Last week, the Craft Brewers Association of South Africa (CBASA) released the results of their most recent member survey, and the findings were so bleak I decided not to publish this post on Friday and ruin everyone’s weekend. I also thought posting on a Monday would be better as I could include a call to action: it’s a new week, booze sales are open – go forth and buy some beer. But with the president’s announcement yesterday, there is little point in trying to encourage people to buy craft beer, because you can’t. At least, not legally.
CBASA has been sending out regular surveys to the craft beer industry during lockdown. The results paint a stark picture
When I was writing this on Friday, I found it so depressing I had to leave off and play some Lego by the fire with my son to cheer myself up. Today, the dying embers of hope I had for South Africa’s craft beer industry have all but gone out.
I have been so impressed with how the brewers have hustled to try and make the best of things. They’ve employed all manner of methods to stay visible and relevant. Online stores offered discount deals and free delivery, some breweries ran cool, inventive competitions, some released limited-edition beers and others offered online events such as live tastings or brewery tours. But the truth is that the industry has been severely damaged by the lockdown restrictions, and CBASA’s most recent survey lifts the lid on just how bad things have got.
The survey received responses from 108 breweries and contract brands, representing a little over 50% of the industry. And of those who responded, a whopping 87% said that they are currently unable to meet their monthly expenses. And here’s the real kicker: only 10% of brewers believed that they would be able to continue trading in the near future if the current restrictions on the trade of alcohol continued – and this was before Ramaphosa reinstated the ban on alcohol sales. Ten per cent folks. This is devastating.
“We are dangerously close to closing our taproom,” says Lethu Tshabangu, co-founder of Ukhamba Beerworx in Claremont. “We shrank our staff from eight to two, then last week we had to send the two home so that we can try and keep things going by ourselves. Most of our patrons are young black folks who don’t earn much and many people in that bracket have lost their jobs.”
Although many breweries started to focus on online sales, it was not enough to keep their businesses thriving. The CBASA survey found that in 53% of cases, sales had decreased by 60-100% since the start of lockdown, with 24% of these respondents indicating that their sales had dropped by 90-100%. The survey reported that seven breweries have been forced to close their doors permanently.
I happened to pass by the new Ukhamba Taproom last year on the day they were hanging their sign. Let’s hope they don’t have to hang a “closed” sign soon.
The anonymous nature of the survey means that the association doesn’t have the details of the brewery closures. However, I can confirm that Sir Thomas Brewing Co. in Stellenbosch has permanently closed. The Robertson Brewery in George is advertising its brewing equipment on GumTree, as is Owl and Hare Craft Brewery in Wakkerstroom (although the reason for the sale here is stated as retirement). RedRock is seeking a buyer, while Three Stags (Johannesburg) are selling their equipment and moving to a contract brewing model – something I expect we will see a lot more of in the coming weeks and months. Suppliers are also struggling. Earlier this year, Walts Malting – South Africa’s only micro maltings plant – announced its closure, which was a huge blow to many small breweries around the country.
Of the breweries that remain open, the situation is dire, with 63% of the survey respondents having had to retrench staff during May and June as a result of the limited trading restrictions. Nearly 70% of these businesses indicated that they had to retrench over 50% of their employees, with eight breweries having to retrench all of their staff members. Government UIF payouts have been difficult to secure, with just over 40% of those that applied for UIF for their staff receiving no assistance at all.
“We hired young people who were all on their first jobs,” says Lethu. “They were so excited about having jobs, and to see young black guys operating the business inspired and pushed them on. They really believed that they’d one day be running their own businesses. Our aim was always to hire people who would soon leave and pursue their own dreams. Now this shop is dying with their dreams.”
I wish I could sign off with something positive, but today I am struggling to see anything but doom in the future of South Africa’s beer industry. People often ask my prognosis – how many breweries I envisage closing by the end of the year. We started this year with about 220 breweries and contract brands. I think if we can see out the year with 120, it will be a miracle.
What can you do to help? These days, I really don’t know. All of the lobbying and petitions have failed. You can’t (legally) buy beer from them. Shit, you can’t even offer a hug these days. I will regroup and try to come up with something. Until then, ration your beers, wear a mask and support small businesses whenever you can.
