Tiffany Biscuits

Two major newcomers plan to spice up SA’s FMCG food market

SA’s fast-moving consumer goods (FMCG) market is set for a shakeup. At the retail level Walmart will see to it. At the product-supply level two new foreign entrants, Iffco Worldwide and Diplomat, aim to do the same, reports The Financial Mail.

Lauren Siebrits“The FMCG market is ripe for change,” says Iffco (SA) CEO Lauren Siebrits. “Local food manufacturing giants have had it their own way for too long. Their position has been largely unchallenged by foreign players and enabled them to build huge brands that sell at premium prices.” [See related story below: Iffco sets up office in Southern Africa]

Diplomat (SA) CEO Steve O’Hagan is of the same opinion.

Iffco (SA) comes with the backing of Iffco Worldwide, a Dubai-based food manufacturer and distributor with a presence in over 85 countries.

“Iffco is determined to build a major, sustainable business [in SA] and has the financial muscle to do it,” says Siebrits, who previously headed PepsiCo’s Simba unit in SA.

Also boasting financial muscle, Israel’s largest FMCG distributor, Diplomat, has entered SA under an agreement with Procter & Gamble (P&G), the world’s largest FMCG manufacturer.

“Diplomat has been associated with P&G for 20 years and is one of its top 10 distributors,” says Diplomat group CEO Noam Weiman. P&G, which focuses on the personal care, household products and baby care sectors, reported global sales of US$79bn in 2010.

Occupying two different FMCG segments, Iffco and Diplomat share the goal of aggressively growing their brands’ market shares. “We [Iffco] have started by importing products and will move into manufacturing locally when we have built scale,” says Siebrits.

Iffco’s initial drive is led by its Tiffany biscuit and confectionery range, which has already achieved good penetration in Shoprite stores, says Siebrits. “We intend to expand into areas such as pasta, ice cream and cold drinks,” she says .

AVI controls some 70% of the biscuit market, says Siebrits, adding: “Market shares of this size are not good for consumers. They end up paying more.”

Iffco’s strategy is to supply products which are as good as or of better quality than current leading brands but at an affordable price . Thanks to the recession, consumers are far more aware of costs. Siebrits points to a study by Unilever which found that 65% of SA consumers now compare prices more often and 60% shop around.

Cost awareness, she says, is now a permanent feature of the FMCG market. “The big players felt that when the economy picked up, consumers would come back to their premium brands. But things have changed.”

O’Hagan says Diplomat’s initial focus is on tier-two retailers, which include pharmacies, speciality chain stores and independent wholesalers, and tier-three retailers, which covers small formal and informal retailers.

“We offer full-service distribution covering all aspects including logistics and even debtor admin,” says O’Hagan. “This enables retailers to focus on their business. We see this holistic service as our key differentiator.”

Diplomat has built distribution centres in Gauteng, Cape Town, Durban and Port Elizabeth.

For both Iffco and Diplomat, Walmart’s arrival could not have been better timed.

“Cambridge has accepted us as a supplier,” says Siebrits, referring to the brand Massmart is using to drive its entry into the lower-income FMCG market. She adds: “They are backing our products through TV advertisements. The Walmart spirit has already arrived.”

Diplomat has also forged ties with Cambridge, says O’Hagan. “It has a no-nonsense approach based on quality and price. It is dynamic and keen.” He concludes: “The [FMCG] market is in for an interesting fight.”

Source: Financial Mail

Iffco sets up office in Southern Africa

IFFco logoIFFCO identified an opportunity in the South African FMCG market for good quality consumer goods at affordable prices and decided to launch here as a comprehensive, fully-fledged business. IFFCO South Africa (SA) was established in October 2010 as a private company and Lauren Siebrits was appointed CEO.

IFFCO Worldwide is a United Arab Emirates-based international group, which manufactures and markets a well integrated range of mass-market food products, related derivates, intermediates and services. IFFCO operates under the following business segments: fast moving consumer goods (FMCG), agri business, commodities, oils and fats, farm fresh, chilled and frozen foods, food ingredients, condiments and beverages, personal care and services.

