CEO's review

Central to our turnaround strategy is a sharpened strategic approach, a new operating model and a renewed entrepreneurial spirit, addressing both internal and external challenges. Sustainability remains integral to this strategy, ensuring we operate ethically, responsibly and in line with our purpose to nourish and nurture more lives every day. Despite a tough operating environment, we have made good progress while staying aligned with our sustainability goals.

Economic hardship remains an ongoing reality for most consumers in South Africa, shaped by the country’s racial history and exacerbated by challenging macro-economic conditions. We continue to drive black economic empowerment through our core business, supply chain and corporate social investments.

Evolving consumer demands, including a shift towards healthier lifestyles, alongside the need for affordability and convenience, have sharpened our focus on making healthier products more accessible and affordable, advancing a commitment to “democratising nutrition”.

Additional pressures include the ongoing listeriosis class action, climate-related disruptions to our agricultural supply chain, stricter environmental regulations and heightened ESG expectations from investors. These challenges underscore the importance of strategic action and transparent reporting on sustainability issues.

We continue to make steady progress in building robust foundational management practices and working towards the targets outlined in our sustainability strategy.

Our sustainability strategy aligns with 11 priority SDGs and is built on three strategic pillars: health and nutrition, enhancing livelihoods and environmental stewardship. These pillars are underpinned by seven critical anchors: ethical behaviour, food safety and quality, ethical supply chain, safety, health and environment; responsible marketing, partnerships and transparency; and a purpose-led culture.

Through this strategy, we aim to operate ethically and responsibly, driving meaningful impact in relation to our core business, supply chain and social investments. The strategy sets overarching ambitions and 2030 targets for each pillar, which are periodically refined in relation to contextual developments, industry standards and practical feasibility.

This year, we made a few adjustments. In response to South Africa’s constrained economic environment and growing nutrition inequality, we have shifted our focus to making healthier products more affordable and accessible. Our ambition for the health and nutrition pillar has been updated: to democratise good nutrition for everyday southern African consumers. Additionally, we revised one of our 2030 targets, now aiming for 65% of our food portfolio (excluding Home, Personal Care & Baby, and Snacks and Treats) to meet EWLW nutrition standards for healthier product categories.

For environmental stewardship, we revised our 2030 targets for packaging to align with industry realities, aiming for 80% of plastic packaging to be recyclable and PET to include 25% recycled content. While progress on plastic and packaging reduction has been slow, these adjustments ensure our targets remain both impactful and achievable. No changes were made to our strategy in relation to enhancing livelihoods.

Our annual materiality process keeps us focused on the most material social, ethical and environmental issues, facilitating direct engagement on fundamental priorities and informing our core strategy. This year’s facilitated session was well attended by senior managers and elicited strong engagement, particularly on environmental and climate-related disruptions to our supply chain, including impacts on local small-scale farmers. Lively discussions also centred on the potential of a more brand-forward approach to sustainability, aligning with our strategic focus on strengthening our most accessible and loved brands.

Over the year, we made progress in improving our sustainability management approach, with continued emphasis on building strong foundations that enable us to deliver on our long-term goals. These foundations support the group’s strategic outlook, ensure compliance obligations are met, uphold ethical and responsible conduct, and help us make measurable progress towards our 2030 targets. To align with the new operating model, we evolved our approach slightly, decentralising sustainability management across our operations and placing greater emphasis on site-level ownership, decision-making and accountability.

We established a central sustainability working group to ensure alignment and coordination across the group, bringing together key site-level operatives from our process optimisation and safety teams, alongside the group’s sustainability executive. Additionally, we introduced site-level community engagement steering committees at priority sites, providing a platform to enhance ground-level management of community relations, including grievance management, needs assessments and performance monitoring.

These new structures will support management continuity as we prepare to bid farewell to our current corporate affairs and sustainability executive, who retires in December 2024.

Overall, we met our compliance obligations and made incremental progress on our strategic sustainability goals during the year. However, we recognise the need to accelerate efforts to stay on track with our 2030 targets. While improvements continue, we have yet to achieve significant gains against our absolute and intensity targets.

