Tiger Brands is exploring the addition of more breakfast products under its iconic Jungle brand with a new manufacturing line as it pursues further growth after a buoyant 2025 financial year.
The company has set new growth targets and embarked on a number of initiatives, including the expansion of some of its manufacturing plants, the construction of a new super-bakery and a mega-distribution centre. It is also mulling consolidating its snacks plants in Durban, where it has three facilities.
Tjaart Kruger, CEO of Tiger Brands, said: “Jungle brand has got so many legs to go outside oats. We’re really looking at going into other breakfast offerings. We launched Jungle cornflakes and it bombed because we didn’t get the supply chain right. We’re probably going to try again, but we’ll get it right this time. [It] will probably take another 18 months, because we’re not going to outsource it. We’re going to build our own plant.”
We’ve got great brands, we’ve got great businesses. The consumers want our products, but if we are 20%, 30% more expensive than alternatives, then we’re going to lose ... And we really have to make ourselves relevant
— Tjaart Kruger, Tiger Brands CEO
The company is spending over R1bn in expanding its plants. It will insource some culinary products, such as Mrs Balls chutney, at a new megaplant in Paarl, where a new production line for vinegar will also be installed to reduce the dependency on suppliers for critical products such as All Gold and Cross & Blackwell mayonnaise. The benefits of these investments will be realised from the 2027 financial year. “So there’s enough stuff for us to improve on until I retire,” Kruger said.
In late 2023 Tiger Brands embarked on a turnaround plan to grow profitability and focus on core products. It exited a number of categories, including baby products and maize.
In the financial year to September, the company exceeded analysts’ expectations by achieving most of its targets ahead of schedule.
Operational strength was particularly evident in Millbake, grains, snacks, treats & beverages. The culinary division delivered a “respectable performance, though it was partially weighed down by temporary vinegar supply disruptions”, said Sean Culverwell, investment analyst at Anchor.
The home & personal care segment faced constraints due to insufficient aerosol cans during peak season and continued competitor intensity on pricing.
“The standout feature of the release was the continued improvement in the group’s operating margin, supported by a well-executed portfolio restructuring and the successful rollout of several efficiency initiatives,” said Culverwell. “Importantly the pace of progress has been both strong and consistent — something that marks a refreshing shift for Tiger Brands.”
Dirk van Vlaanderen, portfolio manager for Camissa, said it was a strong performance by Tiger Brands, with most of its divisions showing good volume and profit growth, benefiting from the multi-faceted turnaround strategy implemented by the new management team. The cash generation of the business was also “excellent” and, combined with asset disposals, had enabled Tiger Brands to return R10bn to shareholders through dividends and share buybacks this year.
Tiger Brands reduced the prices of its products during the year, with overall price deflation of 0.8% and volume growth of 3.5% driving revenue, which grew 2.7% to R34.4bn.
Asked whether there would be further price cuts, Kruger said: “We will try to keep the price as flat as possible. Our purpose is to be relevant to our consumers. We must have the right price, the right promotional activity, and we must be able to play well in combos and those types of things.
“We’ve got great brands, we’ve got great businesses. The consumers want our products, but if we are 20%, 30% more expensive than alternatives, then we’re going to lose ... And we really have to make ourselves relevant.”
Culverwell said Tiger Brands management had introduced a new set of goals that were “bold, and given their recent execution track record, it is increasingly difficult to question their ability to deliver. We expect above-market volume growth to be sustained, supported by a portfolio in which more than 80% of the remaining brands hold leading market positions, enabling management to concentrate efforts on the most value-accretive categories.”
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