Emerging businesses in the Fast Moving Consumer Goods (FMCG) sector are learning how to manage costs while maintaining quality as key ingredients such as oats, nuts and seeds in bulk, a common approach among producers attempting to balance input costs, margins and consumer pricing.
As competition intensifies in the FMCG sector, small food manufacturers are increasingly forced to find niche strategies to survive in markets dominated by large, established brands.
Rather than competing on scale, pricing power or shelf space, many FMCG SMEs are turning to product differentiation and specialised consumer demand as a route to market.
One strategy gaining traction is personalised nutrition, driven by rising health awareness and increasing concern around diet-related conditions such as diabetes. Small producers are positioning targeted food products as alternatives to mass-produced, standardised offerings that dominate supermarket shelves.
How Alu’s Muesli stands out
Within this space, Alu’s Muesli, founded by Aluwani Netshisaulu, offers a case study of how an FMCG SME is attempting to compete in the breakfast foods category through custom-blended, preservative-free muesli, including a Banting and diabetic-friendly option.
Unlike mass-produced cereals that prioritise long shelf life, additives and volume production, Alu’s Muesli operates on a small-batch production model. This allows customers to personalise their blends according to dietary goals such as low sugar, high protein or gluten-free requirements.
“Our aim was to move away from the one-size-fits-all approach to breakfast,” Netshisaulu told Vutivi Business News.
“Many people want to eat better but struggle to find products that truly align with their nutritional needs, especially if they are managing conditions like diabetes.”
The introduction of the Banting and diabetic-friendly muesli, priced at R107, reflects how FMCG SMEs are responding to specific market gaps rather than broad mass demand. Banting and low-carb diets have gained popularity in South Africa, particularly among consumers seeking to manage blood sugar levels and reduce processed carbohydrate intake.
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Addressing diabetes and consumer demand
According to the Diabetes Atlas, South Africa has one of the highest diabetes burdens in sub-Saharan Africa, with an estimated 2.3 million adults living with the disease, a figure projected to rise. Despite this, many diabetic-friendly food products remain imported and are often priced beyond the reach of price-sensitive consumers.
“We noticed a growing number of customers asking for low-carb, low-sugar options that don’t compromise on taste,” Netshisaulu said. “Affordability was non-negotiable for us. Healthy food should not be a luxury.”
SME challenges and growth plans
However, structural barriers continue to limit growth across the FMCG SME sector. Access to funding, production equipment, compliant packaging and entry into formal retail channels remain significant challenges for small food manufacturers.
“I’m still using normal kitchen equipment to produce the muesli, which can be limiting,” Netshisaulu said, noting that maintaining consistency in taste and texture was an early operational challenge.
Looking ahead
As competition in the FMCG sector intensifies, small food manufacturers are increasingly being pushed to decide whether to remain niche producers or invest in scaling their operations. For businesses like Alu’s Muesli, the challenge lies in balancing product quality and customisation with the demands of formal retail, including consistent supply, compliant packaging and pricing pressure from dominant brands.
