South Africa: SABMiller's hop farms supply their products to an increasing number of craft brewers

Reflective of the burgeoning craft-beer industry, SAB Hops Farms now supplies hops to about 140 microbreweries, from as few as 10 just five years ago, Business Day reported on March 7.

SAB Hops Farms, a wholly owned subsidiary of South African Breweries (SAB), has under its breeding programme produced three aroma-flavour varieties of the crop, which have become popular among microbrewers, says management.

But despite the rapid growth of the craft-beer market, microbreweries use only about 2% of SAB Hops Farms’ total production, given the small scale of their operations.

A number of microbreweries also choose to import their hops, which are produced more cheaply in the crop’s natural environment in parts of Europe, and in other parts of the northern hemisphere that are further from the equator.

Rustenburg-based Brauhaus am Damm has doubled its monthly craft-beer production over the past two years to 8,000 litres a month, an example of how popular craft beer is becoming. The German-styled microbrewery has grown on demand from craft-beer festivals, German school events and the growing number of bars, restaurants and pubs serving craft beer, says its brewer Imke Pape.

SAB Hops Farms and eight private growers have operations in South Africa, which have earned "international recognition and praise" for successfully adapting the crop to suit local conditions, says SAB Hops Farms GM Laurie Conway.

Mr Conway said this week that while the microbreweries industry has flourished, this is not expected to be a major growth area for his company, given the small hops requirements of microbreweries.

SAB Hops Farms is rather looking to become the preferred supplier of hops to its parent company, SAB, and to the group’s operations in Southern Africa. SAB Hops Farms supplies about 37% of SAB’s annual hops requirements, while private growers supply the rest.

Mr Conway said the weak rand, together with the perceived and actual hops shortages in the world market, had seen the company’s product become relatively more competitive against imports over the past few months.

The global demand for hops had declined over the past two decades due to a change in beer preferences which have seen less of the bitter crop added to beer.

Mr Conway said that while the land use of the local industry had also fallen, crop yields had improved significantly, due to better management and varieties created.

07 March, 2014