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[LISTEN] Are South African Consumers Searching for Alternatives to (Costly) Bread?

May 28, 2022

Umm Muhammed Umar

Albany Bread says South Africans, on both the upper and lower end of the income scale, are eating less bread. This comes as commodities such as wheat face supply disruptions from the Russia – Ukraine war, as well as other factors. The company also said that brown bread has lost some market share with many believing that brown bread is not as healthy as it was once touted to be. Business Insider of South Africa’ s Ntando Tukwana spoke to Radio Islam.

Tukwana said that for consumers on the lower end of the income scale, bread has become very expensive, especially with the rising prices of commodities. She said that wheat prices have increased quite significantly because of the Russia-Ukraine war as well. She said, “it will hit them mostly because most of their income covers the basics such as food.” Regarding the higher income groups, Tiger brands pointed out that some of the categories did enjoy some growth, like rice and ready to eat options in the Jungle Oats brands. Tukwana said, “So, it could be that they are moving to alternatives for health reasons, and others, that we may not know. But across the income spectrum, consumers are generally eating less bread.”

Bread, in South Africa, has acquired almost a traditional roll over generations. There could be a change in the eating habits of South Africans, where they’re getting their calories elsewhere, without a consideration to cost. However, Tukwana said that diets are changing because of costs, especially in the lower income group. She said that those consumers really did not have an option. It becomes difficult for them as they don’t have a lot of options to choose from, in replacing bread. She added, “in the high-income groups, those people have much more options, to choose from – their basket of goods is much wider than then consumers in the low-income group.” She added, “this is this is evidenced in a lot of food categories. It’s not just bread……….if you look at meat, consumers are looking for alternatives you know, so that they can still have meat on the plate. They’re looking for alternative cheaper brands, or even different processed meats, for instance, so that they can keep the meats as a protein source on the plates.”

Tukwana said that Knorr had released research indicating that many people were no longer eating breakfast. She said that this could also be one explanation as to why bread was not selling as much as it used to. Another explanation was that people were choosing snack bars, or instant oats, over bread, for breakfast, as had been found by Tiger Brands.

Inflation is expected to run into double digits in the second half of the financial year, and this could possibly have a further impact on bread sales. Tukwana said that when the price of commodities increased, there was a 3-month lag between that increase and its reflecting on supermarket shelves. She said that South Africa, being dependent on Ukraine for wheat, would only later in the year see the impact of the Russian – Ukraine war.

Meanwhile, Albany Bread is seeing a loss of sales in brown bread, due to in – house brands as well, for example, Pick and Pay. The company’s brown bread pricing, apparently simply cannot keep up with the more pocket – friendly competitors.

 

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