A report from the US Department of Agriculture (USDA)’s Foreign Agricultural Service this week is of interest. “Insufficient Food Ingredients Production in South Africa Presents Diverse Opportunities for US Exporters” gives the facts for US exporters, but should also alert local companies to the opportunity.
The local food ingredients market was valued at R25.6 Billion (US$1.7 billion) in 2019, and is expected to reach R30 billion (US$2.0 billion) by 2024. Local demand for food ingredients outstrips production with the result that an estimated 90% of food ingredients are imported. Food processors are so used to importing that there would hardly be a blink of the eye when approached by American exporters.
Those who have kept an eye on the sugarcane sector will be aware of the lack of enthusiasm regarding the sugar tax. It comes into play here as manufacturers of beverages wishing to avoid the tax, opt for sweeteners instead. Sweeteners accounted for 53% of total food ingredient demand in 2019, followed by Food Flavours and Enhancers (18%).
The beverage sector is the leading user of food ingredients in South Africa (27% of the total demand); followed by Dairy and Frozen Products (19%); Bakery Products (13%); Confectionary (9%); Meat, Poultry, and Seafood (7%).
The main categories of products or sectors which are large-users of food ingredients presented in the report include, Animal and pet food; Baking and confectionary; Beverages; Canned Food; Cereals; Cured/Processed Meat; Dairy; Dietary Foods; Sauces, Dressings and Condiments; Sweets and Chocolates.