From being the 12th-largest beer-consuming nation to pioneering Rooibos-infused brews, South Africa&#8217;s beer industry shows no signs of slowing down, as we explore on International Beer Day.



Today marks International Beer Day and South Africa raises its glasses to an occasion that epitomizes its passion for beer. Marked every first Friday of August, this day brings together enthusiasts to revel in the endless creativity that characterizes the world of beer.



South Africa&#8217;s love for beer is legendary, a sentiment reflected in its status as the world&#8217;s 12th largest beer-consuming nation, with an annual consumption of roughly 34.47 million hectoliters. But beyond the impressive numbers lies a landscape brimming with innovation and cultural resonance. No longer confined to mass-produced lagers, South African beer has transformed into a dynamic palette of craft breweries, unique flavors, and a consumer base eager for new experiences.



Adele du Toit, SA Rooibos Council spokesperson, expressed her excitement about this trend: &#8220;The way we drink beer is changing because of how beer-makers are looking to innovate in the market. We&#8217;re seeing an uptake in craft breweries and brewing at home, allowing more personalization and bringing the experience of beer-making and enjoyment to the forefront,” she says to FORBES AFRICA.



South Africa&#8217;s brewing innovation is deeply rooted in its culinary heritage. Craft beer has taken center stage, with breweries experimenting with local spices, fruits, and particularly Rooibos, resulting in blends that are both intriguing and reflective of the nation&#8217;s rich culinary traditions.



Homebrewing is flourishing, adding a personal touch to the beer experience. Beer&#8217;s influence even extends into the culinary world, making surprising appearances in casseroles, desserts, and unique pairings like pickles and cheeses. From restaurants to microbreweries, tastings guide enthusiasts in discovering the perfect blend.



Rooibos-infused beer has become South Africa&#8217;s signature contribution to the global beer scene. Du Toit elaborates on why this combination is so compelling: &#8220;Rooibos and beer taste profiles are a great match and complement each other really well. The Rooibos taste profile, naturally sweet, mild, earthy, with fruity notes like peach and apricot, and most having caramel and vanilla notes, pairs beautifully with beer, especially light and malt beers, as well as ales and lagers. Nowhere else can it be duplicated in the world.”



Reflecting on the experimentation with Rooibos in breweries, she adds: &#8220;A lot of breweries are experimenting with Rooibos. It can be incorporated in different ways, even in cooking, and its taste pairs well with both sweet and savory dishes. Not just in South Africa; it&#8217;s gaining popularity with small and large breweries overseas as well.&#8221;



The future of South Africa&#8217;s beer industry looks bright, with the growing appeal of Rooibos-infused brews and a spirit of innovation that shows no signs of slowing down.



Whether enjoying a classic lager, savoring a Rooibos-infused craft brew, or indulging in a beer-and-cheese pairing, the options are as rich and diverse as South Africa itself. On International Beer Day, South Africa will not only be toasting to its favorite beverage but also celebrating the unique flavors and innovations that place it on the world beer map.

Finnish Brewer Launches NATO Beer As Finland Seeks NATO Membership

Ale Is Well: Why South Africa’s Unique Rooibos-Infused Craft Brews Are Gaining Popularity

Rowan Leibbrandt trained as a scientist but he ended up selling beer and whisky  in Africa.
A younger Leibbrandt, from the rural Matubatuba, outside Richards Bay in KwaZulu-Natal, South Africa, did everything right. He was a maths and science whizzkid and earned a university degree. But a career in science was not what he had in mind.
It was in 2012 that an epiphany in Nigeria changed everything for Leibbrandt. At the time he was heading Pernod Ricard’s marketing department, selling whisky brands in African emerging economies.
“Time and again I was with these young and rich Nigerians in focus groups. They were amazed by these whisky brands they had never experienced before. There were two things going on there, these guys attracted to international brands and there was this man with a briefcase representing these companies. I said, ‘hang on, I can be that man with the briefcase’. That was my real epiphany,” says Leibbrandt.
A year later, Leibbrandt found his first business partner in South Africa and he quit Pernod Ricard to return and form a company – Truman &amp; Orange. Jason Duganzich, a former brand ambassador for Glenfiddich, and Leibbrandt launched their distributing business in South Africa with a Scottish blended beer Innis &amp; Gunn.
By 2015, Truman &amp; Orange gained two more partners, an incognito financier in Zurich and Robert Hill, a brand specialist based between India and Britain.
“My insight was that in a lot of these African countries, some of the bigger companies are taking their eye off the ball. Things in Africa are happening far quicker than they anticipated. I thought that’s an opportunity for us. In the spirits front, Africa hasn’t really been there with the rest of the world. So, we have a 10 to 15 year window period while these guys are trying to set up in Africa for formidable businesses,” says Leibbrandt.
The journey began when Leibbrandt made his career switch from science.
“I probably wanted to work with people, so I found advertising quite captivating and I started my career in advertising. At that stage, the advertising agency I worked for managed a very small account for Glenfiddich in the early 2000s. The whole whisky phenomenon was not as big as it is now in South Africa,” says Leibbrandt.
He landed a marketing post at Glenfiddich in London in 2005. After three years, the company sent him to Moscow to set up a joint venture marketing business, which encompassed brands such as Glenfiddich; William Grant &amp; Sons; Remy Martin; Campari and Russian Standard Vodka, in a vodka country.
While he was in Russia, juggling work and an MBA at Warwick Business School in England, Leibbrandt met his wife Nadya Surikova.
“My wife Nadya comes from Russia, a country where the idea of working for one company your whole life is absolutely zero. The safest thing for them is to start your new business. One of the things young entrepreneurs often struggle with is the partner who feels security and safety when they are starting a business,” he says.
It was in Moscow where the idea of entrepreneurship took root in Leibbrandt.
“In many ways Russia was quite similar with South Africa, they had enormous political disruptions in the nineties, and later a mass emancipation of people with money that had been put into the system. You had a drinker who didn’t have a role model, like a father who had money, but is suddenly learning to drink these western products that are affordable to him because he’s making money. I started gradually to get the sense that I wanted to do my own thing. Each time I got promoted in the business, I started to realize that it doesn’t matter how high you get but you are still going to be answerable to somebody,” says Leibbrandt.
Leibbrandt says the craft beer revolution in South Africa taught a few lessons to Truman &amp; Orange.  Innis &amp; Gunn is a hybrid of beer and single malt whisky.
“Innis &amp; Gunn is the cornerstone of our business at the moment, but although it is the important part of our story, it’s by no means the most important part,” says Leibbrandt.
By the end of March, Truman &amp; Orange will be shipping its first sparkling wine and whiskies in Angola, Nigeria, Ghana, Congo and Kenya.
And he could have been a scientist.

