Transcript Slide 1
Food Bites Edible Oils Annual Market Quantification December 2011 Market context South Africa’s edible oils are mainly from sunflower seeds and canola seeds, with production seen predominantly in KwaZulu-Natal and Gauteng. In recent years there has been growth in the production of edible oils from alternative plant sources, such as olives. This forms part of the speciality oils analysis, where much of these volumes is imported. The search for alternative energy implies that the future consumption of edible oils competes with fuel uses of the same product. This may inflate demand for the product in years to come. The edible oils market maintains a reasonable contribution to overall GDP compared to other food and beverage categories. Edible oils have a long history of use during cooking, with many Mediterranean dishes relying heavily on their use. This is due to the region’s rich soil and good olive and nut growth. Oil manufactured from nuts may be used in the baking of confectionery, and carries with it the danger to those allergic to nuts. 2 2010 Category Breakdown Pan Release Agents 0.2% Speciality Oils 1.1% General Purpose Oils 98.7% 3 2010 Category Distribution Industrial 16.7% Foodservices Direct 3.5% Export 9.9% Retail 43.0% Wholesale 26.9% Retail continues to be the major channel for the distribution of edible oils. Wholesale is also very popular as many informal retailers and foodservice outlets prefer to buy their oil in bulk from this sector. 4 Annual Growth Rates 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% 2001 2005 Volume Growth 2010 5 Good growth in general purpose oils • General purpose oils haven shown large increases in volume for the past several years. It is hypothesised that because of their affordability, availability, and re-usability they are the most popular form edible oil. • More variety and cheaper variants within the palm oil market internationally (and particularly within Malaysia) have collectively bolstered the popularity of the edible oils category. These palm oil variants are expected to rival traditional general purpose oils and speciality oils. • The majority of South Africa’s edible oils are produced locally, with a limited proportion being exported to other countries. Speciality oils form the majority of the imports, and are sourced primarily from countries such as Italy and Spain. The increasing popularity in Malaysian palm oil may result in a spike in oil imports and also overall edible oil volumes. • Speciality oils have shown decreases over the past several years. This may be a result of instability within the economy resulting in difficulty importing the product, and also more conservative spending among consumers given the premium pricing of the category. 6 Good growth in general purpose oils (Cont.) • Pan release agents constitute a very small percentage of the edible oil markets, and the total volume recorded in 2010 is very similar to that in 2007 in which a large decrease in volume was experienced. This market is not expected to show any considerable growth in the short term. • Edible oils are distributed primarily within KwaZulu-Natal. This inflated demand in comparison to other provinces may be driven not only by the high population concentration, but also by the fact that the majority of the oil manufacturers are based in KZN. • Retail is currently the primary distribution channel for edible oils, but more particularly general purpose oils. Wholesale is still a dominant sector for this category and closely follows the retail share. The wholesale focus may be a result of the requirement for oil for large-scale food production and for re-distribution through informal retail outlets. • Speciality oils and pan release agents are viewed as premium priced, luxury items and thus are purchased particularly by upper end households. This drives the retail channelling of these products. Food Bites Edible Oils For more information, contact: Jan Wegelin Research Manager Tel: (011) 615 7000 Mobile: 082 938 0744 www.bmi.co.za