Lucky Star-owner Oceana is targeting smaller African markets to test its new canned meat range as part of its continued expansion into the burgeoning alternative and affordable protein market, the group says.
Oceana is rolling out new products, which include canned chicken livers in gravy, in Botswana and other small markets in Namibia and Zimbabwe where canned and corned meat are popular staples, it said on Monday.
Oceana CEO Neville Brink said the approach aimed to test consumer preferences, pricing and product appeal before scaling up to the bigger SA market.
The company was leveraging direct promotions and consumer feedback in these regions while maintaining a manageable scale of operations.
Brink said the findings from this testing phase would inform product entry into SA retail chains, where substantial stock levels and competitive positioning will be required to meet the demands of major players such as Shoprite and Checkers.
“In Botswana and Namibia they traditionally eat a lot of canned meat and corned meat, and we believe it’ll be a nice way to test the market, margins and pricing,” Brink said.
The group plans to launch these products nationally in the next six months shortly after poultry producer Astral Foods will have launched its canned protein alternatives.
Last week, Astral said consumers should be able to find canned chicken on retail shelves from March 2025. The group said it had already started producing small quantities of canned chicken fillets in gravy for sampling.
The expansion is part of Oceana’s broader strategy to diversify its product offerings and reduce dependency on seafood products, which remain subject to global commodity price volatility.
In 2023 the group ventured into the corned meat segment, challenging a market in which RFG’s Bull Brand dominates. At the time, the group said there was a gap in the market allowing it to expand.
Oceana reported a 12.5% increase in full-year profit due to strong results in its US operations, though challenges in the African business and a decline in its horse mackerel performance offset the results.
Revenue was up 0.7% to R10.06bn for the 12 months to end-September, while operating profit was 9.5% higher at R1.63bn. Profit after tax grew 12.5% to R1.11bn, while headline earnings per share (HEPS) increased 13.5% to 917.6c.
US business Daybrook delivered an “outstanding result”, achieving its strongest operating performance to date and contributing 72.2% of the group’s operating profit, driven by a 17.4% increase in fish oil sales volumes and a 49% surge in fish oil prices.
In contrast, the African fishmeal and fish oil business suffered a 10.2% dip in revenue and a 47.3% decline in operating profit due to reduced production and sales volumes, as well as lower anchovy landings and pilchard trimmings.
“The West Coast plant upgrades, which were completed this year, started to deliver benefits in the latter part of the production season, driving efficiency gains and enhancements in product quality,” the group said.
Lucky Star recorded a 23.7% increase in operating profit to R428m, driven by improved margins.
The hake operation’s volumes increased 36.3% due to the combined effect of increased sea days and improved catch rates. However, SA horse mackerel operations were affected by a vessel breakdown and lower catch rates, leading to a 141.7% decline in operating profit for the segment.
Oceana said it invested R645m in capital expenditure, including modernising canneries, expanding squid fishing capacity and repairing its Desert Diamond vessel. These investments have led to a R546m increase in the group’s net debt to R2.58bn.
The group declared a final dividend of 300c a share, bringing the total annual dividend to 495c, a 13.8% increase from the previous year.
Update: November 25 2024
This story has been updated with new information.
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