THIS ISSUE: 22 Apr - 28 Apr
It’s Freedom Week, but many south Africans are free neither from poverty nor from hunger. An urgent and important piece from The Daily Maverick (see Trade Environment, below) looks at the ways in which this great industry we call home can contribute to food security. Elsewhere, Unilever frees kids from the burden of excessive marketing, and Shoprite brings affordable proteins to all South Africans. Enjoy the read.
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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Clicks Clicks here. And here. And here...
We’ve had occasion to remark, over the years, on the driving pace and relentless schedule of Clicks’ store-opening regime and noted recently with admiration that it had just opened its 800th store. What we haven’t explored, so much, is the location of these stores. For example, how 30% of the Group’s stores are situated in lower-income communities where their sales grow faster than the stores located in mid- to upper-income suburbs. The idea, says managing executive Vikash Singh, is that all South Africans will have access to what the retailer has to offer – from collecting medication to purchasing cosmetics – without having to worry about transport costs. Fortunately for Clicks, which aspires to having a store within five kilometres of each and every South African (it’s currently at six kilometres), malls and strip malls are opening hand over fist in lower-income communities. The business is currently on track to open 25 to 30 new stores annually and meet the target of 900 by 2026.
Comment: Both quality, and quantity then. Nice one, Clicks.
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Shoprite Protein power
In another example of its fiercely pragmatic marketing savvy, Shoprite has launched a campaign that highlights its sources of affordable, nutritious, and protein-rich food available across its formats. According to the Household Affordability Index, households prioritised core foods like maize meal, rice, flour, and sugar in March 2022 over nutritionally and protein-rich foods, like meat, eggs and dairy. This campaign – a mix of public-service information and promotions – is aimed at changing that. Some of the items showcased include Tin Stuf’s tinned chicken feet and necks at R19.99, Value Ground Beef Mince, which retails for up to R10 per kilogram less than the usual fare, Ritebrand’s private-label tinned sardines, and the various tinned or dried pulses on offer.
Comment: A good promotion identifies a real consumer need and meets it in a meaningful and relevant way that is affordable to the target audience. This initiative seems to tick all these boxes.
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In Brief Lemon, lemon, burning bright
There was a time when if you wanted a pair of Levi’s 501s you’d have to go down to Grey Street on a Friday after school and drive a hard bargain with the sharp-eyed sales assistant at Kalidas Extension and still pay twice what you would for the equivalent pair of Lees. Now you can get those still sought-after trousers at Woolies, in an increasing number of locations. This is called progress. Where were we? Ah, yes. Massmart has joined up with credit solutions provider and BNP Paribas subsidiary RCS to offer further benefits to punters using store-branded credit cards to shop either online or in store at Builders, Makro and Game. And finally, in news of the monstrous, Pick n Pay is now offering something called Pink Tiger lemons, which are exactly what they sound like – striped, pink fleshed, sweeter and with exciting floral notes that will make them the darlings of dessert-makers and pourers of gin everywhere. Sourced from Spain, they will be slightly more expensive than your run of the mill, sour, yellow variety.
Comment: Truly, we live in a time of wonders, if we’re prepared to stretch our supply chain a touch.
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International Retailers Rings of Power
In Canada – a vast and powerful country which has nevertheless rarely, if ever, made it into these pages – Walmart has begun outfitting its store staff with wearable tech in the form of scanner rings which will enable them to more easily pick items for online orders. Operating by a thumb activated button and thrillingly ergonomic, the rings send and receive data over the internet and no doubt represent the thin edge of the wedge for wearable tech at the retail coalface. Further south, in the USA, beach-bar-themed retailer Trader Joe’s has fallen victim to the stream-of-consciousness ramblings of a random TikTokker called @katarinakitt, who says, inter alia, “Where I'm from, me and my family, we don’t shop at Trader Joe’s because it’s expensive to us.” It being a Tuesday, or something, the internet has blown up about whether Trader Joe’s is expensive or whatever. Trader Joe’s offers a vast selection of sometimes quite creatively conceived packaged foods, ready meals, and produce, most of it private label, and much of it priced to fit most budgets.
Comment: Reputational risk is – that word again – absolutely random these days and might have nothing whatsoever to do with your own carefully considered brand positioning. And BTW – South Africa is ripe for a Trader Joe’s-style offering with a local spin.
MANUFACTURERS AND SERVICE PROVIDERS
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Unilever Unilateral disarmament
In 2003, Unilever was one of the first companies globally to apply specific measures for the marketing of its food and refreshment products to children, and in 2020 announced it would stop marketing and advertising foods and refreshments to children under the age of 12 in traditional media, and under the age of 13 via social media. Now it’s announced a further update to these principles, specifying inter alia that it will not target children under 16 with any marketing or social media comms, not collect or store data on kids under 16, not use influencers, celebs or social media stars who are under the age of 16 or appeal to kids who are, and continue to refrain from punting its wares in schools. It said: “Recognising the power that social media and influencer marketing can have on children’s choices, we believe it’s important to raise the bar on responsible marketing to a minimum age of 16 years old across both traditional and social media,” says Matt Close, President, Ice Cream.
Comment: Unilever leads the way globally as a business that believes in doing the right thing whatever the competitive landscape or initial impact on the bottom line. Hopefully others will follow suit.
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In Brief Women make up half the sky
RCL FOODS has let it be known that due to inflation and rising input costs, higher chicken prices cannot be avoided. The South African Informal Traders Alliance (SAITA) has called for government to remove VAT and other tariffs on chicken products. “This increase has made it impossible to bring the chicken products into the informal sector,” they say. “When this happens, families go hungry and people don’t eat nutritional food, they eat what they can find which usually comes with a health risk.” In other RCL FOODS news, nine people have been arrested in Mpumalanga for their role in defrauding the Akwandze Agricultural Finance, a JV between RCL FOODS and Liguguletfu Cooperative, which represents 1,200 small-scale sugar growers, to the tune of R28m. Moving on, Tiger Brands has appointed Ismail Nanabhay as Managing Director of the company’s beverages category, charging him with the responsibility of successfully bringing to market such thirst quenchers as the Oros and Roses ranges. Finally, speaking of leadership, Africa.com has announced the launch with The Coca-Cola Company of the Women Heads of State Initiative, which will deliver open-enrolment, virtual training for women who are early in their careers as government civil servants in any of Africa’s 54 countries.
Comment: Excellent work, that giant multinational beverage company. More women heads of state, and indeed of business, a healthier more peaceful planet. Fact.
TRADE ENVIRONMENT
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Food Security Food for thought
A long read but an important one in the Daily Maverick this week on the subject of a just transition to a more sustainable food supply on this great continent we call home. The authors argue that as the climate changes we’ll have no choice but to change our business models – especially when it comes to the businesses who are most entrenched in the current system of production and who have the most to lose. And to make our food systems more fair and more secure, they say, we need to include more small-scale producers, specifically through competition law and policy as important tools to work for inclusion. In South Africa, our big retailers, with the control they can bring to bear on the supply chain, are also key partners in this endeavour. The report looks at how vertical integration can help achieve efficiencies in food production, particularly as the digitisation of our industry gathers steam, but that this also increases the control exerted by the major players. Again, they say, competition legislation is key.
Comment: Honestly, too much here – and too many nuances – to capture in one short piece. But we do urge you to dig a little deeper yourself, here.
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“A safe, affordable and plentiful supply of food is a national security issue.”