Ceo’s review
As Africa's largest food producer, we have historically overcome many challenges, executed effective strategies and built brands that are now a well-loved part of people's everyday lives.
Noel Doyle
Chief executive officer
It is again my pleasure to provide an overview of Tiger Brands' approach and performance in delivering on our strategic commitments to sustainable development, and the management of our most material environmental, social and governance (ESG) impacts. This is our fourth sustainability report, and each year we have made improvements that reflect our commitment to transparency and accountability on ESG matters.
Celebrating the Tiger Brands' centenary this year calls for reflection. As Africa's largest food producer, we have historically overcome many challenges, executed effective strategies and built brands that are now a well-loved part of people's everyday lives. In recent years, we have met increased volatility and uncertainty on economic, social and environmental fronts, and trends indicate that these patterns are not temporary. Sustainability has become aligned with adapting to this context to deliver better business results, and it is clear that enhancing sustainability performance is in the best interests of the business.
For Tiger Brands to flourish in its second century, we need a healthy workforce and consumer base, a strong economy with robust institutions and sustainable resource flows based on functioning ecosystems. Protecting these is as much a financial necessity as it is a moral imperative; yet sustainability is about more than just protecting value, it is about proactively creating value for a sustainable future.
This is the core ethos of our sustainability strategy, which outlines three focus areas: health and nutrition, enhanced livelihoods, and environmental stewardship. These focus areas address our key ESG impacts and highlight where we can proactively create value through our core business activities, to make the most meaningful contribution to the SDGs. There lies growth opportunities in three strategic platforms namely, value and affordability, snackification and health and nutrition, organically and inorganically.
While we have made some encouraging progress across our sustainability focus areas this year, which I review in more detail below, our most immediate priorities have been to look after our employees in response to the ongoing pandemic, ensure business continuity in the face of production challenges and civil unrest, and continue to build on the steps we have taken in previous years to re-establish a stronger financial position.
OUR ONGOING RESPONSE TO COVID-19
We continued to be impacted in all areas by the ongoing Covid-19 pandemic. We have maintained and expanded our Covid-19 management measures (see here), and I remain heartened by the resilience we have shown in the face of the prolonged stress.
We continue to focus on supporting the health and wellbeing of employees, with a shift in our approach from initial protective protocols to proactive screening of employees and the promotion of vaccination. We have provided additional mental health support this year, including for anxiety and bereavement and managing work-life balance in a remote-work arrangement that has become more permanent.
We have conducted 29 967 tests to date, with 2 812 positive results, and 2 777 recoveries, yielding a recovery rate of 99%. Despite our best efforts, I am saddened to report that a further 18 of our employees died after contracting the virus this year, bringing our total Covid-related loss to 29 employees. I extend my deepest sympathies to the families of all those who have been severely affected.
The prolonged pandemic has amplified existing food security crisis in poor communities across South Africa and we continued to provide community food support through our socio-economic development (SED) activities, despite disruptions to some of our programmes. This year we continued to support 30 000 people monthly through our family food programme, and provided 5 200 hampers to students through our Plates4Days programme (see here). In addition, we provided food relief to the value of R3 million during the recent civil unrest and looting in South Africa.
ENABLING HEALTH AND NUTRITION
South Africa's population is one of the least healthy globally, with high levels of obesity, lifestyle-induced non-communicable disease, and persistent hunger and malnutrition, all trends that have been amplified by Covid-19. In this context – and given our role as a leading company in South Africa's food system – we recognise our responsibilities, and the opportunities, in promoting health and nutrition. We continue to make progress in better enabling consumers to improve their health and wellbeing by providing products that are more nutritious and affordable, developing best-in-class nutritional standards and leveraging our brand to promote healthy lifestyles and good nutrition (see here).
We have updated our health strategy to have a stronger focus on commercialisation and launched several new healthy and affordable products. We continue to redesign product labels to accommodate more nutrition information and are keeping our eyes on compliance with the pending front-of-pack nutrition labelling regulations in South Africa. We launched the Colour Your Plate with KOO TV show in partnership with KOO and SABC 2, which promotes healthy home-cooking and the benefits of eating fruit and vegetables. We spent a total of R3,3 million on promoting health and nutrition through our Eat Well Live Well (EWLW) programme, which included the publishing of two State of Nutrition reports.
ENHANCING LIVELIHOODS
In response to the weak South African economy and high levels of poverty, inequality and unemployment that reflect historic racial discrimination, we have committed to improving the livelihoods of thousands of people by providing opportunities across our value chain for inclusive economic participation. This includes a specific focus on supporting black/black women-owned farming and agri-processing enterprises, through our supplier and farmer development programmes and our preferential procurement policies. Our progress this year has been driven through our ESD fund, agriculture aggregator model, preferential procurement activities, and ongoing investments in SED (see here).
We further capitalised the Dipuno ESD Fund to a total of R85 million, with R28,6 million invested in approved projects and a further R49,7 million worth of applications under review. We successfully onboarded two black female-owned aggregators, expanding our farmer-support programme to 103 farmers, and our job-creation impact to over 800 jobs in the small farmer sector. We increased our preferential procurement spend by R273 million, reaching an accumulated preferential procurement spend of R1,089 billion. We slightly increased our local procurement from BBBEE verified suppliers to R13,5 billion, with R5,6 billion and R4,3 billion procured from black and black women-owned enterprises respectively.
