Beer more popular than sodas in SA

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Beer is the top seller among fast-moving consumer goods. Photo: Justin Sullivan/Getty Images
Beer is the top seller among fast-moving consumer goods. Photo: Justin Sullivan/Getty Images

BUSINESS


Thirsty South Africans prefer beer to soft drinks, according to the findings of NielsenIQ SA’s latest research.

Nielson reports that beer is the top seller among fast-moving consumer goods, and sales of it have grown by 8% over the past 12 months.

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For the five weeks to April 3, beer sales pushed soft drinks out of the top-selling position. Cigarettes are the third-largest product category, with sales growing by about 60% over the past 12 months, according to Nielsen’s data on grocery purchases in the retail sector.

For these figures, Nielsen analyses data from more than 10 000 branded shops (such as supermarkets and shops at petrol stations) and almost 143 000 independent shops (spaza shops, for example). This represents more than 80% of all grocery purchases at South African retailers.

Ged Nooy, managing director of Nielsen SA, says that the ban on sales of alcohol and tobacco products during strict Covid-19 lockdowns in 2020 and last year contributed to the strong growth in these sales from a low base.

According to statista.com, beer makes up the bulk of alcohol sales in South Africa. Sales are expected to amount to more than R116 billion this year. On the other hand, it is estimated that revenue from sales of non-alcoholic beer will amount to almost R1.2 billion this year and will grow at 15% a year over the next three years.

Serena Ramiah-Chetty, senior brand manager: innovation at Heineken SA, says the beer market has grown by double digits in the past two years. This trend is expected to continue this year.

Non-alcoholic beer remains a small subcategory of the local market. During the Covid-19 lockdowns, sales grew, but the segment began to shrink after the ban on alcohol sales was lifted, she says.

BusinessWire, a Berkshire Hathaway company, estimates that the South African beer market (calculated on the basis of retail prices) will grow by about 5% a year to $12 billion (R190 billion) by 2024.

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The price of cooking oil, which is one of the top 20 products that Nielsen measures, has skyrocketed recently. According to Nooy, this is largely due to Indonesia’s decision to halt palm oil exports to stem local shortages. The prices of soya beans, European rapeseed and even canola oil are also at historic highs.

“Because vegetable oils are an ingredient of various products, from prepared meals to personal care items, rising prices will have a further negative effect.”

According to this week’s inflation figures from Stats SA for last month, oils and fats are now 21% more expensive than they were a year ago. Inflation on food products is almost twice as high as in most other categories.

Nielsen says the average price of cooking oil in shops was R42.76 a litre in the week before Russia’s invasion of Ukraine. In the week to May 1, consumers paid almost R12 a litre more when a bottle cost R54.70.

James Hodge, chief economist of the Competition Commission, said in a television interview on SABC News that the commission monitors the price of cooking oil to ensure that retailers and companies that process edible oils do not push up prices unnecessarily sharply.

According to Nielsen, South Africans no longer buy as much long-life milk and instant coffee as they did at the beginning of the Covid-19 pandemic and during the lockdowns, when many people worked from home. Sales have reached a plateau as more consumers now move back to the office or follow a hybrid model of flexible office and home work.

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Meanwhile, a recent survey by Pick n Pay shows that many consumers are increasingly experimenting with cooking at home – a trend that took hold during the strict lockdowns when restaurants were closed.

Nearly 90% of respondents said in an online survey of 1 000 South Africans in March that they had been cooking more at home since the country was shut down in March 2020.

Added to this, 93% of them are experimenting with new recipes. Most people try something new every week and do so mostly to improve their cooking skills.

More than 75% say TV cooking shows, such as the recent MasterChef SA series, of which Pick n Pay was the title sponsor, influence their cooking habits.


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