ADC Africa Business Briefing
Lord Charles Hotel
5th March 2013
“An Overview of the Western Cape Fine Food Initiative”
What is food?
"any substance or product, whether processed, partially
processed or unprocessed, intended to be, or reasonably
expected to be ingested by humans.” ….. EU
Excludes:
"(a) feed;
(b) live animals unless they are prepared for placing on the market for human consumption;
(c) plants prior to harvesting;
(d) medicinal products within the meaning of Directive 65/65 (…);
(e) cosmetics (…);
(f) tobacco and tobacco products (…);
(g) narcotic or psychotropic substances (…);
(h) residues and contaminants."
Definition of Fine Food
Fine Food products shall mean:
“Foods and beverages that exemplify quality, innovation
and style in their category”
The Fine Food specialty nature derives from some or all of the following
characteristics:
Their originality, authenticity, ethnic or cultural origin, specific processing,
ingredients, limited supply, distinctive use, extraordinary packaging or
specific channel of distribution or sale.
By virtue of their differentiation in their categories, such products maintain
a high perceived value and often command a premium price.
Adopted from NASFT
National Association for the Specialty Food Trade
Clear Vision
To guide the growth of the South African
Fine Food (and related Agro-Processing)
Industries
toward achieving worldwide recognition
as a supplier of premium products
and brands
History Time lines
2008
Idea of an Association conceived at meeting at Blouberg’s Blue Peter Hotel
Steering Committee Elected
2009:
Strategic Planning
Interim Board Elected
Structure and Organisation
2010:
Implementation, Project Management
Section 21 Company, Constitution,
Programs & Events identified
2011:
Membership of 50 TOP FINE FOOD CO’S
Sustainable, Self Funding
Participate in Events (SATH, FFS)
Appointment of CEO
2012:
Series of Capacity Building Workshops
Towards Full Corporate Governance Compliance
Improved Strategic Partnerships
3-Year Budget
AGM
Partnerships & Associates
Western Cape Department of Economic Development & Tourism
Supporter of WCFFI from inception – ongoing commitment
Provides funding, people and facilitation support
Strategic Partner in the spirit of a Public Private Partnership
WCFFI Project Management, Project Planning, Funding
CPUT
– AFS Projects, events and progammes (Larry Dolley)
South African Global Trade Hub
– Funding, Export Development
Government
- DTI, SEDA, SETA, Agriculture, Embassies
Development Agencies
– USAID, NorAid, Swiss Contact, etc.
Corporate SA
– as Associate Members
OPERATIONAL &
OVERSIGHT STRUCTURE
WCFFI Board
Chief Executive
Officer
Admin
assistant
Industry Development
Officer
Shreef Abass
Debbie Payne
Nazeem Sterras
Larry Dolley
Chair Person
Deputy Chair Person
Acting CEO
Board Member
Business
Service Providers
Dingaan Goodwell
Earl Starr
Shelldon Breda
Amina Abrahams
Board Member
Board member
Board member
Board Member
Objectives
Manage, promote and protect the interests of the Fine Food
Industry;
Create close links between suppliers, producers and retailers;
Share information on training provision to fulfill the needs of the
organization;
Create a conducive environment for the development of the
Fine Food Industry by means of a membership-based platform.
Promotion of services, operations and functions of the Fine Food
Industry including procurement, processing, marketing, sales and
distribution in respect of the products of the industry;
Promote the protection of consumers by adhering to international
food safety standards and the Consumer Protection Act;
Promotion and implementation of innovative measures in line with
local and international requirements;
Adhering to the transformation charter by employing an affirmative
approach to the industry
PROGRAMS, SERVICES & EVENTS
 Improve Competitiveness in Supply Chain
 Identify Trade Opportunities, Trade shows & Trade missions
 Enterprise Development & Supplier Diversity (BEE)
 Market Access & Compliance
 Access to Business Finance, Funding & Risk Management
 Capacity Building, Mentorship & Incubator program
 Market Research & Market Intelligence/Information
 Workshops & Industry Applicable Events
RSA Agro-Processing Value Chain Matrix
R&D
TECHNOLOGY
MARKETING
INPUT SUPPLIES
GOVERNMENT SUPPORT
MULTINATIONALS
Fresh, dried, canned & frozen fruits
Horticultural
Crops
Processed, dried, frozen & canned
vegetables
SLAUGHTERING
CUTTING
FERMENTING
Bakery & Confectionery
Field Crops
AGRO- PROCESSING
Beverages
Live Stock
MOLDING
BLENDING
MILLING
Sugar
Forestry
Processed, value added meat &
meat products
Inputs for Bio-Fuels
Inputs for Chemical products
LOGISTICS
TRAINING & SKILLS DEV.
MACHINERY
QUALITY ASSURANCE
INVESTORS
Selected Sectors/Sub-Sectors
Agri Business
Fresh Produce
Fruit
Flowers
Eggs
Vegetables
Benefication Technologies
Seed Oils
Fuel
Energy
Waste Management
Processed Products
Milling – Grains,Oilseeds
Dehydrated Products –
Soups, Sauces, Spices,Dried
Fruit
Non/Alcholic Beverages Wine,Tea,Juice
Canning – Fruit,Vegetables
Meat – Poultry,Red.Wool
Needs of target Group
DEMAND SIDE
Small,
Large
Small,
Emerging,
Agribusinesses
Emerging, Commercial
& Commercial
CommercialEnterprises
Corporations
Enterprises
Manufacturing,
Sorting, Packing
Agro-Businesses
Six pillars
of support
Training &
Capacity Building
Financial
Assistance
SME & CORPORATE SUPPORT
Large commercial
retailers, export &
consumer markets
Marketing&
Business Development
SUPPLY SIDE
SUPPLY
Existing Supplier that is
Linkage Ready
DEMAND
Mobilise corporate support for
SME supplier development

