It is not easy running a microbrewery – especially at a time when the government is cracking down on booze through the dreaded sin tax.
It is much tougher operating in an industry dominated by the big guns who boast mega marketing and distribution budgets that can easily drown out the small players.
But in the misty hills of Limpopo an enterprising brewer is hard at work trying to take his award-winning brew to the world.
Zwakala Brewery, based in the picturesque village of Haenertsburg near Tzaneen is steadily making inroads into the craft beer market locally.
Its flagship craft beer Zwakala Lager has already won a number of local and international awards.
This has caught the attention of retailers who are beginning to stock up on ale, especially in Limpopo, but also in Gauteng.
Zwakala produces four beers: Naked Ale, Limpopo Lager, Mountain Weiss and Weekend Special. The brewery produces craft tequila and ciders.
The term zwakala, made famous by legendary 1980s pop group Stimela, is slang for “come on over here”.
International market researcher Grand View Research estimated last year that the global craft beer market could be worth an estimated $500 billion by 2025.
According to the website www.brewmistress.co.za, run by beer market research expert and author Lucy Corne, there were at least 180 micro breweries countrywide by the end of 2016, the bulk of them in the Western Cape, producing an estimated 20 million litres of beer, which accounts for less than 1% of the beer market in South Africa.
Although the going is tough in this market, the outlook augurs well for microbrewers, such as Zwakala.
“We are in talks with some of the larger retailers – Tops Spar makes it easy for us to list as they are all independently run. So we do supply a number of Tops Stores. However, with Checkers, Pick n Pay and Makro the listing process is a lot more difficult, but we are persevering,” said Luca Tooley, brewer and general manager at Zwakala Brewery.
Tooley said one of their immediate goals was to take the brand across the borders, especially in the southern Africa market.
“We are working on the international market and hopefully next year we will be able to achieve this. We are lucky enough to attend international trade shows and we hope these can help create future relationships overseas,” he said.
It sounds a bit awkward that Haenertsburg, which is known best as a tourist haven with a vibrant outdoors and adventure scene, could be the home of a brewery. But Tooley said that even though the brewery was not based in an industrial hub, that did not count against it.
“Running a brewery here is bliss. We have the best water and that is an important part of beer,” said Tooley.
The brewery has become an important player in the local economy, which rests heavily on tourism and, to a large extent, forestry.
Zwakala employs eight full-time staff and an additional three temporary workers.
It offers students from the University of Limpopo an opportunity to do their internship studies.
“We contribute a lot. We source all our building bricks locally and we use as much fresh produce from the area as possible.”
Zwakala hosts regular fairs and lifestyle shows which have become a huge draw card and major boost to the local hospitality and tourism economy in general.
But the going in this tough industry isn’t as easy as downing a cold one.
“The brewing industry is tough and the margins are small. The bigger breweries are becoming way more aggressive price-wise, which is hard for us at the moment. In addition, the legislation around beer and alcohol only benefits the bigger guys as it does not work on a sliding scale like they do in the States,” laments Tooley.
In February government announced an increase of between 6% and 10% on alcoholic beverages. As a result of this, he said, the bigger players can be way more competitive because of their economies of scale.
“However, the smaller breweries are coming together and hopefully we can lobby government to work the sin tax on a sliding scale. The bigger the brewery, the more excise they pay and the smaller the less excise they pay,” he says.
He said small breweries give a lot back to the local economy because, as they expand, they need more intensive labour as their brewing process is not entirely mechanised.
In December 2016, the consumer inflation weights published by Stats SA revealed that beer accounted for 2.1% of total household spending. – Mukurukuru Media