By: Anna Majavu
A massive 87% of companies working within the food and beverage sector are SMMEs, and if their products are unique, they stand to gain a strong foothold in the export market. This was the view of experts from Proudly South African, the Food and Beverage Seta, Absa, and a chocolatier who started her business at home with just R8000 and now exports to several countries.
Absa’s head of SME Business in Gauteng North and Limpopo, Monnie Mongwe, told a Proudly South African webinar attended by 1000 food and beverage SMMEs earlier this month, that unique and interesting South African food and beverage products – many of them invented and manufactured by SMMEs – were doing very well in the export market. A number of them were also located in rural areas, supporting other small businesses that supplied raw materials and provided much-needed jobs, Mongwe added.
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Some SMMEs were making headway by processing raw agricultural products, such as dehydrating mopani worms and turning them into chips. The food and beverage environment is very competitive. It is dominated by huge food producers and major retailers, with just five large supermarket chains controlling 64% of the national market. These SMMEs could bypass the difficulties of getting their products onto local supermarket shelves and make sales on online marketplaces set up by Proudly South African to market local products to the world.
However, this could only happen if their products were of high quality, the experts agreed. “There are some critical challenges in skills and training. Most of our SMMEs start a business but there is no sustainability and success,” said Sinaye Mgidi, senior manager of learning programmes and strategic projects at the FoodBev Seta. The cost of getting products certified as fit for human consumption by the SA Bureau of Standards (SABS) could be up to R12,000 for a nutritional analysis of the product, said biotechnologist Rose Modise, technical lead of the Food and Pharmaceutical Microbiology Department at the SABS.
In some cases, the Small Enterprise Development Agency might fund the costs of certification – if not, food and beverage SMMEs would struggle to get their products onto shelves. Stephanie Ceronio, who founded the Pretoria-based Jack Rabbit Chocolate Studio, told the webinar that going “boutique versus industrial” gave her an edge in the market. This was because she did not need the capital to start a production facility with expensive machinery.
Having started her hand-painted chocolate business at home with R8000, Ceronio had very few local buyers until she posted samples to an international competition for chocolatiers in Turkey. After winning gold, she now exports to Japan and several countries in Europe, her business employs nine people and has set up its own production facility.
