INDUSTRY TALK

Innovation and collaboration needed to reboot industry

South Africa’s liquor industry, particularly craft distillers and brewers, have been hard hit by the protracted lockdown and ban on the sale of alcohol, with fears that many may not be able to survive.

Hard-hit craft brewers and distillers brace themselves for a rocky business restart

EXPECTING TO TAKE years to recover, the sector hopes that it may survive by collaborating and innovating. This emerged during an online panel discussion hosted by Messe Muenchen South Africa, the organisers of the food & drink technology (fdt) Africa trade fair, held in July.

Moderated by Clive Belcher, chairperson of the Institute of Brewing & Distilling (IBD) Africa sector and MD of Global Beverage Solutions, the panel included Craft Beer Association South Africa (CBASA) chairperson Wendy Pienaar, brewmaster and founder of Brewsters Craft Apiwe Nxusani-Mawela, and Southern African Craft Distilling Institute (SACDI) secretary Pro Tem, Hendré Barnard, amongst others.

Panellists noted that the sudden lockdown left brewers with beer still in tanks; it dried up key contracts and cash flow, and negatively impacted supply chains. This means that most would be unable to pick up production immediately when the ban is lifted again.

Nxusani-Mawela said, “Brewing beer is a process. It takes three weeks, so restarting won’t happen overnight. Cash flow is also a problem, so buying raw materials and packaging will be a tight squeeze – if we can source these at all. It won’t be easy.”

Pienaar added, “There are operational issues to consider – like getting staff safely to work, and making the brewery safe for customers and staff. Even if the ban is lifted, it won’t be the end of the challenges we face.”

Brewers and distillers might face challenges in obtaining yeast, hops, botanicals and bottles and producers would likely find that neutral spirits would be diverted to making sanitiser. “If producers are able to access alcohol, they might be able to get production up and running in around a week after the ban is lifted, but distillers and brewers will take a lot longer,” Barnard pointed out.

SURVIVAL STRATEGIES

Noting that craft brewers and distillers had been achieving slow growth even before the ban, the panellists said there would be tough times ahead for the entire sector. However, craft brewers and distillers could survive by innovating and collaborating.

Barnard noted that the market would become more price sensitive, and that brewers and distillers would have to prepare for this. “There is a real possibility that the market is going to change. We are in a recession and the first thing to suffer will be luxury goods. Some things will become more expensive to produce and certain raw materials and bottles will be more expensive. If you are spending R50 on packaging, you need to consider rebranding, using cheaper packaging, and passing the savings on to consumers.”

Pienaar said collaboration could help the industry survive. “We need to think about buying as a consortium, working together, becoming more creative in using what is available. We also need to do market research to make sure that we are producing what the market wants and will move quickly.”

Now is the time for brewers and distillers to work on industry collaborations, market awareness and innovative new ways to go to market. Facilities should also be preparing to reopen production by sourcing the safety equipment and personal protective equipment their factories and staff would need once the ban on alcohol production is lifted.

“Food & drink technology Africa has always been a hub of local and international industry collaboration and innovation. As the world adapts in this new environment, we are committed to working with stakeholders to help them overcome challenges,” said Dain Richardson, senior exhibition manager of food & drink technology Africa.

The spotlight will be on the challenges, solutions and emerging trends in the craft brewing and distilling sector at food & drink technology (fdt) Africa, the biennial trade fair for the pan-African food & drink sector next year. The fourth edition of this exhibition will be held from 13 to 15 July 2021 at the Gallagher Convention Centre in Johannesburg. •

Growth and agility underpins activity in Africa

Iberchem has announced that it will expand its presence on the South African market through the the joining of Iberchem, Scentium and Versachem under a new name: Iberchem South Africa. Maryke Foulds looks at what this venture will bring to the industry.

DID YOU KNOW?

Iberchem’s technical laboratory in South Africa has developed a library of flavours, specific for the African market.

Ishida was contracted to provide a complete packing solution

THE ANNOUNCEMENT COMES two years after the group acquired 70% of Versachem, a company specialising in food colourants and seasonings. The group recently bought the remaining 30%, thereby fully integrating Versachem’s activity into the group’s portfolio. All three divisions will be temporarily accommodated in Versachem’s current offices in Pretoria, north of Johannesburg, South Africa until a new location is found.

Scentium creates bespoke flavours for beverages as well as for sweet and savoury products while Versachem specialises in the production of food seasonings, dustings and colourants. With all three expertise combined, the group is well-positioned to service not only locally but also the export market, creating work opportunities and earning foreign exchange for South Africa.

Iberchem South Africa is managed by Quentin Questiaux, who joined the company in May this year. Questiaux is well-known on the African market, with a proven track record in the flavour and fragrance industry. In the coming months, Iberchem South Africa will gradually welcome new members to both Iberchem and Scentium. “We are looking to expand our equipment to be even more autonomous and agile with shorter delivery times of the projects. Our biggest strength would be the laboratory that was developed to perfectly respond to the needs of our local clients,” he enthuses.

A key focus for the company this year is the expansion of its sensory library. It is an ongoing process as taste trends evolve and change. “We rely on thousands of fragrance and flavour references, all made available to our clients. If what we have is not exactly what they're looking for, our teams of specialists are at their disposal to fine-tune the selected reference until we find the exact profile they were looking for. In my opinion, having an extensive library is essential, but the technical support that goes with it is even more important.”

One of the biggest trends and areas of growth Questiaux predicts is that of reduced sugar products with a clean label – especially in beverages. “The sugar backlash continues to put pressure on the food and beverage market to reformulate with low and nosugar variants and meet consumer health demands without compromising on taste. This situation is Quentin Questiaux expected to keep going even more as the result of the COVID-19 pandemic.

“Botanical ingredients like herbs and spices are innovative, and also feature certain health benefits, combined with less sugar claims and vitamin and fibre additions. This can help brands to capitalise on growing consumer interest in natural and better-foryou products,” he notes.

The experience-seeking consumer is also looking for unique and quirky flavours, such as banana & chocolate or coffee & caramel. These flavours take you into a sensory journey that can intrigue consumers in-store and encourage impulse purchase.“Substitute products must be equally qualified in taste for not losing the consumer's attention. Working in artificial sweeteners or natural flavours is a challenge for the sector.”

Concerning growth on the African continent, he is optimistic. “Iberchem South Africa is the result of substantial investments that fall into an even larger expansion plan by the Iberchem Group on the African continent. Overall, it confirms the tremendous growth potential we see on the market. We wish to support and be part of this growth offering speed to development, production, supply, affordability, and the ability to supply both small and large volumes to service a broad spectrum of customers. I am confident that this news is only the beginning and that shortly we will be making more announcements,” he concludes. •