A couple of weeks ago, SAB quietly announced that they would be venturing into the South African craft beer scene (the first I heard of it was on Beerhouse’s blog). Well, they didn’t quite put it like that – they’re sensibly staying away from the word “craft”. The press release stated that their “development brewery” would “deliver small batch speciality beers”. These beers, brewed “on a very small scale” at SAB’s Fransen Street brewery, will be available in limited quantities and only in Gauteng, though I don’t know if there are plans to roll them out nationwide at a later date.
The announcement has, unsurprisingly, caused something of a stir in the craft beer industry. So I thought I’d throw in my two rands’ worth (I have more to say than the proverbial two cents…)
The issue
It’s not SAB’s first foray into small batch beer – they’ve exhibited a range of one-off beers at beer festivals in South Africa, like the Presidential Porter at the 2012 CTFoB
There are a few issues that people have brought up regarding SAB dipping its toes into the craft fermenter. Of course they would offer some pretty huge competition and some think that it would be an unfair playing field. Well, it would be – I mean of course SAB have bigger, better equipment, while many craft brewers are cobbling together their breweries with stainless steel tanks and a lot of ingenuity and juggling the brewing with a day job. SAB – or Fransen Street – are also offering free branded merchandise, free taps and free servicing of said taps – something that many of the small brewers simply cannot afford to offer a bar. So yes, it is an unfair playing field, but c’est la vie, and if no one’s doing anything illegal or immoral – like paying off a bar to remove one beer in favour of selling another – then business is business.
The biggest complaint though, of course comes down to money. Now, SAB’s Fransen Street beers won’t be offering a cheap alternative to the consumer wanting something other than lager – they are recommending that the beer retails at R40 a pint, which is on a par with many microbrewed South African beers, particularly in Jo’burg.
There has been a lot of buzz on Twitter regarding the wholesale price. Fransen Street’s beers will be available to bar owners for less than R13 per 500ml – a rate that often undercuts the craft brewers. Naturally, lots of bars will see the dollar signs and snap up the beers that will give them a greater profit, perhaps at the expense of some of the independent microbreweries. Is it fair of SAB to charge so little? Perhaps not, but you don’t become a multi-billion dollar company by always being fair.
In the hands of consumers
The decision then, really rests in the hands of the consumers. If you can buy a beer from a small, independent brewer for the same price as a pint from one of the world’s biggest brewers, the choice will come down to two things that are at the epicentre of the craft beer culture: ethos and flavour.
It might not look like it, but Ndlovu Brewery is a good example of the little guy…
If you’re someone who wants to support the little guy, who respects the hands-on process, the small batches, the blood, sweat and beers approach of the microbrewer, then you’re probably not going to suddenly switch to “crafty” over craft. And if customers don’t buy it, then bars won’t sell it. I sincerely hope that SAB is up-front on the label and states that the Fransen Street range is part of SAB Miller. I don’t like the idea of someone thinking they’re supporting a local, small enterprise when in fact their money is going to the company whose beers they’re perhaps trying to avoid. Consumers have a right to know who’s brewing their beer and a right to drink whatever beer they want to – whether it’s brewed by billionaires or hobos or anyone in between.
If, for you, the beer you choose all comes down to flavour, then it’s up to SAB. Will they use adjuncts or malt extract to cut costs? Will they import ingredients essential for certain styles? Will their brews – which will include Cream Ale, Irish Red Ale and Krystal Weiss – stand up to the best craft examples currently on the SA market? If not, then, again, craft breweries are not going to lose their craft audiences. And if the beers are top-notch – as they should be with the equipment and resources SAB has at its disposal – then the rest of the industry will also have to step up. More on that later.
New audience
Will Fransen Street’s IPA be able to compete with this bad boy?
Now I’m not saying that SAB venturing into “small batch” brewing isn’t of concern to South Africa’s microbrewers. Of course it is. What I’m saying is that these microbreweries have built up a loyal and almost cult following and I don’t see those customers jumping ship even if the beers are spectacular. One Facebook comment I read said that the Fransen Street move will simply serve to switch drinkers from one SAB beer to another, which I think was a valid point.
