Packaged-food manufacturers can tap market opportunities in South Africa, with packaged food predicted to see steady retail value growth over the next five years.
The Euromonitor Digest said consumers are likely to continue to be attracted to both affordability and convenience when choosing packaged-food products.
However, the growing number of mid to higher living standards measure (LSM) groups is more likely to be attracted to added-value products with slightly higher prices.
“Such consumers will become more prepared and better able to pay more for packaged-food products that offer added value, particularly health and wellness benefits,” said the online publication of the Export Management Bureau of the Department of Trade and Industry (DTI).
In 2017 packaged food achieved strong current retail value growth. Dairy, baked goods and rice, pasta and noodles remained the largest categories in value terms.
The report said dual trends of convenience and health and wellness continue to drive the market.
“Consumers are becoming increasingly time-pressed and are looking for products that are quick and easy to prepare and cook. However, alongside this trend, there is also much more awareness of the importance of eating healthily, to which manufacturers are responding by focusing on the health aspects of their products,” it noted.
The report further said health and wellness products typically carry a higher unit price than their standard counterparts, which makes them attractive to more affluent consumers who are willing to pay for the added health benefits.
Supermarkets remained by far the leading channel in packaged food in 2017. However, it continued to lose share to mixed retailers.