By Nqobile Dludla
JOHANNESBURG (Reuters) – Tiger Brands has increased its presence in townships in South Africa by nearly half this year to more than 71,000 stores, it said on Thursday, as the country’s biggest food producer sees good growth opportunities in previously underserved areas.
Fast-moving consumer goods (FMCG) companies as well as grocery retailers have been doubling down on investments in new product offerings or moving their shops and brands closer to townships and rural areas, where millions of South Africans reside.
In 2023, Tiger Brands said it planned to increase its brands’ presence to at least 130,000 stores in townships, including spaza stores, mini-mart, and mini and midi-wholesalers, over the next five years.
“Spaza” shops are informal stores that dot township corners.
“Since then, the business has increased its presence and visibility in more than 71,000 stores, up from 50,000 at the end of 2023,” the company said in a statement.
“The business expects to reach 90,000 stores by the end of 2024 and is well on track to cover a total of 130,000 stores over a period of five years.”
According to 2022 findings by Trade Intelligence, more than 70% of South African households purchase their grocery and other products at outlets in townships and rural areas, Tiger Brands said.
It is a significant market contributing at least 26% or 184 billion rand ($10 billion) of the 716 billion rand South African FMCG sector. Its growth rate also exceeds that of trade in supermarkets and other stores in urban areas, the company added.
Since Tiger Brands launched its township strategy, distribution and availability of its products in this market has increased by more than 90%, the company said.
“We see significant opportunity to grow in the township market by offering consumers affordable quality products that are trusted, sought-after and meet the needs of consumers,” Luigi Ferrini, Tiger Brands’ chief customer officer, said in the company’s statement.
($1 = 18.1568 rand)
(Reporting by Nqobile Dludla; Editing by Susan Fenton)
