SOUTH AFRICA – South African grocery giant Tiger Brands is embarking on a strategic reshaping of its portfolio to boost revenue growth, emphasizing health, nutrition, and snacks as key focus areas.
The company, owner of popular brands such as Beacon confectionery and Oros drinks, reported a 10% increase in revenue to R37.4 billion ($2 billion) for the 12 months ending 30 September. However, it anticipates “low to no growth” in the upcoming fiscal year.
Newly appointed CEO Tjaart Kruger, who assumed the role on November 1, 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 identified three growth platforms centered on “driving affordability, democratising health and nutrition, and over-indexing on snackification.”
To oversee these initiatives, Tiger Brands is appointing a new Chief Financial Officer, Thushen Govender, effective 1 January.
According to the company, the main aim is to simplify and rationalize its brand portfolio, 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.
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 and significantly increased costs for manufacturers and food retailers.”
The company is contemplating exits from certain categories deemed non-strategic while exploring entry into adjacent categories with growth potential.
According to Just Food, it remains to be confirmed whether Tiger Brands will pursue acquisitions or focus on internal innovation to achieve these goals.
The immediate market outlook remains challenging, with consumer confidence under pressure and the added burdens of double-digit inflation and disruptions in the supply chain.
Despite volume growth in exports, Tiger Brands experienced declines in specific grocery categories, partially offset by gains in others.
As the company navigates these challenges, the success of its strategy will depend on effectively addressing market dynamics, consumer behaviour shifts, and external economic factors.
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