R85 – Online (Via Quicket)
R100 – At the door
This comedy fundraiser aims to support educational enrichment programs, complete maintenance projects, upgrade school equipment and to provide the school with funding to make their classrooms student- ready.
In a remarkable strategic move, Devil’s Peak has acquired all taps by South Africa’s biggest craft beer distributor company “The Tap Room” and immediately began to remove competing breweries from the bar counters of this country, replacing (some, but not all of) them with their own wide range of brands.
After Heineken bought craft breweries like Jack Black, Soweto Gold and Stellenbrau and SAB’s aquisition by AB-InBev and the influx of their international brand portfolio (like Budweiser, Hoegaarden, Corona, etc) this the next big story, that is going to affect beer lovers in South Africa.
Since opening our doors on Long Street 5 years ago, BEERHOUSE has always owned their own tap equipment to have absolute independence on which beers to put on our 25+ taps and which one to pull at our own discretion. Nearly all other restaurants and bars in South Africa rely on taps being installed and maintained by breweries or distributors and their variety on tap will be seriously affected by this move, while we will proudly continue offering an independent variety of the best beers from all over South Africa and beyond.
These Brands are brewed by Devil’s Peak and distributed by their Signal Hill Products umbrella company: Devil’s Peak, Alpha Cider, Mitchell’s, Fokof Lager, Little Wolf, St Francis Brewing. They are also brewing many house beers like our own LIT Lager, contract-brew for international brands Mikkeler, Fierce Beer and Amundsen Brewery plus own exclusive distribution rights to Guinness(!) and Striped Horse for South Africa, meaning that people will walk into bars seeing a big variety of beers on tap, not understanding, that they all come from Devil’s Peak, squeezing small independent breweries out!
Industry veteran Carl Nienaber broke the news on Facebook, where he explained the significance of The Tap Room’s (aka “The Draught Guys”) asset acquisition by Devil’s Peak (aka “The Pizza Dudes” as they are funded by US money, that also invested into Pizza Hut), which he allowed me to quote in full (scroll down for my own comment):
“This week, quietly and without fanfare, the landscape of the South African craft beer scene changed radically for the worse when the country’s largest craft beer distributor (who I’ll hereafter refer to as The Draught Guys) sold all their draught dispensing equipment to the country’s largest “craft” brewing group (hereafter The Pizza Dudes). Overnight, many hundreds of taps in scores of restaurants and bars became the property of one brewery.
To put the scope of this development into perspective, let me explain the underlying business model driving draught beer sales in the craft category. Draught dispensing equipment refers to the taps, towers, coolers and other items required to pour beer out of a keg, through a tap into your glass. This equipment is quite expensive to buy, install and maintain which means that the majority of bar and restaurant owners choose not to own their own equipment. Instead, they typically take on the services of a distributor or brewery who will install and maintain the equipment in exchange for sales exclusivity on that equipment. So, if my bar has equipment installed by a particular distributor/brewery, then I undertake only to order products from that distributor/brewery. The cost of the equipment is then amortized over a period through the profit margin generated by the sale of kegs.
This model has proven to be very popular in recent years, resulting in the proliferation of craft beer on tap throughout the country. Over time, a certain amount of consolidation has taken place – we’ve seen the majority of tap space in the trade being dominated by the Big 4 local craft breweries and – significantly – by The Draught Guys. Competition for taps has become fierce recently simply as a function of limited real estate. A bar can only sustainably operate a certain number of taps before they start running into issues of space and stock expiry, meaning that every brewery who wants to grow their market share either must put taps into outlets that don’t currently have taps (a rarity these days) OR they need to convince an outlet to replace their taps. The second option happens quite frequently, particularly when certain of the bigger breweries offer aggressive deals and low pricing.
This is where The Draught Guys have hitherto played a very important role in our industry. As a distributor, they represent a large portfolio of breweries which they can offer to trade customers. However, unlike most distributors, who only offer a delivery service, The Draught Guys also owned a huge stockpile of dispensing equipment that they could install in the trade. What this means is that if I owned a bar and I chose the services of The Draught Guys, they would install a dispensing system at no cost to me and I would then be free to choose whatever products they offered in their basket, whether it was from a big craft brewery or from a tiny micro operation.
Additionally, if I had multiple taps, I could order products from a whole range of different companies, thereby giving the consumer a choice of products from different breweries.
The Draught Guys’ model was hugely beneficial to smaller breweries in particular, who – unlike the Big 4 – can’t afford to buy, install and maintain their own equipment. In fact, this model was so successful the The Draught Guys owned probably as much dispensing equipment in the trade as any one of the Big 4 Breweries. And a large proportion of those taps were pouring beer that was not supplied by one of the Big 4. The Draught Guys were central in providing the craft beer consumer with a diversity of interesting and independent products and this is why the sale of their equipment to The Pizza Dudes can’t be good for the industry.