Potential Supplier that is
Linkage Ready
Company Diagnostic
SME readiness/




Analyse corporation value
and supply chains
Identify and quantify linkage
opportunities for SME
suppliers
Strategise & plans for SME
linkages & support to
procurement practitioners
SMEs engaged in accordance
with corporation requirements

Org & management improvements

Accounting/MIS

Quality assurance

Certification (ISO)

Product/ Production improvements

Marketing strategy

BEE certification

Mentorship, coaching
Deficiency report
Facilitate
necessary
support to build
capacity
SME readiness/
Deficiency report
INCREASED BUSINESS
LINKAGES
No progress REFER to
STRATEGIC PARTNER
Business
Service
Providers
provide support
Periodic review of
progress
SMEs competent to bid and deliver on standards
required by large corporations
Dilemmas
Balance
Product/supplier
Market/Buyer
SME
World food TRENDS
Trend 1: Sense of Simplicity:
- People nostalgic for simpler times, and simpler foods
- Back to Basics has driven interest in natural and clean-label foods
- Natural ingredients, including natural sweeteners extracted from source
(apple, agave and maple syrup)
- EU approval of the high-intensity natural sweetener stevia also looks close
- The natural trend has been particularly evident in beverages:
* 13% of global soft drinks launches in the first 9 months of 2009
period
were positioned on a “natural” platform,dominated by bottled water and fruit drinks
Trend 2: Sustainable Gathers Steam:
- Well-informed consumers looking for locally-sourced,
fairly-traded products
- The organic trend has flattened in the downturn
- Fairtrade new product activity is continuing to rise
* major confectionery companies Cadbury
and Mars making fairtrade commitments
- The notion of carbon footprinting also looks set for a
move into the mainstream
World food TRENDS
Trend 3: Inherent Nutrition:
- It is a tough time to be in the functional foods
- Strict EFSA policies demanding scientific support for ingredients such as
probiotics
- Consumers increasingly skeptical of foods that fail to provide
immediate benefit
- Foods with traditionally perceived benefits (fruit, vegetables, milk) pushed
further as inherent health benefits are communicated
Trend 4: Functional Superstars:
- The relatively few healthy ingredients have survived EFSA’s early rulings will
move to the fore in functional foods
- Others will be forced to rely on softer claims
- With EFSA decisions thus far, it is difficult to predict exactly which
ingredients will triumph, but tough times ahead for radical and
obscure ingredients making outlandish claims.
Trend 5: Going Immune:
- Swine flu fears have fuelled a demand for immunity boosting products
- Expect ingredients (probiotics, various antioxidants) to be marketed on this
- Manufacturers will have to be careful overdoing claims
(E.g. Danone has found itself in trouble with the Advertising Standards Authority UK over
claims that its Actimel probiotic drinks could help support children’s defences and Kellogg’s
has already dropped an immunity claim it was using on Rice Krispies in the US)
World food TRENDS
Trend 6: New Delivery for Energy:
- “Energy” is the hot concept in functional foods
- Stimulating ingredients are used in new applications
- Energy shots, essentially US concept, now well and truly arrived.
- The “energy” concept increasingly hot in confectionery product
activity, E.g chewing gum
Trend 7: “Free From” Rises:
- Move toward more “gluten-free” and other “free-from” foods
- Focus more on taste and quality
- High-quality brands are positioned as “easy to digest,”
- At ANUGA : a product formulated with konjac gum addressing needs
of seafood allergie indicating that previously untapped markets are
now starting to be addressed.
Trend 8: Continuing to Cook at Home:
- Grocery retailing enjoying a boom in both budget and high-end
products
- While………….. the mid-sector is squeezed (majority of consumers)
- One of the catchphrases “Staying in is the new going out”
- Despite some indications of “green shoots of recovery” on the
horizon,
consumers do not have
the confidence to foresee complete economic recovery as yet
