Tiger Brands | Integrated Annual Report 2025

OUR OPERATING ENVIRONMENT

We are operating in a macro-economic context that is increasingly "brittle, anxious, non-linear and incomprehensible" (BANI), requiring heightened agility and proactive management.

Our ability to create value as a business and to deliver on our purpose is affected by the increasingly volatile dynamics in our external operating environment, globally, nationally and regionally.

This year, we have prioritised the following four interconnected trends that are having a material impact on our business model and that continue to inform our strategic response:

Each of these trends brings specific challenges and opportunities to the business, highlighting the critical importance of having the right skills, operating processes, strategy and culture to ensure Tiger Brands' continued resilience and growth.

SUTAINED PRESSURE ON CONSUMER INCOME AND FOOD SECURITY

The South African consumer remains under significant pressure, both in terms of disposable income and food security. Median household income is lower than the average cost of a nutritious basket of food and the child support grant is less than the average cost to feed a child. This highlights the imperative of delivering affordable, quality nutrition.

Economic strain heightens price sensitivity, with affordability and accessibility key drivers

The South African consumer continues to experience significant pressure on disposable income in the context of high unemployment levels, declining inflation-adjusted wages and increasing loan repayments. A sizeable share of the population lives below the poverty line: the official unemployment rate remains high at 33.2%¹, while 40.1% of South Africans depend on a monthly social grant, up from 12.8% in 2003²
This pressure on consumers is exacerbated by South Africa's sluggish economic growth rate (expected to be around 0.9% to 1.6% for the full year 2025), as well as rising debt-servicing costs that are projected to reach 5.2% of GDP in 2025, exacerbating household financial pressure³
In September 2025, South Africa's inflation rate was 3.4% year on year, the second consecutive monthly increase and the highest rate in ten months. A key driver behind this increase were food and non-alcoholic beverages (reaching 4.5% year on year in September), with essential food groups such as fruits, nuts, meat, vegetables and oils and fats contributing to the increased inflation rate⁴
Given that food and non-alcoholic beverages constitute around half of the poorest households' expenses, rising food prices have a disproportionate impact on these households, significantly impacting food security and nutritional intake, with many families either purchasing less food or buying cheaper food with reduced nutritional value (see strategic response)
In this context of reduced disposable income and low wage growth, consumers are typically shopping less frequently, across fewer categories and at fewer retailers for bigger baskets. Many consumers are switching to cheaper value offerings, with around 36.4% of the food basket in South African retailers being shopped on promotion, with some categories as high as 50%⁵. There is also continued uptake of private label, with brand-loyal customers reverting to smaller pack sizes
In the face of heightened price competition, volumes and margins are threatened, with cost recovery ahead of inflation a key strategic priority. With tighter budgets driving growth in the informal market, there is a heightened imperative drive affordability and grow our presence in the general trade segment

¹ Statistics South Africa; Quarterly Labour Force Survey (Q2 2025)
² Statistics South Africa; General Household Survey (May 2025)
³ OECD Economic Surveys: South Africa (June 2025)
⁴ Statistics South Africa; Consumer Price Index (September 2025)
⁵ NIQ Pulse report, September 2025

South Africa's profound nutritional challenge⁶

64% of South African households live below the "food poverty line" and cannot afford the minimum required daily energy intake (based on 2021 data)
28% of South African children under five are growth-stunted due to inadequate nutrition
57% of adult South Africans are either overweight or obese
R560: the monthly Child Support Grant, 30% below the food poverty line of R796

Our strategic response

Meeting the needs of the value-seeking consumer, and contributing to addressing the country's nutritional challenges, informs our purpose and strategic objectives:

We are enhancing the affordability and accessibility of our existing and new product offerings through appropriate pack, price and channel architecture, driving operational efficiencies across our activities, realising opportunities for product and packaging innovation and renovation, and harnessing effective distribution channels. These are supported by our value marketing and consumer engagement campaigns
We have made significant progress in restoring cost leadership and driving simplification, with strong results in the short term (here). We are doing this through rationalising our brand and product portfolio, enabling us to increase product affordability and accessibility and preserve margins by focusing on our best performing lines
To defend our product offerings against the increasing threat of private label, we are further investing in our brands, building our innovation capabilities, and providing compelling tiered value offerings (here)
We are continuing to democratise nutrition by expanding nutritional options within our core product range, fortifying foods with essential vitamins and minerals, providing simple, clear nutritional information on our packaging, and leveraging our brand and marketing activities to promote consumer nutrition and health awareness (here)
This year, through the Tiger Brands Foundation, we provided nutritional in-school breakfasts to 48 443 learners at non-fee-paying primary and secondary schools across all provinces; the Foundation has also continued to facilitate the construction and refurbishment of school kitchens and to build the capacity of volunteer food handlers who prepare these meals (here)

