Why this is important to Wisconsin businesses: As consumers' tastes shift and prepared meals become more popular, Wisconsin companies can capture a piece of the market.

In 2016, the retail sector contributed 9 percent of South Africa’s overall GDP, reaching a size of R491.60 billion ($38 billion). The sector has recorded positive growth in recent years. There are six major grocery chains in South Africa totaling more than 4,000 grocery stores (in comparison, all of sub-Saharan Africa has 6,400 store units, making South Africa the predominant regional market, according to the Global Agricultural Information Network). To remain competitive, retailers have had to diversify their portfolios, adopt multi-channel approaches and strategies, and expand their product lines. Launching online stores to supplement store-based retailing sales has led to growth in the online shopping channel. Rising internet penetration, coupled with better delivery services, has increased online shopping, although online food shopping is not yet catching on as well as expected.

South African local retailers are aggressively expanding with solidly growing footprints into other African countries, exceeding projections and expectations of income, and giving U.S. companies a gateway to the rest of sub-Saharan Africa. An example is South Africa’s biggest retailer, Shoprite, which has opened stores in 15 other African countries along with expanding within South Africa.

The sauces and preparations segment, valued at $28.6 million, may be of special interest to Wisconsin exporters. The U.S. currently has the largest market share, accounting for more than 30 percent of imported sauces and preparations available in South Africa. The third-largest category in packaged food in terms of consumption is sauces, dressings and condiments. This category experienced growth of 57.9 percent, with “table sauces” driving most of the increase at 73.3 percent growth, from 1999 to 2012. Consumption of tomato sauce/ketchup and salad dressings has more than doubled since 1999, and consumption of mayonnaise grew by 50 percent. A new category, “spicy chili/pepper sauces,” emerged around 2004. The trend toward home dining to save money, as well as the “braaing,” or barbecuing, culture in South Africa and the whole southern African region, are some of the reasons for increased consumption.

Food consumption patterns in South Africa have changed dramatically in recent decades. The largest shifts in food consumption were seen in the categories of soft drinks, sauces, dressings and condiments, sweet and savory snacks, meat, and fats and oils. Convenience, health and nutrition, and indulgence were the main drivers of the increase in consumption of packaged foods and beverages.

Total food expenditures have increased for fruit and vegetables and processed foods such as spaghetti and oven-ready meals, while expenditure on maize and wheat flours and starch mono-diet products have declined. For South African women, who do most of the household grocery shopping, the most important consideration when choosing a food item is the price. After price, the factors they consider (in order of importance) include taste, health, nutrient content, safety, hygiene and ease of preparation.

In the search for growth and to build economies of scale, South African retailers are also looking abroad, and expansion into the rest of Africa remains firmly on the agenda. Challenges include complicated supply chains and adapting merchandise for countries with warm climates year-round.

In recent years, grocery retailers have been opening in-store pharmacies and standalone liquor outlets, as well as expanding existing categories—for example, both Massmart and Woolworths have indicated their plans to enlarge their food offerings. Aside from offering basic retail services, both food and clothing retailers have begun to offer financial services products such as personal loans and insurance—for example, Edcon, in partnership with Hollard Insurance, sells Edgars and Jet branded insurance.