Our strategy

Performance
summary 2020

Positive response to the Covid-19 pandemic
Optimised innovation and renovation to deliver against value specific consumer needs
Share gains in bread, liquid concentrates and baby snacks

Acceleration of portfolio optimisation initiatives:

  • Disposal of VAMP
  • Evaluating a number of proposals regarding the exit of Deciduous Fruit

Deliver growth through our innovation pipeline

We see consumer-based innovation as a critical lever for sustainable growth. As part of our innovation drive, this year we introduced changes in three key business areas: we restructured our R&D activities to create more direct accountability in each business unit, while introducing key new roles to improve our innovation capability; we strengthened our ideation process, refining our innovation pipeline and introduced better processes for prioritising innovation opportunities; and we have driven a stronger business focus on ensuring the successful commercialisation of the identified innovation opportunities. We are working further on building a culture of innovation, strengthening our commercialisation capabilities, increasing our science and technology acumen, and developing a more agile approach.

Although Covid-19 had a material impact on our innovation pipeline this year as we prioritised known value items (KVIs) during the pandemic, at the end of the fourth quarter, we were able to launch nine new innovations in time for the high-demand summer and holiday seasons.

In terms of meeting consumers' value-specific needs, we launched, among others: the 12.5kg Induna Super Maize Meal; Jungle Plus 500g refills; new 2kg offerings in pasta; an alternative size in the All Gold Jam Tub in the convenience and value seeking space and the launch of fragranced lotions and creams in the Dolly Varden range.

Drive growth

Winning category, channel and customer strategies

To deliver on our growth ambition through winning category, channel and customer strategies, we will be optimising our product portfolio, driving an innovation pipeline, realising commercial opportunities in health and nutrition, and winning at the point of purchase. This will be accompanied by our strategy to drive growth in Africa while positioning us to explore alternative growth opportunities.

Optimising our product portfolio

In response to sustained margin contraction across many of our product lines, and to deliver long-term growth, we are continually evaluating and optimising our product portfolio. We have adopted a structured approach to identify those categories with high attractiveness and competitive strength that should be invested in and grown, those where we will focus on improving profitability, and those to be evaluated further for possible exit through a carefully structured process.

Informed by this assessment we see particular potential for further growth in Baked Goods, Baby, Breakfast, Snacks & Treats, Beverages, Home Care, Exports and Chococam, with opportunities for enhanced profitability in Other Grains, particularly Rice and Pasta, Groceries and Sorghum-based products. We are investing in product and process innovation, driving further process efficiencies, and/or expanding production capacity in these areas.

In rationalising our portfolio, and following a thorough evaluation of all alternatives, the board approved the sale of our Value Added Meat Products (VAMP) and the Deciduous Fruit (LAF) business as well as the closure of Deli Foods in Nigeria and the subsequent disposal of related fixed assets. The disposal of VAMP and Deli Foods was successfully concluded this year, and we continue to explore opportunities regarding the sale of LAF. Following a careful review of recent performance, and an assessment of market prospects, we are reviewing the following business units over the medium term: Maize and Personal Care.

4% volume growth
Consumer relevant innovations deliver   5,1% of sales
Achieved compliance with our   Eat Well Live Well nutritional profile across more than a quarter of our portfolio

Realising the commercial opportunities in health and nutrition

We believe that there are valuable business opportunities associated with leading the health and nutrition agenda in South Africa and across the continent. We seek to realise these significant opportunities through our recently agreed health and nutrition strategy, and the associated stretch commitments, and in so doing to deliver on our core purpose of nourishing and nurturing more lives every day. The strategy includes three key focus areas: renovating our existing product range to make more of our products compliant with our Eat Well Live Well standards, while striving towards global best practice; innovating to develop more nutritious, affordable food products; and educating consumers – in partnership with government, academia and NGOs – in a manner that allows them to make better informed decisions about their wellbeing.

We made further progress this year in delivering in each of these three areas. We introduced clear and simple consumer relevant health claims in various brands, including Jungle, Brookes Low-Cal and Albany, and we began the process of including portion control messaging on the back of packs in the Snacks & Treats category. We launched new healthy product lines in the Baby and Personal Care categories, and we participated in a consultative process on the adoption of progressive front-of-pack food labels.

