Stocktake: The drinks market is making a splash
The liquor industry emerges with a host of newsy flavours after more than a year in lockdown limbo.Tuesday, 01 Jun 2021
Food and drink is the main course of today’s news roundup of the past week; and there’s also a smorgasbord of design to look forward to as House and Leisure magazine relaunches as a delectable 240-page quarterly tome.
Galito’s adds spice to Kenyan fast food market
Fast food takeaway restaurant Galito’s has increased its total number of outlets in Kenya to 20, growing the brand’s visibility and accessibility on the continent. Galito’s, which describes itself as a ‘proudly South African brand serving fiery, fresh, flame-grilled chicken with bold African flavour’, says its 25-year success and recent expansion on the African continent is due to its spicy chicken and attractive pricing. Says Galito’s founder and CEO Louis Germishuys, “Price points are important in Africa – if you’re not looking at your price you’re going to be in trouble. You’ve got to be competitive, but you can’t be competitive by providing an inferior product. So, you have to be better at everything you do.”
Galito’s operates more than 150 stores across four continents and in 17 countries. Within Africa, Galito’s has spread its wings into Mozambique, Zambia, Malawi, DRC, Botswana, Mauritius, Lesotho, Swaziland, and Namibia is hatching soon. The brand is currently looking for new master license agreements across several other African countries. Galito’s also offers different store options, including the innovative entry level GaliPod, where set-up costs and ROI’s are value engineered compared to competitors.
Heineken toasts Distell
Shareholders were advised that Heineken has approached Distell regarding the potential acquisition of the majority of Distell’s business. The SENS announcement read: “The parties have entered into discussions which, if successfully concluded, may have an effect on the price of the Company’s securities. Bearing in mind that there can be no certainty that an agreement will be reached, shareholders are advised to exercise caution when dealing in their Distell securities until a further announcement is made.” Dutch brewer, Heineken is the world’s second-biggest brewer and according to analysts, is after Distell’s cider business. Distell is the leading cider company globally and its brands include Savanna, Hunter’s Dry, Amarula, Nederburg, Durbanville Hills, Klipdrift, Richelieu, Oude Meester, Three Ships, and more. According to Bloomberg, Distell is currently valued at almost $2,5 billion.
Exclusive liquor cocktail from Woolworths
Woolworths has launched an exclusive new liquor store complete with a sommelier to advise customers on their purchases. The new WCellar launched in the Nicolway Shopping Centre next to the Bryanston Woolworths Food Market. The new ‘drinks shop’ format aims to be an experience, so that Woolworths can cater for all its shoppers lifestyle and entertainment needs. Along with a carefully curated collection of well-known alcohol brands, Woolworths will also have its own exclusive wine labels from unique collaborations with local wine farms. The clean lines and wood effect shelving has an exclusive deli feel, with some of the most elegant bottles displayed as they would be on a perfume counter.
Spar impacted by lost liquor lockdown trade
In a recent trading statement, the Spar Group reported that turnover for Southern Africa increased by 3.1%, which was a reflection of the weaker consumer spend and continued disruptions to the liquor business under lockdowns. Within this, the core Spar grocery business reported turnover growth of 0.8%. The business slowed significantly for the month of March 2021, as it lapped the extraordinary performance recorded in March 2020, when consumers stocked up in advance of the COVID-19 pandemic lockdown regulations. Internally measured, price inflation of 5.2%, reflects the continued pressure on a wide range of grocery items. Spar reports that the business has noted changing consumer behaviour over the past 12 months of the pandemic. For example, the retailer benefitted from increased home consumption; with consumers choosing local, convenient and community-based stores during the initial strict lockdown. As lockdown measures were eased, consumers ventured back to restaurants as well as the larger shopping malls, where SPAR has low exposure, negatively impacting the business during this period. This trend, coupled with the liquor trading restrictions has attracted less customers for the overall ‘weekend shop’. Smaller format stores were particularly impacted.
