Have you seen enough to make you realise we are experiencing a societal transformation? Some sensationalists refer to it as a “tsunami”. Let’s consider one staggering statistic. The fertility rate in SA has dropped from 5,7 in 1970 to 2,5 in 2004. At 2,1 our population stops growing, which is predicted to happen within the next 20 years.
Rising education levels and the urbanisation and empowerment of women is at the source of this change. Not so long ago women were paid less than men; they were mostly married in community of property; they had no contractual power and needed their husband’s signature to open a bank account.
Today over 30% of our parliamentarians are women. Women have been largely responsible for driving car sales to unprecedented levels. JP Landman, political and trend analyst, refers to them as bappies: the “booming, aspirational and previously poor”, and points out that this group is mostly black, young and female. In socio-economic terms they are the Living Standard Measure (LS M) 5 and 6 groups which make up 27,5% of SA ’s households. This group lies central between LS M 1 (extreme poverty) and LS M 10 (upper income earners), and have spending power of close to R200 billion a year. They are transforming the retail environment and are driving fashions in shoes and clothing, and they buy the household food. If you are producing a food product that the bappies consider unpalatable or fattening, you are heading for trouble.
An exercise by UNISA ’s Bureau of Market Research in 2005 found that 71% of LSM 1 group’s expenditure is on food, with poultry topping the list at 11%, followed by white bread, rice and mealiemeal. LSM 6 spends less than a quarter of its cash budget on food. However, its diet varies considerably from the lower LSM groups. White bread, beef, mutton, poultry and fresh milk make up relatively high amounts of its spending.
No wonder 2006 was a great year for beef producers with weaner prices jumping from R9/kg to R16/kg. Alastair Paterson, a beef industry consultant, reports that certain farmers made up to 20% return on their beef businesses last year – an unheard of level in an industry which for the last 50 years has been returning less than 5% per annum.
We’re about to see major shifts in food preferences, which will not only affect demand for basic food commodities, but also the way these products are processed, packaged and presented. Are you prepared? Contact Peter Hughes on (013) 745 7303 or e-mail[email protected].