Tiger Brands expands footprint in South African townships

ZIMSPHERE 

JOHANNESBURG – Tiger Brands, South Africa's leading food producer, has expanded its presence in South African townships by nearly 50% this year, reaching over 71,000 stores, the company announced on Thursday. 

South Africa's Tiger Brands' new peanut butter manufacturing facility is pictured in Krugersdorp, West of Johannesburg, South Africa April 12, 2024. [Image: Reuters/Nqobile Dludla]

This expansion underscores the company's strategy to tap into growth opportunities in previously underserved areas.

Tiger Brands, known for its wide array of food products including cereals, snacks, and beverages, is capitalizing on the fast-moving consumer goods (FMCG) sector's trend of targeting township and rural areas. 

These regions, home to millions of South Africans, represent a significant market with substantial growth potential.

In 2023, Tiger Brands set an ambitious goal to increase its presence in at least 130,000 township stores, including spaza shops (informal retail outlets commonly found in townships, providing essential goods to local communities), mini-marts, and wholesalers, within five years.

Since the inception of its township strategy, Tiger Brands has boosted its store presence from 50,000 at the end of 2023 to over 71,000 currently. 

The company aims to reach 90,000 stores by the end of 2024 and is on track to achieve its five-year target of 130,000 stores.

According to a 2022 report by Trade Intelligence, over 70% of South African households purchase groceries and other products from township and rural outlets. 

This market segment contributes at least 26% (184 billion rand or $10 billion) of the 716 billion rand South African FMCG sector. 

Notably, the growth rate in these areas surpasses that of supermarkets and urban stores.

Luigi Ferrini, Tiger Brands' Chief Customer Officer, emphasized the company's commitment to the township market. 

"We see significant opportunity to grow in the township market by offering consumers affordable quality products that are trusted, sought-after, and meet their needs," Ferrini stated.