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Addressing the changing
consumer behaviour in the South
African market
Etienne Booyens
Challenging economic climate
• Household consumption expenditure - slower that anticipated
(Household consumption expenditure increased by only 3.5% year-on-year
in 2012);
• High unemployment levels are contributing to the pressure on consumers’
spending
(2012 unemployment remained high at 24.5%);
• Substantial household debt and low savings
(SA has just below 20 million credit active consumers, of which a significant
47% have impaired credit records);
• Rising inflation
(From February 2011 to February 2013 (i.e. over two years) the CPI
increased by 12.3%);
Source: NAMC Food Price Monitor
SA EXPENDITURE ON FOOD
25.0
27.0
29.0
31.0
33.0
35.0
37.0
39.0
41.0
Jul‐08
Sep‐08
Nov‐08
Jan‐09
Mar‐09
May‐09
Jul‐09
Sep‐09
Nov‐09
Jan‐10
Mar‐10
May‐10
Jul‐10
Sep‐10
Nov‐10
Jan‐11
Mar‐11
May‐11
Jul‐11
Sep‐11
Nov‐11
Jan‐12
Mar‐12
May‐12
Jul‐12
Sep‐12
Nov‐12
Jan‐13
The cost of a basic food basket expressed as a share of the average 
monthly income of the  poorest 30 % of the population
2.0
2.2
2.4
2.6
2.8
3.0
3.2
Jul‐08
Sep‐08
Nov‐08
Jan‐09
Mar‐09
May‐09
Jul‐09
Sep‐09
Nov‐09
Jan‐10
Mar‐10
May‐10
Jul‐10
Sep‐10
Nov‐10
Jan‐11
Mar‐11
May‐11
Jul‐11
Sep‐11
Nov‐11
Jan‐12
Mar‐12
May‐12
Jul‐12
Sep‐12
Nov‐12
Jan‐13
The cost of a basic food basket expressed as a share of the average 
monthly income of the wealthiest 30 % of the population
29 %
40.4 %
2.3 %
3.2 %
The impact of these economic
conditions on the consumer
• Strong focus on good value;
• More price sensitive;
• Better planned consumer spending (less impulsive purchases);
• More attention to sales / promotions;
• Focus on convenient (and often nearby) location of retailers;
• Focus on ‘tried and trusted’ products;
• Increased focus on home-prepared meals;
• Availability of high quality fresh produce; and
• Products delivering health and safety at an affordable price.
4
The good news…….
Living Standard Measures (LSM®)
5
6
Source: Stats SA, 2013.
Expenditure patterns
0
10
20
30
40
Lower 2 3 4 5 6 7 8 9 Upper Total
Percentage
Income deciles
Food and non‐alcoholic beverages
Alcoholic beverages and tobacco
Clothing and footwear
Housing, water, electricity, gas and other fuels
Furnishings, househould equipment and routine maintenance of the dwelling
Health
Transport
Communication
Recreation and culture
Education
Restaurants and hotels
Private consumption expenditure on
food
7
0
20000
40000
60000
80000
100000
120000
140000
160000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Million Rand
  MEAT
BREAD & GRAIN
  SUGAR
MILK & MILK PRODUCTS
  OILS & FATS
 POTATOES
 FRUIT&VEG
  OTHER
COFFEE, TEA
Source: DAFF, 2013.
Food affordability in South Africa: Price remains important
8
Cost  of  NAMC  
Food  Basket  in  
2010, 2011  and  
2012  prices  for  
each item 
Sources: For 2001 
from Jacobs, 2009. 
StatsSA & AC Nielsen 
(2005, 2013)
Food groups and items 2010 2011 2012
Bread and cereals
Loaf of brown bread 700g 7.06 7.70 8.45
Loaf of white bread 700g 7.88 8.65 9.46
Maize special 5kg 16.64 17.71 26.95
Rice 2kg 21.41 20.42 21.51
Beef brisket - fresh per kg 45.26 51.34 57.55
Whole chicken - fresh per kg 28.29 29.37 32.20
Fish (excl tuna) - tinned 425g 12.12 11.33 12.08
Dairy and eggs
Full cream milk - fresh 1ℓ 8.55 6.78 9.38
Eggs 2.5 dozen 34.45 33.58 35.79
Fruit
Apples - fresh per kg 12.13 13.28 13.55
Bananas - fresh per kg 9.69 10.27 11.00
Oranges - fresh per kg 7.39 7.14 7.87
Vegetables
Potatoes - fresh per kg 9.25 9.87 9.03
Tomatoes - fresh per kg 14.73 9.15 9.86
NAMC food basket 396.43 418.82 451.08
How do we create consumer
awareness of potatoes?
9
NUTRITION TABLE 
FOR LABELLING 
PURPOSES
Allowed claims for general potatoes
10
Potato cultivar classification system
11
Price and income is simple to
measure. However the
impact of awareness on SA
consumers can only be
measured over an
extended period
Measuring marketing results
13
14
15
16
Potatoes and sport
17
The Comrades Marathon
• Approximately 20 000 runners
• 90 km endurance race
• Potato South African (11 potato fuel
stations along the route)
• Potatoes has become known for
preferred carbo-loading food for
endurance races
• Also involved in other endurance sport
e.g. soccer and cycling.
