Tiger Brands, the largest food producer in South Africa, has significantly expanded its reach within the country’s townships, aiming to tap into previously underserved areas. This strategic move has seen the company’s presence grow by almost half this year, bringing their footprint to over 71,000 stores. This expansion reflects Tiger Brands’ commitment to seizing growth opportunities in these crucial markets.
Fast-moving consumer goods (FMCG) companies and grocery retailers are increasingly focusing on townships and rural areas. These regions, home to millions of South Africans, are now receiving more attention and investment. Companies are launching new products and moving their brands closer to these consumers to meet their needs more effectively.
In 2023, Tiger Brands announced its ambitious plan to extend its brands’ presence to at least 130,000 stores within five years. This expansion strategy includes reaching spaza shops, mini-marts, and various wholesalers. Spaza shops, which are informal stores commonly found in townships, play a significant role in the local retail landscape.
As of now, Tiger Brands has already increased its visibility in over 71,000 stores, up from 50,000 at the end of 2023. The company expects to reach 90,000 stores by the end of 2024 and remains on track to meet its five-year goal of 130,000 stores.
Tiger Brands’ strategy aligns with the 2022 findings by Trade Intelligence, which revealed that more than 70% of South African households purchase their groceries and other products from outlets in townships and rural areas. This market segment contributes significantly to the South African FMCG sector, accounting for at least 26% or 184 billion rand ($10 billion) of the total 716 billion rand sector. Moreover, the growth rate in these areas surpasses that of urban supermarkets and stores.
Since implementing its township strategy, Tiger Brands has seen a 90% increase in the distribution and availability of its products in these markets. This impressive growth underscores the company’s belief in the potential of the township market.
Luigi Ferrini, Tiger Brands’ chief customer officer, emphasized the company’s focus on offering affordable, quality products that meet the needs of township consumers. “We see significant opportunity to grow in the township market by offering consumers affordable quality products that are trusted, sought-after, and meet the needs of consumers,” Ferrini stated in the company’s announcement.
The expansion strategy not only aims to increase the company’s presence but also to foster economic growth within these communities. By establishing a stronger foothold in townships, Tiger Brands is positioned to create more jobs and support local economies.
