A look at the craft spirits industry in South Africa and its current challenges

The nationwide lockdown and alcohol ban has had a major impact on the liquor industry as a whole. Experiential experiences were at the forefront of South Africa’s alcohol trends in 2018 and 2019, which was good news for the local craft spirits manufacturers. But how is the craft spirits industry doing in 2021? Let’s take a look at the current state of it, the main trends, as well as the challenges the industry is facing. 

The current state

Before the lockdown craft distilleries boomed all around the country. New, very well-crafted spirits appeared on shelves and in online stores. Unfortunately the alcohol ban has pushed the South African alcohol industry to its knees – on the up-side the recent easing of restrictions has enabled local distilleries to sell and distribute their products again. 

The rise of local distilleries and the popularity of their products has allowed most of them to survive the lockdown, together with the reality that spirits production is not linked to – or dependent on – seasonality as is the case with the wine industry. 

It is predicted that the resilient craft spirits industry will grow steadily over the next year and go into 2022 stronger than before. 

Trends 

  • More innovation 

With the increase in available craft spirits, consumers can expect even more growth from brands. Competition leads to increased innovation with their offerings, as well as with their advertising. Consumers can look forward to new flavour explorations and the blending of various styles, as well as interesting ways of presenting it. 

  • A move to local brands 

As local brands become more innovative, there is a big shift from consumers buying from global brands to supporting local businesses. 

  • Healthier options 

In line with the trend in the food industry, craft spirits are responding to changing consumer habits. Brands are now promising low-calorie, low-carb, and alcohol-free products that are more appealing to health-conscious consumers. 

  • Tapping into the origins 

Increasingly more consumers are becoming curious about their brands and want to understand where they’re coming from. Therefore, spirits brands need to connect with their consumers by communicating the brand’s entire journey, from the origin, to ensure its message is in line with consumers’ values.

The challenges 

  • Recovering 

One of the industries that have been hit hardest by the lockdown is the liquor industry. The challenge is now to see how brands will recover from the impact. 

  • More restrictions 

No one can predict exactly if and when new waves of the pandemic will reach South Africa and if more alcohol restrictions will be set in place. If so, the craft spirits industry will be put under immense pressure again. 

  • Keeping it affordable 

The local craft spirits brands will always compete with global labels. Especially now, with recovering from the restrictions, the local industry has to find ways to keep their production costs low to offer consumers lower prices while still making profits. 

Moving forward 

The craft spirits industry in South Africa is facing major challenges in 2021. However, with the focus and move towards supporting local brands, the industry will survive and even thrive in the coming months.