A Scientist With Spirit

As the summer heated up in the heart of Soweto, Johannesburg’s largest township, businessmen Ndumiso Madlala and Josef Schmid, brewed 12,000 liters of beer for the Christmas rush. All seemed busy with the whiff of malt and hops. Brewmaster Madlala shared his brew with the FORBES AFRICA crew. The slightly sweet, lingering finish washed agreeably over the palate of this avid beer imbiber.
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It is their first Christmas; they want to double their production; enough to get the whole of Soweto drunk until the New Year. But it has not been smooth-sailing for the duo; an in-house beer festival in October was postponed following a yard inspection by the health authorities. They wanted an oil tank to be covered at the brewery. A hiccup in the frothy beer business.
“With this venture alone we foresee a good R55 million ($5 million) per annum, and we are also planning to open another four establishments in other townships in the country. Our model is exclusively township. As I was traveling Europe when I was a student, I saw every little town had its own beer. Here townships are big neighborhoods, I see it necessary they have their own local beers,” says Madlala.
Schmid joined forces with Madlala with a vision and a passion.
“In South Africa microbrewing was very elitist and white dominated, prior to Soweto Gold. But with the great emerging and growing middle class in the townships we saw a niche market. So, we see ourselves as pioneers,” says Schmid.
The two are as different as cold beer and warm tea. Thirty-five-year-old Madlala grew up in Elandskop, a village 35 kilometers outside Pietermaritzburg in KwaZulu-Natal. He obtained a Master’s degree in science in the Netherlands and then worked for Africa’s biggest brewer, SABMiller, for nine years. Schmid, 44, the son of an Austrian butcher, was born to the Swedish middle class. He is a hospitality and tourism executive who came to South Africa to work.
They met through a friend in early 2012. In October, they registered the business under MadMead Brewing Co. After a two-year wait for a full license, they turned out their first batch of Soweto Gold in July. This start-up company cost investors $800,000. The Industrial Development Corporation, a government entity, also loaned the company $320,000.
“We estimated that we will brew for about seven months until we reach capacity and in that time we accumulate funds to do an expansion but there was such a demand for the beer that Ndumiso started brewing in July and we reached capacity in August. The reality is that we have hit the production peak in the first month of production. Coming from nowhere, we are the second-best selling craft beer in the country,” says Schmid.
“As an entrepreneur you are always a dreamer and it is that dream that makes you so sure that everything is going to work out. No matter how bad things turn out, the vision carries you forward,” says Madlala.
It’s been a long and winding road. Schmid and Madlala traveled to China searching for the best machinery and shipped it to South Africa, in late March.
“Ndumiso is an expert in processing; he modified their designs to work in our space and our flow and what we want to do,” says Schmid.
MadMead Brewing Co is based in Ubuntu Kraal, an entertainment venue with a restaurant, in Orlando West, Soweto. In a few months, they’ve channeled the beer through 25 restaurants, pubs and taverns around Johannesburg, including affluent Sandton, Rivonia and Fourways. They employ more than 60 people.
As the company senses demand, the names are born: Apple Ale, Cherry Ale, Orlando Stout and Weiss Gold.  In this, Ndumiso has not forgotten his roots.
“For next year we are also conceptualizing a sorghum malt maize beer which brings our traditional ways of brewing together with the Western ways of brewing… We want to put sorghum beer back in its premium space, so we want to see if we can flavor the traditional beer with pineapple. But this will be on the non-commercial scale for the guests to enjoy in-house,” says Madlala.
Soweto Gold is enjoying popularity at craft beer festivals.
“The best ego boost for us is to go to a beer festival and you get people saying this was the best beer on the market. We outsell people on price because we are a quality beer,” says Schmid.
“We have hit capacity without even tapping into Cape Town or Durban; we are only in Johannesburg for now. We are now venturing into canned beer because it is easier to package and we are modelling ourselves after American micro-brewers,” says Madlala.
He says canning of their beer will help in shipping to markets in Africa and overseas, but their first attempt was difficult.
“We had cans already out in the market but we pulled them back because we could not control the quality. The canning was done by a third party. As soon as we started our own canning line we were sold out. This has enabled us to pasteurize our product and it can stand on the shelves for at least three months and therefore makes a viable retail product,” says Madlala.
Cans could be a good move in a market that rates them above brown bottles, according to Apiwe Nxusani, a general manager and master brewer at Brewhogs Brewers, one of craft beer pioneers in South Africa.
“I personally believe there’s a market for brands like Soweto Gold to grow and compete with the commercial beers. It depends at which segment of the market they are specifically targeting as the price at which craft beer is sold at could never compete with your 750ml of Black Label, for example, as sold at the shebeens,” says Nxusani.
“The market would be the upmarket, classy and BEE guys in Sandton who want to make a statement.”
Christopher Gilmour, an investment analyst at Absa Bank, agrees that craft beer has its place.
“Craft beer, or real ale as it is known in Britain, is a small but rapidly growing industry in South Africa. Until seven years ago, there were fewer than 20 brewers, the largest being Bavaria and Mitchell’s,” says Gilmour.
He says the rest of the world is catching up.
“These beers have a loyal and knowledgeable following, quite different to that of premium beers. Pricing is often significantly higher than premium beers and reflects the lower volumes brewed and higher input costs and lower economies of scale compared to mainstream and premium beers,” says Gilmour.
Whatever the volume, Soweto is heading for a golden Christmas. Don’t let the gentle sounding name of Soweto Lady Gold fool you. This lady has a kick like a mule.

