South Africa: Local premium-beer market is to increase by 10% a year

The South African premium-beer market is experiencing a promising growth rate of 10% a year. This fact is particularly beneficial for the country’s smallest commercial brewery, Bavaria Breweries South Africa, based in Centurion, Pretoria, Engineering News from South Africa communicated on November 18.

Bavaria Breweries is South Africa’s only independent brewery and is a subsidiary owned by Bavaria Breweries Holland and Metier, a South African financial-investment institution.

The brewery hosts a diverse range of premium-beer products, including Bavaria Premium, a Pilsner-style beer; Bavaria Draught; Bavaria Light and Bavaria Malt, one of the original nonalcoholic beers to have entered the South African market.

Interestingly, Bavaria Breweries produces the only light draught on tap in the country and also sells the lowest and one of the highest alcohol-content beer available on the South African market at 0% and 7,9%, respectively. In an interview with Engineering News, Bavaria Breweries chief commercial officer Craig Mackenzie explains that the premium-beer market in South Africa is showing good growth, which is presenting a good opportunity for the brewery’s flagship brand. “There has been a change in drinking habits in the mainstream market, which is directly linked to the aspirational nature of the majority of the population aspiring to improve their social status,” explains Mackenzie.

Mackenzie believes that an indication that the premium-beer market is experiencing growth is the positive consumer response regarding South African Breweries’ (SAB’s) introduction of the Italian number-one beer brand, Pironi.

“This is the third new brand that SAB has launched in South Africa recently, and reflects the opportunities for beer in the premium market.” The effect that the growth of this sector has had on Bavaria Breweries is evidenced in the increase in production over the last 18 months, which is expected to increase to 100 000 hectolitres in the near future. Bavaria currently has a 4% share of the premium-beer market, which is growing month on month despite the dominance of SAB in the brewery industry.

“We are not deterred by SAB’s market dominance but will continue to focus our efforts on ensuring that we provide high-quality products that meet the needs of the beer drinkers within niche markets,” says Mackenzie.

“It is most promising that South Africans are adapting to a variety of beers and broadening their beer horizons.” In addition to the positive growth in the premium-beer sector, Bavaria Breweries has expanded its product range to include a familiar cider brand. Expansion of product range When Engineering News reported in November last year that Bavaria Breweries had bought the adjacent Bulmers bulk-cider facility, the company was still investigating options for the deployment of the production plant, which would have involved the addition of new brands. However, at the beginning of this year, the decision was taken by the new Bavaria management team to continue to use the adjacent facility as a cider plant.

“Originally, the bulk-cider facility was used to produce cider for the Mauritian export market,” explains Mackenzie. “However, the company recently made the decision to launch its own cider brand and, as a result, we acquired the rights to use the Crossbow brand name.

“We do not have a lot of money behind the new product and have, as a result, brought it out as a price fighter, which is 10% cheaper than any of the other cider brands in the market.” Although the recipe has remained the same, the cider will be the first to be available on tap at certain bars around the country. Crossbow is also one of the only 100%-pure apple ciders available on the South African market, as the other brands include a pear blend in the final product.

In terms of the production of the cider, Mackenzie explains that the apple pulp is brought up in bulk form from the Western Cape and is taken through a fermentation and dilution process in the adjacent cider plant. “The cider is then pumped across to the main brewery for bottling and packaging,” explains Mackenzie.

“The cider plant is totally mechanised, requiring just two people to operate the machinery, and is able to produce one-million litres of cider a month.” The new packaging of the Crossbow cider is strikingly different from the old black-and-yellow can that was available in 1990 and the marketing and packaging of the product has been specifically designed to appeal to the female market.

“However, this is an offshoot focus for the company, and our primary focus will remain in the local beer market where we intend to grow our market share through the use of below-the-line marketing strategies,” concludes Mackenzie.

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