Baked Goods in South Africa

PROSPECTS

South African consumers continue to see bread as a daily essential

Consumer incomes in South Africa continue to be pressured by rising inflation, mainly due to fuel price rises and VAT increases for the first time since 1994. Although some baked goods products such as brown bread are zero-rated for VAT, most baked goods are not.

Cost remains key among price sensitive South African consumers

White bread, followed by brown bread, remains one of the most popular types of packaged food in South Africa due to its appeal among low-income consumers. Although unpackaged baked goods are cheaper in terms of unit price per kg compared to their packaged alternatives, consumers still tend to prefer packaged baked goods.

New product development trends impacted by rising health awareness

Consumers have become much more health-aware when shopping for food and are increasingly reading food labels in order to better understand the nutritional value of the products they buy. This trend has led to the increased prevalence of low-GI and functional bread in South Africa, with consumers increasingly demanding nutritious and healthy options.

COMPETITIVE LANDSCAPE

Leading players facing growing competition from cheaper alternatives

Pioneer Foods continues to lead baked goods sales in South Africa, followed by Tiger Consumer Brands. Albany variants by Tiger Consumer Brands lead packaged leavened bread, with Sasko by Pioneer Foods ranking second.

New flavoured and speciality breads attracting consumers

Baked goods in South Africa is benefiting from increased variety in terms of flavoured and speciality breads. Manufacturers are moving away from simply offering traditional brown and white bread to adding functional and flavoured bread to their portfolios to offer consumers a variety of choices and cater to all demographics.

Consumer price sensitivity fuelling demand for private label ranges

South African low-income groups remain price-sensitive and tend to prefer the cheapest brands that offer reasonable quality. These consumers do not always opt for private label as manufacturers offer a wide range of bread prices, from economy to premium, with price discounting remaining prevalent to accommodate a large consumer base.

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