UNCERTAIN GLOBAL, REGIONAL AND NATIONAL MACRO-ECONOMIC LANDSCAPE

Our operating environment continues to be impacted by high levels of geo-political and macro-economic uncertainty, globally and across our markets in Southern Africa and the rest of the continent.

Global

This year, the global economy is projected to slow from 3.3% in 2024 to around 2.3% in 2025, the lowest since the pandemic, with a modest projected recovery in 2026 of 2.5% to 3.1% depending on the forecast source.⁷ The subdued economic outlook reflects the impact of heightened trade tensions, tighter financial conditions and reduced investor sentiment in the face of continuing policy uncertainty and geopolitical risks
The ongoing conflicts in Ukraine, the Middle East and other regions have been disrupting energy and food supplies, increasing prices and fuelling inflation, with OECD projecting inflation at around 4.2% in 2025. The intensifying rivalry between the US and China is prompting many companies to rethink sourcing, market access and investments. This general uncertainty is compounded by rising populism and protectionism, increasingly leading to trade and investment flows being redirected along geopolitical lines

South Africa

South Africa's GDP growth for the full year 2025 is expected to grow modestly at between 0.9% to 1.6%, reflecting the country's continuing structural challenges, such as infrastructure bottlenecks, limited freight capacity and slower than anticipated progress on policy reforms, as well as the impact of the subdued global growth environment⁸
The rand is anticipated to remain volatile over the medium term, driven by economic policy reforms, commodity prices and geopolitical factors
Despite this sluggish economic growth, business and investor sentiment is cautiously optimistic. The SACCI Business Confidence Index rose to a four-month high in July 2025, signalling improved optimism off the back of stronger manufacturing output, firm commodity prices, contained inflation and interest rates, and the generally positive sentiment following the establishment of the Government of National Unity (GNU) in 2024 with progress made in important areas such as electricity, logistics and visas
Some uncertainties remain, however, with concerns around the market impact of the US trade tariffs, the pace and scale of infrastructure reform and anti-corruption measures, and the longer-term stability of the GNU. The outcome of the ANC's 2027 national conference, and the election of President Ramaphosa's successor, could profoundly shape the country's political and economic future
The South African retail sector is showing modest but positive growth in 2025, aided by the easing in inflation and stable interest rates earlier in the year. Retail trade sales for the year are forecast to increase by about 7% nominally and 2% in real terms, with total retail sales projected to reach R1.53 trillion in current prices⁹ E-commerce is a major growth engine, with online retail sales expected to surpass R130 billion, capturing nearly 10% of total retail sales, driven by digital payment adoption and mobile commerce¹⁰

⁶ Stats from HSRC: National Food and Nutrition Security Survey (released by the government in October 2024), and PMBEJD: April 2025 Household Affordability Index
⁷ OECD (June 2025): Global Economic Outlook
⁸ OECD Economic Surveys: South Africa (June 2025)
⁹ Bureau of Market Research (July 2025): South Africa's Retail Trade Outlook for 2025
¹⁰ World Wide Worx (July 2025) Online Retail in South Africa 2025

Regional

Our markets across sub-Saharan Africa are expected to show moderate economic improvement this year, with average GDP growth for the region rising from around 3.2% in 2024 to around 4.1% in 2025, driven by easing financial conditions and improving infrastructure
Despite positive anticipated growth rates, these markets continue to face some significant macro-economic challenges, including high unemployment and inflation, continuing energy constraints, and ongoing governance challenges and political instability, emerging water challenges, as well as vulnerability to global economic uncertainties and changing weather patterns

