The KwaZulu-Natal floods hurt the snack industry

Ntando Tukwana

An estimated N$250 million worth of damage to South Africa’s sugar sector as a result of the devastating KwaZulu-Natal floods has had a knock-on effect on the snacks and confectionery industry, a new report says.

The country’s confectionery industry has already seen a 2% drop in sales volumes following the sugar shortage, says Anje du Plessis, senior research analyst at market research firm Euromonitor International.

South African sugar growers are still reeling from losses worth N$223 million stemming from 2,516 hectares of cane fields damaged when floods wreaked havoc in KwaZulu-Natal.

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Sugarcane crops in these fields, which required replanting, have suffered severe root and crop damage.

Damage to sugar plantations means less sugar is produced locally and may push snack makers to import sugar for production, Du Plessis says.

“It will take time to replant the plantation and more time before the plantation is productive. This will increase the price consumers pay at the end of the day, because imports are more expensive,” he says.

The confectionery sector was not the only sector affected by the floods, the report said.

Locally and globally, the floods have also affected potato chips, with manufacturers warning of shortages in 2022, according to Euromonitor.

Asked if it expects to report any shortages this year, leading food and beverage company PepsiCo, which also makes Lays and Simba chips, declined to comment.

Du Plessis says the volume of crisps sales was down 7% by 2022.

As in many parts of the world, South African consumers, facing high fuel and food costs, are buckling under financial pressure.

With consumers’ purchasing power declining, the snack industry is adversely affected by increased discretionary spending and shoppers sticking to tight budgets.

“Impulse purchases are suffering because consumers are making fewer trips to the store. This means their purchases are more pre-planned,” says Du Plessis.

She says middle- and high-income consumers will look to buy bulk packs to share, while those on lower incomes “will stick to smaller packs because it’s less money out of pocket.”

The report also said consumers were making fewer trips to stores, opting for monthly visits instead of weekly visits, leaving fewer opportunities to buy snacks on impulse.

– Business Insider SA