Driven by rising population, urbanization, and increasing GDP’s, the beer market in Africa is predicted to grow faster than any region in the world over the next five years.  On a year-on-year basis, beer consumption is set to achieve an increase of nearly double digits, according to

Multiple organizations monitoring global markets are eyeing the African beer market as the future of beer production. Multinational beer companies like AB InBev are already thriving, and the microbrew market, where small breweries and home-brewers compete, is relatively new.

Norland produces all of the brewing equipment you need. Including this Brewhouse.

Enter Norland International’s expertise in the craft beer industry. Over the last 25 years, Norland has helped many African Entrepreneurs establish themselves in the bottled water industry. Today, Norland stands ready to help burgeoning craft brewers.

Norland, through it’s sister company American Beer Equipment, has been designing, building and selling craft brewing equipment across America and around the world since 2013,” said Norland regional sales manager Daren Waters. “We already have a pipeline to and experienced team of technicians based in Africa to help install brewing equipment.”

A Growing Trend

Due to the expanding, African middle-class with disposable income, craft breweries are beginning to grow in popularity as products become more main-stream. As access to modern infrastructure improves and with a burgeoning middle class across Africa, the demand for craft beer is increasing at unprecedented levels.

Demographically, Africa is a major emerging market. It is projected that by 2025, one-fifth of the world’s population will be in Africa, coupled with the highest urbanization and GDP growth rates in the world. These demographics have enabled the African beer market to have the fastest predicted growth rate of any beer market in the world between 2015 and 2020. Market analytics magazine World Finance points out that as the middle class grows, craft beer could be the driver of the market, as a upper end “status symbol.”

“Craft Beer’s popularity has exploded because you can appeal to hyper-local tastes,” Waters said. “If a certain flavor or style is popular in your area it is a lot more economical for a local craft brewer to produce it than one of the larger International beer brands that take a ‘one size fits all’ approach.”

As the saying goes, the early bird gets the worm. With AB InBev ingraining itself in the African beer market through the acquisition of local breweries, the up-and-coming consumer base of middle-class Africans is likely to feed these big players and consolidate the market around their growing monopoly. Africans have shown a preference for homebrewed beer or different alcoholic beverages entirely. Only time will tell if industry giants will consume this new African market, or if local microbreweries will take control, as is happening across Europe and the U.S.

Case In Point

Formerly just for the hipster set, craft beers are taking South Africa by storm, writes Justin Brown of City Press.

The value of local craft beer sales could double over the next year to as much as $1 billion due to changing consumer tastes and boredom with mass-produced lager, said Jason Cedarmore, the owner of Craft Liquor Merchants, recently reports.

Cedarmore, who represents craft beer makers such as Jack Black, Cape Brewing Company and Darling Brew, estimated that local craft beer production stood at between 8-10 million litres, and that the average retail value of craft beer was $50 per litre – so 10 million litres could generate $500 million in sales. In 12 months, Cedarmore expects local craft beer production to more than double, to 20 million litres.

Using a canning or bottling line to package your product can greatly boost profitability.

“The craft beer market is strong, and Craft Liquor Merchants is experiencing strong growth every month. There has been a massive shift in interest. Tastes are changing in the market,” said Cedarmore.

Kevin Wood, owner of Darling Brew in Cape Town, said he was also expecting local craft beer output to more than double in the year ahead. Darling Brew last year spent $52 million on building a brewery so that it could meet growing local demand for craft beer, he added.

There was massive scope for growth in craft beer because the footprint for the production was “tiny”, said Wood. There was a lot of investment being made in the sector to meet growing craft beer demand, he added.

On the other hand…

On the other hand, Standard Bank is forecasting that the local craft beer market will grow by 35% this year, on top of 30% last year. Craft breweries could produce as much as 18 million litres by 2017, to give it a 2.1% share of the total premium and light market of about 790 million litres – from just 0.3% in 2011, Standard Bank reported.

In the US, craft beer makes up 14% of the beer market and has experienced a 20% growth rate since 2012, according to Standard Bank.

Brendan Watcham, the owner of Copper Lake Breweries, said when he started his craft brewery in Lanseria near Johannesburg in 2010 there were between five to 10 microbreweries in South Africa, but that has now grown to more than 150. Copper Lake, which employs 40 people, is selling its beers to 300 outlets in South Africa – mainly in Cape Town, Johannesburg and Durban. “We are growing all the time,” said Watcham. “Our orders have shot up by about 600% over the past year. There is a lot of interest in artisanal beer. “It is a fantastic industry to be in – it is a lot of fun. I love beer. Copper Lake would like to be a big role player.”

Copper Lake opened its first brewpub in Broadacres in Johannesburg in February last year to showcase its eight beers, and is looking at opening other brewpubs in Lynnwood in Pretoria this year. It’s also looking at opening brewpubs in Cape Town, Soweto and Sandton. Watcham said the explosion in local craft beer followed the craft beer trend in the US. Grundlingh said the move to craft beer was not quite a “beer revolution”, but it was going to shake the market up and create massive opportunities for savvy businesses and investors.

Cedarmore said craft beer was catching on, as different styles of beer; in particular ales instead of lagers, which have long dominated in South Africa, were entering the market. Ales are usually described as “robust, hearty and fruity”, while lagers are characteristically “smooth, elegant, crisp and clean”.

“For more than 100 years, one brewer – SABMiller – has dominated the local beer market. It has been a sterile, stagnant, one-dimensional market. Production has been dominated by big corporate manufacturing of beer. Now the guys are starting to brew beer in their back yards and garages. Each beer has a personality, a story. With a craft beer, you can speak to the owner of the craft beer.”

‘Four or five years ago, craft beer was just for the hipsters, but these days its target market has expanded, he said. “The target market for craft beer is people aged from 25 to 40,” said Cedarmore.

If you are looking to get into this exciting business opportunity, Norland  and A.B.E. can outfit you with every piece of equipment you need. For more information, contact Daren Waters.