Transcript R`show 2012, Sunley-SA Food Ind by RM (12

The South African Food
Industry
Opportunities to be explored.
South Africa as a hub
• In relation to Africa, South Africa accounts for
– 6 percent of the continent's population
– 50 percent of its purchasing power
– 25 percent of the GDP
– 50 percent of the electricity generated
– 45 percent of all mineral production.
Strengths
• Physical and economic infrastructure
• Natural mineral and metal resources
• Growing manufacturing sector with potential to
compete in the global economy
• Strong growth potential in tourism
Economic activity
• Four main metropolitan areas
– Johannesburg and surrounding areas (Gauteng)
– Coastal Durban /Pinetown areas (KZN)
– Cape Peninsula
– Eastern Cape Area
• Financial and industrial sectors are concentrated in
Gauteng
– 30% of the country's GDP
HOW LARGE?
• The SA food industry sells 20.4m tons food per
annum (R159bn)
• It is the second biggest employer in the country
with over 1,5 million workers
• There are over 4000 food manufacturers. In 16
different sectors The top 10 account for 70% of
the industry turnover
• The food industry ranges from high-tech to small,
labour intensive operations
Food processing industry
• 16 sub sectors
– Meat processing
– Dairy products
– Preservation of food and
vegetables
– Canning and preserving of
fish
– Fruit canning and jams
– Bakery
– Chocolate and sugar
confectionery
– Vegetable and animal oils
and fats
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Flour and milled products
Ready Meals
Prepared animal foods
Soft Drinks
Wine and Distilling
Brewing
Sugar mills and refineries
Other food products e.g.
starch
Food supply
• South Africa is largely self sufficient
• Rice is the exception and most of the countries
requirements are imported from the Far East
• South Africa is the 6th largest producer of wine
world wide
• Important agriculture-based food industries
– Fruit and vegetables
– Sugar
Exports
• Until recently South Africa was a net food
exporter
• Fresh fruit and nuts are the largest export (by
value and volume) followed by sugar, processed
fruit and vegetables, fish products., alcoholic
beverages and cereals and grains
• South Africa exports some niche products e.g.
rooibos
Increased imports
• For the first time in 2008 South Africa became a
net importer of basic agricultural commodities
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Yellow maize
Wheat
Vegetable Oil
Red meat
Poultry meat
• Specialty products
• Low cost confectionery and biscuits
Key players
• Multinationals
– Nestle
– Unilever
– Mars
– Kraft
– McCains
– General Mills
– Coca Cola
– Pepsico
– Heinz
– Danone
– Parmalat
– Cadbury
• Local
– SAB
– Tiger Brands
– Pioneer
– AVI
– Foodcorp
– Genfoods
– Distell
– KWV
– Clover
The rainbow nation
• South Africa is a nation of over 49m people of
diverse origins, cultures, languages and beliefs.
• 33% are under 15
• 7.6% are over 60
• 11 official languages
• Religious affiliation
– 2/3 are Christian, mainly Protestant.
– Other significant religions are Islam, Hinduism
and Judaism.
SA Consumers
• First and third world in one country!
• Consumers in the middle to upper income levels are
demanding healthier, convenient , quality foods
• The poorer consumers demand staple foods at low prices
• SA is a nation of fatties - 29% of men and 56% of women
are either overweight or obese
• Although 14% of SA Children are overweight / obese,
18% are underweight
Structural change in the South African
economy
• Black middle class growing rapidly - now >3m
mouths
• Worth >R200billion ->30% of total SA spend
• LSM7-9
• Blacks now make up about a third of SA’s total
middle class
But the gap between rich and poor is
widening
48% of the South African population live on less
than R400/month
>25% have no jobs
Urbanisation
• ~70% of the population is urban
• South African urban growth rate is 4%
• Rapid urbanisation brings with it many problems
as it places huge demands on land, water, housing,
transport and employment.
• Food consumption patterns change.
Brand loyal
• South African consumers are notoriously brand
loyal
• Private label less important than in other areas of
the world BUT are becoming more important as
PRICE is now key
• This is good news for manufacturers who need
consumers to remain loyal to their products in the
midst of so many choices
• Brands are built on awareness, trust and
confidence
Brand loyalty
• Products must be relevant to local consumers
• Sustainability depends on keeping up with
changing consumer demands.
• 80% of households say the person doing the
shopping makes the brand decisions but other
family members are increasingly giving their
input. This is particularly so for children who are
brand savvy
• “reasonable quality at reasonable prices”
Changing lifestyles result in food service
growth
• Modern consumers demand
– Speed
– Value for money
– Convenience
• Fast food outlets are responding with meal
solutions that suit the needs of modern living
We’ll eat anything as long as its chicken !
• South Africans are mad about
chicken
• The top three fast food brands all
sell chicken
• There is a cultural affinity with
chicken on the bone -real food
South African innovations
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Boerewors
Biltong
Rooibos tea
Red Espresso
Speciality ice cream (Dynamic Commodities)
What else???
www.weirdfood.com
Are we an endangered species?
• Food science is the life blood of the food industry
• Food Science is a mystical term to most
consumers
• Food scientists are often associated with food
scares and “unnatural” practices
• In UK Food scientist are becoming a rare species
with applicants for food science degree courses
down 50% in the last decade
Numerous Opportunities
• Academic institutions
– Research
– Teaching
• Food Manufacturers
– R&D
– Procurement
– Production
– QC/QA
– Regulatory
Numerous Opportunities
• Government
• Technical Sales
– Ingredients
– Machinery
• Food Service /Fast Food
• Retail Environment
• Independent laboratory
Numerous Opportunities
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Consulting
Food Associations
Market research -sensory science
Marketing
Journalism
Management
Entrepreneurship
You are entering a learning curve
• Don’t try to be a hot shot on your first day
• Small steps and a good attitude make you stand
out from the crowd!
Good luck!