The following presentation was delivered at the 2023 GCCA Cold Chain Conference in Cape Town , by Patrick Prestele , a consultant at Frost & Sullivan , a global leader in consulting and research with over 60 years of experience .
INCORPORATING COLD CHAIN
ASSOCIATIONS
Consumer market trends SA : frozen foods Edited by Eamonn Ryan
The following presentation was delivered at the 2023 GCCA Cold Chain Conference in Cape Town , by Patrick Prestele , a consultant at Frost & Sullivan , a global leader in consulting and research with over 60 years of experience .
Contrary to the misconception of Africa as a homogenous entity , we ( Frost & Sullivan ) recognise its complexity . Dynamic variations from one country to another demand a localised approach to understanding and managing market trends .
In respect of South Africa , business confidence is affected by governmental indecision , causing hesitancy among potential investors . Yet , the country ' s economic diversity , despite challenges , positions it as a significant player in the region . South Africa ' s population , currently at 60 million , is projected to reach approximately 74 million by 2050 , implying a considerable increase in households . Urbanisation , expected to rise from 63 % to 71 % by 2030 , and to 85 % by 2050 ( a phenomenon common to all sub-Saharan Africa ), adds another layer to the dynamic landscape . These demographic shifts contribute directly to the high demand for consumer goods , setting the stage for the frozen foods market .
Globally , the frozen foods market is anticipated to grow yearly by 6 % over the mentioned forecast period . Fellow middle income countries such as Argentina , Brazil and Mexico are seeing strong growth . The South African frozen foods industry is valued at USD252-million , anticipated to grow to USD323-million by 2028 .
As we navigate the intricate landscape of South Africa ' s frozen foods market , it is evident that the intersection of convenience , changing consumer demographics , and technological advancements is reshaping the industry . Ready-to-eat meals , fueled by the preferences of the younger generation , are anticipated to play a pivotal role in the future of the market .
In our quest to decipher the frozen foods market in South Africa , we conducted comprehensive consumer studies to uncover the preferences that drive purchasing decisions . By analysing consumer behavior across various age groups , we gained valuable insights that are instrumental in understanding the dynamics of the market .
Analysing the data , we observe a diverse landscape of preferences among different age groups . The younger generation , often characterised by a fast-paced lifestyle and a desire for convenience , is a driving force behind the surge in the ready-to-eat meal sector , which has seen a remarkable growth in the number of start-up manufacturers of ready-to-eat meals . This demographic shift aligns with the growth of fast-food chains and the increasing demand for on-the-go , easily accessible food options .
The convenience culture is notably prominent among the youth , who prioritise
quick and efficient meal solutions . This trend has fueled the rapid growth of the fast-food sector in South Africa . Noteworthy players , such as KFC and McDonalds , have expanded their presence in the country , adding thousands of new stores to cater to the changing preferences of the younger consumer base .
In addition to traditional fast-food establishments , the rise of food delivery services has reshaped the landscape of the frozen foods market . Specialised manufacturers , dedicated to producing meals that are either fully frozen or partially frozen , have entered the scene . This dynamic shift is partly driven by the lower costs associated with online platforms compared to traditional brick-and-mortar stores .
To cater to evolving consumer preferences , food delivery services have adopted innovative strategies . For instance , some companies , like Discovery , offer cashback rewards for the purchase of healthy frozen foods . This not only aligns with the convenience aspect but also reflects a growing consciousness about health and wellness among consumers .
While the 18 and younger age group is excluded from the research as being dependent on their parents , young professionals aged 18 to 34 emerge as the primary consumers of the frozen food market , constituting approximately 64 % of total consumption . This demographic , encompassing students , early career professionals and young parents , is increasingly seeking convenient ways to minimise time spent in the kitchen . The demand for frozen food delivery services is particularly pronounced within this segment , reflecting the busy lifestyles characteristic of this age group .
Africa , with the youngest and fastestgrowing population globally , presents a unique landscape . The age group 35 to 44 is also anticipated to experience growth , suggesting a shift in consumer demographics . Although South Africa exhibits some characteristics more in common with middleincome countries and is more advanced than sub-Saharan Africa as a whole , the frozen food market is expected to remain robust on a national basis .
Several factors contribute to the strength and resilience of the frozen foods market in South Africa . Notably , the increasing employment of women globally and locally has led to more households relying on frozen products due to time constraints . The proliferation of fast-food franchises , including global giants and local favourites like Nando ' s , further fuels the demand for convenient frozen options .
CHALLENGES AND RESTRAINTS REPRESENT A BALANCING ACT
A noteworthy trend is the changing perception of frozen food , particularly among the younger generation . Frozen food is no longer viewed as a compromise on nutritional value or as outdated . Recent studies suggest that frozen foods can actually be more nutrient-rich than fresh foods due to advanced freezing technologies . This shift in perception is crucial for the sustained growth of the frozen foods industry .
However , challenges persist . The enduring popularity of fresh , natural foods remains a restraint , as many consumers still view frozen foods as substitutes rather than equals . Additionally , the aftermath of Covid-19 and fluctuating food prices have left some consumers hesitant to opt for frozen products over fresh alternatives . A unique factor contributing to the demand for frozen foods is load shedding , which affects both supply and demand . Though it constrains manufacturers , it surprisingly can be a boon for demand . With uncertainty about power supply durations , consumers are turning to frozen foods as a practical solution , given their longer shelf life over fresh alternatives .
The frozen foods market in South Africa stands at the intersection of evolving consumer preferences , demographic shifts , and technological advancements . As we navigate this dynamic landscape , industry players must adapt to changing perceptions and leverage emerging trends to stay ahead . The future promises continued growth , driven by a younger , busy demographic seeking convenience without compromising on quality . CLA
Lizelle van der Berg , past director , GCCA Africa , introducing the speaker .
Images by Cold Link Africa
Patrick Prestele , a consultant at Frost & Sullivan , a global leader in consulting and research .
As we navigate the intricate landscape of South Africa ' s frozen foods market , it is evident that the intersection of convenience , changing consumer demographics , and technological advancements is reshaping the industry .
COLD LINK AFRICA • March / April 2024 www . coldlinkafrica . co . za 11