As a major food producer, we are uniquely positioned to address the high prevalence of diet-related lifestyle diseases and improve public health outcomes in South Africa. With health and nutrition central to our purpose and business model, we continue to enhance our product portfolio through targeted nutritional improvements, healthier product offerings, and consumer education campaigns that empower healthier food choices.

Our focus on health and nutrition spans both profit-led and philanthropic activities, driven by a commitment to democratise health and nutrition by making healthier products more affordable and accessible. In line with our turnaround strategy, we have shifted focus slightly, prioritising the strengthening and scaling of existing core healthier products and brand messaging over new product launches.

In 2024, we launched KOO Dry Pulses and Ace Baby in spoutless pouches as affordable, healthy options and concentrated on scaling our core healthier products for Jungle. We allocated R84 million – 8% of our total marketing spend – to health and nutrition-related campaigns, highlighting health attributes and promoting health-positive messaging for KOO, Jungle, Ace, Purity, Energade ZERO and Albany. Approximately 41% of our Grains portfolio includes micronutrient enrichment and 60% of our food portfolio (excluding Home, Personal Care & Baby, and Snacks and Treats) meets our EWLW nutritional standards for healthier product categories.

Transforming our business across race and gender to enhance livelihoods remains a core priority tied to our social licence. With a strong emphasis on black economic empowerment, we drive economic transformation in South Africa through policies and programmes covering employment equity, preferential procurement, supplier development and corporate social investment.

We have robust governance and management systems in place to mainstream these efforts, with the priority this year being to maintain our level 2 B-BBEE contributor status, which we achieved. Additionally, the very real challenges we face in transforming our supply chain in partnership with small-scale farmers and acquiring diverse top talent amid the current skills shortage have elevated the priority of these initiatives.

Supporting small-scale farmers remains a significant challenge as part of our supply chain transformation efforts. Persistent systemic obstacles faced by small-scale farmers, including vulnerability to growing environmental and climate-related disruptions, make this work increasingly complex. We are actively engaging with stakeholders and potential partners to explore creative solutions and set a new baseline for small-scale farmer funding and support.

In 2024, our workforce was 95% African, Coloured or Indian (ACI) and 30% female. At senior and top management levels, ACI representation was 64% and 58% respectively, while female representation stood at 40% and 25%. Despite a lower overall procurement spend, we performed well on preferential procurement, spending 86% of our total spend with local suppliers, with 57% of our local spend with B-BBEE-verified suppliers, including 18% with black-owned or black-women-owned enterprises. While our Dipuno ESD Fund remained frozen, with capital investment and committed agri-investments unchanged at R104 million and R54,4 million respectively, we onboarded four new farmers without funding agreements, creating 42 permanent and 342 seasonal jobs.

Tiger Brands also invests more than 1,5% of net profit after tax annually in socio-economic development (SED) initiatives and supports the Tiger Brands Foundation (TBF) through its ownership structures, contributing approximately 5% of shareholding dividends annually to help fund its activities. In 2024, TBF received R30,5 million in dividends from Tiger Brands to support its national in-school feeding programme, which delivered 14 million breakfasts to 74 465 learners daily across 78 schools during the year. Our SED spend, which prioritises food and nutrition support in our neighbouring communities, totalled R28,8 million and included the distribution of 90 723 food hampers to 64 556 people.

We continue to invest in reducing our environmental footprint, prioritising our most resource-intensive sites, in alignment with our 2030 goals. Our core environmental initiatives remain operationally focused, building foundational systems and practices to drive continuous improvement against targets for emissions reduction, energy efficiency, water efficiency and waste management.

Strategic progress this year included completing an expert-led water risk assessment to guide efforts to enhance water security for our operations. The recommendations have informed the prioritisation of initiatives to improve water security at our sites, with implementation of key projects planned for 2025. This work aligns with addressing climate risk exposure, an area where further progress is needed. Next year, we will conduct a cost-benefit analysis to evaluate options for advancing our climate strategy. While implementation of our clean energy plan continues, progress has been slow, with no new solar installations completed this year.

