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    FMCG Trends in South Africa 2023

    Marthinus Havenga | South Africa | 20 January 2023

    FMCG Trends in South Africa 2021

    Louise Mitchell | South Africa | 15 April 2021

    Report Info

    Report Summary Table of Contents
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    Report Coverage

    This report is part of a series of Who Owns Whom trends reports, and it expands on trends and developments highlighted in various FMCG-related reports produced by Who Owns Whom. This report covers the latest trends in South Africa including online trends, buying down, sustainability, waste and loss prevention, and Africa as a driver of growth.

    FMCG Trends in South Africa

    The retail industry contributed more than R1tn in sales to South Africa’s economy in 2021, with the FMCG sector’s contribution estimated at over 70% of those sales. The sector returned good sales growth and its defensive nature is borne out by fact that sales grew at the height of the pandemic, contrasting with a decline in sales of non-FMCG products. The FMCG sector faces challenges including a hostile economic environment, electricity constraints, logistics barriers and illicit trade.

    Prices

    The pandemic and the invasion by Russia of the Ukraine, huge escalations in input costs and disruptive climate changes led to general inflationary pressures globally with food inflation being the main driving force. South African inflation is above the Reserve Bank’s upper target band of 6%. Food and beverages prices have been the main reason for inflation. Food price increases have been mitigated somewhat by retailers absorbing some input costs and the diversity of agricultural products produced in the country.

    Online Growth

    Online retail revenue has doubled in the past two years, largely because of lockdown, and this trend is set to continue. Research indicates that more buying decisions are being made online, shopping app downloads are rising and consumers are trying new brands. Speed, convenience, price and stock availability are at the forefront of purchase decisions. Online sales still account for a very small percentage of retail sales. Consumers still prefer to buy perishable items in stores, and there are concerns about parcel theft and online fraud, high mobile data costs and challenges with last-mile delivery.

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    FMCG Trends in South Africa 2023

    Full Report

    R 20 000.00(ZAR) estimated $1072.96 (USD)*

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    Historical Reports

    FMCG Trends in South Africa 2021-04-15

    R 6 500.00(ZAR) estimated $348.71 (USD)*

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    Table of Contents

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    PAGE
    1. INTRODUCTION 1
    2. THE FMCG MARKET 1
    2.1. General Market Description 1
    2.2. Industry Value Chain 3
    3. SIZE OF THE MARKET 4
    3.1. Total FMCG Retail Sector Size 4
    3.2. Number of SME Players in the FMCG Retail Sector 9
    4. FMCG CROSS-BORDER TRADE 11
    5. FMCG PRICES 21
    6. TRENDS IN THE FMCG SECTOR 27
    6.1. Private Label and Brand Loyalty 27
    6.2. A Shift to Online 28
    6.3. Buying Down 30
    6.4. Consumers Are More Informed 31
    6.5. Sustainability 31
    6.6. Healthy Products 32
    6.7. Africa as Driver of Retail Growth 33
    6.8. Food Waste and Loss Prevention 35
    6.9. Spaza Shops 36
    6.10. Other Trends 36
    7. CHALLENGES FACING THE FMCG SECTOR 37
    8. COMPETITION 42
    9. OUTLOOK 43
    10. REFERENCES 43
    10.1. Publications 43
    10.2. Websites 44
    APPENDIX 1 45
    List of Sectors 45
    APPENDIX 2 46
    List of HS Codes Covered 46

    Report Coverage

    The report focuses on South African FMCG markets as part of the retail and wholesale industry. Markets are segmented according to type of retailer: general dealers, including supermarkets and non-specialised stores selling FMCG; food, beverages and tobacco sold in non-specialised stores, pharmaceuticals and medical goods, cosmetics and toiletries; and all other retailers that also sell FMCG like stationery, FMCG sold online, and at craft markets. The report refers to 28 Who owns Whom sector reports on individual FMCG markets. In total, over 300 local and international companies are profiled in these reports.

    FMCG Markets in South Africa

    Locally manufactured and imported goods are sold via a countrywide network of formal and informal channels to shoppers that are deeply divided in terms of spending power. The largest retail outlet for FMCG is supermarkets which have well-established supply chains. Other channels include omnichannel retail (e.g. online, e-commerce, mobile commerce), direct selling, and craft, art and food markets. Some of the largest FMCG companies in the world operate in each market segment, e.g. Johnson & Johnson, Estee Lauder, Colgate-Palmolive, British American Tobacco, Nestle, and Henkel. Local players include listed entities like the largest supermarkets, food manufacturers and wholesalers – among others Pick n Pay, Spar, Woolworths, Shoprite, Tiger Brands, and RCL Foods – and pharmacy chains including Dis-chem, and Clicks. Local privately-owned small businesses abound, e.g. Africology (a cosmetics manufacturer and retailer), and Sally Williams (a confectionery manufacturer and retailer).

    Trading Conditions

    The effects of the lockdown that started on 27 March 2020 made trading conditions even more challenging than during the previous four years of recession. Supply chains were disrupted in the first few months of the lockdown, most FMCG products were declared non-essential, and sales stopped for almost three months. The worst-affected markets were tobacco and liquor with bans on sales, while pharmaceuticals, fruit and vegetables experienced huge demand. Panic buying led to product shortages, e.g. flour, yeast, soap and hygiene products. The lockdown was a driver for rapidly rising online sales. Before coronavirus retailers have been trying to divert the effects of operating cost increases from consumers by passing the costs on upstream. Price sensitive consumers keep competition among retailers high and they shop for the best prices.

    Competition

    Strong rivalry exists in fragmented markets with a multitude of competitors in the informal sector and numerous small businesses. In the formal sector, the four largest supermarkets are dominating causing high levels of concentration. Overall, market forces are exercising moderate pressure on competitors. The biggest force is coming from price sensitive buyers in spite of their reduced disposable income. Supermarkets are under investigation by the Competition Commission for unfair price increases of certain foodstuffs, while pharmacies, wholesalers and manufacturers of face masks, sanitisers and other sanitising products have been found guilty and fined for unreasonable price hikes during the lockdown. Following the grocery retail market inquiry, the Commission made recommendations to reduce the dominance of the leading supermarkets. Should these not be implemented regulations to enforce the recommendations might be promulgated.

    Read More..
    FMCG Trends in South Africa 2021

    Full Report

    R 6 500.00(ZAR) estimated $348.71 (USD)*

    Buy Now +

    Historical Reports

    FMCG Trends in South Africa 2023-01-20

    R 20 000.00(ZAR) estimated $1072.96 (USD)*

    View Report Add to Cart

    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE MARKETS 1
    2.1. Industry Value Chain 3
    3. SIZE OF THE MARKETS 4
    4. COMPETITION 6
    5. STATE OF THE MARKETS 8
    5.1. Coronavirus 9
    5.2. Trade 10
    5.3. Corporate Actions 11
    5.4. African Markets 12
    6. TRENDS 14
    6.1. Innovation 14
    6.2. Digitalisation 17
    6.3. Price Increases 18
    6.4. Investments and Disinvestments 21
    6.4.1. Direct Investments 21
    6.4.2. Disinvestments 23
    7. PESTLE ANALYSIS 24
    8. OUTLOOK 26
    9. REFERENCES 27
    9.1. Publications 27
    9.2. Websites 27
    APPENDIX 1 28
    List of Sectors Covered 28

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