No Matter How Bad Things Turn Out: Cheers!

David Martin works in the mines during the day; but at night puts away the hard hat and blue prints to tackle his passion with pipes, hops and malt.
Martin, an industrial engineer, his brother Andrew, a communications manager and Grant York, an aeronautical engineer, are trying to live their dream. The three entrepreneurs have opened up their own brewery, SMACK! Republic, a bright new addition to the ballooning craft beer market in South Africa that has already won an award.
All three chipped into the brewery in the hope it will be their lives.
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“Beer has been part of our lives for many years, since late school days. The passion started when we started home brewing. What’s nice about beer is it gives you the opportunity to brew awesome beer in your garage at your house. Wine is a bit more sophisticated and spirits need some distillers. The ease of getting into the hobby is why we developed a love for it,” says Martin.
“We started with kit brews in little plastic fermenters and then moved up to all grain brewing. We then started experimenting and decided to take it to the next level.”
That experimentation makes their beer stand out from the rest. The three are not afraid to use strange ingredients: black pepper, coffee and naartjie; a South African citrus fruit, in their brews.
On the morning of our interview, SMACK! Republic launched their latest offering, a brew of rooibos tea and honey. The flavors may sound odd but the first customer seemed to approve at 10AM.
“This is the perfect breakfast beer,” he remarks with a grin.
Getting to this point has been difficult. The initial cost to set up the brewery and obtain a license took its toll.
“The capital required to start a brewery is generally quite a lot. A lot of the equipment is imported because local suppliers aren’t yet at a stage where they can supply this because it is a fairly new industry on a micro scale,” says Martin.
They also had to vault bureaucratic hurdles. The license delayed their launch by two months.
“The liquor board claim it is a three month turnaround to claim a manufacturer’s license. It took us eight months and that was with an agent who facilitated the process. We had to set up this brewery in a building that was not built for a brewery. We needed to change a few things inside to get through the health inspection and other legal issues.”
Besides the steep expenses and administrative nightmares, the lack of sleep took its toll.
“We opened in March [2013]. Up until recently all three of us had day jobs. We work from 8AM to 5PM, come to the brewery at 6PM and then go home at 2AM. Doing that for six months is hectic. You have to be passionate about beer to do it. It is seven days a week of something that is a business but also a passion at the same time,” says Martin.
As of September, Martin’s brother, Andrew, started working fulltime. This has taken a lot of the pressure off as he can now brew during office hours. It allows the other two to focus on selling beer at their brewery and at events on weekends.
“It is more fun now because we have normal hours during the week,” says Martin.
As fun as it may be, opening a microbrewery in a market that is dominated by South African Breweries (SAB) is risky. A lot of money has been invested into the business and failure will be equivalent to pouring their painstakingly crafted beer down the drain. To avoid this, SMACK! Republic did their homework before opening.
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“We did research in the local market and spoke to other brewers for around 18 months. We then came up with a business plan,” says Martin.
“There is a risk but we based ourselves in an area, in Maboneng, which is very open to craft beer and the people that come here want something different to drink. We get a constant supply of thirsty customers, especially on the weekends.”
The Maboneng Precinct is an arty area, full of galleries, sidewalk cafes and trendy restaurants which attracts the young, the restless and the affluent.
“They want something a little bit left of center and craft beer fits that mold perfectly. They come for a connection with the inner city. This building is over 100 years old. It is old Joburg but with life breathed into it. What we are doing is beer that has been around for thousands of years but we are providing a fresh twist. That paradox is what complements the area quite well.”
The names of their beers are drawn from the inner city: the Braamfontein Brawler; the Maboneng Maverick and the Bree Street Belle. Is it too close to home?
“It won’t affect national sales. It’s a Jozi brand and we are known for that now. We wanted to tie our idea into the city and the urban vibe. People understand that,” says Martin.
The rapid growth of the craft beer scene in South Africa means that consumers are no longer solely drinking the mass-produced SAB products.
“For years SAB have run a monopoly. At the moment they are supporting local craft breweries and supply the local hops and malts at cost. They also support most of the festivals. Craft beer is such a small segment at the moment. They are trying to understand the new beer movement. They had a reputation for being against anything new or small but their attitude has definitely changed,” he says.
Compared to the international trend, SAB does not have to look over their shoulder any time soon.
“At the moment they shouldn’t be worried. If you compare the market in the United States (US) with that in South Africa, the US market has been going for 20 years and only takes a 5% share of the overall market. They have over 2000 breweries,” says Martin.
Roeks Griessel, the organizer of the South African Microbrewers Association and Guild, also thinks that SAB should not be worried.
“It is a different market. We provide beer for a premium market, while SAB cater to the mass market,” he says.
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According to the beer enthusiast, it is the wine farms that need to be concerned. Consumers could now be leaving their bottles of chardonnay in the cellar to gather dust so they can test their palates on the various flavors that craft beers are offering.
How South Africa’s major beverage companies view microbreweries is unclear. Both SAB and Brandhouse were not available for comment.
Is it the perfect time to open a micro-brewery then?
“We are right at the start of the curve. The demand from restaurants, bars and bottle stores is incredible. It’s in line with the craft beer booms around the world. In the next 15 to 20 years there will be a lot of growth,” Martin predicts.
SMACK! Republic are on their way to proving Martin right. In November, they were winners of the best beer from a new brewery at the inaugural South African National Craft Brewers Championship. It shows small beer can go a long way.   FL

