Tiger Brands says it is operating in one of the toughest food markets it has seen in years, as cheaper rivals, retailer-owned brands and aggressive pricing put pressure on sales and profit.
In its latest annual report, the maker of brands such as Jungle, All Gold and Oros paints a picture of a crowded and unforgiving market where shoppers are spending carefully and retailers hold more power than before.
“Competition across the food sector has intensified, with retailers and manufacturers fighting hard for market share,” CEO Tjaart Kruger told shareholders.
Tiger Brands said competition is coming from all sides. Global food companies are entering African markets while local and informal producers are multiplying, especially in staple foods. At the same time, South African consumers are under pressure from high unemployment, debt and slow economic growth.
Competition across the food sector has intensified, with retailers and manufacturers fighting hard for market share.
— Tjaart Kruger, Tiger Brands CEO
The result is a fierce battle on price. Consumers are increasingly buying cheaper products, switching brands and shopping on promotion. Many are also choosing retailer house brands and private labels, which are often cheaper than well-known branded products.
Tiger Brands warns that private labels are no longer just low-end options. Retailers are now offering premium private-label products that compete directly with established brands, squeezing volumes and margins.
‘Aggressive competitor pricing’
“We are continuing to see aggressive competitor pricing, as well as increasing sophistication in private label penetration by leading retailers, with some diversifying their private label from entry-level offerings to a new generation of premium products, competing head-on with traditional premium-priced brand offerings, placing increasing pressure on branded product volumes and margins,” it said.
Though private-label growth slowed slightly in early 2025 it is still growing at double-digit rates and Tiger Brands said there is room for further expansion in South Africa.
The pressure is made worse by the structure of South Africa’s food retail market. Tiger Brands points out that just four major chains, including Shoprite, Pick n Pay, Spar and Woolworths, dominate grocery retail.
While Shoprite and Pick n Pay together control more than half the market, according to the food producer, Shoprite has been steadily gaining market share across all consumer segments for several years.
This concentration gives big retailers power over pricing, promotions and shelf space, forcing food producers to work harder to stay relevant.
‘Multiple store formats’
“In addition to aggressive pricing and promotional activities, retailers are pursuing multiple store formats to capture different consumer segments, as well as expanding their presence in underserved township and rural markets. Recently there has been particularly active retail competition and above-average growth in the hard discounter segment [such as Boxer and Usave],” Tiger Brands said.
At the same time, retailers are investing heavily in e-commerce, loyalty programmes and data-driven promotions, making competition even tougher for suppliers.
Tiger Brands said it has been forced to adapt quickly. The group has made affordability a focus, rolling out value packs, sharper pricing and simpler product ranges to appeal to cash-strapped consumers and defend against private labels.
It has simplified its operations, cut costs and reduced complexity across its factories and product lines. It said its turnaround strategy is starting to show results.
Read: Tiger Brands eyes growth in informal market
Revenue rose 2.7% to R34.4bn in the past year, driven by a 3.5% increase in volumes. Gross margins improved to 31.3% while operating income jumped 35% to R3.8bn. Headline earnings per share rose to R20.56.
Kruger said the company’s “execution is sharper, our operating model leaner and our decision-making quicker”.
The group is shifting its focus to where consumers are spending. It said more South Africans are skipping traditional sit-down meals and opting for snacks or quick, convenient food instead.
Tiger Brands is increasing its emphasis on snacks, treats and beverages, while also pushing healthier and more nutritious options in its core food categories.
The company has set a target for 65% of its food and beverage portfolio, excluding snacks, to meet its nutrition standards by 2030. Presently 62% already do.
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