OVERVIEW
Food and beverages Acquisitions are supporting backward integration.
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ood and beverages make up 26% of the South African consumer products sector, just ahead of agri-business (25%), diversified companies (23%) and sugar producers. Between 2009 and 2016 the sector grew by 2%. Most recent capital expenditure has targeted improving efficiency rather than expansion of production. Some of the biggest companies in the sector are Tiger Brands, RCL Foods, Pioneer Foods, Clover, AVI and Astral. The food and beverages sector employs about 230 000 people. Beverages account for just over 4% of all manufacturing sales while food is responsible for 13.5%. Within the sector, beverages accounts for 24% of sales. One quarter of the 37% of national GDP that is generated by agri-industries derives from agri-processing. Gauteng, the Western Cape and KwaZulu-Natal are the leading provinces, with about half of the companies in the sector located in Gauteng. There are approximately 4 000 food-processing companies in Gauteng, employing more than 100 000 people. South African Breweries is spending R2.8-billion on expanding two of its three Gauteng breweries. Heineken’s brewery at Sedibeng is undergoing its second expansion since it opened in 2010. Nestlé operates four manufacturing plants in the province and has invested heavily in increasing production volumes. Tiger Brands runs six plants in Germiston that produce a range of meat products, and the establishment of a new tomato sauce plant and pasta plant rank among the company’s recent investments in the province. McCain Foods SOUTH AFRICAN BUSINESS 2019
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SECTOR INSIGHT Unilever has invested R4-billion recently. produces frozen vegetables for the Gauteng market. Global consumer goods company Unilever, whose plant in Durban is shown above, has invested nearly R4-billion in recent years, including R600-million in a Gauteng ice-cream factory that will boost the company’s drive into Africa. This highlights a trend across the food and beverage sector. In 2016 Nestlé South Africa invested R1.2-billion in adding instant coffee to the products it makes in South Africa. RCL Foods, formerly Rainbow Chickens, has been on an aggres-
