South Africa (SA) is grappling with multiple crises that are hitting both businesses and consumers hard. The country’s ongoing energy crisis, characterized by frequent and prolonged power cuts – called load shedding – is crippling production capabilities, driving up operational costs for manufacturers and severely disrupting supply chains.
Coupled with skyrocketing inflation – which has dramatically reduced consumers’ purchasing power – the snacks industry is feeling the heat. Producers face rising production costs and logistical challenges, while consumers are forced to make difficult choices about where to spend their limited budgets. With load shedding and economic instability tightening their grip, how will South Africa’s snack industry survive these turbulent times?
The biggest threats to SA’s snacking sector
One of the most pressing issues is the power cuts, which have severely disrupted production schedules for food producers – big and small.
According to Euromonitor, companies like Tiger Brands, one of South Africa’s largest food producers, have experienced significant operational disruptions as a result of load shedding. To keep production running, producers have resorted to using expensive generators, which have driven up operational costs – or else shut up shop for that period – losing revenue. Both scenarios have reduced production volumes, making it difficult for companies to maintain profitability and meet consumer demand.
The financial strain extends beyond power outages, as rising costs are affecting producers across the board. According to Mordor Intelligence, snack companies like Simba (PepsiCo) and AVI Ltd., which produces household brands such as Willards and Bakers biscuits, are grappling with soaring costs of raw materials and energy. This has forced producers to pass price hikes onto consumers, who are already feeling the pinch of economic instability. Already sporting a significantly disadvantaged population, even more financially constrained households are now cutting back on non-essential purchases, especially snacks, which has seen reduced sales volumes.
The pandemic exacerbated supply chain disruptions that were already present due to load shedding: delays in the delivery of both raw materials and finished products, while logistical challenges make it increasingly difficult to keep shelves stocked.
This ‘perfect storm’ of rising costs, production challenges and disrupted supply chains has created a tough environment for South African snack producers.
The silver lining: Nostalgia and brand loyalty
Despite these challenges, SA’s snacking industry is projected to grow at a 8.1% CAGR to 2029, driven by resilient consumer demand and shifts toward healthier and more sustainable snack options.
According to Arpan Sur, senior director for Mondelez International, citizens continue to prioritize snacks in their budgets, even in the face of economic hardship.
“Eight in 10 South African consumers ensure they always find room in their budget for snacks,” said Sur, reflecting the crucial role snacks play in offering affordable indulgence during tough times. This sentiment is particularly prevalent among younger consumers, such as Gen Z and Millennials, who view snacks as small moments of self-reward.
Brands with strong historical ties – such as Mondelez, PepsiCo’s Simba and AVI Ltd. – benefit from a deep sense of nostalgia among consumers. And many South Africans are willing to pay a premium for snacks that remind them of their childhood, notes Euromonitor, presenting an opportunity for local producers to tap into nostalgic appeal while introducing new, innovative products.
However, brands must be cautious, as rising inflation has increased price sensitivity among consumers. Private-label brands from retailers like Pick ‘n Pay and Woolworths are gaining traction by offering high-quality snacks at lower price points, putting pressure on established players to maintain competitive pricing without compromising quality.
Health-conscious snacking
The demand for better-for-you (BFY) options is another key trend reshaping the local snacks market.
According to SNAC International, consumers around the globe – and SA is no different – are increasingly seeking out snacks with functional health benefits, think low sugar, high protein and high fiber. Millennials, in particular, are driving demand for plant-based and functional snacks – again presenting the opportunity to reformulate traditional products or introduce entirely new ranges that cater to these evolving preferences.
Surprisingly, sustainability – typically a concept to take a backseat amid economic woes – is becoming a critical factor in the local population’s purchasing decisions. Euromonitor data reveals that 63% of South Africans are willing to pay more for snacks that are sustainably sourced or come in biodegradable packaging.
This means those local producers who are adopting environmentally-friendly practices, such as reducing plastic usage or sourcing ethical ingredients, are coming out in front, proving a competitive edge in a crowded market and resonating with the growing body of eco-conscious consumers.
Several long-established brands and startups are making waves in the BFY snacks segment.
