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

Taking care of customers in store

Eat better. Live better.

Mama's Pies

Changes in SA Foodservice Demographic

Ivodent Free travel size Dentyl pH

Two product of the year awards

Fleur Du Cap National Cycle

A customer is the most important asset a retailer has and they should therefore be at the centre of the retailer’s universe. Every retailer has a clear and expressive “customer centric policy” or a “customer satisfaction strategy” that is presented by executives at every opportunity. Putting it on paper is easy but turning it into a reality is something entirely different.

South African retailers have a sophisticated store infrastructure in place that is modern, well-run and aesthetically pleasing. European shoppers would find it difficult to believe that they were on the Southern Tip of Africa. It is clear that our retailers spend a great deal of time and money on the “hardware” aspect of the customer experience but neglect the “software” or personal aspect.

A retailer’s only direct contact with its customers is through the store’s floor staff. They have a powerful impact on the customer’s in-store experience, whether it’s positive or negative. Every shopper has a customer service story to tell and the vast majority of them are negative. That is something that needs to change. Most consumer goods can be bought at a competitor’s store for very close to the same price. This makes it near impossible to generate shopper loyalty based on price.

A great in-store experience is worth as much as a quality product. I believe retailers need to place more effort on the development, education and training of their floor staff to ensure that they deliver the best service to every customer, at every opportunity. It is crucial that staff realize their integral role in the retail experience and the influence they have on customer experience.

   BRAND NEW

Easter Greetings It’s hard to believe that the time has already come to showcase Cadbury’s Easter range for 2011. read more
Ignites body and soul Pure releases its 4 hour natural energy drink made from whole fruits and berries with no added, colourants, flavourants or preservatives. read more

Marketing to the bottom of the pyrimid

Eat better. Live better.

John West Discover the Best

Re-thinking your marketing in 2011? Let us help..

Imperial Logistics Growing digitally!

Bioflora Caratino Palm Fruit Oil

aQuellé Chic new packaging for aQuellé

Target Market
Too often marketers and manufactures overlook a crucial segment of the market, The Bottom of the Pyramid (BoP), which comprises the poorest people in the world. Together they constitute more than half of the world’s population (approximately 4 billion people) and they annually spend five trillion US dollars.

At last week’s TNS Breakfast Series talk, the guest speaker Sebastian Janini, Regional Director of the Consumer Sector for TNS, expanded on this issue.

Janini notes that when considering the BoP, many marketers and manufacturers don not fully know how to approach and reach these audiences. Marketing to these consumers is notably different than to the middle or upper classes. Furthermore, he highlighted that even consumers with a very low income are willing to pay extra for a product that will add quality and deliver better value to their lifestyles.

In addition, he pointed out that BoP consumers are highly sociable and community based. The influence of these social groups can greatly affect the success of a product. It is therefore essential to always consider the social context and then cater to the community as a whole, opposed to the individual.

The Bottom of the Pyramid constitutes a large portion of the consumer market with significant unmet needs. Those who are willing to innovate will be met with a wealth of opportunities. In terms of the domestic potential, with approximately 50% of the population living under the global poverty line of $2 a day, the bottom of the South African pyramid is very large indeed. This must surely be the single biggest growth opportunity for the next 10-20 years and that is without taking the rest of Africa into consideration.

For more on this issue, click here to download Sebastian Janini’s full presentation.

   BRAND NEW

New GUM Flosbrush Automatic GUM Flosbrush Automatic is designed to make flossing easy and convenient by providing a simple single-handed flossing experience. read more

Outlook for African Retail in 2011

Eat better. Live better.

Heinz 2 Minute Noodles – No added MSG

Tampax Keep dancing all night long

Liqui-Fruit The new generation of health drinks

Rhodes Baked beans for one

Moirs Mousse Double Delight

An insight for the year to come
From what’s come through my desk and over the internet over the last few days, it seems reasonable to speculate that the local retail industry has enjoyed a decidedly positive Christmas trading period for the first time in two years. Although details for the December /January period have not yet been released, several retailers have reported improved results despite seeing significant price deflation for the period.

Shoprite Holdings reported 9.5% rise in first-half turnover, with comparable store sales up 2.8% in the six months to end December and an internal deflation of 1.2% for the period. Massmart also reported a 13.3% increase in sales in the latter half of the year and an estimated 2.9% deflation was recorded year to date. The Clicks Group enjoyed an increase in sales of 16.8% with selling price inflation of only 0.9%.

In the final weeks of 2010 TNS Research Surveys released its latest Economic Confidence Index (ECI) results for metropolitan adults, conducted in the first week of November. The overall ECI was up four points from the previous quarter to 137, maintaining the highest levels it has seen for 2 years. Click here for more

This increase in consumer confidence, together with the lowest interest rates seen in the last 30 years, could make 2011 the year of the consumer comeback. Prof Deon Tustin, executive research director of the Bureau of Market Research (BMR) at Unisa, provides further impetus with the release of his report, Forecast Of Economic Indicators And Formal Retail Sales By Product Group For 2011. Amongst other things the report forecasts a 3.4% real growth rate for formal retail sales in 2011 which, if it holds, is cause for optimism amongst retailers. Click here for more

Despite very high levels of debt amongst consumers, 2011 has the potential to be a year of strong sales growth for the FMCG industry. The sales growth is positive but retailers will have to cope with very low levels of price inflation, this environment should provide a platform for the most efficient retailers to outperform competitors and gain market share. It will be interesting to see who the 2011 winners are.

BRAND NEW

New Sonicare for kids KidTimer trains to a 2-minute brushing routine-helps children develop healthy brushing habits on their own. read more
Baked Beans for one Rhodes is proud to introduce a 215 gram Baked Beans in Tomato Sauce into the existing Choice Grade canned range. read more
New Liqui-Fruit Vitality™ – The new generation of Health Drinks Liqui-Fruit, South Africa’s leading and most innovative fruit juice brand, proudly introduces the new generation of health drinks - the Vitality range with Superseed™; 100% pure pressed superfruit juices, loaded with grape seed extract. read more