When a lockdown was announced in South Africa to slow the spread of COVID-19, it was one of the strictest in the world. No take-out, no walks or runs, and a total ban on alcohol sales.
The initial three-week quarantine became five, and while certain restrictions have now been lifted, the sale of alcohol remains illegal. WhatsApp groups are rife with price lists for bootlegged booze, liquor stores have been looted, homebrew forums are buzzing with new members, and roughly 200 craft brewers across the country are all asking the same question: How will we survive this?
Most of these microbreweries were confident they could weather a month without cash flow, but the ban drags on with no end date in sight.
“May is terrifying,” says Brendan Hart of Johannesburg’s Frontier Beer Co. “There is little in the way of financial relief for brewers. We’re lucky that we’ve been able to defer payments for rent and bank loans, but by the end of May we won’t be able to cover our overheads.”
A recent survey by the Craft Brewers Association of South Africa (CBASA) showed that 20 percent of breweries have already laid off staff, and while most have applied for assistance from the government’s Unemployment Insurance Fund, few have received a pay-out.
All brewers are nervous, perhaps none more so than brewpub owners. The South African response to COVID-19 works on a five-stage system, where level five is full lockdown. Alcohol sales will be allowed from level three, but bars and restaurants (and of course brewpubs) aren’t permitted to open until level one—likely months away.
John Morrow is the general manager at Nottingham Road Brewing Company, one of South Africa’s oldest microbreweries. With much of its beer sold on tap at the quaint country brewpub, the 24-year-old company is planning to pivot. “We had already started getting an online store up and running in the months preceding lockdown, so we want to finalize that, as well as collections and deliveries—whatever it takes,” Morrow says. In the meantime, Nottingham Road plans to produce non-alcoholic beverages and possibly hand sanitizer in order to continue paying staff salaries.
The ability to adapt to a new business model will be crucial for survival. Before lockdown, few breweries were set up for online sales, but many are using this time to add e-commerce to their websites.
Hart was ahead of the game. His site, bestcraftbeer.co.za, launched late last year as an online store for select breweries. “When we started, the idea was to have an exclusive selection, but we’ll probably put that on hold for a while in order to support as many brands as we can,” he says. Loyal craft consumers have already begun placing advance orders to assist with cash flow for small breweries—and to avoid the inevitable crush when liquor stores eventually reopen. But it won’t be enough to save everyone.
“We will emerge from this a changed industry,” says Kevin Wood of Darling Brew, which, with two locations and nationwide distribution, is one of the country’s larger craft breweries. So far they have avoided layoffs by cutting management salaries and he’s fairly positive about Darling’s future. “We’re in a different position to some of the other larger microbreweries because only about 25 percent of our sales are for on-consumption at bars and restaurants,” Wood says. The rest is sold via liquor stores and from the taproom.
According to the CBASA survey, 57 percent of brewers said they could only continue for another month without any sales, taking them to the end of May.
Some brands could live on as contract brews, others might form co-ops, and others still will simply wither away. But just like nearly everything else about post-pandemic life in South Africa, craft beer will take years to recover. It’s a sobering thought.