Tiger shakes up offerings for cash-strapped consumers

SA’s biggest food manufacturer, Tiger Brands, is looking at recipe and packaging shake-ups across various products to make its products more affordable to cash-strapped consumers.

This comes as the owner of All Gold tomato sauce, Koo canned goods, Jungle Oats and Beacon confectionery makes headway in its turnaround plans, which have simplified the business organisational structure from nine to six business units, each with a new MD.

Speaking to Business Day at the launch of its new R300m peanut butter manufacturing plant in Johannesburg’s West Rand on Friday, CEO Tjaart Kruger said Tiger was focusing on rolling out its new simplified operating model centred on quick decision-making, rationalising costs and improving efficiency in factories.

This included the group’s drive to move away from glass towards the cost-effective polyethylene terephthalate (PET) packaging while recipes for peanut butter, mayonnaise, tomato sauce and baked beans were being reviewed for enhancements that would shore up affordability at a time of high inflation.

“Some of our product recipes can be re-engineered and we are doing that with peanut butter,” said Kruger.

“We are working on a variant which will probably be ready early next year which has less peanuts but the taste profile will be the same,” said Kruger. Testing was continuing.

Black Cat peanut butter’s mainstream range contains 91% peanuts, while the health variant, with no added sugar or salt, contains 99% peanuts.

Peanut butter is seen as an affordable plant-based protein solution that is also convenient during load-shedding as it does not require refrigeration. It is also used in cooking to increase the nutritional value of meals.

However, many Tiger brands such as Tastic rice, Black Cat and Mrs Balls chutney are considered premium brands with cash-strapped consumers opting for cheaper private labels or competitor options.

The CEO said that with consumers and producers under pressure, Tiger was responding by restructuring into a “leaner and meaner” machine as the previous operating model was “ineffective”.

Kruger said the group’s simplified structure, in place for two months, was paying off. “The decision-making is already much better and our costs are lower because we’ve delayered the business,” he said.

Moreover, the multimillion-rand Black Cat plant is set to improve reliability and efficiency, enabling Tiger to run two lines for different-sized jars at the same time and produce an average of 1-million jars of peanut butter a month.

Kruger said the modifications of traditional Tiger brands would spread across many culinary products.

“I think with mayonnaise we must get into PET. We use eggs in mayonnaise; I think we need to look at alternatives that are much cheaper,” he said.

“Baked beans we offer in cans/ We can get into thinner cans. With tomato sauce we are in glass, we can get into PET,” said Kruger.

Tiger has started selling its mayonnaise and chutney brands in plastic bottles, which is at least 35% cheaper for the factory than glass and is proving popular. 

Koo, which has strong brand appeal, also introduced a pilchards range, and Tiger Brands launched a cheaper sauce range called Kasi Magic. It was working on selling directly to spaza stores that earn billions of rand in revenue and attract far more daily shoppers than supermarkets, according to a Survey 54 and Rogerwilco 2023 report on the township economy. 

Raw materials

Culinary MD Dumo Mfini said the inability of the local agricultural sector to supply 100% of its raw materials was a challenge and called for government intervention to ensure food stability and limit the volumes of imports of raw materials.

“With this plant, we strive to procure only local nuts. However, we can’t always achieve that,” he said. The peanut butter factory procured as much as 70% of its required nuts locally “but then we run out of capacity in the country and then we have to import the rest”.

First launched in 1926 Black Cat is one of the biggest in the market and requires 10,000 to 20,000 tonnes of ground nuts to be procured for production every year.

Mfini said that for its part Tiger had developed an in-house case study to ensure the supply of tomatoes for the All Gold range.

“For many years we’ve had to top up with imports of tomato paste from China,” Mfini said.

“But because of the work we have been doing with the farmers, having our agricultural managers help farmers grow the correct cultivars and so on ... that is starting to bear fruit for us now and for the first time in the next two or three years, we are not going to import any tomato paste or tomatoes.”

“So now we must take that case study and replicate it in nuts as well,” he said.

gumedemi@businesslive.co.za