Thanks Lucy, tough times indeed. We will have to forge a way through this. Somehow.
I know it’s a stretch, but I will be putting it out there on social media to prepurchase beers and/or vouchers from their local. Possibly even donations if it’s getting to that. Not positive news but it’s what we are facing. I am fully committed to #keeplocalalive
Sad very sad. The Thousand Sensations Craft Beer Festival also on hold at the moment. But only on hold
I know this goes against a lot of tradition and will be questionable but can microbreweries start to invest in producing non-alcoholic beer. I know it changes the taste completely and they will most probably be ridiculed for it but this what your average beer drinker resorts to in times like these and only the big breweries produce them as far as I can see. Just a thought.
It is an option, but it’s actually very difficult to make non-alc beer. Plus I think there’s a limited demand, but it’s not a ridiculous idea…
I’m not keen on non alcoholic stuff. Just haven’t developed a taste for it. But the pre buying, yip. I’ll do that. I’ll do a lot to support the craft breweries. It’s just so sad that the deeds of a few people who can’t handle their alcohol end up affecting so many. It’s not right.
We must look at bigger picture, its not just the actions, but more the spending power, the drop in sales indicate luxuries coming to end. Need to be involved with solutions to uplift economy… ppl can’t afford what they did, to be ignorant and watch till gets uplifted is going to cripple more than pockets….figures have dropped, no buying power sadly reality.
My local craft brewer is selling beer kits, seems a good idea to me
Is that wort with yeast or the typical homebrew kits? If it is legal (I can’t think of a reason why it would not be legal) I think selling wort with yeast would be great.
Are anyone selling wort at the moment? If so, who?
Funny you should ask this – I have been chatting to the brewers about selling wort and will be putting a post up next week re where to get some!
Great! Thanks Lucy, that is good news!
Oh Lucy…in the words of Charlie Papazian “relax, have a home brew!” Easier said than done, I know. It does seem quite momentous that as an industry we need to factor in COVID-19 infection and death rates into our demand planning and ultimately business case calculations. We pray for South Africa, its people and its leadership to make the right decisions and act as a collective functional entity. It is a shame that a small majority of our population does not respect alcohol and the need to drink and act responsibly and that it can have such a devastating effect on the greater South African people and businesses. Vasbyt SA, stand together and overcome the thirst!
Thanks for breaking these devastating numbers and news and all the best for everyone’s survival. Seeing the second part of lockdown unfolding from Europe does help me to see there’s life after lockdown, but it won’t be easy.
I would totally support pre purchasing. Also the beer brewing kits is a smashing idea with most people not having enough stockpile of their beloved brew. I for one was looking for beginner kits on Sunday evening, and could find none who had stock.
Sad sad news indeed and I don’t think our Government is seeing the wood for the trees. We’re going to win the battle but lose the war. Too many of our rights are being taken away and people are suffering hugely as well. Very happy to purchase 0% beer especially if local.
Lucy – Thanks for being the source that you are and the work you have done to cover and promote this craft. Peter Sellers in “Being There” is quoted in the character of Chancy Gardner as saying “in the Spring there is new growth” and I believe in both his words and his beautiful optimism in the human spirit to innovate and prosper. This isn’t Hollywood for certain but art imitates reality time and again.
Thanks Robert. I cannot wait to drink a draught beer in the sun with friends in the spring!
Time to stop blogging and getting out in the streets toi typing… Enough is enough!
Toi typing…that’s like a written protest in the street is it? 😉
Time to start bootlegging – Since when have south africans listened to authority, especially one without any common sense.
Make soup get in the headlines for good reasons then deliver beer hidden amongst the soup just remember to give out the soup in the townships and not the beer
Really a sad situation. It also seem if the drive to get something done that I saw with the first part of lockdown (ban) is less now. I don’t see initiatives from breweries to pre-sell or anything at the moment. Unless I look in the wrong places
I think they need a bit of time to pick themselves up and get their heads together after the most recent ban – we were totally blindsided. I will post as I hear…
Yes, maybe I were too short in my earlier post. My point that I wanted to make was that it seems as if this round really took it’s toll on the brewers’ spirit. And I fully understand it when it is your livelihood that is “played” with like that. I really feel for all people that has been negatively impacted by this epidemic!