A total of R35,6 million spend focusing on reducing utilities (LED lighting conversions, power factor improvements, cooling tower refurbishments, dry vacuum technology, rain water harvesting and metering). Our carbon tax obligation for 2024 is projected to be approximately R4,85 million.

We recorded absolute reductions in energy consumption, water use and carbon emissions, with a 9,1% reduction in carbon emissions exceeding our 8% annual target. However, these reductions were largely due to lower production levels. Efficiency gains were recorded for thermal energy and carbon emissions intensity, however, we missed our annual targets for all intensity measures, including electrical energy and water, where increases were recorded.

Waste management performance was mixed. While solid waste and food waste volumes increased, along with food waste intensity, we significantly reduced waste-to-landfill intensity, achieving a 19% reduction in overall waste sent to landfill. This keeps us on track with our non-hazardous waste target, aiming for zero waste-to-landfill by 2030. On packaging, 25% of our plastic packaging is currently recyclable.

The new operating model has naturally brought changes to our people systems, revitalising our culture transformation journey and energising our teams. Under this model, we have simplified and clarified roles and interdependencies between business units and support functions, fostering greater cohesion across the organisation. Management teams have been relocated to factories and operations, strengthening accountability and promoting a hands-on, decentralised decision-making culture.

Tiger Brands was again recognised among South Africa’s top 20 employers. Training and development remains central to our talent strategy, supported by both generalised and tailored programmes, including the WINGS programme for high potential talent and new offerings introduced during the year. In 2024, we invested R73,5 million in learning and development across the business, averaging R8 354 per full-time employee, with each employee dedicating an average of 30,8 hours to training. We also strengthened our succession bench, making 511 new hires in critical and leadership roles, with 55% of leadership vacancies filled through internal moves.

We recorded fewer complaints overall through our whistle-blowing line this year, the majority relating to HR and ethical conduct issues. Theft, fraud and corruption accounted for the fewest complaints, with allegations relating to these unethical and illegal activities also declining from last year. We continue to promote our whistle-blowing facility and conduct internal training on ethical conduct. An independent assessment of our ethical policies and practices was recently completed and will inform updates to align with global standards through 2025.

Food safety and quality remains a non-negotiable priority and an area where we have significantly strengthened our systems in recent years. In 2024, we continued implementing improvement strategies, completing the roll-out of foundational systems and practices and making progress on the digitalisation of key processes. After addressing a few challenges early in the year, we ended well, achieving 2,85 complaints per million units sold – a 4% decrease from 2023 – and recorded no product recalls or regulatory violations. An immediate priority is addressing developments in the listeriosis class action, where we remain responsibly engaged, recognise the harm caused and support an expedient, ethical resolution.

Safety and security similarly remain critical priorities. In 2024, we continued reinforcing foundational systems and practices and building a safety-first culture, with a special focus on managing route-to-market incidents within our Albany business. Notable progress was made during the year, with a 1,2% reduction in route-to-market incidents and a 23,6% decline in lost-time injuries (LTIs). Regrettably, one fatality was recorded from a route-to-market incident.

As sustainability continues to grow in importance for our stakeholders, particularly investors, we remain focused on steadily improving the management of our most material impacts, risks and opportunities to ensure the business operates with integrity and responsibility, while driving progress towards our 2030 targets.

While there is room for improvement in our sustainability performance this year, the progress made in evolving our approach, reinforcing foundational systems and implementing our turnaround strategy gives me confidence that we are on track to support the long-term interests of the business in alignment with our purpose and stakeholder expectations.

I would like to extend my appreciation to the board and my colleagues on the leadership team for their ongoing support and dedication, and to all of Tiger Brands’ employees, whose renewed entrepreneurial spirit drives the business to nourish and nurture more lives every day. Together, our contributions are felt far beyond the footprint of Tiger Brands operations.

December 2024