Tiger Brands depends on a strong economy and healthy consumer demand to drive sales of its premium branded products. South Africa's economy remains particularly weak, with a volatile exchange rate and the majority of households under significant financial pressure. Pre-Covid-19, the economy contracted by 1,4% in the fourth quarter of 2019, following a contraction of 0,8% in the third quarter. This technical recession was profoundly impacted by the national lockdown introduced at the end of March 2020, with the economy slipping into a recession much faster and deeper than expected. South Africa is one of the most unequal countries in the world, with a Gini co-efficient of 0,66 and unemployment at 27%; with youth unemployment at 50%. Prior to the pandemic, more than half of the population – the majority of black South Africans – lived in poverty. The economic impact of Covid-19 has exacerbated this situation, deepening job losses, hunger and malnutrition, and amplifying the need for economic and social redress.
There is an evident need for business to enhance their social efforts, respond to the call to "build back better", and take a lead in ensuring economic and social inclusion in South Africa and regionally. As a leading employer and essential player in South Africa's food system, there is both a societal obligation and business imperative for Tiger Brands to work strategically to enhance livelihoods and contribute to achieving our priority SDGs in this context.
Our key initiatives to deliver on this commitment, are:
- Support new black/black-women owned enterprises and create sustainable livelihood opportunities by 2030
- By 2030, at least 50% of our total local procurement spend will be towards black/black-women owned suppliers (restricted by global multinational supplier exclusions)
- Annually contribute at least 1,5% of net profit after tax towards socio-economic development activities that promote sustainable thriving communities
- To attract, source and develop a skilled and diverse workforce, create an inclusive and collaborative work environment where our people can thrive, grow and innovate
Enterprise and supplier development
Towards economic transformation in South Africa, a significant focus for Tiger Brands is the transformation of our own supply chain. We currently procure roughly 1,7 million tons of agricultural commodities per year, approximately 63% of which are from local suppliers; including livestock, vegetables, fruit and grains. A small percentage is currently sourced from black-owned businesses and we aim to increase this aggressively.
Through our enterprise and supplier development (ESD) programme, Tiger Brands is committed to developing the operational and financial capacity of black-owned and black-women owned enterprises to become part of our value chain – from sourcing to distribution. In 2019, we developed a three-year ESD strategy that aligns with our corporate strategy and provides a roadmap to focus our initiatives. In alignment with our business model, we have naturally focused on developing black farmers, suppliers and distribution enterprises to be at the heart of our supply chain.
Towards achieving our target to launch an ESD fund and commit R100 million investment by 2025, we have launched the Dipuno ESD Fund. This ESD fund will operate as our chief conduit for financing and providing liquidity to black-owned and black women-owned small enterprises and black smallholder farmers. The fund will also play an active role in providing post-investment non-financial support to build operational and financial-skills capacity of invested enterprises. An initial capital investment of R45 million was made to the Dipuno Fund to provide loans and technical support to beneficiaries and to provide for a small operating budget. We have since approved projects to the value of R12 million and disbursed R8,4 million, with a further R15 million worth of applications under review. More information is available on: www.tigerbrands.com/sustainability/transformation/developmentfund.
Towards achieving our target to set-up a business incubator to support emerging entrepreneurs and facilitate 1 000 jobs through the set-up of new enterprises, we have established our smallholder farmer programme and our agriculture aggregator model. Through these initiatives we are supporting small black/black-women owned farming and agri-processing enterprises that need intensive business development assistance and connections to other enterprises to reach the scale required for access to corporate supply chains.
By aggregating black small-scale farmers into collectives, we are able to meet the capacity and quality that Tiger Brands requires. By providing input finance, agricultural support, and technical and development support, we help these businesses access supply chain opportunities and comply with requirements. We help improve their productivity, build their products or service offerings and ensure their commercial success. Through these programmes we have supported 50 emerging entrepreneurs through business incubation training and created more than 100 new jobs in the small farmer sector.
To expand on our enterprise development engagements this year, we further invested in a farmer development programme in Mount Frere in the Eastern Cape. Kick-off of the programme was unfortunately delayed due to Covid-19, but we have since signed a service-level agreement with all stakeholders and have scheduled a community orientation visit.
Testimony to our efforts this year, we are proud to announce that our ESD programme received a number of awards at the recently held Absa Supplier Development Awards 2020. Tiger Brands was the winner in two categories, receiving the Impact Award and the Collaboration Award (together with Anglo American). We also received recognition as the runner-up in the Youth Development Award and the Local Manufacturing Award.
