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Executive Summary: Inaugural FMCG Insights in association with Sowetan

FMCG Insights in association with Sowetan

Johannesburg, 17 May 2016: The inaugural FMCG Insights & Conference, in association with Sowetan took place at the Turbine Hall in Johannesburg on 10 May 2016. The event emanates from the sister-title Sunday Times’ Top Brands research, which measures consumer brand preference and is published annually, serving as a leading benchmark of success for SA’s retail sector.

Partners to the event included Hirt & Carter,Yourself Management, Neural Sense, iRAM, and Keys Communications.

Maryla Masojada, Managing Director of Trade Intelligence delivered the introductory presentation, providing a snapshot of the state of the FMCG industry in South Africa. Masojada acknowledged that consumer confidence is at a low with R78 of every R100 spent by SA consumers going towards debt payments, which places significant pressure on retailers to find extra margin in a tough and highly competitive economic climate. The food and grocery channel is reflecting the highest turnover growth particularly in the spaza format, and fuel retailers are similarly showing strong growth. While Caltex and Freshstop have 219 outlets in SA, Woolworths and Engen are showing the biggest turnovers within their 67 outlets. Masojada also noted interesting developments in the Pet and Fresh categories, which provide retailers with higher footfall and opportunities to increase margins. Some other interesting takeouts:

· There has been a massive proliferation of new stores in SA, with more than 2,400 formal retail stores opening their doors in the past 5 years. Besides their presence in SA, South African retailers also operate a total of 735 stores across Africa.

· Pick ‘n Pay now has more than 10 million SmartShopper card holders in South Africa.

Author of Kasinomics and CEO and founder of Minanawe, GG (Marc) Alcock provided fascinating insights into the growth of the informal trade sector in SA with the presence of approximately 100,000 informal stores across the country, 70% of which are spaza’s and the balance ‘spazarettes’. There are more than 50,000 fast food outlets serving traditional and modern African food, and more than 150,000 hair salons within the informal sector. Alcock says the informal outlets are successfully competing with retail chains in townships, where they have highly efficient distribution systems and can be profitable on low margins. Alcock stressed the importance of timing brand promotions and activations at the right point of the month – near pay day. Other stats presented:

· The South African trade in traditional medicines is R2.9Bn annually – equal to 5.6% of the national health budget.

· Parmalat cheese slices are sold at a rate of 13 slices, every second of every day – a total of 200 million cheese slices per year and worth R1Bn annually.

Thembi Mazibuko, Head of Merchandise Strategy for Pick ‘n Pay discussed the importance of ‘retailers giving back’, and the role of PnP’s small business incubator programme “Boost Your Biz”. The concept allows for small suppliers to have their products listed on PnP’s shelves, and also provides opportunities for skills development and capacity building.

Taking a look at the emergence of Omni-channel marketing, Colin Fleming, Group eCommerce Executive at Massmart noted that the internet has had a significant impact on all retail touchpoints from pricing, through to the consumer experience. “Digitally enabled retail is what we must understand,” said Fleming, particularly with regards to the impact of e-commerce in the grocery and FMCG sector.

Packaging and product design are key, with regional references becoming a global trend as consumers

show a growing preference and appreciation of locally produced items. This was according to the international insights gleaned from Gail McLeod, Managing Director of Stratcom. Sharing examples of packaging trends from China, Russia and the USA, McLeod emphasised the importance of a product’s structure and design in influencing the intensity of consumer engagement, and their tangible experiences with brands.

The FMCG Insights also included three panel discussions.

In a discussion moderated by Stephen Gunnion of BDTV, Sharon Keith (Marketing Director, Coca-Cola), Sarah Britten (Regional Strategic Director, Y&R LabStore) and Pippa Capstick (Executive Director, Joe Public Ignite) discussed the effectiveness of global vs local advertising strategies, making references to global advertising campaigns from Coca Cola which have been regionalised for local market effectiveness.

Kojo Baffoe hosted the panel discussion between Julian Remba (GM: Castle Milk Stout, SABMiller), Antony Stearns (National Head of shopper marketing strategy at Geometry), and Kabelo Ncholo (MD Yourself Management), discussing the factors that influenced the success of in-store and out of home brand activations, in the both the formal and informal retail sectors.

The science of decision making amongst consumers, and the need to understand the rational and subconscious drivers of behaviour were debated by Chris Davies (Innovation Partner: New data streams, TNS), Dr David Rosenstein (Director, Neural Sense) and Carl Dos Santos (Director, iRam). Alishia Seckham of BDTV moderated the discussion, which also investigated the ethics behind neuro-marketing, and the place it holds alongside traditional consumer research models.

Global vs Local Advertising Strategies In-Store / Out of Home Brand Activations The Science of Decision Making

Trevor Ormerod, GM Group Sales & Marketing at Times Media says, “We believe this first FMCG Insights conference has delivered true value to those operating in the FMCG sector. We have received phenomenal feedback from delegates, and are proud to have delivered this knowledge-sharing opportunity to our clients and advertisers. We will be making this an annual event and look forward to hosting it again in 2017.”

The 2016 FMCG Insights & Conference in association with Sowetan, was presented by Times Media Events. To view the full event gallery, click here .

About Times Media Events

Times Media Events draws on the editorial expertise and media-powerhouse advantage of the Times Media Group (TMG) to deliver stimulating and engaging encounters that encourage excellence across South Africa’s various industries. Aligned to the thought-leadership of TMG’s prominent platforms like the Sunday Times, Financial Mail, Business Day, Sowetan, Business Day TV, The Home Channel and Ignition TV, we are committed to facilitating events that nurture the socio-economic success of our country. Leading industry events successfully executed by the team include the Annual Adfocus Awards, AMARA Awards, AdForum, Sunday Times GenerationNext, Sunday Times Top 100 Companies, Leaders on the Move, The Directors Event, Top Brands, Sunday Times Literary Awards, Business Day Investor Relations & Strategic Communication Conference and the Investment Summit to name a few.