Application of manufacturing strategy principles in adapting craft brewers for sustainable growth in the South African beer industry
Date
2018
Authors
Ramorula, Gaolebalwe Timothy
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Abstract
There is noticeable change in types of beers preferred by consumers in markets previously thought as mature and saturated both globally and in the South African context.
Although the market has been dominated by big players with massive capitalisation and resources such as Anheuser-Busch Inbev (ABInbev), Heineken plc, and others, in-roads into the beer market by much smaller players are observed. These are the craft brewers that are apparently growing, seemingly emboldened by success in penetrating the established market previously thought to be mature and saturated, and managing to retain market share.
Being SMMEs, standing up against the more resourceful and hostile competitors and holding their own requires agility and resilience. Even more skill at devising and employing appropriate strategy is required by craft brewers to grow their brands.
The study investigates the growth and impact of craft brewers in an FMCG environment and the implication for manufacturing strategy development in providing an appropriate response to the developments. Understanding the strategy used by craft brewers to survive and thrive is valuable to big players that are considering how best to respond to this threat of their dominance in the market.
Data was collected using a face to face administered questionnaire and the sampling method applied was a convenience sampling given the constraints on time and resources available with a large population covering the drinking population in South Africa and the geographic vastness of the craft breweries.
In the examined cases of five craft breweries in South Africa, application of manufacturing strategy framework were evident to an extent, however, these were not organised and not sufficiently deliberate to be made out as specific patterns of decisions to improve the manufacturing process and sustaining the performance. For most of these breweries the core manufacturing strategy constructs such as quality, cost, flexibility and reliability were not well addressed and this was evident in the responses given by the consumers in their interaction with craft beers. A manufacturing strategy framework sourced from the literature was used to demonstrate each brewery’s priorities and recommendations made of areas of focus for the craft brewers.
Description
A research report submitted to the Faculty of Engineering and the Built Environment, University of the Witwatersrand, in partial fulfillment of the requirements for the degree of Masters in Engineering, May 2018
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Citation
Ramorula, Gaolebalwe Timothy, (2018) Application of manufacturing strategy principles in adapting craft brewers for sustainable growth in the South African beer industry, University of the Witwatersrand, Johannesburg, https://hdl.handle.net/10539/25885