IFFCO is a sixth generation family business started by the Allana family in 1975, and transformed into a global presence in over 85 countries. Since its inception, IFFCO’s history has been one of consistent and successful growth, arising from continuous and prudent investments.

Siebrits was previously the first woman and South African to be appointed as CEO of Simba, part of the global PepsiCo group in 2009, over-seeing 1 700 staff. Siebrits is an innovative, results-driven professional with proven success in marketing and general management at an executive level.

She has extensive experience in the FMCG sector and a strong entrepreneurial flair, which has resulted in an impressive track record in various marketing roles, and a distinguished marketing career in leading FMCG companies such as Borden Foods, Coca-Cola, Dairybelle and SmithKline Beecham.

The local IFFCO office has since been assigned with introducing and distributing the Tiffany range of biscuits, chocolates and confectionery. Tiffany is IFFCO’s flagship brand of impulse foods and while it has been available at Shoprite stores for the last eight years, it will now be offered in leading retail stores throughout suthern Africa.

The excellent quality of the product range and attractive price are the key factors which have enabled Tiffany to achieve success worldwide in the highly competitive food and beverage market.

A recent research project called ‘Wake Up Shake Up’, conducted by the Unilever Institute, indicates that “the recession has changed consumer buying behaviour – 65% now compare prices more often and 60% shop around”.

“Consumers are exercising caution, so trading in FMCG is becoming tougher and local dominant players need more competition,” adds Siebrits.

IFFCO SA also wishes to change local perception that affordable products lack quality to the view that consumers can obtain value for money and quality simultaneously.

“IFFCO SA intends to build a strong reputation and gain market share with the aim of becoming the next leading FMCG conglomerate,” she says.

Siebrits and her team will now step up marketing activities to establish brand awareness and drive trial and consumption. Print, outdoor, promotional activities and television advertisements will communicate the Tiffany brand proposition as being “affordable indulgence”.

It has also become synonymous with innovation either through the introduction of new products, attractive packaging designs or eye-catching in-store displays. Distribution and merchandising partners have been appointed nationally in order to facilitate world-class delivery and on-shelf presence in all stores.

In future, IFFCO SA intends manufacturing goods locally, which will significantly aid job creation through the establishment of a manufacturing plant, and create procurement for local, small businesses.

“We also plan on extending our product line by introducing new food products in the next few years including pasta, beverages, ice cream, condiments and olive oil,” Siebrits says.

Tiffany Prebiotic biscuit
Tiffany Activ Pro the world’s first prebiotic digestive biscuit took the limelight at the Gulfood 2011 Awards in March, winning the accolades for the Best Innovation in Function Food or Drink 2011 category.

IFFCO is aware of the increasing market trend towards health and nutrition and is also focusing its efforts on innovations such as sugar-free and digestive biscuits containing prebiotics.

By March 2012 all IFFCO packaging will be adapted in accordance with the Labelling and Advertising of Foodstuff Regulations promulgated by the Department of Health in terms of the Foodstuffs, Cosmetics and Disinfectants Act.

Tiffany’s product packaging will provide clear nutritional information displaying the ingredients and demonstrating how the serving size of the products fits into the consumer’s recommended daily intake.

IFFCO SA says it will operate in accordance with the core principles and pillars on which the company has built its brands to become the preferred provider of essential and value-added foods for everyone, everywhere and every day.

It aims to achieve this vision by satisfying consumers’ requirements and creating value for them, continually improving brands and services and enhancing quality. The company believes in, and stands for, a set of clearly articulated values and ethics that guide all aspects of business activity, including strength through their people, integrity, passion for excellence, consumer-driven goals and an entrepreneurial approach to business.

“Quality is an important aspect of all that we practise, produce and promote in our pursuit of excellence,” Siebrits concludes.

Source: Iffco SA