SOUTH AFRICA - Tiger Brands is embarking on an expansion into South Africa's informal trade sector, branding spaza stores with vibrant murals showcasing some of its most iconic brands, including ACE, Golden Cloud, Oros, and KOO. 

This multi-million-rand project is part of the company's strategy to deepen its presence in the township economy and strengthen ties with local communities.

Mural branding to reach 2,000 stores by 2029

The branding initiative, which started in mid-2023, aims to emblazon the exteriors of 2,000 spaza stores by 2029. The first 50 stores selected for the project are located in Gauteng’s bustling townships of Soweto, Alexandra, and Tembisa. 

Local artists have been commissioned to execute the designs using a mix of techniques, including hand painting, spray painting, and vinyl application. These murals are not just advertisements but also reflect the vibrancy and entrepreneurial spirit of South African townships.

According to Tiger Brands' Chief Customer Officer, Luigi Ferrini, the project benefits both traders and the company. 

“The trader benefits from increased consumer traffic, while Tiger Brands’ products gain more visibility as we expand into the informal sector of the South African economy. This outdoor branding also highlights the energy of our townships and the artistic talent of local communities,” Ferrini stated.

The branding initiative is part of a broader expansion strategy targeting the informal sector, a rapidly growing market in South Africa. 

According to Trade Intelligence (2022), more than 70% of South African households make purchases within the informal trade, contributing about R184 billion (US$9.6 billion) annually to the Fast-Moving Consumer Goods (FMCG) sector. This market segment is growing at a faster rate than the modern retail trade.

Route-to-market strategy gains momentum

Tiger Brands' township route-to-market strategy is already delivering significant results. The company’s products are now available in over 71,000 stores across South Africa’s informal trade, a marked increase from 50,000 at the end of 2023. 

The company aims to extend its reach to 90,000 stores by the end of 2024, with a total target of 130,000 outlets over the next five years. These stores include spaza shops, mini-superettes, and wholesale distributors.

Ferrini sees the township market as critical for growth. 

“We see significant opportunity to grow by offering consumers affordable, quality products that are trusted and meet their needs,” he noted. Since launching the strategy, Tiger Brands has boosted its distribution and availability in informal markets by over 90%.

Perfect outlets and cooler branding initiatives

In addition to branding, Tiger Brands is working closely with its customers to develop ‘Perfect Outlets.’ These stores receive tailored point-of-sale marketing support and branded coolers to enhance the visibility of Tiger Brands' ready-to-drink beverages. 

This initiative ensures the company’s entire product portfolio is prominently displayed and accessible in township outlets.

Upcoming Boxer IPO

In a separate development, Tiger Brands has announced plans to list its discount grocery chain, Boxer, with an estimated value of R8 billion (US$450 million). The initial public offering (IPO), expected in late 2024, is seen as a move to boost the company’s market value and address financial challenges, including a trading loss and increased debt. 

Further details of the IPO will be disclosed closer to the listing date.