Premier spreads its market footprint

Food producer Premier was expanding its product offering by adding other fast-moving consumer goods (FMCG) products through small but valuable acquisitions, chief executive Tjaart Kruger said yesterday.

The group, whose main lines are staple foods with brands such as Iwisa maize meal and Snowflake flour, was launching a Blue Ribbon bread manufacturing facility in Port Elizabeth after investments of R10 million. Premier produces and sells about 500 million loaves of bread a year.

In line with its aim to grow the business into an FMCG company, Premier last month dropped the word “Foods” as a suffix to its name as it was no longer simply a food company.

Kruger said Premier had bought five bakeries from Star Bakeries spread across the Eastern Cape, including Port Elizabeth, Queenstown and King William’s Town.

“Our strategy is to grow the business through acquisitions and organic growth. We decided some time ago that we want to be a major bread producer in the country,” Kruger said.

The company also has bakeries and a mill in Swaziland.

In recent years, the company has bought confectionery brands such as Manhattan’s and Super C, with the latest acquisition being Lil-Lets, which makes sanitary protection wear for women.

“We are looking not only into food but non-food categories in the FMCGs. This is where we are looking for growth but we will not be buying anything we find, we are looking for good acquisitions.”

The opening of the bread facility fits into the company’s strategy to make Blue Ribbon into a national brand. The brand competes with popular bakery brands such as Albany and Sasko, owned by Tiger Brands and Pioneer Foods, respectively.

Kruger believes the company holds a market share of about 20 percent for bread and hopes to increase this to 30 percent in the next few years.

“It is difficult to quantify market share because it is only measured in the formal trade and not informal trade. However, we would like to believe that our market share is between 20 percent and 25 percent and would like to get closer to 30 percent.”

Kruger stressed that it was important that the growth in market share remained profitable.

The new bakery is Premier’s first manufacturing facility in the Eastern Cape.

“We have been selling some of our brands in the Eastern Cape, such as Snowflake, Iwisa and others, but we had no bakery facilities.

“This will enable us to enter the Eastern Cape bread market,” Kruger explained.

Blue Ribbon bread would now be available to the whole of the Eastern Cape, as well as in the towns of the south-western districts, including George, Mossel Bay and Knysna, among others.

He said the firm had manufacturing and distribution facilities in most regions of the country, besides in Northern Cape, especially in the outlying areas.

Kruger said that the bread market was highly competitive and served a highly strained consumer.

“We make sure that we get two things rights, that is quality and consistent availability of the products at all times. Our focus is to have our products available in all the shops and shelves,” he said.

Kruger attributed the company’s success to consistency in service delivery.