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Smack In The Eye Of A Brewing Storm

It was a 180 degree turn. One minute Tayrene Mugridge was modeling on catwalks in Milan, Japan, the United States and Belgium; the next she was baking bread.
It all began when she was a toddler, when her late grandmother baked beer bread every Sunday.
“I used to be with granny and I’d say ‘granny, can I please pour the beer?’ It was a ‘you fight over it with your sister’, kind of thing,” says Mugridge.
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“I used to make this as Christmas presents back in the day in a glass jar, with a ‘Happy Christmas’ label and a picture of a cat. All the ladies got a brownie mix and all the boys got a beer bread mix.”
The origin of the recipe is obscure. What is clear is that it was passed on from grandmother to Mugridge’s mother and then to Mugridge herself. It was she who vowed to turn the bread into a business. It was an idea that Mugridge came up with while making herself up for modeling.
Modeling was her life nearly a decade ago. After completing high school, she left for the fashion shows of the world—and all the lights and glamour that goes with it. When she returned to South Africa, with no university education, modeling was her only way to make a living.
She was worn-out by life on the catwalk, so she started a model booking agency which she ran for around eight years. But she grew tired of the business as well.
“I came home one day and said I was sick of it. I asked my fiancé if I could quit my job and he said, ‘yes, go for it’. And then I said, ‘but what am I going to do?’ And he said, ‘well, do the beer bread’. I looked at him and asked him if he was crazy. Who wants to buy beer bread? This was something I did on the weekends; I didn’t think it could be a career. And then it was,” she says.
It took two months without a paycheck to nudge Mugridge into giving the beer bread business a chance. The recipe was there, the flavors could be added. All that was left was the packaging and six months later she launched Barrett’s Ridge Beer Bread in August 2012.
“It has just taken off. I thought I’d be sitting at markets on the weekends begging people to buy my bread, but it’s going well,” she admits.
“I sent out a couple of drop boxes to some of the bloggers, I took it to some of the delis and orders started coming in. I got the website, Facebook and Twitter up and running, which is a great way of advertising, especially when you’re starting out and can’t afford marketing.”
Three months after launching Barrett’s Ridge Beer Bread, Mugridge received a message from an online kitchen store, Yuppiechef, via Twitter. They were starting a pantry section on their website and wanted to sell her beer bread.
Yuppiechef’s first order was quite small, Mugridge says, but then they asked for around 800 units.
“I managed to give them 400 loaves. I then called them and said I was sorry and would give them the other half later during the following week,” she remembers.
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At the time, Mugridge was doing everything on her own, with the help of her fiancé. She made the beer bread mix, cut the material, stitched the packaging by hand and folded labels from her house. But this was a sign that she couldn’t do all the work alone.
As the orders increased, she outsourced the work to Zimele Packaging Solutions where they mixed the ingredients and did the packaging. This enabled Mugridge to focus on the management side of the business.
Today, without any marketing and just her website and social networking sites, Barrett’s Ridge Beer Bread is exported to Namibia and Australia and exporting over two tons to Britain in December. The bread is mostly sold at delis and some grocery stores in South Africa.
“I didn’t really realize how powerful social media was until I started tweeting and Facebooking… the distributor from Namibia found us on Facebook and she was coming to Cape Town to meet some of her suppliers. So she popped in for a meeting and we took it from there,” Mugridge says.
Some people complain that the bread is salty.
“Then I ask them, ‘what beer did you use?’” she says. The beer changes the flavor of the bread.
A simple recipe from her grandmother has helped Mugridge become a successful beer bread baker. It turns over around R150,000 ($14,000) a month.
“I asked my mom, ‘do you think granny would mind if I’m making money off her idea?’ She said ‘No, not at all. Not if you pay for me to go on a nice holiday.’”
And that’s the way the beer bread crumbles.

