Naturally Healthy Beverages in South Africa

PROSPECTS

Stable demand for NH bottled water driven by mistrust in local water supplies and warm weather

Naturally healthy beverages continued to record stable demand in South Africa in 2019, with sales dominated by NH soft drinks. While the largest single category of NH fruit/vegetable juice continued to experience declining volume sales, the niche of NH superfruit 100% juice continued to perform well.

Drought impacts demand for rooibos, driving up unit prices

Nationwide campaigns continue to highlight the impact of non-communicable diseases in South Africa, which will boost ongoing demand for NH tea such as green tea and rooibos due to their antioxidant properties and other health benefits, championed by some consumers as part of their healthy lifestyles. However, while an increasing number of players are anticipated to invest in niche areas to capitalise on the growing demand for these products, the severe droughts experienced in South Africa have impacted the production of rooibos, pushing up the unit price and influencing demand as consumers were unable to find these local products on retailers’ shelves.

NH RTD green tea is strongest performer in line with health and convenience trends

In line with health and wellness trends in addition to demand for greater convenience amongst busy consumers, NH RTD green tea continued to post the fastest growth in both retail volume and current value terms in 2019. While remaining a niche over the forecast period, the category is likely to see further expansion in terms of new product development and the entry of new players, as witnessed in 2019 as the value share of “others” continued to grow.

COMPETITIVE LANDSCAPE

Increasingly fragmented competitive landscape

Clover SA (Pty) Ltd retained its narrow lead of naturally healthy beverages in 2019, due to its strength NH 100% juice with its brand Clover Krush. It also ranked second within the dynamic niche of NH RTD green tea, where its brand Manhattan Green Ice Tea continued to gain share from the leader Lipton Green Ice Tea from Pioneer Food Group.

High value sales for players within NH other tea due to rising prices of rooibos

NH other tea remained a fairly consolidated category in 2019, dominated by National Brands with its leading brand Freshpak Rooibos, in addition to Eleven O'Clock and Five Roses Rooibos. Drought conditions have negatively impacted volume sales of rooibos tea, which has led to a dramatic increase in the unit price, resulting in ongoing high current value growth for the category and the players present in it that offer this tea type.

Flavour development likely to attract consumers searching for differentiation

Flavour development is expected to continue within various types of NH tea over the forecast period. Joekels Tea Packers (Pty) Ltd continued to gain value share within NH tea, launching herbal flavoured green tea for popular brand Tetley.

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