While South African barley and hop farmers have been able to maintain growth momentum, beer breweries are struggling to find their feet post-Covid due to a decline in consumer demand.
During an annual hop harvest tour hosted by South African Breweries (SAB) in George in the Western Cape, vice president for SAB, Zoleka Lisa, painted a “happy and hoppy” outlook for their beer company and farmers that supply SAB.
According to Lisa, Mzansi’s hop industry created an annual revenue of R90 million and about 1 500 jobs in the Southern Cape.
Lisa said the hop industry is 409 hectares in 2023, ranging from three cooperate farms, one research farm, seven private farms, and lastly, two black farmers in the country.
“South Africa produces nine hops varieties which are locally utilised and exported internationally. A total of 409 hectares of hops are currently cultivated in the George region [alone],” she said.
While farmers are exploring other regions, George is the only region in South Africa where the conditions are just right for hop growing.
Lisa added that local barley production increased by 70% in the last five years, as well as collaborations with various research institutions on barley hops, canola, wheat, and other crops advanced the agricultural sector.
‘How much more can we take?’
In the meantime, beer breweries, especially craft beer breweries, are struggling to stay afloat.
According to South African beer brewer Apiwe Nxusani-Mawela, the start of the new year points to a very gloomy 2023 for their industry.
“Economically, it is tough on everyone, especially consumers. People don’t have the cash to spend on beer… Interest rates, the price of petrol, and food are all going up. It’s just a ripple effect,” Nxusani-Mawela said.
Adding fuel to the fire are the high costs of certain raw materials, partly due to the Russia-Ukraine war.
Nxusani-Mawela said some of the barley used in South African beers are sourced from the two Eastern Europe countries. This is at a time when the price of locally malted barley and bottles also increased.
Many of the industry challenges are external, making it much more difficult for breweries to mitigate.
Alleviation of pressure
While there is only so much that brewers can do, Nxusani-Mawela said a developing trend is that more and more beer breweries are partnering up to lighten their expenses.
“Brewers are joining hands to minimise the running costs. Instead of brewing on their own, they are contract brewing with one person. This is a trend that is currently happening.”
Collaboration brews are also on the rise. These are beers that two or more breweries collaborated on.
When asked when the industry could likely see improvement, Nxusani-Mawela said, “A bounce-back for our industry is linked to the challenges of the country. We hope that with the new minister of electricity, things will change.”
Meanwhile, Nxusani-Mawela has a few questions of her own. “They say South Africans are resilient, but how much more can we take? And will things get worse before they get better?”
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SAB invests in agriculture
The hop harvest tour was also attended by the minister of agriculture, land reform and rural development, Thoko Didiza. She pointed out that it was important to invest in farmers.
“The hops industry is very important in South Africa, particularly for this part of the region because of its contribution to job creation,” Didiza said.
According to Didiza, partnerships are important to survive in this sector. “Unless we work in meaningful partnership together and work at solutions, we can never survive,” she said.
Meanwhile, Lisa said the industry could look forward to their agricultural investments. In 2022 alone, the company invested approximately R100 million in interest-free loans to emerging black farmers.
“We work with a host of farmers in the country. We also have an intense agricultural research team that ensures that they work with farmers daily,” she explained
Girl power
The support for women has been incredible and quite a sight to see. SAB has supported 1 120 black farmers of which 500 are female.
“We have expanded our food security programme to over 500 farmers (mainly women). They plant a lot of maize fields, mostly in the Free State and the Eastern Cape to enhance food security,” said Lisa.
Hops farmer Beverly Joseph, who started farming in 2016, said she is grateful for the work SAB has done to help her thrive. “[I am] a level one black female-owned business. The farm was purchased in 2016 and I made some loans to run the business,” she explained.
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