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Manufacture of Breakfast Cereals in South Africa
BY Natalie Bryden
South Africa
08 June 2020
R 14 400.00 (ZAR)  
estimated $ 871.26 (USD) *
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Manufacture of Breakfast Cereals


South Africa’s breakfast cereals sector is increasingly mature and competitive and dominated by a few large companies. Despite two of the largest cereal manufacturers reporting higher revenues and volume improvements, operating profits and margins are under pressure. Protracted low GDP growth and high unemployment will continue to affect the industry as low income consumers substitute cereals for lower-priced maize options, and health-conscious consumers opt for breakfasts with higher protein content. The coronavirus pandemic will add further pressure as supply chains are strained and as consumers’ incomes decline.


Consumption


South Africa’s breakfast cereal consumption is low compared to developed markets, and the poor economy, high unemployment and decreasing disposable incomes are affecting consumer spending. During tough times, price-sensitive consumers switch cereals for cheaper carbohydrates such as bread or maize or between brands based on promotional prices, different pack sizes or cheaper variants.


Trends


There is rising demand for convenient on-the-go meals and snacks. Companies producing cereal and porridge have repackaged and reformulated their products to make them more portable and developed on-the-go breakfast products. Manufacturers are adding organic and healthy ingredients such as superfoods, quinoa and probiotics to breakfast cereals. Low carb, low sodium, gluten-free or grain-free breakfast cereal options are popular. Due to rising rates of obesity worldwide and a backlash against cereals containing high levels of sugar, manufacturers have introduced sugar-free or no-sugar-added cereals.


Report Coverage


This report focuses on The Manufacture of Breakfast Cereals and includes information on the state of the sector and factors that influence it including consumer trends and the performance of the major players. There are profiles of 18 companies including the major players such as Pioneer Foods, Tiger Brands, Kellogg’s and Nestlé, as well as Future Life, which makes cereal with healthy additives and muesli manufacturers such Alpen Food and Paul’s Muesli.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 4
4.1. Local 4
4.1.1. Corporate Actions 6
4.1.2. Regulations 7
4.1.3. Enterprise Development and Social Economic Development 9
4.2. Continental 10
4.3. International 12
5. INFLUENCING FACTORS 14
5.1. Economic Environment 14
5.2. Price of Commodities 16
5.3. Coronavirus 16
5.4. Food Programmes 17
5.5. Rising Operating Costs 18
5.6. Pesticides 19
5.7. Genetically Modified Organisms (GMOs) 19
5.8. Environmental Concerns 20
5.9. Labour 21
5.10. Cyclicality 23
5.11. Technology, Research and Development (R&D) and Innovation 23
6. COMPETITION 24
6.1. Barriers to Entry 25
7. SWOT ANALYSIS 25
8. OUTLOOK 26
9. INDUSTRY ASSOCIATIONS 27
10. REFERENCES 28
10.1. Publications 28
10.2. Website 28
APPENDIX 1 30
Summary of Notable Players 30
COMPANY PROFILES 32
AGT FOODS (PTY) LTD 32
ALPEN FOOD COMPANY SOUTH AFRICA (PTY) LTD 34
DAISY HEALTH FOODS CC 36
DATEX INTERNATIONAL CC 38
FUTURE LIFE HEALTH PRODUCTS (PTY) LTD 40
GLUTAGON (PTY) LTD 42
HEALTH CONNECTION WHOLEFOODS (PTY) LTD 43
HEARTLAND FOODS (PTY) LTD 45
KELLOGG COMPANY OF SOUTH AFRICA (PTY) LTD 47
LIBSTAR OPERATIONS (PTY) LTD 49
MONDELEZ SOUTH AFRICA (PTY) LTD 54
NESTLE (SOUTH AFRICA) (PTY) LTD 56
PAUL'S MUESLI (PTY) LTD 60
PIONEER VOEDSEL (PTY) LTD 62
SIZANI FOODS (PTY) LTD 66
TIA'S MUESLI CC 68
TIGER BRANDS LTD 70
VITAL HEALTH FOODS (PTY) LTD 75