Tiger brands

COMMENT: Competition heats up as food firms hype brands

Competition is heating up in the food producers’ kitchen, and they all plan to stay. Last week, in his company’s year-end results, Tiger Brands chief executive Peter Matlare said that as much as things were tough in the South African market the company believed its power brands would deliver good volumes, comments Business Report.

Likewise, rival Pioneer Foods said yesterday that it would definitely turn up the heat on its brands in order to gain market share. Pioneer Foods expected its growth to come from strong brand awareness, resulting in higher-margin purchases, and not necessarily from volumes.

While the two fight for brand power, RCL Foods has snapped up another primary food producer, TSB Sugar. The former Rainbow Chicken, which recently bought Foodcorp, said it wanted to diversify its offering and also planned to reach a market value of about R15 billion.

With brands such as Nola mayonnaise and Yum Yum peanut butter already in the bag, it was obvious that RCL Foods was on the path to becoming a huge food manufacturing company, analysts said.

Bigger rivals Tiger Brands and Pioneer Foods share a precious offering, which most consumers cannot do without, and that is rice, maize meal and bread brands.

This is one space that RCL Foods has not set its foot in. Yesterday Pioneer Foods chief executive Phil Roux said that when it came to bread, the company was not only facing competition from its known competitors, but also from retailers that baked their own bread.

“In-store bread has become our main competitor as more and more retailers sell their own bread.”

He said other trading challenges came from the fact that consumers were trading down on their starches by replacing bread with potatoes or other starches.

Source: Business Report