And do you know what I think we might see happening? I think it’s totally plausible that SAB finally admitting that there’s more to beer than pale lager could lead to a whole new wave of ale drinkers in this country. The craft beer industry is young and many are still wary of it, equating microbrewed beer to the bad batch of homebrew that exploded in their mate’s garage in 1976. People are afraid to try it, especially considering the elevated price when compared with their usual pint of lager. But if the brewery that they’ve trusted all of their drinking life brings out an IPA or – can you imagine – a cloudy weiss, then maybe conservative drinkers will dare to taste something new. And if they like it, what’s to stop them then ordering a CBC weiss, a Woodstock IPA or a Cockpit stout?
Golliath brewing ales is undoubtedly worrying for the Davids of the SA beer industry, but it’s not ridiculous to see that it could also benefit them and the industry as a whole.
A plus for the drinker
I’m nearly done – then I’ll pass it over to you. If SAB’s beers are good – and I mean appropriate for the style they’re supposed to be – then it could have a knock-on effect and lift the whole beer industry. Now there are many breweries in this country that could teach SAB a thing or two about a perfectly balanced weissbier, about how to dry-hop an IPA or how to introduce herbs into an ale. There are also many that could learn a lot from SAB – how to brew a clean beer that’s free of any off-flavours. If the Fransen Street’s beers are up-to-scratch, these brews could help to teach the consumer that beer can have big flavour and just what those flavours should be. Gone will be the days of a brewer or a barman fobbing off a newbie ale lover with crap like “it’s craft beer, it’s supposed to taste that way” after a sour beer complaint, or suggesting that the aroma of band aids comes from dry hopping. The consumer will be empowered and shoddy brewing/cleaning/bottling will have to become a thing of the past. Sure, Fransen Street has an unfair start, with their fancy equipment and huge corporate backing, but hopefully South Africa’s craft brewers will step up to the challenge and bar owners will stay loyal to the little guy to ensure that their brews remain on tap next to those of their big brother.
The Fransen Street beers will launch on September 25th and be available at the Jo’burg Festival of Beer. From September 29th you’ll find them in select outlets around Johannesburg.
Join the debate – are SAB an evil force trying to squash the country’s microbrewing scene? Could this help the industry? Will you taste the beers? Or will this make you stick even more to your craft ales? Share your comments below and follow the debate here and here.
Well written Brew Mistress – let’s see what the beers taste like. More beer is never a bad thing. We will continue to support the beer revolution . The small guys will always have tap space at Beerhouse.
Thanks for the excellent article Lucy! Here’s my two cents as a craft brewer: I’m not overly concerned about this development and can only hope that the plus points you mention come to pass. What does dismay me a bit is that SAB will probably succeed on some level to fool people into believing that they’re doing “craft” (even if they don’t use the wordt).
Maybe it’s because, as you mentioned, craft beer in SA is still highly variable in terms of quality, and SAB knows how to make a clean beer. But I think it’s also that a lot of purported craft beer is still way too close to the middle of the road, safe options using cheap ingredients familiar to the SABs of this world. So in SA the consumer often has to fork out more money for a “craft” beer that really doesn’t use ingredients much different from that found in most mass-produced beers.
My guess is that this is how SAB will be able to produce cheap beers, label them “small batch” and get pub owners to charge craft prices. Where’s the mountain-of-hops IPAs, the complex grain bill Imperial Stouts, and the weird Belgians? You won’t find them in SAB’s line-up I think, because small batch or not, they won’t produce beers that won’t make them close to their normal margins and aren’t consumed by the majority.
But then you also won’t find these expensive styles in most local craft brewers’ lineups either. And that’s the real pity.
You make some fine points. I really hope they don’t try to deceive the public. I’m with you hiking up that mountain of hops with a couple of weird Belgians!
Thanks Lucy…nicely put. If the American craft beer scene is anything to go by (which it hopefully will) good mass produced ales made by big brewing corporates will thrive alongside a dynamic growing craft brewery industry.
Thanks Ant – here’s hoping!
