The food & beverage industry in South Africa

Some common growth strategies and focus areas emerged across clients that are fully aligned to global trends:

• Capacity increase through optimisation, innovation and waste reduction initiatives.
• Water efficiency and consumption reduction.
• Energy footprint reduction programs to support the journey to net zero.
• Focus on machinery and process safety improvements and compliance to legislative changes.

The South African beverages market size is expected to grow from USD 19.01 billion in 2023 to USD 24.47 billion by 2028, at a CAGR of 5.19% during the forecast period (2023-2028).

This market has experienced significant growth in recent years due to various factors, including changing dietary patterns and preferences of consumers.

A rise in organic, plant-based and functional beverages

Moreover, organic, plant-based, and functional beverages are gaining immense traction with consumers' increasing preference for healthier and more natural beverage options. Furthermore, the demand for premium alcoholic drinks in South Africa has been growing and is projected to continue during the forecast period. Local players have been introducing fruit hops in preparing craft beer, which has become popular among consumers. This strategy allows the companies to position their products as premium, bolstering market growth.

Social trends affecting the beverage industry

Besides this, with a rise in social drinking trends due to cocktail culture and the growing urban population, the demand for alcoholic beverages, including beer, has increased. On the other hand, alcohol-free and low-alcohol beer has also gained popularity, especially among young consumers trying to make positive lifestyle choices and manage their alcohol intake.

Additionally, the increasing influence of social media, increasing Internet penetration, and growth of the e-commerce sector have enabled manufacturers to create improved retailing channels and market presence.

Source: https://www.mordorintelligence.com/industry-reports/south-africa-beverages-market

Covid-19 and its influence on the dairy industry

For the dairy manufacturers in particular, Covid-19 left a mark on more areas than just production volume and export. There’s been a significant shift in consumer demand towards more nutritionally-rich and convenient beverages thought to boost overall health. Demand for plant-based alternatives has been on the rise as well, heightened by a rise in lactose intolerance. Food safety is a big contributor as well, with consumers prioritizing this to an even greater extent.

Ready-to-eat bakery products are setting the tone for the bakery industry

Looking at bakery products, there’s a growing demand for affordable and ready to eat products which is boosting the industry in South Africa. The market has grown, supported by the government’s contributions to micro, home-based, co-operative bakeries and confectioneries.

The South African process industry is certainly still very much in a growth phase despite various common trading impact factors that have to be addressed such as Corporate Sustainability programs, HSE legislative changes, Electrical power availability to highlight a few. Clients in the region however are resilient and have deliberate plans to address these factors and deliver growth.