Success Brewing in South Africa*
Mohale Mahanyele's story exemplifies the immense business opportunities to be found in commercializing the traditional foods made from African grains.
In the late 1980s South Africa's government set out to privatize the sorghum-beer industry. For at least 20 years, sales had been dropping, as workers migrated to the cities and left the rural villages where the low-alcohol, high-protein drink is embedded in the culture. The government hired a management consultant, Mohale Mahanyele, to advise it on how to get rid of the business. His task seemed like a thankless one; the sales decline seemed inexorable. One analyst said the authorities were merely unloading "an old Third World product doomed to die."
Mahanyele did not agree. "There were a lot of leaders in the African community who thought we were being set up to fail," he says. "But I thought differently. Here was a drink that had always been associated with our festive occasions, and it had been taken away from us and tainted. It was humiliating, degrading. I wanted to restore the dignity of sorghum."
Armed with that vision, Mahanyele himself set out to buy the business from the government-run monopoly in 1990. It seemed like a foolish notion. He had to raise $20 million to purchase the corporation and its 21 factories, but he had no access to white capital. So he did something never before attempted in his country: he sold shares to fellow Africans, building on the centuries-old custom of stokvels— small, informal savings societies—in traditional communities.
National Sorghum Breweries ended up with 10,000 shareholders, more than 90 percent of whom are black—a novel arrangement in a country where few blacks own the roof over their heads. But Mahanyale's problems were far from over. In addition to the dropping sales, he had to overcome sorghum beer's political stigma, created during the 80 years when the white-minority government ran the business. To his own people, "Kaffir beer,'' as it was known, had become a symbol of white oppression. But Mahanyele succeeded. Today, National Sorghum Breweries is by far South Africa's most successful black-owned business. It has nearly doubled its volume in the past three years, while