Entrepreneurial opportunities in the craft- distilling market in South Africa

Abstract

Opportunities for entrepreneurial entry into the craft-distilling product and market domains of the agricultural sector are presented in this study. Although the craft spirits industry in South Africa is currently in its infancy, the study is able to investigate potential entrepreneurial opportunities for such activities in the farming areas of the Western Cape Province. The first part of the study explores the supply side (product-led diversification) of the market. This in turn leads to a better understanding of the current state of the craft-distilling industry, and establishes a base for the survey. An appropriate survey instrument is developed and administered to existing distillers. The subsequent findings confirm the small size of the craft spirits industry. As expected, the small number of active producers generates a limited range of products in a market with established players having strong bargaining power. To perform effectively however, the entrepreneurial craft producer is advised not to compete directly with these players but rather to exploit niche product opportunities created in the premium consumer market segment attracted to handcrafted, locally-produced and customised offerings. By developing products with a competitive positioning of focussed differentiation complementary to the current portfolio of offerings, new market space can be created and new entrants should find attraction.