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.
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.
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.