One of the reasons that the “craft” beer industry came into being in the first place, is that consumers grew weary of being offered only the illusion of choice provided by a handful of macro breweries making light lagers. Craft beer gave people choice again, not only in terms of the beer styles on offer, but also in terms of who produced the beer.
Now, in a tactical master stroke, The Pizza Dudes appear to have taken us closer to the pre-craft era than we’ve been in years. What have they done specifically, you ask?
Step one: create the illusion of consumer choice. The Pizza Dudes set up various in-house brands in addition to their core brand; they quietly acquired several small independent breweries; they secured distribution rights for some big international brands. They were now able to offer a product basket appeared diverse and interesting to the consumer, even thought the vast majority of those products were produced in the same factory.
Step two: hit the market HARD. Armed with their lovely product basket, The Pizza Dudes’ sale force began aggressively targeting beer tap market share. By leveraging economies of scale, and by not shying away from loss leaders, they were able to offer keg prices and incentive deals that no other brewery in the country could match. This proved immensely successful and soon the Pizza Dudes had the largest market share of any individual craft beer supplier.
Notwithstanding this success, The Draught Guys remained an obstacle to the Pizza Dudes’ market domination. Unlike their other 3 main competitors, The Draught Guys could also make a compelling case to customers in terms of the variety of their offering.
So they implemented Step three: buy out your competition.
Effective this week, all of The Draught Guys’ dispensing equipment has become the property of the Pizza Dudes. That means that the Pizza Dudes now own taps in the trade that are pouring their competitors’ products. And in light of their historical marketplace tactics, is it likely that the Pizza Dudes will abide this? I think not.
Over the next few weeks we are likely to see dozens, if not hundreds of taps that had been pouring beers from small independent breweries being replaced with products from the basket of one company – the biggest, least independent craft brewery in South Africa. And if that’s not a loss for the craft beer consumer and the small producers in South Africa, then I don’t know what is.
My own comment and Beerhouse perspective is: We are not here to badmouth Devil’s Peak, Tap Room or any other market player. I got mad respect for Devil’s Peak beer quality, innovation and their pioneering work and we proudly work with and sell their products, but it is important for us to educate our customers on the source of the beloved product and make sure they can make informed decisions. I do believe, that Devil’s Peak is helping grow “craft” beer, by lowering the price point and making it more accessible, but I also believe, that we will need real and authentic variety to convince these customers to drink craft forever. Craft beer is not a winner-takes-it-all market, but can only thrive, if the ecosystem, the craft beer community is functional.
Old Taproom customers have already lost taps in the few days since the change was announced and there’s now a distribution gap in the market. I do hope, that breweries, that lose their taps will find new independent outlets and distribution partners. My Beer Revolution group of companies happens to have a dormant nationwide distribution license and licensed warehouse in Paarden Island, which I’m happy to utilize, if required for such an undertaking…
P.S. after publishing this article an intense debate erupted on social media, some even questioning, if Devil’s Peak is still craft
P.P.S. Devil’s Peak finally released an official statement on Monday emphasizing, that they are going to continue sharing a lot of their lines with small brewers as they always did…
P.P.P.S. I was sent this copy of The Tap Rooms email to their brewer-customers:
We wish to advise you that the Board of Shareholders at The Tap Room has taken a decision to sell its assets in trade to Signal Hill Products. We have until now been unable to inform any our stakeholders of these happenings as we have been bound by confidentiality.
This decision has not been taken lightly and was motivated by the consolidation in the industry. In addition to experiencing substantial pressure by large players targeting our outlet space we have also seen a significant drop in volume of product sold. As a result, the sale of our assets was a strategic imperative that we believe will enable the Tap Room to go on from strength to strength.
Pursuant to the sale we are changing our business model to be one that focuses on distribution and dispensing services. Should you be interested in us doing installs on your behalf, we will gladly assist where possible. We would also like to continue distributing your products going forward.
We can advise that it is not in SHP’s interest to remove all competitor lines, and they have intimated that they want to work with you guys going forward as they do with all other breweries. The Tap Room will continue to service and maintain these lines and will continue to collect line rentals.
As the home of the Beer Revolution and tasting room for South African beer, we are proud to host the South African National Beer Trophy – SANBT 2018 – Beerhouse People’s Choice Awards.
The Award ceremony will be held on Wednesday the 29th of August at Beerhouse on Long. The Beerhouse People’s Choice Awards are to be voted in store at Long Street and Fourways. You can also vote online at beerhouse.co.za/vote for the beer you believe to be South Africa’s Best. By voting you stand a chance to win a R999 Beerhouse Voucher.
