SOUTH AFRICA – South African grocery giant, Tiger Brands, is undertaking a strategic reshaping of its portfolio to enhance revenue growth. The company is emphasizing health, nutrition, and snacks as key areas of focus.
The company, the owner of popular brands such as Beacon confectionery and Oros drinks, reported a 10% increase in revenue to R37.4 billion (US$2 billion) for the 12 months ending on September 30th. However, it anticipates “low to no growth” in the upcoming fiscal year.
Newly appointed CEO Tjaart Kruger, who assumed the role on November 1st, outlined the company’s plans to navigate the challenging market environment.
“The objective is to achieve a ‘step change in trajectory’ by exploring opportunities in higher-margin products and adjusting the product portfolio,” he noted.
The company has identified three growth platforms focused on promoting affordability, making health and nutrition accessible to all, and prioritizing snackification.
To oversee these initiatives, Tiger Brands is appointing a new Chief Financial Officer, Thushen Govender, effective from 1 January.
According to the company, the main aim is to simplify and rationalize its brand portfolio by rejuvenating brands through strategic marketing investments that align with consumer demands.
While revenue and earnings per share increased, operating income fell by 9% to R3.1 billion (US$165.8 million).
Tiger Brands acknowledged the challenging market outlook, stating, “While there has been a recent softening in global food prices, this has been offset in South Africa by a weakening rand, as well as load-shedding that has disrupted food production and distribution, significantly increasing costs for manufacturers and food retailers.”
The company is considering exiting certain non-strategic categories while also exploring opportunities to enter adjacent categories that have growth potential.
According to Just Food, it remains to be confirmed whether Tiger Brands will pursue acquisitions or focus on internal innovation to achieve its goals.
The immediate market outlook remains challenging, with consumer confidence under pressure and the additional challenges of double-digit inflation and disruptions in the supply chain.
Despite experiencing volume growth in exports, Tiger Brands saw declines in certain grocery categories, although these were partially offset by gains in others.
As the company navigates these challenges, the success of its strategy will depend on effectively addressing market dynamics, shifts in consumer behavior, and external economic factors.
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