During the six month period ended 31 March 2021, TOPS lost 72 trading days (40%) wholesale liquor sales declining by 7.8% for the six month period, against a decline of 17.9% for the 18 weeks to 29 January 2021. The cigarette business has not seen a full recovery since restrictions were lifted and turnover was down 13.1% for the period. To counteract that, the Build It business continued to outperform expectations with sales of building materials increasing by a remarkable 26.2%. The consumer in this market remains surprisingly resilient and continued to invest in home improvements during the period, Spar reports.
House & Leisure heroes print
SA décor and design publication House and Leisure is back on shelf with new publishers, Lookbook. It is now appearing quarterly as a 240-page journal-style magazine and niche publishing coffee table collectable. Different types of paper have also been used to amplify the craft aspect of the design and photography. The theme for the first edition is ‘Escape’ – which we all want to do after more than 400 days in lockdown. This is exactly what the new publishing team is counting on. Charl Edwards is the new Editor-in-Chief. He co-founded Lookbook with entrepreneur and creative director, Pieter Bruwer. The title was acquired last year after Associated Magazines closed its publishing division. At a retail price of R130.00, readers can now purchase the first volume of House and Leisure online through www.houseandleisure.co.za or in store from national stockists, including Woolworths, selected Checkers, Spars and Exclusive Books, and a range of independent retailers.
FoodForward SA expands food parcel programme
Three months after launching in the Western Cape, FoodForward SA (FFSA) is adjusting the scope of its Food Parcel Programme and expanding it nationally, to reach even more vulnerable families left destitute because of the pandemic. Launched in January 2021, the pilot initiative was aimed at helping patients with compromised immunity and their families who depend on them, access nutritious food. It enabled FFSA to deliver 800 food parcels per month to the homes of patients that the Western Cape Department of Health identified as requiring additional nutritional support. Each food parcel contains enough non-perishable grocery items, staple food products, as well as fresh vegetables to feed a family of four to six people for a period of two to four weeks.
Because of the national expansion of FoodForward SA’s Food Parcel Programme, each month a total of 1,800 food parcels are now delivered to the homes of vulnerable people who are unable to visit FFSA’s beneficiary organisations to access food, as well as people suffering from amongst others, COVID-19, TB, HIV/Aids and other acute and chronic illnesses. 10,800 people now benefit from the programme each month. Financial support comes from Pick n Pay’s Feed the Nation Foundation as well as The Global Foodbanking Network (GFN). To provide added nutrition to the food parcels FFSA also uses food donations from Standard Bank’s OneFarm Share initiative.
This week in numbers
The Shoprite Group has a fundraising drive in all of its 764 Shoprite, Checkers and Checkers Hyper supermarkets countrywide in an effort to combat stunting, which impacts 1.5 million South African children, with three out of every 10 children suffering chronic malnutrition. A percentage of the sale of each packet of Shoprite Ritebrand and Checkers Housebrand soup is going to the Lunchbox Fund. “Since its inception just over 18 months ago, this initiative has generated enough to provide 650,000 meals to more than 4,000 primary and secondary school children,” says CSI manager, Lunga Schoeman. The three-way partnership between Sizani Foods, the Lunchbox Fund and the Shoprite Group, links commercial activity to a charity, giving the initiative sustainable funding and longevity.
QUOTE of the week:
“A crisis is often the time to reflect on what does and does not work, and to introduce new ways of thinking and working that can have a lasting impact. Ways of working and business practices will be quite different in a post-Covid world. The companies that are able to respond quickly and imaginatively to this new environment will be at the forefront of business growth and economic transformation,” said Nompumelelo Mokou, Managing Director of Dimension Data, on Retailing Africa this past week.
*Stocktake is a weekly roundup of current FMCG retailing and brand news, curated and edited by Retailing Africa Publisher & Editor, Louise Burgers. Keep the industry updated and send your announcements and news to: firstname.lastname@example.org.
– Receive the Retailing Africa newsletter every Wednesday • Subscribe here.