Media Feedback Report

RTD Fruit Juice in South Africa

May 2018

2 / 2018 Media Feedback RTD Fruit Juice Report

GDP is the market value of all officially recognised final goods and services produced within a country in a given period of time.

Growth rates in industry value added and GDP (constant 2010 prices)

Source: Statssa, IMF

South African Economy

South Africa’s GDP

2.5%

1.8%

1.3%

0.6%

1.3%

2013 2014 2015 2016 2017

The South African economy grew by 1.3% in 2017, up by 0.7% compared to 2016 but reflecting 2015 performance. The RTD fruit juice category

saw a volume decline of 0.1% in 2017, the first negative performance recorded in five years, and contributed 0.6% to the total South Africa GDP.

3 / 2018 Media Feedback RTD Fruit Juice Report

Source: Nedbank

Currency

Performance of the South African Rand

R 9.62

R 14.98

R 12.73

R 10.86

R 17.87

R 14.41

R 12.98

R 19.74

R 14.43R 14.76

R 19.66

R 16.03

R 13.80

R 17.94

R 15.89

USD GBP EUR

2013 2014 2015 2016 2017

4 / 2018 Media Feedback RTD Fruit Juice Report

Source: SARB, Statssa

Consumer Price Index Household Consumption Expenditure

South African Economy

5.7%6.1%

4.6%

6.4%

5.3%

2013 2014 2015 2016 2017

2.0%

0.8%

1.8%

0.7%

2.2%

2013 2014 2015 2016 2017

5 / 2018 Media Feedback RTD Fruit Juice Report

Market Trends

In 2017, the RTD fruit juice category saw its first decline in five years. The category is possibly not a priority purchase for consumers

who are financially strained by the difficult position the South African economy is in, as evidenced by the slowing performance.

Segments with fewer perceived health advantages (“Other” – ie. carbonated), make up only a small portion of category sales. This may

be the association a consumer makes of carbonated fruit juice to sparkling soft drinks. The rest of the market volumes, accounting for

more than a 90% share, entail long life aseptic juices and short life juices.

Top end retail comprised close to half of all category volume sales for 2017 and continues to see growth. The greatest growth shown

came through bottom end retail (though this was still fairly slow). It is hypothesised that cash-strapped consumers shifted to purchasing

in more convenient channels, and that this was a driver of the performance seen within the bottom end.

South Africa’s three key major metropolitan regions dominated the volume share for the fruit juice category. Gauteng is the dominant

region and declined as North West, KwaZulu-Natal and the Eastern Cape experienced growth. The shift to top end retail in these

regions may drive this dynamic.

Rigid plastic and carton are the prevailing pack formats within the fruit juice industry, where larger “sharing” pack sizes (1L – 1.5L) are

dominant.

6 / 2018 Media Feedback RTD Fruit Juice Report

Top end retail was close to half of all category volume for 2017, with wholesale the next largest channel in volume terms. Promotional activity in

these store formats may have contributed to volume growth, though the ease of reaching a greater number of consumers through established

means, makes these channels more attractive too.

Channel Distribution

10.0%

10.2%

11.6%

9.7%45.1%

13.4%

Bottom End Retail Export Forecourts On-Consumption Top End Retail Wholesale

7 / 2018 Media Feedback RTD Fruit Juice Report

South Africa’s three key metropolitan regions dominated the volume share for the RTD fruit juice category. High per capita population, as well

as demographic profile in these regions, drives sales here.

Excludes Exports

Local Regional Distribution

7.0%

3.7%

35.7%

17.8%

5.5%

3.9%

1.9%

4.6%

19.9%

Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Prov. Western Cape

8 / 2018 Media Feedback RTD Fruit Juice Report

More than 90% of fruit juice sales are through long life aseptic juices and short life juices, while long life other (driven by carbonated), makes up

only a small portion of sales. The smaller share for the latter may be as a result of this segment having fewer perceived health advantages, as

they may be associated more with sparkling soft drinks.

Market Breakdown

8.4%

46.4%

45.2%

Long Life - Other (Carbonates/Other) Long Life - Aseptic (Pure/Nectar/Fruit Drinks) Short Life - Fresh (Pure/Nectar)

9 / 2018 Media Feedback RTD Fruit Juice Report

7.6

%

4.1

%

5.8

% 6.4

%

6.7

%

5.7

%

5.7

%

6.1

%

4.6

%

6.4

%

5.3

%

5.7

%

1.3

0.7

1.3

1.0

1.3

1.0

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0%

1%

2%

3%

4%

5%

6%

7%

8%

2013 2014 2015 2016 2017 CAGR since 2013

ISP % Change CPI % Change CPI vs Industry Selling Price % Change

Price increases have been evident each year over the past five years. The increase in the base year was 6.7% (ahead of headline CPI) with an

increase in industry selling price increase of 5.7%

Average Industry Selling Price vs Inflation

The industry selling price represents a weighted average selling price across all channels

Pricing represents an average weighted Rand per Litre

The industry selling price in this report has changed as an improved methodology of calculating on-consumption pricing has been applied

10 / 2018 Media Feedback RTD Fruit Juice Report

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