From Top Model Gear  To Baking With Beer

Having lived in Nigeria for most of my humble life, I can comfortably say that there is at least one huge ‘all family and friends’ party going on everyday in this country. A couple of hedonistic folks have even suggested that the concept of African celebration was a Nigerian idea, complete with beer, wine, gourds of palm wine (a local brew), jollof rice and spicy chicken.
Consumer behavior such as this often becomes a trend. Very few folks, are therefore, totally surprised that, almost overnight, Nigerians have redefined the essence of celebration, and our affection for the eponymous produce of the Champagne region has become a sub-culture, a puzzling and dynamic social phenomenon with a deepening impact on the cultural and economic ethos of the land.
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To comprehend the contemporary culture of champagne consumption in Nigeria, you would have to recognize one simple fact: Nigerians are showy, ambitious, possibly more ambitious for their own pockets.
Anyone who disagrees with this view should simply go grab a magnum of the latest bubbly stuff available. And that would be ‘Taste of Diamonds’ by luxury champagne brand Goût de Diamants.
Designed by UK-based, Nigerian luxury designer Alexander Amosu, this one-off drink for ‘very private’ clients is reputed to be the most expensive champagne in the world; the asking price for one bottle and its liquid content is $1.9 million.
But why would a French vinery approach a Nigerian to help it project its expensive brew to its target markets? The answer is somewhere between personal recognition and social economics: Amosu has a track record of co-creating and helping to launch luxury goods. He once showcased the world’s most expensive suit to high society in Lagos and in London, UK. Secondly, it helps that Amosu identifies with his Nigerian roots. In a place like Nigeria, poverty and affluence could be twin brothers.
The United Nations says 63% of Nigeria’s 160 million people are technically poor, existing on less than $2 a day. The country also has some of the world’s wealthiest folks. For instance, Aliko Dangote and Mike Adenuga, two of Africa’s wealthiest moguls (worth $20 billion and $4.7 billion). Dangote and his ilk on the Forbes rich list can afford bodyguards, bullet-proof cars, private jets, luxury yachts, authentic designer goods, stadium-size parties, little islands, and several cases of ‘Taste of Diamonds’. But will the Dangote’s of Africa spend so much lucre on one bottle of liquid lust? Who knows?
The point here is that a ‘struggling giant’, Africa’s most populous economy, has become the destination of choice for the world’s champagne brands. Already acknowledged as big spenders in the retail zones of Europe, North America and the Middle East, Nigerians at home have now been recognized as one of the fastest adopters of champagne drinks globally.
Adeoye Omotayo of R&amp;B Public Relations Ltd in Lagos observes that the Nigerian environment is, without a doubt, easily part of the global champagne culture.
“Whilst a bit of pocket power may be required to constantly savor the exquisite experience of drinking champagne, one thing that can be said about Nigerians regardless of their socio-economic status is that they are largely appreciative of the fine things in life, one of which is certainly sparkling wine from the best champagne houses of Europe,” he said.
A recent report by Euromonitor, the research firm, identifies the West African nation as having the fastest growing rate of new champagne consumption in the world, second only to France, and ahead of rapidly growing economies like Brazil and China, and established markets such as the USA and Australia.
In 2011, in value terms Nigerians might have gulped as much as $50 million worth of the sparkling French liquor, and in volume terms they allegedly drank more champagne than Mexicans, Russians and South Africans, three nationalities well known for their contributions to global drinking culture. By 2017 champagne consumption in Nigeria is expected to reach the 1.1 million liter mark, competing favorably with annual beer and soft drinks purchases.
“I am not surprised by this piece of news. It is actually not a revelation to me. Nigerians have exquisite tastes, they are always willing to explore new drinks, trust me, I know what I am talking about,” says Roger Chedid, a Lagos-based Lebanese businessman who trades in wines, spirits and champagne. “Nigerians who really drink champagne don’t just take any brand; they always go for the particular brands they like. They are brand loyalists and image conscious.”
Chedid’s liquor store cum mini-bar, in the posh Lagos neighborhood of Ikoyi, reflects the avuncular character of champagne consumers; friendly talk and soft jazzy music often fills the air as patrons stroll in for a cup of cappuccino and friendly company; a few minutes later, they stroll out with their stash, business done. After 14 years of doing business in Nigeria, Chedid’s clientele come from all over the country. Increasingly, customers now order their cases of ‘sparkling wine’ via email and over the phone. Similar establishments are opening shop all over Nigeria’s urban centers.
My expedition into the local champagne ecosystem revealed the top 10 champagne brands consumed by Nigerians, as Moët &amp; Chandon, Don Pérignon, Veuve Clicquot, Lauren Perrier, Nicolas Feuillatte, Louis Roederer, Lanson, Taittinger, Ayala and Ruinart. The cheapest item on this list is about $100, for a pony sized bottle. That would buy you about 100 bottles of pop soda (soft drinks).
“We like to live the life, and our penchant for acquired taste is legendary,” says Ebi Atawodi, an events and sponsorship executive for a Nigerian cellular operator. “Increasingly, our social and private parties are like champagne and wine competitions.”
Omotayo, the PR executive whose firm also represents some of the leading champagne brands in Nigeria, agrees with her.
“Indeed, Nigerians can be somewhat ostentatious, but even champagne, like cars, has its various grades and quality brands will continue to dominate the liquor landscape,” he says.
Champagne cognoscenti believe that technology, education, global hip hop culture, the runaway success of the local music and movie scene, the coming of age of the ‘Facebook and YouTube’ generation and the expansion of the elite middle class have helped to grow the local champagne market. Clearly, the social arithmetic of champagne consumption reflects the ‘aspirational realities’ of the bold, wealthy and the adventurous.
“There are millions of Nigerians who are well traveled and have experienced the best of all worlds,” says Kayode Oguntayo, wine connoisseur, business man and owner of 1662, a ritzy wine bar in Lagos.
He reckons that, despite the waning popularity of a Nigerian music genre, the ‘Highlife Culture’ of enjoyment, has remained with us.