Key projects have included:
- The For Farmers project in the Western Cape. Tiger Brands invested R4 million, as an unsecured input finance loan, in 10 black-owned smallholder farming enterprises to grow 500ha of wheat and oats. Secured through offtake agreements with Tiger Brands, the loan facilitated access to our supply chain for these farmers, making them the first black farmers to supply these grains in our value chain. The development of our new state-of-the-art Oat Mill in Maitland Cape Town, at a cost of R208 million, in part opened up this opportunity for local contribution to the supply of oats for use in our Jungle products.
- Our partnership with Anglo American Platinum through Zenzele Itereleng Community Trust in the North West. Tiger Brands participated in a 50/50 joint-investment of R9 million, as an unsecured input finance loan, to 48 black-owned smallholder farming enterprises to plant 500ha of wheat in the Taung area. R500 000 of this investment was allocated towards the provision of technical and business support for the farmers. It is through the success of this project that we were announced as winners of the Impact and Collaboration Award at the recently held Absa Supplier Development Awards 2020.
A personal story of women empowerment in the Tiger Brands supply chain
It remains a sad fact that in 2020, the barriers to entry into corporate supply chains remains high for black-owned enterprises in South Africa. A key difficulty for many of these small businesses is the challenge of being able to scale-up production to meet large agricultural orders, especially when starting out. One smallholder cannot fulfil a large order, but a group of smallholders can. This is why enterprise and supplier development (ESD) is such a key aspect of Tiger Brands' Sustainable Future strategy.
A key example of the actions we are taking to progress this transformation agenda, is the ESD programme we have recently run in Taung, North West province, in partnership with Anglo American Platinum. Together, Tiger Brands and Anglo invested R9 million in a collective of small farmers known as the Baphuduhucwana Production Incubator (BPI) to enable their participation in the Tiger Brands supply chain. Empowered through this partnership and investment, the farmers of BPI have been able to build skills, finance equipment, scale their harvests and secure large orders of wheat and white beans from Tiger Brands.
Within this larger ESD narrative is a lesser told story, and one which gets to the heart of our transformation agenda in the Tiger Brands supply chain. Black women are the primary custodians of most low-income households in South Africa, yet face stronger exclusion from economic participation due to the patterns of historic gender-bias. This is equally true in regard to participation in agri-processing value chains such as ours at Tiger Brands. This is why an important focus of our Sustainable Future strategy is on supporting livelihoods for black women and empowering black-women owned farms and enterprises to participate in our supply chain.
Bringing this home, is the personal story of Mrs Kedidimetse Radebe, a black woman, a small farmer and an unknowing inspiration for women farmers across the country. Although her parents were Taung farmers, Kedidimetse moved to Johannesburg in search of "greener" pastures where she worked as a professional nurse for 15 years. After a marriage and three children, it was time to reinvent herself and return to her family home in Taung. Thanks to various funding and training interventions provided through the Tiger Brands partnership, Kedidimetse is among a growing list of women farmers in the BPI collective. Through weekly training, she gained new knowledge on crop cultivation according to grain type and seasonality, even winning an entrepreneurship award in her district in 2018.
Since returning to Taung, Kedidimetse has learnt a lot and done a lot. She likens her crops to her own children: demanding care and attention, but offering an abundant harvest in return. She is proud of the house she has built adjacent to her smallholding, the new Toyota Hilux parked in the driveway, and the legacy she is leaving her children, one that comes with the implicit message that any woman can start over and make it on her own.
Supporting livelihoods through preferential procurement
Tiger Brands is committed to supporting black economic empowerment and prioritises procurement awards in South Africa to suitably qualified suppliers in line with the Broad-Based Black Economic Empowerment Act 53 2013 (BBBEE). BBBEE suppliers will be given preference among competing bidders where all other selection criteria are met. Tiger Brands reserves the right to restrict any business with suppliers suspected of BBBEE fronting.
This inclusive approach also ensures our requirements for the best-value package are met, comprising best price, quality, service and delivery performance. Our procurement team has rationalised these strategies to deliver value to Tiger Brands and meet transformation obligations. This includes ensuring that suppliers improve their BBBEE credentials.