Beerhouse is passionate about providing a podium for local breweries to shine on. We also aim to bridge the gap between the brewer and beer consumer; the Beerhouse People’s Choice Awards enable us to do that. Beers that are entered into the SANBT are blind tasted and rated by certified beer judges according to BJCP (Beer Judge Certification Program) guidelines. Beerhouse introduces the People’s Choice award by opening up the voting to the public and puts the power in the consumer’s hand and cultivates a true beerocracy.
SANBT was launched in 2015, with the aim to offer a fair, independent and reliable assessment of the burgeoning local beer scene, and to provide the best-emerging brewers with the recognition they deserve. Over the last two years, brewer participation in the competition has grown substantially. In 2015, 56 South African beers were entered into the competition; 95 in 2016 and over 200 beers in 2018 with gold and silver medals to be awarded.
Let’s drink up and vote!
Please cast your vote at Beerhouse Long Street or Fourways or online at beerhouse.co.za/vote
It’s Beerhouse on Long 5th Birthday and we are going to celebrate all week with a line up of our favourite events. Join us for a beer, food and events from 30th July till 5th August
Tuesday 31st July: ‘The State of Beer’- An industry review. Beerhouse has always championed the BEER revolution and believes in inclusivity. We curate a beer menu that includes macro and micro beers and is committed to the education of the market. We are in a great position were we observe both macro and micro challenges to the market and wish to create dialogue to increase further cooperation and education. The open discussion will take place at Beerhouse with a live and streamed audience. The intention is to create transparent dialogue in an open forum focusing on the current state of the industry and the challenges it faces.
Lucy Corne – The Brewmistress
Nick Smith – Soul Barrel
Wolfgang Koedl – Cape Brewing Company
Steve Miller – Garagista/ Ex-SAB
Time – 6pm – 8pm
- Macro and Micro – can they work together for the betterment of the industry?
- Competition Commission discussion – Ab-InBev undertakings regarding support microbrewing industry.
- Challenges facing ‘craft beer’ in SA.
- Beer Appreciation initiatives and Programs.
- Training and quality initiatives and Programs.
Participation is free and open to all. A serious discussion followed by some fun…
We are bringing you a FREE entry quiz to do with ALL THINGS BEER!
Are you smarter than the Beer Whisperer? Build a team of beer nerds and let’s see.
Time: 8pm – 9pm
Prizes: R500 off of your bill
Alternative bookings contact:
phone: 021 424 3370
Wednesday 1st August: Bottomless Ribs & Darling Bone Crusher
This Wednesday we have a very special Bottomless special! Grab BOTTOMLESS BEER with your Bottomless Ribs for only R299!
If you aren’t into the bottomless beer top up, you can still get our delicious Bottomless Ribs for R130.
Beer brought to you by Darling Brew.
Thursday 2nd August: IPA Day- First Thursday
IPA DAY – Meet The Brewers
Our now famous First Thursday Live music vibe and International IPA Day, it’s a double whammy!
Meet The Brewers of Cape Town’s finest IPAs and have a free tasting with a side of beer banter.
JC Steyn – Devil’s Peak – Capenhagen NEIPA
Nick Bush – Drifter – NEIPA
Lethu Tshabangu – Ukhamba – Millet NEIPA
Carl Nienaber – 400 brewing Company – Harambe Resurrection Black IPA
Danial Shields – Shields Funk Machine – IPA
Time: 7 pm
First Thursday promises to bring you NON-STOP partying from 8pm!
ENTRANCE IS FREE!
Friday 3rd August: International Beer Day- Majozi Live -Lit Lager Launch
It’s international Beer day and officially our 5th Birthday. Join us for the official launch of our very own house beer, LIT Lager and sing along to the amazing Majozi.
Majozi is a proudly South African musician who has recently emerged onto the scene from the coastal city of Durban.
At the age of thirteen, he started to teach himself guitar, which eventually led to him studying a foundation course in jazz and popular music at the University of KwaZulu Natal.
We are very proud to launch Beerhouse Fourways 4th Birthday beer. The Caramellow beer is a Salted Caramel Ale that was born out of our wish to recreate found childhood memories of the legendary Caramello Bear Chocolate that had a salted caramel centre. This delicious ale was expertly brewed by Brendan Hart of Frontier Beer Co in collaboration with Beerhouse.
The beer recreates a great sweet caramel taste by using rich cara-pills, Munich malts and actual caramel additions that balances Beautifully with late salt additions that give your taste buds a great flavour journey from sweet to savoury and finishes dry and extremely sessionable.
The beer is extremely limited and a first of its kind in the world. A real treat. Get yourself down to Beerhouse Fourways this week to get a taste of experimental beer.