$1.9 Million a Pop

How did you become Africa’s 18th richest person?
Our group has invested steadily and has been very consistent, which has had a compound effect on our investments and the kind of assets we have. And also by the sheer nature that FORBES showed interest in Uganda, or has done more research in Africa and has taken more interest.
Tell us your story.
One of the first businesses we started dealing in was salt and the other was in beer—a rare and very fast-moving commodity—followed by other commodities… very soon we became one of the largest beer dealers in the country and this went on until about 1989. That is when the breweries refurbished themselves and started the production of beer. When they started production, they lobbied to the government to stop importation to protect the local industry and jobs. The government obliged… we had built up a huge clientele&#8230; all the hotels in town would buy beer from us;  we would have expatriates buying beer from us. At the time, foreign exchange was not allowed for luxury items like beer. So what would happen is that people would rent their houses in foreign currency. When they received their rent they would come and change it with us. In the meantime, the expatriate community needed to buy local provisions for their daily requirement. They would buy beer and other things from our store, they would also come and exchange foreign currency. We needed this foreign currency to pay for the importation of beer…
<div id="attachment_1613" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1613" class="size-medium wp-image-1613" src="/wp-content/uploads/2017/04/Sudhir-11-grayscale-200x300.jpg" alt="" width="200" height="300" />Sudhir</div>
After the closure of the beer business there were lots of people who wanted to change money with us. We started buying this currency and would actually deal with a trader who would need foreign currency to buy certain types of goods, we would swap this with local currency. Come 1990, Uganda liberalized the formal market, it was the second country in Africa to do so—Ghana was the first. We opened the first foreign exchange bureau called Crane Forex Bureau. Within six months we were doing more business than the banks’ foreign exchange departments. What transpired in the next two or three years was that the banks worked together and formed a cartel that would hit the forex bureaus by levying high charges and restraints. I realized that in order to sustain us we needed to go into the banking business so we eventually opened the first branch of Crane Bank on August 21, 1995. We had accumulated a lot of funds, so we were buying a lot of real estate. We bought our first property in 1991… The government nationalized all real estate, then the NRM [National Resistance Movement] government decided to return the Asian properties to its former owners but a lot of these people had settled in the West. They were doing well and had their families there, not all of them had intentions to come back. At that time there was an excess supply of real estate. The Asians who had property here never dreamed that this property would be returned to them so they came and cashed their money in. In the beginning, a lot of people were very skeptical about buying into the property: they were not sure about what would happen in the future. Now, we have a surplus of real estate in the country and people did not want the risk. I was one of the very few people at that time, who had faith in myself and I started investing at that time. Ever since then, we [Ruparelia Group] never looked back.
What is your view on the current state of the economy?
At the moment we are going through a restructuring. I guess this is always a good thing to do—a time to relook at all your businesses, trim them and flush out any inefficiencies. The problem here at the moment is that the politics are delaying the passing of a law, which will regulate the oil industry. Uganda desperately needs to pass these oil laws so when the oil comes, it is regulated and there is a transparent process it goes through. They don’t realize that every day they delay it, it costs the country a lot in lost revenue. So the government needs to clear that up.
What is the biggest weakness of the Ugandan economy now?
The left doesn’t know what the right is doing, unfortunately. The decision-making process of this country has gone very bad. Although there are a lot of processes, unfortunately these checks and balances have been misused, thereby the people have been scared into making decisions. The only way people feel they will survive in the job is by not making decisions and that’s very bad.
Recently donors have cut back on aid. Will this hurt the economy?
We don’t have only the issue of donors cutting aid; we have the issue of interest rates and of exchange controls – the foreign exchange rates. Now, Uganda cannot afford to have low interest rates at the moment because there will be capital flight out of the country. At the same time, it will have an effect on the foreign exchange rate. The currency depreciated by 8% at the end of last year. When you have further bad news by donor countries holding onto aid, it will have a negative effect on the country. I think Uganda gets about $800 million in aid and that is quite substantial as far as the budget support is concerned.
What should the Ugandan government do to promote entrepreneurs like yourself?
I think it’s always nice to have a government which has departments that make decisions. I think the decision-making process has deteriorated, that’s number one. Number two: the government needs to seriously finish all the regulatory bodies that are needed for the oil to take off. That’s the savior of this country. And if they can’t make decisions on how to solve oil regulation within the ministry then we are not going to go anywhere.
And the entrepreneurs? What can government do to promote businessmen such as yourself?
The only way any country can come out of unemployment is to support private industries, private entrepreneurs, who will then create jobs. They can’t solve all the problems of the nation but it will reduce unemployment and the other issues that go with it. Government went through one phase in 1990 when they first came in to support the industries and private enterprises. They brought in a lot of incentives, which has helped this country to get to where it is now. All it needs now are proper policies and if its oil is sorted out then industries will come here. Government does not need to do much more, just clean up its oil industry. If the oil is controlled and regulated and being produced you will see people queuing up to invest in this country.
What are your plans for 2013?
We have a lot of investments in real estate and we will continue [to invest]. We have projects of more than $150 million in the pipeline and we will fulfill those within the next 18 to 20 months. And hopefully, target a lot of service industries, which will service the oil industry; accommodation, education.
Do you think you will grow in the ranks in 2013?
Definitely. We have a lot of oil in this country and you can imagine that we have not even had one drop of oil come out, and the kind of resources that we have mobilized within the group.
Do you think you’ll be in the top 10 next year?
I am not sure but I am very happy to be at number 18 this year. The next few years will definitely have some kind of an impact. Crane Bank is expanding rapidly, it has 27 branches. By the end of this year, it will have 40 branches and then the year after, another 10, and it will continue to grow by at least 10 branches a year.

