Entrepreneurship Zone: 30 March 2022 :: How to sell plant-based food products in South Africa

Wed Mar 30 09:48:12 CAT 2022

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Entrepreneurship Zone: 30 March 2022 :: How to sell plant-based food products in South Africa

South African plant-based food company Herbivore Earthfoods discovered the best way to get consumers to buy its meat- and dairy-free alternatives is to make products that consumers are already familiar with that can compete on price with the traditional animal-based varieties.

The company learnt this lesson the hard way. When it started in 2014, its first product was kale chips, meant to be an alternative to traditional potato chips. The company dehydrated the kale, as opposed to baking it, which meant all the nutrients remained in the product. It also packaged the kale chips in 100% compostable material. But despite all these benefits, the product had lacklustre market adoption.

The reasons for the poor sales were that the product was pricey and too different from potato chips, according to Chanel Grantham, founder of Cape Town-based Herbivore. “I mean kale chips are quite strange-looking chips,” she quipped at a recent event.

The company pivoted to meat and dairy alternatives in formats consumers were already used to. For instance, Herbivore makes plant-based sausages, burger patties and cheese slices that look the same as the traditional versions.

Wider market adoption will be driven by products that look and taste the same as animal-based varieties but at a better price, according to Davey du Plessis, a director at Herbivore. “A simple example is you walk into Pick n Pay [and] instead of picking boerewors (a traditional South African sausage made from beef, lamb or pork), you would pick Herbiwors, which is our boerewors alternative. There won’t be that conscious dilemma where you are thinking, ‘Am I going to go plant-based tonight? What are people going to think of me?’ You’ll pick it because it tastes the same, looks the same, cooks the same, and is priced better. We see that as the only way to get a wider market adoption, not through education and not through conscious consumer behaviour. It will be price and familiarity,” Du Plessis explained.

Herbivore’s product line currently includes dairy-free milk alternatives and desserts, confectionery and protein alternatives available at supermarkets like Pick n Pay. In 2020, the company launched an online store catering for on-demand deliveries of products directly to consumers across South Africa using its own distribution network.

Investor interest

Johannesburg Stock Exchange-listed food company Tiger Brands this week announced an investment in Herbivore through its Tiger Brands Venture Capital Fund.

“In line with global trends, consumers in South Africa and across the continent are driving increased interest and desire for a wide range of plant-based products. Herbivore’s innovative and tasty meat and dairy alternatives have gained significant traction, with scope to scale and drive further penetration,” commented Barati Mahloele, director of the Tiger Brands Venture Capital Fund.

The fund was founded in 2021 and seeks to back businesses operating in two broad categories:

·         Consumer products related to health and nutrition, snackification (snacks and treats) and economical food options; and

·         Technology, including foodtech and agtech.

The African plant protein market, of which South Africa represents 57%, is estimated to grow at a compound annual growth rate of 6.5% to $560.62 million by 2023.-Howwemadeitinafrica

A selection of plant-based foods produced by Herbivore Earthfoods.

Invest Wisely!

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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