South Africa is the most dynamic consumer goods market in Africa. Its consumers are brand conscious and always interested in new and novel products.
Within the food and drink sector, South Africa is by far Africa’s most developed market, yet there are still large opportunities with food consumption expected to increase. Price is a major purchasing determinant and accordingly growth of premium items is restricted.
Soft drink sales in South Africa are dominated by carbonates. There is also a significant increase in the number of health drinks sold. For hot drinks, both tea and coffee are widely consumed and there is a lot of investment into creating new indigenous products. South Africa has a well developed alcoholic drinks industry especially wine and beer and is one of the world’s top wine exporting countries.
South Africa is a large meat eating country yet is only able to produce around 85% of its domestic demand leaving the remaining 15% to be imported. The consumption of meat in South Africa goes against the global trend because poultry meat is the most widely consumed meat in South Africa (32.96kg per capita).
The food-processing sector within South Africa is very sophisticated which can mean that opportunities for entry into the market by foreign food companies are limited. This sector is highly competitive with over 1,800 food production companies being dominated by 10 large players within the industry – accounting for 68% of total turnover.
South Africa’s grocery retail industry is dominated by domestic retailers. The top five supermarkets in order of size are: Shoprite, Pick ‘n Pay, Woolworths, Spar Holdings Ltd (a Netherlands based company) and Massmart (Walmart has just entered into agreement with Massmart). Most of the South African retail chains have in-house import departments and/or will use third party distributors/importers to facilitate the purchase and delivery of imported goods. South Africa is also a good hub to enter the neighbouring African countries and many of the retail grocery stores already have a presence there.
Health Food and Drink:
South Africans are becoming more health conscious; this is leading to more opportunities in the health food and drink industry. This also includes high quality niche and organic products, which are growing in demand.
Processed and Convenience Foods:
Lifestyles are getting busier in South Africa and as the size of the middle class increases there has been significant increases in sales of packaged foods and ready prepared/convenience foods. Therefore opportunities are to be found within processed and convenience foods as demand for these products rise.
British beef can now be exported to South Africa, following the end of a 15-year embargo, imposed at the height of the BSE crisis in 1996. The removal of the ban means that domestically produced deboned beef from anatomically recognisable cuts, as well as a significant range of offal, including thick skirt, heart, liver, kidney, reticulum and blanched beef heels, could be sold into South Africa, which was the largest non-EU market for English beef prior to the BSE crisis in 1996
Getting into the market
There are two ways of getting into the South African Food & Drink market;
Finding a distributor to market and distribute British product within South Africa
Going directly to the major retailers such as Checkers, Pick n Pay and Woolworths.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
Trade & Investment Advisor
+27 (0)21 405 2420
Trade & Investment Officer
UKTI Cape Town, British Consulate-General
T: +27 (0)21 405 2489
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
The Good Food and Wine Show
Date: 21 – 24 September 2012 (Johannesburg)
Website address: www.goodfoodandwineshow.co.za