- Foodservice will continue to struggle…: Consumers continue
to rediscover their cooking and entertaining skills.
Development Profiles for 2013
Ingredients
black garlic, padron chile, horseradish, quail eggs, durian, ramps, pine needles, fish milt, whey, seaweed, ashes, sawtooth
herb, green chickpeas, kimchi, fermented everything
Flavors
dukkah, sumac, sour, torridly hot,
katsu sauce
smoked, turmeric, barrel-aged hot sauce, gochujang (Korean hot sauce), Japanese
Vegetables
cauliflower, broccoli romanesco, parsley root,
chiogga beets, pumpkin, baby sweet potatoes, turnip greens, beet tops, collards.
Fruit
cherries, baobab, huckleberries, finger limes, calamondin, rambutan, heirloom apples, grapefruit, white strawberries
Grains
freekeh, farro, bulgur, noodles (udon, soba, cellophane, rice), millet, teff, buckwheat
Desserts
Doughnuts, artisanal soft serve, push-pops, savory flavors, boozy desserts
Drinks
Tea (the new coffee?), coconut water
Snacks
popcorn, homemade snacks, popped grains
Authentic Ethnic
Nordic, Middle Eastern (my favorite!), Asian, Nex Mex (high-end Mexican), South American (Brazil, Argentina,
Peru)
center of the plate, sunchokes, raw winter vegetables,
Overcoming export barriers for
South African SME's
TRADE AGREEMENTS:
DOHA Round suspended
EU local import duties waived
Free Trade Agreements signed with Mexico (2000) & Chile (2003)
Generalised System of Preferences (GSP) in place
Negotiating Bi-Lateral Trade Agreements with Brazil and India….and others (not RSA)
FOOD SAFETY LEGISLATION
New impetus after 1990’s food scares
General Food Law – placing responsibility with the industry
HACCP, BRC, GlobalGAP, EurepGAP, Nature’s Choice, Fairtrade
Stronger role for European authorities
STRICTER FOOD LAWS
Contaminants, including MRL’s
Labeling & Consumer Alertness (allergens, nutritional & health claims)
Additives & Flavouring
Full Ingredient Statements
Organic Foods
Genetically Modified Foods (GMO’s)
Preservatives (Long-Life stabilisers)
Growing control of
LARGE Retailers
Concentration in buying power
Demand for high level of professionalism of the
producers, food safety programs, continuity,
volume, competitive pricing, marketing support
Chain control from seed to shelf/field to fork
Value Chain Analysis
Participant
Role/Contribution
Benefits/Interest
Retailers
(PnP, Spar, FreshMark, Whole Foods,
Tesco, Woolworths)
1.Merchandising of produce;
2. Channel products to satisfy
consumer demand
3. Producer Support
1. Competitive Pricing, Compliance, New Market
Development;
2. Consolidation of diverse primary and value added produce for the
end consumer
Traders
(Exporters, LMA, NMA,etc )
1. Market Linkage and
contracting, Market Intelligence;
2. Procurement
1. Product consolidation
2. Competitive pricing and information
3. Creation of markets
4. Satisfy market demand by accessing certified, traceable products.
Wholesalers
1. Provide storage, distribution
network and logistical support
1. Easy access for marketing agents and consumers
2. Act as a distribution hub
Processors
(Millers, Dehydrators, Canneries,
Packhouses)
1. Value addition to primary
products
2. Provide market for the raw
products
1. Diversification of markets for primary products
2. Gaining Economies of Scale and gaining access to a large pool of
suppliers
Increasing market demand for the value added product
Transporters/ Contractors
1. Provides Logistical support
and supply chain management
1. Creation of competitive advantage ( cost efficiency and timeous
supply of produce)
2. Provide efficient cartage services
3. Provides mechanization
Producers
1. To produce quality, secure and
traceable products
1. Satisfy market demand, compliance to local and international
standards
2. Improve efficiency of production
3. Creation of vibrant agricultural sector
4. Generating Sales, and Sustainable Income
Input Suppliers
1. Supply seeds, fertilizers,
medicine, pesticides, energy to
the producers, R&D, etc.
1. Increased producer base
2. Bulk supply of certified input
Improve the volume and efficiency of agribusiness
(Massmart, Fresh produces markets, etc)
(Karos, Seloane, Nwanedi Tomatoes,
Nkuna)
(Sasol, Panaar, Intervet, Kynoch, Agricol,
