The State of Logistics in South Africa

Eat better. Live better.

Heinz Shredded Chicken

Tampax Winner announced!

Johnson's® Face care

Bioflora probiotic products

Bokomo Lucas Radebe in new Weet-bix commercial

The South African logistics sector has long been plagued by consistently high costs and the 7th State of Logistics Survey shows no signs of the trend abating. The survey released on Tuesday 8 March by the Council for Scientific and Industrial Research (CSIR), IMPERIAL Logistics and Stellenbosch University found that between 2008 and 2009 total cost of logistics decreased by just 1.2%, from 14.7% to 13.5% of Gross Domestic Product (GDP).

These figures are considerably lower than forecasts estimated and indicate an under performing logistics sector. Considering the declining nature of the price of diesel and inflation, the two leading cost drivers, a drop closer to 12.5% could’ve been expected.

There was also a drop in total tonnage as well as ton/km of 4% and 3.7% respectively and less freight was transported in 2009.

On the environmental side, 23 million tons of greenhouse gasses were emitted due to land freight transport activities, 20.3 million tons of which was due to road freight.

The survey found that approximately one third of transport activity in South Africa is outsourced and also stated that growth opportunities were to be found in growth in outsourcing and not among available outsourced freight.
A call has been made for further collaboration between the private and public sectors to enhance the economic infrastructure and promote economic growth and job creation. In addition, it is noted that a move away from mediocrity and strive for world-class standards to ensure the envisaged 7% economic growth annually, for the next 20 years.

 BRAND NEW

Five kitchen helpers for a healthy lifestyle Winning the battle between healthy and happy is not easy, and whilst we’re busy ‘living’ (ie working, lifting, carrying, cleaning, fixing, shopping, etc), cooking for convenience is more attractive than ever! read more
Ciro introduces new Barista kit Ciro Beverage Solutions has launched their first Barista Kit conveniently packaged in a handy, durable cooler bag. read more
Bioflora probiotic products Restore and maintain the correct balance of oral, intestinal and vaginal microflora in the body the natural way. read more
Sea Harvest Sailor’s Secret Living in the city is all about living life on the move, 24 hours a day seven days a week. It’s a constant go go go. Go to work, go to gym, go shopping, go to movies, go meet friends, go for coffee, for brunch, for lunch, for drinks, for dinner -there’s hardly any time to breathe let alone cook! But at the end of the day you still need to eat, refuel and do it all again. read more
Sea Harvest Captain’s Choice Life is all about experiences, especially when it comes to trying new types of food. But sometimes it just feels like there’s just no time to prepare the gourmet meals you love, and going out to restaurants too often can be quite expensive! read more
The NEW Five Roses Classics Range Five Roses introduces an exclusive and quality range of Classic black teas read more
Johnson's ® Personal Care Products Start your day with a surge! Cleansers, Astringents, Scrubs, Moisturizers read more
Bettamed Care Cream Skin is the largest organ of the human body and it helps protect the internal organs from bacteria and viruses and also controls body temperature. read more

Changes in South African Retail

Eat better. Live better.

Heinz Perfect Pies Satisfyingly Delicious

I&J Oven Crunch

Lion Matches Win football boots!

Imperial Logistics

Pringles Flavours way outside your comfort zone

The South African retail environment is set to change over the next 5 years and that change is going to be driven largely by Massmart and their competitor’s reaction to their post Walmart strategy. Already every retailer has been asked the question, “How is the Walmart in SA going to impact on your business”. That is a very difficult question to answer when you are not sure how Massmart will change.

Walmex (Walmart Mexico) has been a successful model in an emerging market for Walmart and the management team at Massmart will be encouraged to follow a similar strategy by their American partner. Walmex has expanded successfully into Central America from a dominant position in the Mexican market and one can reasonably assume that the South African team will endeavour to follow the same path.

The key difference in South Africa is that Massmart don’t dominate the local food market and will need to grow a significant food business in a market dominated by a few major players. This will present a challenge that will not be easy to overcome. Already Massmart have pursued each of the independents successfully and the purchase of Rhino will all but close the book on growth by acquisition. Perhaps the competition commission would have a different view on Massmart purchasing Fruit and Veg City than it did to the proposed Pick n Pay buy out. That may be farfetched but it would certainly throw a cat amongst the pigeons.

I don’t believe that suppliers are going to be adversely affected by Walmart’s purchase of Massmart and I certainly don’t believe that factories will be closing left, right and centre. Prospects for suppliers may even improve through Massmarts projected growth in food retail. In all markets a retailers priority is to source locally wherever possible and it is unlikely that that will change. Manufacturers require efficient routes to market to be successful, a growing Massmart with multiple store formats would provide that as well as access to markets that have previously been difficult to supply directly.

To get an idea of how Massmart may look in a couple of years have a look at the Walmex site. It looks remarkably similar to what Shoprite have done in Africa, without an American friend and hats off to them for that!