A lot will depend on the quality and branding of the craft brewer, it’s like all the wine farms/boutiques, there is a place for all. The loyal craft drinkers will stay with their preferred brand and support the craft guys.
Great article Lucy! I have tried to have this discussion on twitter with a few of the guys, there are just not enough characters!
I agree with you 100% If you drink craft because it is craft, you will continue to do so! If you drink craft because it offers different styles to what’s available, then more variety is always a good thing. And finally, if you don’t drink craft because “I don’t like perfume beers!” then maybe Fransen Street will have something that turns out to be a “Gateway” beer, and actually expands the craft market. I just hope that pub/bar owners don’t remove craft taps for Fransen Street taps! I get the financial aspect, but add to your existing tap offering rather than replacing. Hopefully the cult following includes owners as well as their patrons!
I think its a good thing,the more quality beer on the market the better.
I do howeve have a few issues with it
1:RSP,by encouraging outlets to push for those margins will push all local craft beers over R40 and some to R70-R80 and imports to over R100.this will keep potential converts away because its too expensive.
2:free merch,lank glassware and cash incentives.this will be done to get exclusivity in outlets.I know this will/is happening.
3:after SAB,Brandhouse will bring their beers to market as well
No 2 is a concern, for sure. I like to think though, that the current places that are known for craft – the Banana Jams, Beerhouses, Unity Bars, Griffins, Wolf Packs and the like will continue to support. Perhaps if new outlets get only Fransen Street taps, they would be the places that would otherwise have only had SB so maybe it will turn a few more drinkers on to ales. Or maybe I’m being a bit idealistic!!
SOME WHAT SLY, SOME WHAT BITTER, NEVER SWEET!
It seems that for far less than 1% of the beer market it is worth confusing the customer and damaging a start up industry that is reviving and stimulating the overall image of beer.
SABM are advising pub owners to mark up these products substantially and place the taps next to craft beers, showing them the potential profits to be made off the cheap “speciality beer”!
Don’t be duped by outlets trying to lighten you wallets with cheap beer at artisanal prices.
Thanks to all Craft beer drinkers for their devoted support, without which the range of speciality beers available today,
would be non existent.
You bet your pale fizzy lager I’m a craft beer snob!
This is the best thing that could happen to our little craft industry. Why? They are a marketing machine and are going to tell EVERYONE about speciality / craft beers and we all going to ride the wave. This moves people away from shitty lagers and in to the world of different styles of beer, which has always been the challenge for craft brands as they haven’t had the marketing $$ to do it.
I like your thinking, Jason
Like everything in life – good quality things will survive and poor quality will die!
I truly hope that there attempt at “craft” will open the eyes of the unconverted, but i also personally feel that it is ridiculous that they advertise such a massive profit margin so openly. How is it justified? Does this beer pour itself into my mouth? If this product cuts into the current craft market share (the whole 1%, if it is even that much) I will loose serious faith in beermanity.
Well written Lucy. For me the question is always, what is craft and why do people care? If we stick to the spirit of craft beer, why we make it, why we drink it, why we love it, then everything will be awesome.
All in all this could just speed up growth and curiosity and we as craft brewers will keep growing craft beer as a brand. Its the craft beer brand and spirit that we have in common and should value.
Start the mashing, bring the wheelbarrows filled with hops and brew up a storm!
My 1 cent
I’m a newbie craft beer drinker (not even nearly a beer snob, yet –
LOL), and would say from the outset that the growing market I form part of is passionately loyal… not to one, but to true amber-blooded craft as a movement. In other words, all of them – so please, no beat-downs for what I am about to say:
I delight in slight variations. I celebrate the odd ideas and creative tastes of small batches. I’m bemused by skew, home-made labels, scuffed bottles, dented caps, mild over-carbonation and bitter-sweetness. These things tell me that what I am about to experience is personal. A poem, rather than a recipe. Art rather than a perfect reproduction. I am into the imperfection of it all, and am seldomly disappointed the the garage brewer or small-scale brewery alike because I expect only one thing from them: honesty. Because, if a beer is honest you can taste it.
