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 Bloubergs 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 COS

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 EFSAs 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 childrens defences and Kelloggs
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 1990s food scares
General Food Law placing responsibility with the industry
HACCP, BRC, GlobalGAP, EurepGAP, Natures Choice, Fairtrade
Stronger role for European authorities

STRICTER FOOD LAWS

Contaminants, including MRLs
Labeling & Consumer Alertness (allergens, nutritional & health claims)
Additives & Flavouring
Full Ingredient Statements
Organic Foods
Genetically Modified Foods (GMOs)

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 BSPs)

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