Du Roi etc)
Value Chain –
Supporters and Influencers
Participant
Role
Benefits/Interest
Government
Capacity building and policy
1. Leverage additional capacity for skills improvement
2. Increase BBBEE participation
NGO's
Networking, lobbying and advocacy
1. Leverage additional capacity for skills improvement Increase
SME participation
National Business Chambers
Leverage with large corporates
1. Increased BEE & Corporate participation
2. Increased BEE participation
3. Diversify supply and sales to corporates
Financial Institutions
Provide access to finance and risk
mitigation strategies
1. Deal flow
2. Access to government facilities
3. Access to CAPEX
4. Access to production finance
5. Access to large pool of BEE SMEs,
6. BEE complicity
Business Consultants &
Service Providers
Business plans;
Training;
Capacity building;
Mentor-ship
Capacity building
Donor Agencies
(USAID)
Funding, Lobbying, Advocacy,
Credibility
1. Leverage, influence, trade opportunities, Poverty reduction,
growth, business opportunities, job creation.
Dev Agencies
Policy implementation and process
support
1. Increase the number of SME participating
2. Improve the environment in which SME operates Capacity
building of SME to ensure implementation of government policies
& strategy
(Land'o Lakes, Limdev, FAMU,
Technoserve, UFF, etc)
IDC, Dev & Com Banks
(GEDA, GEP, TIL, TIKZN, TISA) NDA,
SEDA CEF
Complicated Value Chain
in South Africa
CONSUMER
MARKETS
Informal Traders
Retailing
Product
Export Markets
Juiced/Canned
Dried/Processed
Product
Local Markets
Large Retail
Stores
Direct Stores
Wholesaling
PROCESSING
Bakkie
Trade
Producing
Municipal & Fresh
Produce Markets
Processed
Products
Commercial
Pack Houses
Packaging Sorting
Commercial Farmers
Small Holders
Nurseries
Root Stocks /Trees
CHANNEL 1:
SMALL/SURVIVOR
Grower Self Export
&
General Marketing
CHANNEL 2:
EMERGING & COMMERCIAL
Export Marketing
Agents
Large Pack House
Facilities
Large Vertically Integrated
Farmers
CHANNEL 3:
LARGE CORPORATIONS
Clear Business Strategic Position for
SME Competitiveness
 Price
relative to competitors
Above Average
 Product Quality
Premium
 Brand Image
High Profile
Uses of Cost-chain Rebates
 Overall Business Strategy
 Service to Customers
Medium/High (Economies of Scale)
Best Cost/
Premium Quality
Superior
Key Success Factors
 Attunement to market signals, incentives, value chain intelligence, competitors,
regulatory, policy and compliance frameworks and specifications; consumer habits; patterns
and trends
 Adaptability to market, technological systems, process, cultural, ecological shifts, trends
and standards
 Alignment of capability, systems, instruments and processes, research and development
to mast benchmarked globally competitive factor conditions and productivity levels. …SCM
Participation in trade shows, co operative shipping and group representatives
Sharing knowledge, logistics, contacts without sharing IP
Membership Application Process Flow
Obtain &
Check
Application in
Office
Application for WCFFI
Membership
Send Pre-Approval and
Member Criteria
Fail
Pass
CEO Submit for
Authorisation
Fail
Board
Approve
Application
Pass
Conduct Initial
Audit/Assessment - Desktop
Basic Corrective
Actions/Missing documents
Conduct Onsite Assessment
(Accredited BSP’s)
Review Results/Membership
Criteria Satisfaction
Serious Corrective Actions
& Interventions
Fail
Board
Accepts/
Rejects
Pass
Approval Process
(Letter, Unique Member No, etc)
Issue Member with Copy
of Constitution
Issue Certificate & Logo Usage
Guidelines & Website Access
Codes
Member Toolkit/Folder
(Events Calendar, Vouchers, etc)
WHAT YOUR
WCFFI MEMBERSHIP
MEANS TO YOU
Access to
Sector Information & Knowledge Management
Food Industry Service Providers (Database)
Programs covering
Capacity Building and Skills Transfer;
Best Practices;
Innovation & Technology;
Market Development, Research & Intelligence;
Enterprise Development & Competitiveness;
Preferential Market Access & Export Promotion;
Value Chain rebates …..Economies of Scale.
Trade Shows, Trade Missions, Trade Exhibitions (with Partners)
In the Future…….E-commerce opportunities…….AND MORE!!!!
SIGN UP NOW!!!
Thank You