I am not overly concerned about the impact of the SAB small batch beers themselves (as they are into perfection, 100% repeatability etc…), but the hold that SAB may have on the supply of ingredients (such as homegrown Hops for instance) as well as potential influence (I imagine) into bottles and other supplies. What leverage could they exert over price, availability and quality control of those resources? Craft to me is about being as local as possible, so SAB hold a major playing card in this respect, with almost endless buying power. This is already apparent in the merchandising plan mentioned in previous comments.
For me though, I want the chaotically-thick oils painted with the imperfect palette knife on an oversized canvas – I want the art of beer… and so do a great many people who have been introduced to the world of Craft – that is what sets true Craft apart. Honest imperfection.
I definitely don’t want one of the million perfectly-printed ‘corporate posters’.
…until I become a beer snob that is.
Craft Parkhurst would just like to add. That we will be supporting Independent breweries Only.
Won’t be lured by high margins and free merchandise!
We are committed to dealing with the Individual, real people who have committed heart & soul to their Craft.
A ringing endorsement for a tough niche from a very shareholder-return focussed brewer. Great.
SAB’s real view? Either an honest micro player, or per the 118 craft video which won a Loerie? Time will tell.
Thanks Lucy for a well written article
My own personal opinion: this shouldnt really come as a shock to the craft brewing industry, it has been brewing for a while. By supporting the small guy, “growing the beer category”, being at festivals was all part of the master plan. SAB has tried before introducing “speciality” beers into the market before but South Africans werent ready hense FSB closed down. They recently spent millions refurbishing it, obviously not just for fun. I believe this will help shape and further grow the industry in terms of better quality control within craft brewers and “converting” more people to wonderful flavours n aromas found in beer. On the downside, they will continue to control the industry…..next year we might just be told we cant sell any more J17 hop (for example) as it’s all reserved for FSB specialty beers -watch this space… or they might just decide to retail their beers at R15 per 500ml.This is just the beginning, but we will all soldier on and hope our loyal fans remain loyal
I am not a mouthpiece for SAB (I promise), but I would be interested to hear a view from SAB or someone who understands their marketing strategy. The old/traditional beers (black label, castle etc) are in decline. The ‘premium’ beers like castle lite are growing markets and FSB may just be a product within that premium range. From what I understand ‘craft’ beer isn’t taking market share from the traditional beer sector but competes with wine…and I don’t think wine really worries because demand is so strong. This is what I have heard while drinking beer, or wine, I can’t remember.
Surely there is a point where an inverse relationship between batch size and quality starts to kick in? I would also expect there to be a batch size which if you go beyond has to involve the use of so many stabilisers and fining agents and so on that it it just won’t taste like ‘real’ (aka ‘craft’) beer. Which begs the question – is it really unfair if they enter this space as (I am sure) the main economies of scale come through the size of individual batches.
Then last, it struck me (hard) that we need a definition of craft beer in this country….and it doesn’t have to include the words ‘bottle conditioned’ 🙂
Hehe – I’ll never live down the bottle-conditioning rant!!
With SAB’s No 3 Fransen Street entry into the “speciality beer” category, they have inadvertently defined their “ordinary beer” for us.
They define their “speciality beers” (note the words they use to distinguish this new category) as:
“… using only the finest premium ingredients, to create a new series of speciality beer styles like no other. Each is batch brewed to create tastes that are unique, and completely lacking in ordinariness. Infused with quality, passion and creativity, to create a real difference in taste.”
By replacing the distinguishing words with their opposites, one gets this definition for their “ordinary beers”:
“… using average ingredients, to create ordinary beers like all other ordinary beers. They are mass produced to create tastes that are common and ordinary. They are not brewed with passion and creativity, to ensure there is no real difference in taste.”
Craft beer found their niche because some people (myself included) wanted to drink beer that is not “ordinary”. Mega brewers brew quality beers, but usually very “ordinary” beers. It is the main reason I started home-brewing 20 years ago. Craft beer in South-Africa was almost non-existent then.
I’d welcome SAB’’s “speciality beers”, as long as they don’t use strong arm tactics to push out the competition. But, with their business history, their marketing budget, their control of the distribution channels, etc., I won’t bet on that not happening.