Towards achieving our target to reach R1 billion in incremental preferential procurement spend, we have spent R816 million incrementally in FY20 (compared to R350 million in FY19). We have achieved our targets to ensure that we have import-replacement plans in place and to drive implementation of our BBBEE procurement policy. We have succeeded in implementing 25% of our BBBEE procurement policy, and in replacing imports, we successfully procured groundnuts (750 tons), small whites beans (270 tons) and wheat (3 216 tons) from local producers.
FY20 procurement highlights
A challenge we face is that transformation in the ingredients and agricultural categories is slow due to the high levels of capital, skills, inputs and land required to establish a sustainable supply. The volumes that Tiger Brands sources and our rigorous compliance requirements also make it difficult for individual smallholder farmers to compete. To move through these challenges, and achieve our ambitions for black economic empowerment, we are advancing our enterprise and supplier development (ESD) programme and amplifying our investment commitments.
We are actively engaging with external stakeholders and suppliers to facilitate and encourage transformation, and intentionally identify suitable BBBEE candidates for participation in our ESD programmes.
See supplier development for more detail.
Our BBBEE scorecard as at December 2019, as verified by EmpowerLogic, is in the table below. Our BBBEE score at present is level 4 against the amended agriculture sector (agri-BBBEE) codes gazetted in December 2017. To align to the revised codes, we have developed a broader group transformation strategy that will ensure focused and integrated execution in all elements of the BBBEE scorecard. Through this approach, we aim to achieve a level 3 contributor status by 2022. The group transformation strategy will guide all activities towards this score. Our 2020 results will only be available after this report is finalised and will be posted on www.tigerbrands.com.
Tiger Brands BBBEE scorecard 2019
|Enterprise and supplier|
BBBEE ownership 2019
|Thusani Trusts (beneficiaries are children of black employees)||1,87|
|Tiger Brands Black Managers Trust||0,60|
|Tiger Brands Foundation Special Purpose|
|Tiger Brands General Staff Share Trust||0,07|
Investing in sustainable thriving communities
The Agri-sector BBBEE codes requires that companies spend 1,5% of net profit after tax (NPAT) on socioeconomic development that facilitates sustainable economic inclusion; at least 75% of beneficiaries must be black. Tiger Brands' fully aligns with these national requirements, spending 1,5% of NPAT (R22,4 million in 2020; R32,5 million in 2019) through our corporate social investment (CSI) activities.
Building on past experience and looking to be more responsive to the real and changing issues impacting communities in South Africa, our CSI strategy focuses on longer-term socio-economic impact in the communities surrounding our sites.
Our sustainable socio-economic development (SSED) Strategy resonates strongly with our purpose and aligns closely with our business and sustainable-future strategies. The focus of the strategy centres on community food and nutrition with an added emphasis on capacity-building and local economic development. The aim is to better build long-term food resilience in the communities around our sites, through more empowering projects that enable us to make a more meaningful contribution to the local achievement of our priority SDGs.
The SSED strategy is underpinned by a sound monitoring and evaluation process, so we can track our outcomes, particularly in regard to the empowerment of our partner non-profit organisations (NPO). We host workshops with all our NPO partners to create a platform where insights, lessons and ideas for improvement can be shared and discussed.
To build, nourish and nurture sustainable, food secure and healthy communities (nurturing the body, mind and soul so our communities thrive)
Food and nutrition
Given the nature of our business, and the significant health and nutritional challenges in many of the communities in which we operate, we are fully committed to using our resources to promote food security. Recent statistics by Statistics South Africa reveal for example that almost 20% of South African households had inadequate or severely inadequate access to food in 2017, with the Covid-19 crisis exacerbating this situation markedly.
Providing nutritious food to thousands of beneficiaries across South Africa is a significant responsibility and requires building strong relationships with external stakeholders for success. Towards achieving our target to support vulnerable community members and university students with food hampers, we have built partnerships with various local non-profit organisations (NPOs).
Through these partnerships, we have:
- Established the family food programme, which currently provides nutritious food hampers designed to feed a family of five, to approximately 30 000 families.
- Established the Plates4days programme, which currently provides monthly food hampers to 4 500 university students at five universities, across eight campuses. This programme was rebranded and relaunched this year, at the University of Johannesburg in February2020. We also welcomed the University of the Free State as a new participating institution.
- Continued with the school nutrition programme, which, prior to the Covid-19 crisis, provided nutritious breakfasts to 74 455 vulnerable learners across 102 schools across South Africa (see "Promoting nutrition through the Tiger Brands Foundation" box below).
- Adapted the above programmes to continue, and where possible extend, our community food support during the Covid-19-related national lockdown.