Our strategic response

In the context of the subdued economic outlook – and given our exposure as a branded manufacturer in staple products – we have strengthened our focus on driving operational efficiencies and delivering a step-change in our innovation practices (here)
To improve productivity and secure long-term cost savings, we have made further investments in improving our manufacturing operations, expanding capacity, optimising efficiency, replacing aging equipment, upgrading infrastructure and realising innovation opportunities (here)
Our various initiatives to mitigate supplier risk and ensure more seamless supply chain continuity have been strengthened by our new federated operating model, empowering our divisions to undertake their own procurement, bringing them closer to suppliers, resulting in stronger relationships, better pricing and improved supply certainty (here)
In striving to alleviate and redress some of the deep socio-economic challenges facing South Africa, we are continuing in our efforts to boost economic opportunities and improve livelihoods across our value chain through a deliberate focus on supporting black/black women-owned enterprises and farmers as part of our strengthened focus on sustainable agricultural sourcing (here)

HIGHLY COMPETITIVE MARKET ENVIRONMENT WITH CHANGING CONSUMER DYNAMICS

We are operating in an increasingly dynamic competitor and customer environment that has heightened the imperative of adopting a customer-first mindset, ensuring cost leadership and maintaining a superior channel presence.

Competition among food producers

With Africa having one of the fastest growing and increasingly urbanising populations, the region presents an exciting opportunity for new market entrants, evidenced by the arrival of global food companies and the emergence and growth of local and regional food producers and retailers. We continue to see a rapid increase in new, largely informal and regional producers of staple commodities in our markets.

Market concentration and competition among food retailers

The South African food retail market is highly concentrated in four main chains – the Shoprite Group, Pick n Pay, Spar and Woolworths. While Shoprite and Pick n Pay collectively holding more than half the market, the Shoprite Group has consistently delivered market share growth across all consumer segments over the past six years. Competition between these retailers remains vigorous, with each looking to defend and grow market share in a low growth economy
In addition to aggressive pricing and promotional activities, retailers are pursuing multiple store formats to capture different consumer segments, as well as expanding their presence in underserved township and rural markets. Recently there has been particularly active retail competition and above average growth in the hard discounter segment (such as Boxer and Usave)

Growth in e-commerce and omnichannel retail

There continues to be a rapid rise in South Africa's online retail sector, with e-commerce sales predicted to surpass R130 billion by the end of 2025, approaching 10% of total retail sales¹⁰. This recent growth has been anchored in particular by the rapid uptake of on-demand grocery delivery services and further impacted by the entry of global players
With digitally savvy consumers increasingly expecting a seamless omnichannel experience, retailers are aggressively investing in e-commerce platforms, last-mile logistics and in loyalty programmes that leverage improved data on consumer spend to strengthen analysis of shopper behaviour
The uptake in e-commerce has been facilitated by improvements in big data analytics and AI, that enable predictive analytics and more streamlined distribution, as well as by the rise in flexible digital payment solutions that facilitate growth across channels and provide an opportunity for integrated loyalty programmes. The uptake in e-commerce has been accompanied by a shift to digital and online marketing activity

The rise of private label

We are continuing to see aggressive competitor pricing, as well as increasing sophistication in private label penetration by leading retailers, with some retailers diversifying their private label from entry-level offerings to a new generation of premium products, competing head on with traditional premium-priced brand offerings, placing increasing pressure on branded product volumes and margins
Although private label saw a slight slow down in growth in the first half of 2025 at 18.3%, compared to 18.5% in the first half of 2024¹¹, it is still experiencing double-digit growth. In developed economies, private label has attained a larger share across the majority of categories, indicating room for additional private label penetration in South Africa, although constrained by capacity.

Changes in route-to-market

There is continuing change in route-to-market, with a blurring in channel lines between mixed and wholesale retailers and top-end-grocers, with the increasing penetration of retailers into townships, that were traditionally the purview of general trade, impacting general trade performance and profitability
This trend is juxtaposed with the trend seen in independent retail and wholesale sector – currently valued at R268 million¹² – where value-seeking consumers are increasingly seeing it as an attractive shopping destination. The independent retail and wholesale sector historically catered to independent informal traders (spaza shop owners) by selling in bulk, however, the attractiveness of the lower bulk selling prices is now taking on traditional retailers as a household shopping destination
This disruption has been accompanied by the recent significant growth in convenience retail solutions, such as forecourts, and e-commerce (reviewed above)