BRAND NEW

I&J Fish Fingers New 600g pack size for the nation’s original favourite fish finger! read more
New I&J Oven Crunch Crisp & Crunchy 100% I&J Hake fillet portions – at an affordable price! read more
Pioneering Whisky born from 2010’s “Great warehouse collapse” Glenfiddich, the world’s most awarded single malt Scotch whisky, recently announced the launch of Snow Phoenix - a unique whisky born of chance and adversity which commemorates a moment of drama in Glenfiddich’s long history. read more

The South African Cold Beverage Sector

There has been a recent, but growing, swell of activity in the non-alcoholic, cold beverage sector, driven by a range of factors, least of which is the onset of summer.

Oceana Brands - CONGRATULATIONS to the winners!

Heinz 2 Minute Noodles – No added MSG

Instant and Long-lasting Relief for Sensitive Teeth - in Sixty Seconds

GUM Original White Toothpaste and Floss

Lucas Radebe stars in Weetbix’s new commercial

Zam-buk Multi Purpose Cream

Non-alcoholic beverages constitute 39.6% of the total beverage market (10 670 million litres), and the sector is valued at approximately R39.731 million.

Year-on-year to December 2010 the CPI for food and non-alcoholic beverages (CPIF) only recorded growth of 1.5%, compared to the international average of 25%, creating ideal conditions for new entries in the market. Amongst the new-comers there is a notable growth in the amount of energy drinks in the market, but that is a topic for another discussion.

Although the sector has traditionally been dominated by carbonated soft drinks (they held 83.2% of the market in 2009), it is beginning to lose its foothold. The best performing categories in terms of volume growth for 2009 - 2010 were Sports Drinks (-15.5% > 4.1%), Mageu (-12.6% > 3.2%) and Energy Drinks (5.5% > 13.5%).

There is also an increasing trend towards healthier lifestyles and this spills over into the food and beverage category. “The average consumer is becoming more aware and educated regarding beverage ingredients and the benefits of these, and there appears to be a greater incidence of consumers who read labels.”

These are interesting times for the beverage industry and if current trends continue, and there are no signs that they won’t, manufacturers and retailers alike will be facing some challenging changes.

Instant and Long-lasting Relief for Sensitive Teeth - in Sixty Seconds Sixty seconds – that’s all it takes for Sensodyne®’s new Rapid Action toothpaste to soothe sensitive teeth. read more
Club Shandy celebrates its new look brandhouse, one of South Africa’s leading premium alcohol beverage companies, has relaunched an all-time-favourite, Club Shandy. The perfectly balanced mix of premium beer and lemonade (ABV 2.5%) is back on the shelves and boasting a slick new look. read more

Urban Consumer spending

Eat better. Live better.

New Heinz Shredded Chicken

Primedia Instore A one stop shop of instore media solutions

Fruity Planet New refreshing drinks

Contempo Condoms for Maximum performance

Pacmar Wilde Cycle Day 2011

A few weeks ago I wrote about the Bottom of the Pyramid and the importance of catering to that sector specifically. Whilst it is true that South Africa’s Bottom of the Pyramid is very large, there is another sector that is growing at an increasing rate and cannot be overlooked, urbanites. An article I recently read dubbed them; Citysumers.

The article defines them as: “The hundreds of millions of experienced and sophisticated urbanites, from San Francisco to Shanghai to São Paulo, who are ever more demanding and more open-minded, but also more proud, more connected, more spontaneous and more try-out-prone, eagerly snapping up a whole host of new urban goods, services, experiences, campaigns and conversations.”

These citysumers present a host of new challenges for retailers. Their loyalty does not lie with a particular brand, but rather they look for brands that “challenge, thrill, titillate, or even shock.” In addition, each city has its own unique citysumers, meaning that a campaign that has swept Cape Town might crash and burn in Johnannesburg or Bloemfontein. City specific marketing is essential. They’re eager for new experiences and not shy to spend a little bit extra to find them.

A recent UNICEF report showed that in 2008 61% of the South African population was urbanized and growing at a rate of 2.1% annually. This is a massive portion of the population, many of whom have considerable disposable income, but not somewhere to spend it.

BRAND NEW

FRUITY PLANET - New Refreshing Coffee, Cappuccino, Milk and Tea Drinks Convenient, Healthy taste experience that is out of this world read more SODA KING - King Malta the new king of malt beverages! It’s dark. It’s strong. It’s irresistible. Of course we’re talking about the new premium malt King Malta drink. read more SODA KING - Big applause for the new Soraya apple malt drink! It’s light. It’s refreshing. And it’s simply delicious. It’s the brand new Soraya! read more The Berry Company introduces a delectable new flavor, Pomegranate Juice An exciting new addition, Pomegranate juice has been added to the deliciously healthy range of juices from The Berry Company. read more Get ready for winter with Durbanville Hills In the run-up to winter, warm your palate with the newly released 2009 Durbanville Hills Cabernet Sauvignon. read more FLO Baby Saline+® Nasal Spray FLO Baby Saline+® nasal spray for infants and children is imported from Australia and treats the source of nasal problems rather than merely the symptoms. read more