Snack makers prioritise efficiencies

BMI Research predicts a conservative volume outlook for sweet and savoury snacks in South Africa this year toward 2014. This is due to market fragmentation and manufacturing pressures resulting from increased input costs along the entire value chain. In response, manufacturers are working to improve their efficiencies, and offer products that meet the needs of different consumers: smaller, more affordable pack sizes for the lower end of the market, and value-added premium indulgent and healthier products for higher-end consumers.

Premium value addition

In the dried fruit segment, the market has been growing well over the past few years and is worth over $57.6 million annually. To meet demand, At Source Handmade Foods, one of the three largest processors, packers and distributors of dried tree fruit in the country, has expanded its export capability.

To handle increased volumes, the 11-year-old company has increased its storage facilities for packaging material, raw materials and finished products by 2,600m2 at its factory outside Ceres in the Western Cape. It has also introduced new technologies to increase productivity and efficiency, including a form-fill-seal machine with multi-head weigher, additional flow wrappers, metal detectors, in-line check-weighers, additional size grading capacity, and an optical sorter, imported from the US.

Managing director Handri Conradie explains that a lack of capacity had prevented the company from being more aggressive in terms of growth in its exports to the Middle East and Australia over the past three years.

“Although South Africa is our core market, it is a very mature market that requires innovative value-added, processed fruit products to drive real growth. We have led the way by introducing dried fruit in a non-traditional and more accessible format through fruit bars, novel fruit and nut combinations, and a dried fruit “flatbar” snack for leading retailers like Pick n pay and Woolworths. We are now also producing a range of products under our own premium healthy snack food brand called Cecilia’s World,” says Mr Conradie.

The products are packed in clear flexible pouches and gusseted bags supplied by two Cape Town-based converters to maximise visibility. He adds that quality forms the cornerstone of the company’s philosophy to source the best possible fruit and ingredients in the world. The majority comes from South Africa, but one variety of apricot is imported from Turkey; whilst cranberries, cherries and blueberries are sourced from the United States.

Driving category transformation

Mondelēz South Africa (formerly Kraft Foods) is the largest confectionery business in the country and enjoys market leadership in the chocolate, chewing gum and bubble gum categories. It is number two in candy, and a focused player in biscuits, and plans to grow snack category sales and volumes by bringing its products to consumers across 22 countries in Southern, Central and East Africa.

In April, Gawad Abaza was appointed as the managing director for Mondelez Southern Africa, Central and East Africa, and moved to Johannesburg from Egypt, where he served as MD of Kraft Foods’ Mashreq cluster from 2010. He was employed by the Cadbury Group for seven years prior to its acquisition by Kraft Foods in the same year, and was instrumental in the successful integration of North Africa into the Egyptian business unAir VaporMax Shoes