest­ment an­a­lyst at Kag­iso As­set Man­age­ment, be­lieves that the craft in­dus­try will con­tinue to show strong growth ahead of main­stream beers, mim­ick­ing the trends seen in the US over the past 15 years.

“The tra­di­tional beer mar­ket in the US de­clined around 1%-2% an­nu­ally since the start of the fi­nan­cial cri­sis due to a weak con­sumer en­vi­ron­ment and on­go­ing mar­ket s ha r e l os s e s t o pre­mium i mport a nd c r a f t beer seg­ments, as well as to t he spir­its cat­e­gory,” says Van Vlaan­deren, adding that the South African main­stream beer mar­ket i s l i kely to see some pres­sure from craft beers, but off a very small base.

SA’s ar­ti­san brew rep­re­sents less than 1% of the coun­try’s beer vol­ume*, with South African Brew­eries, which has an an­nual brew­ing ca­pac­ity of 3.1bn litres of beer, be­ing mar­ket dom­i­na­tor.

In com­par­i­son, statis­tics from the Brew­ers As­so­ci­a­tion, a not-for-profit trade as­so­ci­a­tion that rep­re­sents the ma­jorit y of Amer­ica’s brew­eries, in­di­cate craft beer pro­duc­tion vol­umes in­creased 18% dur­ing the f irst half of 2014 and the coun­try’s mi­cro­brew­eries now col­lec­tively hold a mar­ket share of over 10%.

“Based on vol­ume mar­ket share, we be­lieve that South Africa is prob­a­bly 10 to 15 years be­hind the United States in terms of craft beer pen­e­tra­tion,” says Van Vlaan­deren, ex­plain­ing t hat growth in craft beer is likely to per­sist in SA in the com­ing years.

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