For more information on these initiatives during Covid-19, please see here.
through the Tiger
Between October 2019 and September 2020, the Foundation has donated two school kitchens to schools (Gauteng and Eastern Cape) that won top honours at the National School Nutrition Programme (NSNP) Awards run by the Department of Basic Education (DBE). This donation flows out of the public-private partnership that the Foundation has with DBE. In addition, the Foundation has donated one other kitchen to a school in Free State that is on the in-school breakfast programme. In total, the Foundation has donated three new school kitchens, and refurbished five other school kitchens (four in Gauteng and one in Western Cape) during the financial year, with the total value of these donations being over R2 million.
Addition of new schools
One additional school has been added onto the breakfast programme this year. This brings the total number of schools on the breakfast programme to 102 schools as at 30 September 2020.
Like much of the global community, the Foundation and our beneficiaries have been impacted by the effect of the Covid-19 pandemic. Covid-19 has undoubtedly amplified the existing food security crisis that is deeply felt in poor communities across South Africa. Unfortunately, some of our programmes and projects have had to be suspended in compliance with national lockdown restrictions, but we have worked hard to adapt and extend our programmes where possible, to ensure that we continue advancing our community food support.
As part of our response to Covid-19, we expanded the current School Nutrition Programme with the Department of Basic Education to provide meals to communities where these would ordinarily have previously been facilitated through schools directly. When schools were closed down, the Tiger Brands Foundation instead made available six thousand food hampers, ensuring learners were still fed as many come from families with no income. The Foundation also approached its staff and corporate partners to support the initiative of providing additional food hampers. Further waves of food donations followed and by the end of September 2020, the Foundation had distributed 30 000 food hampers to families of vulnerable learners. The hampers included starch-rich foods (maize meal and rice), proteinsourced foods (soya, tins of baked beans, tins of fish and peanut butter), cooking oil, tea bags, sugar, salt and four non-food items (dishwashing liquid, all-purpose cleaner, sanitiser, and laundry washing soap).
The Foundation has also assisted other organisations across the country to procure food items and hampers through Nungu Marketing & Distribution, our distribution partner. At least 20 400 food hampers were distributed through this method. We have also assisted 15 schools across four provinces with safer sanitation infrastructure, and completed the construction of ablution blocks at four schools in Mpumalanga.
Due to the new streams of distribution required to adapt to the implications of the pandemic, the Foundation has been able to establish a much stronger network of partners (local NGOs, SAPS, Departments of Social Development and Health, churches, etc) within the various communities in which we work. And because new beneficiary registers were collated and Covid-19 protocols had to be strictly followed, the Foundation has developed a new standing operational procedure (SOP) for food hamper distribution. These new relationships and the new SOP have been formalised and will assist in strengthening the Foundation's work in these communities in future.
The Covid-19 pandemic has completely rewritten the economic and social context of our country, and indeed the world. We need to adapt our programmes, and understanding these contextual patterns of change will help us identify our strategic priorities going forward. Towards this, we have lready started consultations with various strategic partners and stakeholders in the formulation of the Foundation's next strategic plan.
It is managed by an independent board of trustees which establishes the criteria and procedures governing resource allocation. From six primary schools in Alexandra, this has expanded to over 100 schools in all provinces, providing the essential breakfast meal to around 74 455 learners. By September 2020, over 87 million breakfasts had been served to our country's most vulnerable learners.
Tastic and Maxhosa Africa collaborate to inspire goodwill in the face of Covid-19
Every year, one of the proudest moments on our Tastic Rice calendar is in celebrating our South African icons during heritage month. This year we have embarked on an even more meaningful campaign in light of the challenging times that we face as a country in partnership with Laduma Ngxokolo, the founder of MaXhosa Africa. This unique collaboration was aimed at celebrating the spirit of Ubuntu and true generosity through embodying how it is entrenched in our South African heritage. A limited-edition Tastic pack that is distinctively adorned by Laduma's traditional beadwork design that aims to commemorate heritage month and the unique cultural practices expressed through food, fashion and music was launched.
To unveil this beautiful union a star-studded launch event was held at Ethos Sandton, where guests came bearing a variety of charitable donations in the spirit of generosity. In attendance were notable industry names including TV host and Idols Judge Unathi Nkayi, former Miss World Rolene Strauss, former Miss SA Basetsana Kumalo and socialite Somizi Mhlongo-Motaung among many others. On the back of this event, Laduma embarked on a five-city tour of South Africa, with speaking engagements booked for the designer to connect with local artists, share his experiences and encourage South Africans to celebrate their creativity and generosity in tackling the Covid-19 pandemic together.
