TRALAC - Trade Law Centre

South Africa: appetite for products insatiable

Tuesday, 03 June 2008

Source: Business Day (Johannesburg)

South African food and beverage producers will soon have an opportunity to establish a presence in North and South American markets with 864-million people in 48 countries.

The Americas Food & Beverage Show and Conference in Miami Beach, Florida, which takes place from September 24 to 26, is a focal point for buyers from all over the southeast US, Central and South America and the Caribbean. The region has a per capita gross domestic product of more then $17500 a year.

The show, known as IFE Americas, is also where orders are placed for cruise liners hosting 3,5- million wealthy passengers each year. The organisers predict that last year's IFE Americas will yield close to $60m in sales over 12 months, stemming from orders taken by almost 4000 buyers. Most visitors (54%) were from the US. Others came from South America (18%), Central America (7%) and the Caribbean (14%).

South African sweets and snacks manufacturer Cartoon Candy took a stand in the SA Pavilion at the show last year. Special projects manager Staci Turnbull says the company is setting up a distribution base headed by Loren Psaltis in Miami to allow it to distribute throughout the region.

Cartoon Candy has identified "a large untapped market in America, one that our price point and quality can fill", Turnbull says. In setting up a distribution base in Florida, Cartoon Candy plans to target the cruise lines in particular. Outside of the Americas the company's export focus in the next 18 months will include Britain, Australia, the United Arab Emirates and Mauritius.

Currently it exports mainly snack products to SADC member countries Namibia, Botswana and Swaziland. "Through our relationship with Pep Africa and Shoprite International we also export into many other African countries through their distribution centres," she says.

Started in Midrand in 1999 with only one line, the company, owned by Mark Froman and Ari Psaltis, now has a growing array of sweets and snacks that it manufactures at a Wadeville factory with 260 employees.

It recently acquired the rights to produce and market Noddy Jelly Numbers sweets. Cartoon Candy has had "great feedback from store groups," says Turnbull, "because Noddy is loved by kids and has been for 50 years". The educational element, with sweets shaped as numbers, is an exciting plus. "We are looking forward to adding to this range soon."

The promoter of IFE Americas in Africa and representative of the state of Florida in the SADC countries, Tongila Manly, believes the show offers enormous scope for makers of quality products.

Manly, an African American who started her company, TMG Solutions, in Atlanta, Georgia, moved to Johannesburg in 1996. The motivation: "To do more business development work focusing on southern Africa." She notes that health issues are coming to the fore, and interest in organic products is rising strongly. Small African farmers with limited resources have traditionally grown organic crops, so good products are coming out of Africa. But scale, quality and reliability are vital.

Manly says SA in particular has a well developed agriprocessing sector and sophisticated and innovative manufacturers who could be a hit at a show that last year had more than 300 exhibitors from 33 countries. She says SA could make inroads, for example, with fruit juices.

"The US does not have the variety you have here. I also think your wines are divine."

In view of south and Central American tastes, and the large Latin American communities in Florida and other parts of the south-eastern US, she believes spicy foods such as Nandos and various chutneys would go down "extremely well".

She cautions that the best way to tackle the vast US market is to first go to a city or state, and grow from there.

Whenever she travels to Florida she takes rooibos tea with her, and sometimes Mrs Ball's chutney.

Products that buyers were looking for last year, in order of frequency, were: snack foods, non- alcoholic beverages, grocery products, general foods and beverages, meats and poultry, ethnic foods, dairy products, fruits and vegetables, bread and baked products, alcoholic beverages, chocolate and confectionery, organic health foods, and sweets (candy).

Manly says the scope of IFE Americas has recently been broadened to include food and beverage- related packaging, services, distribution, merchandising, warehousing, logistics, and information technology. Most buyers last year (56%) were looking for direct product purchases. Another 32% were interested in distribution deals, 8% in joint ventures, and 4% in licensing agreements.

Last year the agriculture department exhibited at IFE Americas for the first time.

This year the trade and industry department is planning a mission to the US, including Florida, in July. The DTI does help exporters through its export marketing & investment assistance (EMIA) scheme, but companies should have a solid track record and be ready to export.

Two shipping lines which serve SA have vessels making routine calls at Jacksonville in northern Florida.