According to industry sources, the shifting nature of the consumer base has allowed for increased trade volumes of meat. Rising income is indeed a key factor underlying changing consumer trends across many consumer goods industries in South Africa. As incomes rose over the course of 2013, South African consumers were able afford more meat, which is perceived as a premium protein source and which is commonly associated with numerous health benefits in addition to its appealing flavour.
The performance of fresh meat continued to improve over the course of 2013, with sales growing by 3% in volume terms. From a growth and development perspective, South Africa is a country with an emerging economy and is widely considered the economic powerhouse of Africa. As the country's economy continues to thrive, consumer income levels are rising, a trend that is driving rapid lifestyle changes and boosting demand for premium fresh food options such as fresh meat.
Fresh meat traditionally carries a higher unit price than other foodstuffs, although over the course of the review period, its increasing affordability amidst improved economic performance increased its popularity among all segments of South African society. As a result, all meat categories enjoyed sustained and positive growth during 2013.
Poultry remained the fastest growth category in fresh meat during 2013, increasing in volume by 4%. Its positive performance is linked to the fact that poultry, especially chicken, is ubiquitous in South Africa and is considered healthier than red meat. Red meat is commonly associated directly with several cardiovascular diseases. In South Africa, chicken is the most popular type of meat consumed and this is evidenced by the high levels of domestic broiler meat production, an area that represents the largest segment of South African agriculture.
Pork and lamb, mutton and goat each saw very little growth during 2013, with each category increasing by 1% in volume terms. Pork and goat meat are relatively unpopular in South Africa and many people do not eat either of them. They are unpopular for various reasons ranging from the lack of tradition, religious reasons and perceptions that they are inferior to chicken, sheep meat and beef.
Lamb and mutton, on the other hand, are considered much more acceptable than either pork or goat meat and sheep meat remains popular in South Africa. Much of the growth in demand for mutton and lamb stems from consistent demand from the country's growing Hindi and Tamil populations. Indians constitute some 2.5% of South Africa's population and the eastern coastal city of Durban is considered the largest Indian city outside of India. For these consumers, lamb and mutton represent the major red meat categories as the consumption of beef is forbidden under religious laws. This ensures there will always be demand for lamb and mutton in South Africa, suggesting growth rates in lamb, mutton and goat will remain static at least for the near future.
According to industry sources, South African broiler meat industry is dominated by two large producers, Rainbow and Astral, which combined account for some 50% of total broiler meat production in South Africa. The other four medium-sized producers Tydstroom, Daybreak, Chubby Chick and Rocklands, produce more than 400,000 broilers each per week. Argyle produces some 300,000 broilers per week and is followed by approximately 49 smaller producers producing fewer than 200,000 broilers per week each as well as some 1,740 subsistence farmers each selling approximately 500 living chickens per week.
For reasons of convenience, South African consumers tend to purchase fresh meat in supermarkets, hypermarkets and small independent grocery stores, which are very accessible. Supermarkets is the most popular retail channel through which the majority of fresh meat in South Africa is sold, mainly as it is the most popular retail channel for consumers who intend to visit one retail outlet for all of their household requirements. Specialist stores-butcheries are also very popular for the purchase of meat in South Africa and this channel appeals mainly to consumers who prefer fresh meat over frozen meat and who value the expertise which only skilled butchers can offer.
Demand for organic meat remains very low in South Africa, as it is generally very expensive and thus unaffordable for the bulk of the country's population. Awareness of the benefits of organic meat remains low in South Africa, although it is steadily growing due to the public concern about various farming practices and the risks associated with chemically produced animal feed, the use of growth hormones and genetically modified agricultural produce. South Africa has already seen considerable growth in free range and Fairtrade food products and this is a situation, which is ultimately likely to result in significant growth for organic meat in the near future. However, it is very likely that organic meat will remain very much a premium product in South Africa for the near future.
Generally, the unit prices charged for fresh meat have risen slightly in recent years, remaining in line with the rate of inflation. The most important change in 2013 was rise recorded in the average unit price of beef as the supply chain has become increasingly integrated vertically. This integration is mainly fuelled by developments in the feedlot industry, specifically that the majority of large feedlots in South Africa now operate their own abattoirs, or at least they now all tend to have some business interests in certain abattoirs. In addition, some feedlots have integrated further down the value chain and now sell their meat directly to consumers through their own retail outlets. Some abattoirs have also begun to integrate vertically in the direction of wholesale distribution. This reduces the need to rely on intermediaries and helps them to maintain low unit prices.
South Africa's fresh meat trade is governed by several strict laws, which control the slaughter of meat, the sale of agricultural produce and the labelling of food, cosmetics and disinfectants. Labelling enforcement falls under the Department of Health and the Consumer Protection Act falls under the purview of the Department of Trade and Industry. The laws, which apply to meat labelling specifically, include regulations relating to the labelling and advertising of foodstuffs and these laws become effective during 2013. Since then it has been forbidden to make any false claims about food or medicines on the product's label. The Consumer Protection Act makes it illegal for consumers to be misled in any way, while the Agricultural Product Standards Act makes strict provisions for the classification, treatment and sale of agricultural products. Finally, the Meat Safety Act governs the hygiene of animal slaughter for food production and the treatment of animals at abattoirs.