The campaign was about celebrating the spirit of ubuntu, through little acts of kindness. The story of Laduma and his success being centred around education set the foundation for the campaign focus. This has led to the increased drive to make a purposeful change in society, through the little acts of kindness demonstrated by consumers partaking in the Tastic heritage campaign. Tastic and Laduma undertook on a series of acts to display the meaning of true generosity during the month of September. To name a few, an education fund will be set up where a student in each province of South Africa will be receiving a generous sponsorship towards their tertiary education. Additionally, an auction will be held in November for a bespoke rug designed by Laduma where the proceeds will be donated towards this education fund.
Community skills development
Tiger Brands believes that as a society that wants to transform itself, we must move away from the traditional donor-charity dependent relationships, to partnerships of equality and empowerment, and from philanthropy to sustainable community investment. Inspired by the partnership ethos of SDG 17 and building on the company's history of working together with others to improve food security in South Africa, we have embarked on a new approach to investing in sustainable socioeconomic development (SSED). A key strategic priority now governing our investment in partner organisations, is to support them in building their capacity towards becoming self-reliant and sustainable over the longer term.
Towards achieving our target to support community social enterprises, we have begun to introduce a range of interconnected programmes aimed at developing the capacity of our NPO partners, to ensure that they become sustainable beyond corporate support. This initiative is being driven through our NPO accelerator programme; an incubator that supports NPOs with the business and enterprise-development skills required to build and run a successful organisation.
An exciting initial project has been to support the start-up of a community bakery at ACFS; one of our beneficiaries of the food and nutrition programme. This project forms part of our exit plan with ACFS, as we aim to reduce food support to them over the next few years. Phase 1 of the project was to alleviate the current spend of ACFS on bread, by creating a micro-enterprise within ACFS to bake the bread themselves. Equipment was sourced, 20 community members were trained in bread-baking and the bakery was established. Phase 2 will explore opportunities to scale volumes and sell the locally baked bread in the community to generate income for the organisation. As an example of success, one of our NPO partners in Paarl has been able to open a second community bakery through their Mosaic Project, and we have now moved the organisation off the food hamper programme.
Community enterprise development
A core focus of our collaborative work is towards establishing community food gardens, as an aide to our family food programme and to support the building of local food self-reliance in the communities where our beneficiaries work and reside. Towards achieving our target to support food gardens for communities, families and schools, we are working with partner organisations to design and implement sustainable projects and create micro-enterprises. We complement these opportunities with training workshops on organic farming and gardening practices, and provide material support to modernise and enhance the productivity of existing community food gardens.
Tiger Brands is a key sponsor of Food & Trees for Africa's (FTFA) EduPlant programme; one of South Africa's longest-running and most successful school greening and gardening programmes. EduPlant supports schools in under-resourced communities with the resources, training and support they need to develop, improve and manage productive food gardens. Endorsed by the Department of Basic Education's National School Nutrition Programme (NSNP), EduPlant is able to integrate environmental learning into the national curriculum and draw on the food gardens to supplement national school feeding schemes. Through this approach, EduPlant ensures that 86% of their participating schools maintain fully functional gardens.
Our work to establish local community bakeries (see here for our community skills development) also expands on our enterprise development efforts. These projects aim to enhance our skills development programme, while addressing a wider spectrum of activities in local food economies. Ultimately, Tiger Brands has the intention to see that community gardens are connected to small local enterprises, which become self-reliant and economically viable, to build local food self-reliance in our communities over time.
TigerForGood employee volunteering
The Tiger Brands Employee Volunteerism Programme (EVP) was designed to provide opportunities for all Tiger Brands' employees to engage in social causes that are close to their hearts and participate meaningfully in the communities where they live and work
To assist employees to identify and connect to projects that they'd like to participate in, we created the TigerForGood platform. Engagement with the platform still needs to gain momentum, and to incentivise this we have launched the CSI leave day benefit for employees who volunteer. In response to Covid-19, we have created a campaign on the TigerForGood platform that encourages employees to donate to the SA Solidarity Fund.
Individual Tiger Brands' operating sites have also been actively involved in contributing to the communities in which they operate. This has been driven by the Tiger Brands Site Champions; a team of passionate employees across all our operations, who together drive positive change in their host communities.