Comrades
19
21
22

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Sess14 2 etienne_th5_abs104

  • 1. Addressing the changing consumer behaviour in the South African market Etienne Booyens
  • 2. Challenging economic climate • Household consumption expenditure - slower that anticipated (Household consumption expenditure increased by only 3.5% year-on-year in 2012); • High unemployment levels are contributing to the pressure on consumers’ spending (2012 unemployment remained high at 24.5%); • Substantial household debt and low savings (SA has just below 20 million credit active consumers, of which a significant 47% have impaired credit records); • Rising inflation (From February 2011 to February 2013 (i.e. over two years) the CPI increased by 12.3%);
  • 3. Source: NAMC Food Price Monitor SA EXPENDITURE ON FOOD 25.0 27.0 29.0 31.0 33.0 35.0 37.0 39.0 41.0 Jul‐08 Sep‐08 Nov‐08 Jan‐09 Mar‐09 May‐09 Jul‐09 Sep‐09 Nov‐09 Jan‐10 Mar‐10 May‐10 Jul‐10 Sep‐10 Nov‐10 Jan‐11 Mar‐11 May‐11 Jul‐11 Sep‐11 Nov‐11 Jan‐12 Mar‐12 May‐12 Jul‐12 Sep‐12 Nov‐12 Jan‐13 The cost of a basic food basket expressed as a share of the average  monthly income of the  poorest 30 % of the population 2.0 2.2 2.4 2.6 2.8 3.0 3.2 Jul‐08 Sep‐08 Nov‐08 Jan‐09 Mar‐09 May‐09 Jul‐09 Sep‐09 Nov‐09 Jan‐10 Mar‐10 May‐10 Jul‐10 Sep‐10 Nov‐10 Jan‐11 Mar‐11 May‐11 Jul‐11 Sep‐11 Nov‐11 Jan‐12 Mar‐12 May‐12 Jul‐12 Sep‐12 Nov‐12 Jan‐13 The cost of a basic food basket expressed as a share of the average  monthly income of the wealthiest 30 % of the population 29 % 40.4 % 2.3 % 3.2 %
  • 4. The impact of these economic conditions on the consumer • Strong focus on good value; • More price sensitive; • Better planned consumer spending (less impulsive purchases); • More attention to sales / promotions; • Focus on convenient (and often nearby) location of retailers; • Focus on ‘tried and trusted’ products; • Increased focus on home-prepared meals; • Availability of high quality fresh produce; and • Products delivering health and safety at an affordable price. 4
  • 5. The good news……. Living Standard Measures (LSM®) 5
  • 6. 6 Source: Stats SA, 2013. Expenditure patterns 0 10 20 30 40 Lower 2 3 4 5 6 7 8 9 Upper Total Percentage Income deciles Food and non‐alcoholic beverages Alcoholic beverages and tobacco Clothing and footwear Housing, water, electricity, gas and other fuels Furnishings, househould equipment and routine maintenance of the dwelling Health Transport Communication Recreation and culture Education Restaurants and hotels
  • 7. Private consumption expenditure on food 7 0 20000 40000 60000 80000 100000 120000 140000 160000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Million Rand   MEAT BREAD & GRAIN   SUGAR MILK & MILK PRODUCTS   OILS & FATS  POTATOES  FRUIT&VEG   OTHER COFFEE, TEA Source: DAFF, 2013.
  • 8. Food affordability in South Africa: Price remains important 8 Cost  of  NAMC   Food  Basket  in   2010, 2011  and   2012  prices  for   each item  Sources: For 2001  from Jacobs, 2009.  StatsSA & AC Nielsen  (2005, 2013) Food groups and items 2010 2011 2012 Bread and cereals Loaf of brown bread 700g 7.06 7.70 8.45 Loaf of white bread 700g 7.88 8.65 9.46 Maize special 5kg 16.64 17.71 26.95 Rice 2kg 21.41 20.42 21.51 Beef brisket - fresh per kg 45.26 51.34 57.55 Whole chicken - fresh per kg 28.29 29.37 32.20 Fish (excl tuna) - tinned 425g 12.12 11.33 12.08 Dairy and eggs Full cream milk - fresh 1ℓ 8.55 6.78 9.38 Eggs 2.5 dozen 34.45 33.58 35.79 Fruit Apples - fresh per kg 12.13 13.28 13.55 Bananas - fresh per kg 9.69 10.27 11.00 Oranges - fresh per kg 7.39 7.14 7.87 Vegetables Potatoes - fresh per kg 9.25 9.87 9.03 Tomatoes - fresh per kg 14.73 9.15 9.86 NAMC food basket 396.43 418.82 451.08
  • 9. How do we create consumer awareness of potatoes? 9 NUTRITION TABLE  FOR LABELLING  PURPOSES
  • 10. Allowed claims for general potatoes 10
  • 12. Price and income is simple to measure. However the impact of awareness on SA consumers can only be measured over an extended period Measuring marketing results
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  • 17. Potatoes and sport 17 The Comrades Marathon • Approximately 20 000 runners • 90 km endurance race • Potato South African (11 potato fuel stations along the route) • Potatoes has become known for preferred carbo-loading food for endurance races • Also involved in other endurance sport e.g. soccer and cycling.
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