E-Malt.com News article: South Africa: SABMiller launching small-scale “speciality” beer brand

The South African Breweries (SAB) — which commands about a 90% share of the local beer market — is dipping its toes into the fast-growing craft beer segment again, with a small-scale "speciality" brand to be launched later this month, Business Day Live reported on September 1.

The rise of craft beer, typically brewed by independent microbreweries, has been fuelled in recent years by beer festivals and a growing number of restaurants and bars selling their often unique products.

With the belief that the craft beer niche promotes the beer category as a whole, SAB has supported microbreweries by sponsoring festivals, supplying ingredients at cost price and offering its expertise. It has also begun to offer nontraditional types of beers, including its flavoured Flying Fish beer.

Parent company SABMiller — the world’s second-biggest brewer — has also stepped up its focus on the niche segment, particularly in the US where it has launched new craft-styled brands and acquired others.

SAB said last week its new small-batch beer brand, called No3 Fransen Street, would be distributed to only about 70 outlets in Gauteng, and would offer Cream Ale, Irish Red Ale and Krystal Weiss draughts.

The speciality beers would be brewed at SAB’s recently redeveloped Fransen Street Brewery in Gauteng on a seasonal basis, and distributed in Johannesburg and Pretoria. SAB has used its Fransen Street microbrewery to experiment with brewing and packaging, and to develop beers for special events.

The company has in the past unsuccessfully taken some of these beers to market, although it says they were "ahead of their time" and prior to the global craft beer phenomenon.

The Fransen Street brewery is a small-batch facility with a maximum capacity of 50,000 hectolitres per brew. SAB produced 27.2-million hectolitres of lager in its year ended March.

The company said its small-batch speciality beers sold at festivals "have been welcomed by consumers, as well as retailers who have been asking SAB to provide the speciality beers to them on an ongoing basis".

Murray Slater, of Cape Town and Johannesburg-based outlet Beerhouse, said last week there would be a market for SAB’s speciality beer "even if it’s tiny compared to that of good old-fashioned lager". Beerhouse would stock the new brands, he said.

"In light of their lager sales, SAB did not really have to get involved in making ales — but they are, and the South African beer scene will be better for it. It’s worth noting that SAB’s No3 Fransen Street isn’t undercutting other microbreweries — as I’m sure they could with their indomitable economies of scale. They politely suggest the beer be sold at R40. Taking into mind how much it costs to buy in, it is decently positioned."

Microbrewed pints of beer sell at the Beerhouse and other bars and restaurants for R25 to R60.

While craft beers still account for a small portion of the South African beer market compared with other markets such as the US, some producers have started to gain recognition abroad.

In July, Cape-based brewer Stellenbrau Brewery won the best lager prize at the 2014 Global Craft Beer Award contest in Germany.


02 September, 2014