Why spirits are losing ground in South Africa
The spirits sector in South Africa is facing difficulties, struggling to gain a foothold against beer’s popularity and fighting off illicit booze.
*This feature was first published in the March issue of The Spirits Business magazine.
Spirits is a minority sport in that great beer-drinking nation of South Africa. Some 70% of beverage alcohol is beer, while spirits had just 3.4% of consumption in 2022, according to the Drinks Federation of South Africa (DFSA), although the value share was much higher, at around 22%.
After the rollercoaster ride through Covid-19, including eight months of prohibition, the spirits market has settled down.
While there is talk of modest, low-single-digit growth, Nuno Fernandes, KWV’s marketing director spirits and liqueurs, says: “Spirits have been in decline for a few years now. The only categories in growth are Cognac and Tequila, and with recently rum showing some growth, but that is predominantly Captain Morgan Spiced driving this.”
South Africa is Cognac’s fourth-biggest market, and exports were up 24.4% by value in 2025 (Bureau National Interprofessionnel du Cognac data) when the spirit slumped by the same margin globally, thanks to heavy declines in the US and China. The go-to brand for South Africans has long been Hennessy, particularly its top-selling VS expression, which sells for R580-R620 (US$36.60-US$39).
Christelle Reade-Jahn, director of the South Africa Brandy Foundation, says domestic blended brandy accounts for 90% of sales, and is typically mixed with cola. Homegrown pot still brandy has a 3% share, and is performing strongly in line with Cognac.
“Our sales grew very rapidly after Covid, when socialising continued while on-trade venues were closed,” she says. “In a way it was a positive for us. Ours is an authentic spirit, as opposed to badge-drinking when you need to maybe show people your Cognac or malt whisky in a bar.”
The French spirit certainly dominates in terms of price and status. “In response, we are in the process of revamping our pot still range to blur the lines between brandy and Cognac,” says Fernandes. The launch of a KWV VS brandy, which sells for around R360 (US$22.50) has been “very successful”, he says. It has been joined by a rebranded 10-year-old, now called KWV X.
But Reade-Jahn admits: “We probably need one big South African brand like Hennessy to just drive the category.” Meanwhile, the nation has enjoyed a gin boom similar to that of the UK, with a mass of new brands where once there were just two or three. According to Glenn Bryant, founder of Six Dogs Distillery, in 2016, locally distilled Gordon’s had around two-thirds of the market.
“When we launched in 2016, we were concerned we’d missed the boat,” he says of Six Dogs gin, “but looking back, we were pretty spot on.” The brand really took off with the release of a blue gin a year later, which was naturally coloured with the blue pea flower. Add tonic, and it turns a delicate shade of pink.
Pre-pandemic, says Bryant: “There were well over 400 gin SKUs, produced locally,” he says. “But then, of course, Covid hit, and not everyone survived.” At a guess, he reckons about half did. In 2019 Pernod Ricard acquired a majority share of one of the hottest new brands – Inverroche.
This was upped to full ownership in February 2025 when Sola Oke, managing director of Pernod Ricard Africa spoke about the firm’s “ambition to make Inverroche Africa’s first global luxury spirit brand.”
However, Fernandes insists “the gin boom is very much over” in South Africa, although he claims KWV’s super-premium brand, Cruxland, is “one of the very few gins to have shown any growth”. Meanwhile the likes of Gordon’s have been choking off the competition from craft gins in the on-trade. As Bryant recalls: “We found we were being ejected from some bars and restaurants who had signed deals with the big guys.”
According to Reade-Jahn, ready-to-drink (RTD) is now the second-biggest alcoholic drinks segment, of which “probably 95% are white spirits-based, principally vodka”, she says. With the same outdoor culture as Australia, albeit with braais in place of ‘barbies’, the convenience and accessible pricing were bound to make RTDs popular.
New entrants
The market was built by Smirnoff Ice and Bacardi Breezer, among others, but the big spirits brands are now facing a raft of new entrants. These have included cider-based RTDs, coolers, and spritzes, and the highly successful Brutal Fruits, owned by AB InBev. Among brown spirits, there has been little innovation beyond the few examples of brandy and cola.
Whisky, which was traditionally the leading spirit in South Africa until it was usurped by gin, has tended to avoid RTDs. Scotch has been under pressure from Irish whiskey for some time, led by Jameson, and its shipments have been on the slide. Having been worth US$221.25 million in 2013, HM Revenue & Customs data shows Scotch exports fell to US$145.69m pre-pandemic (2019) and stood at just US$71.09m in 2025.
“We’ve still got quite an enthusiastic whisky market,” says Andy Watts, whose whisky brands included Three Ships and Bain’s while master distiller at Distell before 2023, when it was bought by Heineken, whose focus is naturally more on beer and cider, in his view. “The top end of the market has continued to hold its own, thanks to the aspirational value of brands like Johnnie Walker,” he says. “One of my biggest challenges was not in making good whisky, it was about changing perceptions.” He reckons South African whisky has a 16% share of the category.
Like all spirits in South Africa, the biggest threat to brands is from the illicit trade that now accounts for 18% of volumes, or almost one in five serves, according to a 2025 report from Euromonitor, commissioned by the DFSA. Those dry months during the Covid-19 pandemic helped drive alcohol underground and into the hands of organised crime, just as it did during US Prohibition.
In spirits, counterfeit gin and vodka make up the bulk of the volume, but according to one industry source brown spirits now account for around 45% of the value. Euromonitor put the fiscal loss to the government through illicit alcohol at R11 billion a year. The incentive for moonshine could, unfortunately, grow as excise taxes continue to rise, as confirmed in the latest Budget.
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