Leveraging the strength of our brands

We have continued to see growth in the sale of private label products in South Africa, including in some of our priority product categories, driven in part by the sustained pressure on consumer disposable income. Given that Tiger Brands is the category leader from a brand equity perspective in more than half of the categories we operate in, our strategic response to the competitive threat of private label is to build explicitly on the strength of our existing brands. To protect and further enhance our brand leadership, and to realise growth opportunities in a post-Covid-19 operating context, we are implementing measures to capitalise on the recent uptake of e-commerce and home cooking, the changes in in-store shopping dynamics, and the heightened levels of price consciousness and increased sensitivity to personal health and wellbeing, underpinned by world-class marketing.

Winning at the point of purchase

Last year we communicated a series of specific commitments aimed at securing growth at the point of purchase. These commitments were in three focus areas: delivering growth in existing and new channels; becoming more efficient and driving ROI; and building the sales force of tomorrow. In the context of challenging market conditions, increased competitive intensity and growing retailer bargaining power, we made good progress this year against most of our commitments, achieving many of our stated targets.

We expanded our reach in general trade, identifying and trialling different route-to-market models, and significantly increased our geo-mapping of stores and wholesale partners. We enhanced our online presence, establishing our e-commerce structure and accounts, and we progressed in developing other non-traditional shopping destinations in certain categories, though falling short of our growth ambitions in neighbouring countries. We successfully implemented jointly developed business plans with some of our major customers, and secured revenue growth through strengthened cross-category promotion and customer segmentation, improving our ROI on promotional activities. Through enhanced use of Big Data, with digital dashboards rolled out with two key retail clients, we have improved in-store execution and delivered material efficiency gains. In delivering on our goal of building a more effective and diverse salesforce, we have finalised a competency framework for the salesforce, conducted management training and run roadshows in all regions.

For the year ahead, we have updated our growth ambitions and specific commitments within the same broad focus areas. We have set ourselves ambitious targets, including on expanding our reach in general trade, growing in e-commerce and alternative channels, delivering a step change in neighbouring countries, and further optimising our sales force and people capabilities. We will also be embedding our revenue management capabilities and deliver improved customer performance and behaviour aligned with Tiger Brands' strategic drivers.

Driving growth in Africa

Our ambition is to organically grow our Africa export business by building on our current established presence across the continent. We will drive category growth through carefully chosen brand investments, by developing superior routes to markets, and by investing in key capabilities. Informed by a thorough understanding of the opportunities and risks in this sizeable market, we have classified the countries for potential growth into four categories:

  • Expand: in countries where we are established and profitable with a developed route-to-market (such as Cameroon), we will leverage our existing presence and capabilities, and invest to reach full potential and grow market share.
  • Develop: in countries where we currently have multi-category presence and are developing in-market capability (such as Nigeria, Mozambique, Zambia and Zimbabwe), we will invest in people, brands and infrastructure to increase our ability to win and grow market share.
  • Trade: in countries that present identified export trading potential (such as some of the SADC and East African markets), we will focus on opportunistic sales and identify future growth potential without currently investing in capability.
  • Explore: in untested markets (for example in West and North Africa) that present potentially attractive in-country and category opportunities, we will explore these opportunities and develop a business case indicating the best entry approach.

While we made some progress this year in delivering on our stated growth ambitions, we were severely impacted by various external and internal headwinds. These include: significant economic challenges in Zimbabwe and Zambia, with currency devaluation of 200% and 40% respectively; Covid-19 related stock shortages in certain markets; a decline in growth of a key retail customer; and an inability to trade in Nigeria due to the trademark dispute; as well as supply constraints in certain product lines. We have learned from these challenges and are taking remedial actions. We remain confident of our ability to deliver growth in the region.


In looking to win trade in the identified key markets, we will be prioritising product categories to drive volume growth, investing in prioritised brands and where necessary developing new products. We have engaged selected partners to ensure an optimised and effective route-to-market in priority countries, underpinned by clear standards and processes with each partner. We have made further investment in building capability with the appointment of a chief growth officer – Rest of Africa, based in Nairobi.

Realising opportunities for inorganic growth

Although our primary focus is to drive organic growth by delivering on the initiatives outlined above, we are continuing to explore alternative growth opportunities. These include specific opportunities that are core and/or near adjacencies to our current business and underpinned by clear consumer trends, while various participation options are being explored.