Tiger Brands, South Africa’s largest food producer, has significantly boosted its footprint in the country’s townships this year, increasing its presence to over 71,000 stores. The company’s expansion comes as it identifies substantial growth potential in these previously underserved regions.
In a strategic move aimed at capturing a larger share of the market, Tiger Brands has nearly doubled its township reach from 50,000 stores at the end of 2023. The company has outlined a plan to increase its presence to at least 130,000 stores over the next five years, targeting a mix of spaza shops, mini-marts, and both mini and midi-wholesalers.
Spaza shops are informal retailers commonly found at the corners of townships, serving as crucial distribution points for essential goods. According to Tiger Brands, more than 70% of South African households purchase groceries and other products from these township outlets and rural areas, underscoring their importance in the FMCG sector. This market segment contributes approximately 26% of the South African FMCG sector, valued at 716 billion rand (about $10 billion), and is growing at a faster rate than supermarkets and urban stores.
The company’s strategy appears to be paying off, with product distribution and availability in these areas having surged by over 90% since the launch of the township initiative. Tiger Brands expects to reach 90,000 stores by the end of 2024 and remains on track to meet its five-year target.
Luigi Ferrini, Chief Customer Officer at Tiger Brands, highlighted the company’s commitment to providing affordable, high-quality products tailored to the needs of township consumers. “We see significant opportunity to grow in the township market by offering consumers affordable quality products that are trusted, sought-after and meet their needs,” Ferrini stated.
The expansion of Tiger Brands’ presence aligns with a broader trend among fast-moving consumer goods companies and grocery retailers, who are increasingly focusing on developing new products and establishing closer ties with township and rural markets.