A Word With  Africa’s Next Billionaire

It came like a bolt from the blue. On the evening of October 20, 2006, Tabitha Karanja the chief executive officer (CEO) of Keroche Brewery Limited was working late in her brewery head office in Naivasha—65 kilometers from Nairobi. Her husband, Joseph Karanja had just gone to Nairobi hospital where he was to undergo minor surgery the next day.
Karanja was winding up so she could rush to see him. As she was leaving, a fax arrived. It was after 5pm and she was curious about who sent a fax so late in the day. Her curiosity turned to shock in seconds. It was the tax man. The Kenya Revenue Authority (KRA) demanded KSh 1.2 billion ($14.117 million) in arrears to be paid within 14 days.
The competitive Kenyan brewing game is tough and like many entrepreneurs, Karanja had weathered many storms. Detractors allege that Keroche products were not prepared hygienically; once she invested in a multi-million dollar plastic bottling plant which was made obsolete overnight by a law banning plastic packaging. On a radio at the office, in the press of busy day, Karanja would hear politicians attacking her beer in Parliament.
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“One member of Parliament alleged that our drink was killing three people in his constituency every day. Considering Kenya has over 220 constituencies, how many people is that?” she asks.
Karanja fought back, she wouldn’t allow anyone to denigrate Keroche products unless they had evidence from the government chemist or the Kenya Bureau of Standards.
It meant the feisty Karanja was often in the media, if she was not threatening to sue the government, she was complaining about raids on Keroche depots by administration police or damage to her billboards by the competition. She has been to court six times to defend her beer business.
This was a world away from her humble beginnings in the age-old story of an entrepreneur spotting a gap in the market. Karanja and her husband, who were traders of manufactured goods, started out as rookie brewers in a cut-throat market. They found themselves in competition with multinational giant, East African Breweries Ltd (EABL).
Their strategy for the alcohol business was simple—to supply beer to thousands of villages in Kenya.
“The brewers who were there, only catered for the upper end of the market and people in the villages were left to drink whatever they could make—the traditional drinks. So we thought, why not make a hygienic and affordable alcoholic product. Our first product, a fortified wine, was released in 1998,” says Karanja.
Karanja says the rough waters have merely made her more determined.
That is, until the brush with the tax man crushed her spirit.
“That was the day I understood why people collapse when running a business. You wonder why a businessman who was getting into his car just died or collapsed in his office.”
On that fateful October evening, Karanja saw the future and it looked terrible. Her eight-year-old brewery, the business she had shed sweat and tears to build, was about to die.
The tax demand did not include interest and penalties. In total she owed the KRA around KSh2 billion ($23.8 million).
“I thought these people wanted to kill me so my employees could find me dead the next morning,” she says.
It got worse. After reading the fax several times, she called the KRA Commissioner’s office in a panic, but she could not get through. It was late in the evening and the government office was closed.
“KRA claimed that the business licence I was given in 1998 was wrong. I was paying 45% tax but they were demanding 65% backdated to 1998. You know how powerful the tax authorities are, not only in Kenya but everywhere in the world. I was literally shaking!”
At the back of her mind, Karanja knew it would be difficult to get a lawyer to fight KRA. Unable to get through to KRA, she went to visit her sick husband. She did not break the news to him that night, instead she went home and had one of the longest nights of her life. She did not sleep a wink.
“I was feeling awful; I panicked because I knew these guys had cornered me. My spirit was devastated,” she explains as her voice breaks.
When she informed her lawyer about going to court, he was hesitant.
Two days later, the lawyer broke the news of court action to her husband on his release from hospital.
“I remember I called the KRA Commissioner and told him I was not going to die. I am strong and I was going to fight!”
Karanja wanted the matter settled out of court but her efforts to get any of the KRA officials before the 14-day deadline were unsuccessful.
“I wanted to show them that they were wrong because I had all my facts,” she says.
It did matter. Time was running out and she knew, if she waited, KRA would freeze her bank accounts and take over her business. So she went to court and fortunately the 14-day order was stopped and after one year the case was thrown out—she had won. After all the pain, angst and fear—she had won.
That was the most horrifying point in her life. There were days she was filled with doubt and fear.
“Fortunately, the judge ruled that it was misuse of power and nobody could explain the KSh1.2 billion ($14.3 million) figure. Furthermore, I was the only one required to pay yet there were 10 other players. I am sure if we did not win that case, Keroche Breweries would be no more,” she says.