REDUCING OUR ENVIRONMENTAL FOOTPRINT
Recognising the significant environmental impact of the agri-food value chain and the vital importance of ecosystem functioning to our business, we have committed to improving our environmental footprint by implementing innovative solutions that optimise energy and water consumption in our operations, reduce the negative impacts of packaging and minimise waste, effluent and emissions. We made some progress this year in reducing the footprint of our operations, focusing on the most material issues: improving energy efficiency, reducing GHG emissions and striving for zero waste to landfill operations (see here).
Progress on some of our programmes has been delayed by Covid-19 and the reductions we have recorded across energy and emissions have been influenced by the slowdown of our operations. Nonetheless, we recorded a 20,4% year-on-year reduction in energy use and a 2,7% decrease in energy intensity from the previous year. Similarly, we recorded a 30% reduction in total direct carbon emissions and a 14,5% reduction in GHG emissions intensity. Water consumption was reduced by 13% and water-use intensity increased by 5,5% from the previous year. We continue to develop packaging solutions to meet our obligations under the SA Plastics Pact, and have optimised light-weighting across our portfolio and achieved 85% recycled PET content in all our plastic beverage bottles.
OUR CRITICAL ANCHORS
Delivering on these sustainability priorities requires continued focus on cultivating a purposeled culture, ensuring robust food quality and safety systems, protecting employee health and safety and maintaining good governance, all of which are reviewed in more detail in this report (see here).
Key challenges emerging this year required specific action in relation to safety and security, food quality and safety and employee relations.
On safety, I am happy to report zero workplace fatalities this year and an improvement in our lost-time injury frequency rate (LTIFR) from 0,34, to 0,31. This progress is positive, but still reflects the fact that some of our people came to work in full fitness and left that day injured. In some cases, these are injuries that may be carried for life. We have some way to go yet to achieve our safety ambitions, especially relating to the severity of injuries observed at some of our operations. On this note, it is of major concern that our people remain under significant threat from route-to-market incidents in the Albany business.
The number of incidents has increased over the last three years, with 105 incidents this year, making up 83% of the lost-time injuries we recorded in Bakeries. These incidents amounted to a total loss of nearly R1 million over the year and addressing them is high priority for 2022.
Food safety and quality is a non-negotiable priority for our business, and this year we experienced a significant quality incident, where a production defect discovered in the cans of one of our suppliers led us to recall around 20 million cans in our canned vegetable range. While this amounted to a significant loss for the company, our rapid and decisive response in recalling the cans reflects our commitment to minimising any potential impact on public health. We have since taken various steps to further strengthen the quality-assurance processes of suppliers and are working to proactively close gaps. Outside of the product recall, we maintained our FSSC 22000 and HACCP certifications across all our sites and are on track with implementing manufacturing excellence customs and practices (MECP) for quality. We continued to improve performance in respect of our quality key performance indicators (KPIs), achieving a 40% reduction in marketplace incidents and a 25% reduction in consumer complaints.
Maintaining good relationships and building partnerships with our stakeholders remains a strategic enabler for all our priorities. In regard to employee relations, we successfully concluded 23 site-negotiations out of a planned 24, without industrial action. Regrettably, we experienced one protected strike at our Davita site due to a wage dispute. The strike lasted 44 days, with 1 056 manhours lost. Stabilisation efforts at this site are starting to have a positive effect, resulting in a more collaborative partnership with our trade union partners.
Beyond these key issues, upholding human rights and ensuring adherence to our code of conduct remains fundamental. All employees received training on human rights in 2021 and we completed 76% of all planned ethics training, with 2 650 staff trained on ethics in total. We continued to invest in our people, spending a total of R93,8 million on employee training and development, across our various programmes, including a focus on leadership, learnerships and internships. We held the first Voice of Tiger culture survey, where 73% of employees contributed insights to better shape the purpose-led culture we need to drive sustainability, innovation, and growth. We are only in the foothills of our journey to realise the purpose-led culture we need and aspire to, but the challenges we have overcome over the last few years, and the way we have adapted in the face of Covid-19, shows me that we have succeeded in igniting the potential to make the climb.
APPRECIATION
All told, this has been another incredibly eventful and challenging year as CEO of Tiger Brands. I give my thanks for the incredible dedication and support provided by Tiger's employees and my colleagues on the executive team and board, particularly in their response to Covid-19, the period of civil unrest, and the product recall incident. These have been trying circumstances and they have impacted us, but they are hardening our resolve and shaping our agility for a future where volatility and uncertainty is more commonplace.
Together, we have set out a path for the recovery and growth of the business, and the creation of long-term value to society. It is my belief that we will prevail in this plan, despite the challenges and disappointments we have experienced this year. There are many areas where we completed planned actions, reached our targets, and recorded wins on the way to improved economic and ESG performance. We will take the learnings and earnings from this year and reinvest them in moving the needle on our strategy in 2022.
Noel Doyle
Chief executive officer
18 November 2021