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Is Craft Brewing a Threat to the Sales of Mainstream Brands in South Africa

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Is Craft Brewing a Threat to the Sales of Mainstream Brands in South Africa Is Craft Brewing a threat to the sales of mainstream brands in South Africa By Carmen Martin Submitted in fulfilment/partial fulfilment of the requirements for the degree of Masters in Business Administration to be awarded at the Nelson Mandela University April 2018 Supervisor: Dr Jessica Fraser DECLARATION BY CANDIDATE NAME: ___________________________________________________________Carmen Martin STUDENT NUMBER: _________________________________________________198180170 QUALIFICATION: ____________________________________________________Masters in Business Administration TITLE OF PROJECT: _________________________________________________ Is Craft Brewing a threat to the sales of mainstream ___________________________________________________________________brands in South Africa ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ DECLARATION: In accordance with Rule G5.6.3, I hereby declare that the above-mentioned treatise/ dissertation/ thesis is my own work and that it has not previously been submitted for assessment to another University or for another qualification. SIGNATURE: ________________________________________________________ DATE: _____________________________________________________________9 March 2018 THE DEGREE OF MASTERS IN BUSINESS ADMINISTRATION CARMEN ESTELLE MARTIN Previous qualifications: 2003 BSc in Microbiology and Zoology University of Port Elizabeth 2005 BSc (Hons) in Microbiology University of Port Elizabeth 2014 BTech in Business Administration Nelson Mandela Metropolitan University Thesis: Is craft brewing a threat to the sales of mainstream brands within South Africa The study investigated the impact of craft brewing on the sales of mainstream brands in South Africa. The population included all craft brewers in South Africa within the Brewers Association. Due to the competitiveness within the alcohol market, the response rate was low within the study. The study unveiled though inconclusive that craft brewing is a contender within South African beer market and is a niche worthy of exploration. Abstract The study aims to answer the question of whether craft brewing is a threat to the sales of mainstream brands in South Africa. This is done through a quantitative multiple case research study into craft breweries within South Africa. The justification of the research resides within the hype around the increase in craft breweries within South Africa. The theoretical framework of the thesis consists of history of beer, the elements of beer, the supply of raw materials to manufacture beer and the definition of craft beer. The comparison is done between the United States Craft beer market and the South African Beer market. The empirical part of the study is divided into six parts. It starts with an explanation of the method of the study, the questionnaire design as well as the data collection methods. Thereafter the topic is further justified, and validity, reliability, limitations and ethical issues will be considered. The results and analysis and findings section there are 212 craft brewers appearing on the Brewers Association membership list, the purposive sampling method meant that the questionnaires were sent out to 192 craft brewers across South Africa. Of the total of 192 questionnaires distributed, only 22 responded to the study, effectively granting us a usable response rate of 11.5%. Due to the closed niche of the alcohol market that craft brewing is competing in, as well as the low participation rate, it was concluded that within South Africa craft brewing though a contender does not impact mainstream brands. Acknowledgement This work would not have been possible without the support and participation of the craft brewers within South Africa. I would like to acknowledge my Supervisor, Dr Jessica Fraser for the continued guidance and motivation through conducting the study. I am grateful to friends and family who guided and motivated me during my study period. I wish to thank my mother for continually encouraging me to complete my studies. I wish to thank my loving and supportive husband, William, who provided me with unending inspiration. Table of Contents Chapter 1 ................................................................................................................................................. 1 Introduction ........................................................................................................................................ 1 1.1 Research Background .......................................................................................................... 1 1.2 Problem statement ............................................................................................................. 1 What triggered the study? .................................................................................................................. 1 1.3 Research Objectives ...................................................................................................................... 2 Purpose and Objectives of the study .............................................................................................. 2 Research Hypothesis ........................................................................................................................... 3 1.3 Research Methodology ........................................................................................................... 4 Research Design .................................................................................................................................. 4 Sampling design and data collection .............................................................................................. 4 Ethics protocol ................................................................................................................................ 5 Data analysis ................................................................................................................................... 5 1.5 Outline of the study ...................................................................................................................... 6 Chapter 2 ................................................................................................................................................. 7 2.1 Literature reviewed and Theoretical framework .......................................................................... 7 2.1.1 History of Beer ....................................................................................................................... 7 2.1.2 Essential Elements in Beer Brewing ....................................................................................... 7 Raw materials supply ...................................................................................................................... 9 2.2 Beer production ............................................................................................................................ 9 2.2.1 Overview of Brewing Process .................................................................................................... 9 2.2.2 Background of the Global beer market ................................................................................ 11 2.2.3 South African Beer Market .................................................................................................. 13 2.2.4 The phenomena of Craft Brewing ........................................................................................ 13 2.2.5 International Craft Beer Market .......................................................................................... 16 2.2.6 South African Craft Beer Market .......................................................................................... 19 2.2.7 Drivers to Growth of Craft Beer in the United States .......................................................... 24 2.2.8 How to start your craft brewery in South Africa .................................................................. 25 2.2.9 Categories of beer ................................................................................................................ 25 Chapter 3: Research Methodology ....................................................................................................... 28 3.1 Introduction ................................................................................................................................ 28 3.2 Justification ................................................................................................................................. 28 3.3 Methodology ............................................................................................................................... 29 3.4 Data collection ............................................................................................................................ 29 Method of study ............................................................................................................................... 29 Multiple format of questionnaire questions ..................................................................................... 29 3.5 Reporting or synthesis ................................................................................................................ 32 Chapter 4 Analysis of results and findings ...........................................................................................
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