In the year she was battling KRA, there were money worries too. The bank was in the process of approving a KSh500 million ($5.9 million) loan for a new plant she wanted to set up for the launch of a new beer called Summit Lager.
“There was so much at stake—our business, our dreams, our investments and other entrepreneurs who looked up to us…”
Fortunately, the loan was approved in December 2007. But her struggles were not yet over, with an on-going case in court, things turned sour when Kenya experienced post- election violence following elections in December 2007. The equipment had been delivered and installed but business only started in June 2008.”
Despite the turmoil in the country, for banks it was business as usual. By February 2008, the bank was knocking on Karanja’s door. She had to start repaying her loan and the interest.
“The bank had warned me they would repossess the equipment if I did not start repaying the loan. I borrowed KSh10 million ($118,835) from a friend without a clue of how I would repay the rest in the coming months,” she says.
Karanja borrowed from the same friend twice.
“I struggled for months. I was entirely dependent on the products and we did not have extra money.”
For three months Summit Lager beer did not move off the shelves.
The sales from a vodka mix, launched in 2007, were not adequate to service the loan. While the company was in the process of growing the Viennese vodka brand they noticed a gap in the beer market—the same market where EABL enjoyed a monopoly.
“People only had one choice. We decided to produce a premium beer product and that is how Summit Lager was born.”
Keroche was in direct competition with EABL’s cash-cow—Tusker. Even the mighty South African Breweries Miller (SABMiller) had been unsuccessful in the Kenyan market and now Keroche found itself staring the giant down.
With a big loan to repay, Karanja was hell-bent on hanging on. She tried every trick in the book and even hired marketing professionals from the competition to help push her products but they too were unsuccessful.
“I understood them; we were fighting a losing battle. The people in the bars were being paid not to sell Summit Lager, our posters were defaced, a client would ask for Summit but they would be told the drink is not available.”
Frustrated, Karanja decided to do something radical. Together with her husband, they went to the market and talked to the distributers in 10 regions around Kenya and offered them an incentive—for every two crates they sold, they would get one free. They also went to the Parliamentary Committee to complain about the unfair competition.
“There is a time we had one million liters in the tanks and had nowhere to take it. Our business was 100% financed by the bank and it would not have been long before they [the bank] came for us.”
Karanja went before the Committee and EABL officials were summoned. She only wanted one meeting because she felt it was a waste of her time.
“I left the meeting disgruntled and told them [my staff] we should fight it out in the market so that I know I was defeated out there instead of a boardroom.”
The courts and then Parliament: it was a long way from the humble beginnings of Keroche. The seed capital was KSh100,000 ($ 1,176) which came from family savings.
The money was used to buy a second hand bottling machine that produced 200 bottles a day—around 10 crates.
“We could not approach the banks but as the business grew, we started attracting financiers,” she says.
When they needed additional capital, the local banks could not loan them the money, so in 2006 they approached Barclays Bank Plc in London for a KSh500 million ($5.9 million) loan. With all that was going on, Karanja, was in constant touch with her bankers. In 2009, her bankers almost gave up on her and a risk audit team from London was sent to look through her books—they spent one month there.
“We were put on a business support program because they also panicked when they saw we were unable to move any beer.”
When having a discussion with one of the auditors, he asked Karanja why she had decided to compete with a multi-national like EABL.
“I remember pleading with him because he was the one who was going to write the report. I begged him to give me an opportunity so that I could prove that a local entrepreneur could make something better than Tusker. I also challenged him to tell me why there should not be a competitor to Tusker.”
The bank official seemed to agree but he was very skeptical. He told her that her business would not last long.
“He gave me three months before I went under. For me to compete with Tusker I had to make a superior drink and I am convinced without doubt that our quality is superior!”
To date, Keroche has two beer brands, two ready-to-drink vodka brands, four spirits and three wines. With a current 5% market share, by end of 2014 Keroche is looking at controlling 20% of the market. Keroche currently owes the bank less than KSh200 million ($2.4 million) and is looking at borrowing KSh1.5 billion ($17.9 million) to expand by producing soft drinks.
<h3>What Did She Learn From Taking On A Giant In The Industry?</h3>
“Whatever you feel you want to start, you must know exactly what you want to do otherwise when you face one challenge, you will run away. Secondly, whatever you are doing you must offer a superior quality and be convinced beyond doubt that it will succeed.”

Tag: Beer

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