This year, we delivered R525 million in savings, reflecting our drive in instilling a culture of cost-savings.

Unlocking costs and cash

We have been running a strong cost-savings culture-change initiative across the company since 2020. The aim of this initiative has been to ensure a more systemic group-wide approach to driving efficiencies across our activities, and to enhance the quality and quantity of cost-savings projects that are being tracked.

To deliver on this ambition, we changed the governance structure, introduced clear process steps from identification to realisation of savings, improved internal transparency, and strengthened our accountability measures to ensure appropriate ownership of expenses. We have been further strengthening our central revenue management capability within each of our business units, delivering positive results in most parts of the business, and we have seen positive results from our revised trading terms that provide stronger pay-for-performance incentives. We have also continued to deliver cost-savings and reduce complexity through SKU rationalisation.

Although we have been successful over the past three years in meeting or beating our continuous improvement targets – delivering R525 million in savings this year – we recognise that we still have work to do to become more cost-competitive. This is particularly important in a highly constrained economic environment in which consumers are trading down, and where margins remain under pressure. To restore our cost leadership and improve operating margins, we have identified further potential savings in raw materials procurement and packaging design, improved manufacturing efficiencies and process automation, product reformulation and SKU rationalisation, while further optimising our distribution and logistics activities.

Delivering digital transformation

Having access to integrated IT solutions is an increasingly important source of competitive advantage, and fundamental to realising our vision of developing an effective, best-in-class supply chain. Last year, the board approved a new digital strategy that provides a comprehensive framework and roadmap to leverage digital technologies to improve productivity, drive growth, and enhance the experience of our customers, consumers, service partners and employees.

Our primary focus this year has been ensuring effective execution of the year's identified digitisation initiatives in three priority areas:

• Food safety and quality: This three-year programme is on schedule to automate all aspects of the food safety and quality management process, which includes tracking non-compliances of specific suppliers, and managing the monitoring and reporting of internal quality management.
• Digitising the freight desk for both import and export goods: In the past, import and export function was managed manually and independently within different categories, relying heavily on external freight-forwarding and clearing agents. Through this freight desk project, we have been expanding the scope of our existing GTS application to encompass the import process. Launched in June 2023, the initiative has already delivered tangible commercial advantages.
• Uplifting our procurement capabilities: This 30-month initiative will enhance our centrally led procurement activities by implementing a technology system encompassing the full spectrum of our procurement capabilities, including sourcing, e-purchasing, contract management, supplier management and spend analytics

We have completed our prioritisation process for next year and have targeted various specific programmes identified for in-depth investigation. These span a number of operational and functional disciplines including HR, order and returns management as well as customer and marketing analytics. During the year, we have also deepened the operational proficiency of our cyber risk management processes.