Changing consumer preferences

A recent report on consumer spending for the first half of 2025 found that consumers are still spending cautiously despite interest rate cuts, lower CPI and declining fuel prices. Consumers continue to down trade and buy on promotion
There also continues to be a shift towards smaller, convenient ready-to-eat snacks or mini-meals, often replacing traditional sit-down meals, influenced by busy lifestyles and changing eating habits. A recent report on the state of snacking in South Africa found that while consumers are feeling the impact of higher food prices, they are still setting money aside for snacks and treats
Consumers are increasingly prioritising health and nutrition, local consumers reportedly valuing companies that offer healthy and nutritious choices
Many consumers also have clear preferences rooted in cultural identity, highlighting the value in having product offerings that are localised to the specific market context
Some consumers – mainly in the more affluent segment – are demanding more sustainable products and practices, preferring to buy from brands that are transparent about their supply chains, use sustainable materials and minimise environmental impact

¹⁰ World Wide Worx (July 2025) Online Retail in South Africa 2025
¹¹ Nielsen NIQ State of Retail Nation (September 2025)
¹² NIQ Market Pulse Report, September 2025

Our strategic response

To ensure more effective penetration in a challenging market, we have strengthened our focus on consumer and customer engagement and prioritised the execution of shopper-centric segmentation of our trade channels. Deepening our insight of broad shopper profiles is informing our shopper activation and store execution plans, enhancing our consumer marketing campaigns, and ensuring more targeted pricing, promotions, and price and pack architecture (here)
We have continued to drive various initiatives to raise our online presence and become the preferred supplier to prioritised digital commerce partners (here)
To capitalise on emerging consumer trends, we have delivered a more streamlined two-track innovation process that balances the benefits of "agility" with more traditional linear product development (here)
In response to the increasing uptake of digital solutions, we are exploring select use cases on leading-edge AI technologies that can be used as confined pilots to test capability, impact and relevance, driving automation and best-practice adoption in functions that can provide material efficiency benefits (here)
We are actively expanding our reach in general trade, and we have refreshed our strategy to best defend our product offerings against the increasing threat of private label. We are continuing to pursue various initiatives to expand our reach in general trade, reaching 101 980 general trade stores by financial year end with the goal of expanding our presence to 150 000 stores by 2030 (here)

CONTINUING PRESSURE FROM SUSTAINABILITY-RELATED ISSUES

Climate change and other sustainability-related pressures are having an increasingly material impact on companies in the food sector.

The growing visibility of social and environmental pressures has prompted strengthened regulatory measures – such as new and/or emerging regulation on food labelling, plastic packaging, disclosure on wage disparities, and carbon and sugar taxes – all of which has a material impact on our business
The recent increase in the frequency and severity of extreme weather events has highlighted the impact of climate-related risks on the availability, quality and pricing of essential raw materials, as well as on the resilience of our distribution and supply chains
The burden of nutrition-related disease remains a challenge within South Africa, with a 51% increase in hypertension since 2015, a 7% increase in the prevalence of diabetes, and 64% of households living below the "food poverty line" (here)
Despite the recent increasing politicisation of ESG issues investor engagement on ESG performance and disclosure remains strong with clear expectations for companies to report on their sustainability-related impacts, risks and opportunities, informed by initiatives such as the GRI and ISSB sustainability disclosure standards and the recommendations of the Taskforce on Nature-related Financial Disclosure (TNFD)
In some market segments we are seeing growing demand for brands-with-purpose, sustainable and local products, plant-based proteins, ethical marketing, and front-of-pack nutrition labels. Globally there is an increasing preference for local ingredients, given these products are often perceived as healthier, and more sustainable, trustworthy and authentic

Our strategic response

Our commitment to addressing our sustainability impacts is reflected in our Sustainable Future strategy, which comprises the following three focus areas:

Health and nutrition: We are continuing to make progress in empowering consumers to improve their health and wellbeing, by launching food products that are more nutritious and affordable, developing best-in-class nutritional standards, and leveraging our brand and marketing activities to promote consumer nutrition. We are investing further in strengthening product quality and food safety through robust systems, qualified people and a strong quality and safety culture, achieving external certification for all our manufacturing facilities (here)
Enhanced livelihoods: We have long-standing activities in place aimed at improving the livelihoods of thousands of people across our value chain, using our procurement practices and our investment in supplier and enterprise development to stimulate economic opportunities, including through a specific focus on supporting black/black women farmers and owned enterprises (here)
Environmental stewardship: We have made further progress in reducing our environmental impact through our investments in renewable energy, enhancing energy and water efficiency in our operations, and minimising waste, effluent and emissions. We continue to identify innovative opportunities for circular economy interventions in areas such as packaging and food waste, as well as leveraging our brand and marketing activities to inspire positive behaviour change (here)