Craft beer makers brew fresh ideas to fight the impact of the alcohol ban

Picture: iStock/Gallo Images
Picture: iStock/Gallo Images
  • Craft beer makers are taking on second jobs, making juice and merging businesses as they grapple with the impact of Covid-19.
  • The government instituted a ban on the sale of alcohol this month but the industry has called for it to be lifted.
  • Smallholder farmers who produce maize, barley and hops for AbInbev subsidiary, South African Breweries, face an uncertain future.

As the ban on the sale of continues affecting businesses across South Africa, some craft brewers are thinking of creative ways to keep going, while smallholder farmers face an uncertain future.

Julian Pienaar, the owner and head brewer at Hops End a brew pub in the East Rand, had quite a busy Thursday.

But it had nothing to do with selling or brewing alcohol, instead Pienaar was busy cleaning his pub.

He is one of many microbrewers who have been impacted by the ban on the sale of alcohol.

The alcohol industry has been at loggerheads with the government due to its decision to impose the ban, saying it was costing jobs and crippling the economy.

However, an increase in alcohol trauma-related cases led to the government's concern there would not be enough hospital beds for Covid-19 cases, which are now past the 470 000 mark.

Before the alcohol ban and national lockdown, Pienaar could count on people, who had just been to the nearby Modderfontein Reserve, to visit his pub but business has been quiet.

When the ban was lifted last month, he started a click-and-collect business but had to stop after the latest ban was imposed earlier this month.

However, he has not stopped looking for alternative ways to make an income as he waits for the ban to be lifted and is busy with an export contract but it will end in about three weeks.

"We are doing some sales to some home brewers who are looking for malt and hops because there are a lot of guys that like to home brew. And we are selling them some ingredients which is obviously helping us as well," said Pienaar.

He added selling to home brewers generated an income that was less than 5% of what he made before the lockdown. 

In the meantime, he is mulling starting a non-alcoholic line of beers.

A survey by the Craft Brewers Association of South Africa found 87% of microbrewers say could not meet their monthly expenses after nine weeks of the ban. 

The survey included brewers from 108 breweries and brew pubs, seven of whom closed their doors for good in June.

Of that, 63% have retrenched staff over the past two months.

Like Pienaar, those who have stayed open are getting creative about making ends meet.

Some have merged with other breweries to reduce costs, others have changed their recipes, also to reduce costs and some have found second jobs to supplement their income.

Manufacturing fruit juice, cleaning products and other non-alcoholic beverages are also some of the new businesses the craft beer makers have moved onto.

Wendy Pienaar, the chairperson of the Craft Beer Association of South Africa, said opening the industry more would be the first step in recovery for brewers but for some it was already too late.

"Irreparable damage has already been done with our sector already losing 15% of South African craft breweries and 68% of those still trading having a decidedly negative outlook for the sustainability of their businesses going forward," added Pienaar.

For small-scale farmers, who are part of AbInbev subsidiary South African Breweries' (SAB) programme, the ban is something they may never come back from.

"We are navigating rough seas, under the circumstances, we fully rely on SAB for funding as a business and even the farmers we support rely on SAB for funding," said Aron Kole, the CEO of FarmSol, the incubator funded and supported by SAB to support startup smallholder farms.

SAB relies on the farmers in the incubator for the barley, maize and hops it uses to produce its beers.

However, the programme is at a standstill and Kole said like many people in the alcohol production value chain, the farmers were impacted by the ban and their businesses were under threat. 

"With the significant downturn in SAB's business, the company might be required to end its funding for agricultural initiatives such as these."

He added a big issue was that because of their size and lack of collateral, FarmSol was the only financial assistance these farmers would ever get. 

SAB sources agricultural products from more than 1 277 farmers, 757 of whom are smallholder farmers.

It has spent almost R750 million in production funding.

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