South Africa boasts a variety of unique snacks, with biltong being the most iconic. This dried, cured meat snack, similar to jerky but with a distinct seasoning, has seen rising popularity both locally and globally due to its high-protein content and rich flavor. Another favorite is chakalaka, a spicy vegetable relish often paired with bread or crackers. Popular local crisps like Nik Naks, a cheesy maize snack, and Flings, a light, puffed corn treat – along with rusks, a hard, biscuit-like snack for dunking in tea or coffee – are staples that are much loved across generations.
Futurelife is a brand that has gained popularity for its range of nutrient-dense products, including protein bars and whole grain-based snacks. The brand’s success is rooted in its commitment to providing snacks with added nutritional value, making it a key player in the health-conscious snacking category.
Fry’s Family Foods has been pioneering the plant-based snack movement in South Africa. While originally focused on meat substitutes, Fry’s has expanded into plant-based snack options like sausage rolls and pies, catering to the growing demand for vegan and vegetarian alternatives. Pura is an exciting startup with a drinks and snacks product line that focuses on reducing sugar content and artificial ingredients while maintaining flavor. Pura is a perfect example of how new players can disrupt the market by innovating in response to consumers’ concerns over so-called ‘unhealthy’ ingredients.
Additionally, Herbivore Earthfoods is making waves with its vegan and gluten-free snacks. Offering everything from dairy-free chocolate to plant-based protein bars, Herbivore has tapped into the niche of consumers seeking permissibly indulgent snacks. Local startups like Oh Mega Nut Butters are also reshaping the snacking landscape with its high-protein nut butters, catering to consumers looking for clean labels and functional benefits.
One notable disruptor is black-owned Spinach King, founded by Lufefe Nomjana in Khayelitsha. Launched in 2011, Spinach King is focused on promoting healthy, affordable eating by incorporating the nutrient-rich veggie into novel snacks. The company produces a range of goodies – from spinach bread to muffins and even chips – are all designed to encourage healthier eating habits. And it’s desperately needed. South Africa’s obesity rate, particularly among the black population, has been rising steadily, with recent studies showing that nearly 41% of black South African women are classified as obese, a trend driven by urbanization, dietary changes and socio-economic factors.
Another motivator is Nutaria, one of the few black-owned agro-processing companies in the country that prides itself on producing sustainably sourced, high-quality macadamia nuts, oils and nut-based snacks. The company has expanded its footprint globally – products are exported to Europe – while maintaining a focus on health-conscious consumers at home. Nutaria’s products have become increasingly popular for their nutritional value and eco-friendly approach, meeting the growing demand for both healthy and sustainable snacks.
These businesses reflect the growing trend in South Africa toward health-conscious snacking, while also highlighting the success of black entrepreneurs in the local food industry. Despite being a crowded category, this proves there is still ample room for local producers to enter the health-conscious sector. By addressing consumer demands for low-sugar, plant-based and functional snacks, they are not only disrupting the sector but also creating opportunities for growth in this rapidly evolving market.
What’s next for South Africa’s snacks market?
Like elsewhere, digital transformation is significantly influencing the landscape. According to SNAC International, more South Africans are discovering new products through digital platforms, such as social media and e-commerce sites. In fact, 92% of locals say that seeing a snack online influences their decision to purchase it instore. So local producers need to invest in digital marketing strategies, including social media campaigns and influencer partnerships. Black consumers – in particular the tech-savvy Millennials and Gen Z – are highly invested into social media influencers on platforms like Instagram, TikTok and Facebook.
Looking ahead, the future of South Africa’s snacking market will likely be shaped by the continued demand for functional snacks that cater to health-conscious consumers and sustainable, eco-friendly offerings, while embracing digital platforms will be crucial for success.
South Africa’s snack industry remains resilient, but local producers will need to adapt, if they haven’t done so already, to survive the current challenges – and these are many: rising costs, supply chain issues, load shedding, high crime rates and even corruptions.
But, by focusing on innovation, sustainability and digital engagement, local brands can position themselves for success in a market that values affordability, indulgence and environmental responsibility.