On day two of the Produce Marketing Association's (PMA) Fresh Connections: Southern Africa, www.freshfruitportal.com caught up with the PMA's CEO Bryan Silbermann and California Avocado Commission’s vice president of marketing, Jan DeLyser. The two event speakers reflected on Africa’s growing middle class and burgeoning retail potential.

Over the next decade, Africa expects to see unrivaled growth in the retail sector, explained Silbermann at the event in Cape Town. Not only does this equate to a new shopping experience for middle class Africans; it also means new opportunities for marketers.

"Some of the largest growth on a net basis for population in the world is going to come in Africa, second only to Asia in the next 30 to 35 years. That bodes very well for people expanding the domestic market," Silbermann said.

"With a rising middle class and a much bigger customer base that can afford quality, you have the rise of supermarkets across the African continent. Over the next 10 years, that continent is going to see the greatest percentage growth in modern retailing of anywhere in the world."

Alongside retail growth, Silbermann described potential for marketers to step up their game and specialize packaging much like in the U.S. and Europe.

"There’s an awful lot of experience in marketing and packaging that people have from around the world that's applicable in both South Africa and Africa," he said.

"There are opportunities for innovation in packaging and the types of marketing techniques that others use for their products in North America, Europe and the industrialized world."

Despite the trend toward higher demand goods, he did not expect exporters from the U.S. and Europe to immediately jump on the African bandwagon - pricing in the region simply cannot compete.

Growth on the continent, however, could lead to higher quality domestics products staying closer to home.

"You’ve got much more focus on quality and marketing because you have more supermarkets emerging to replace the informal sector. You have a rise of a more affluent middle class who expects a high quality product," he said.

Innovation for avocados

For South Africa, exporter interest is expected to grow in other blossoming African markets such as Angola and Nigeria. Domestically, DeLyser said there is also noted esteem for local products.

"From what I’ve seen in the stores here, there’s a sense of pride in South Africa buying South African products. They’ve got the locavore thing going on. [Historically] the system has been that export quality is exported and the other volume is sold here," DeLyser said.

This has been the case for Hass avocados. Although South Africa is a major producer of the product, the variety is relatively unknown in the country. The fruit mostly goes to export while green skin varieties stay on the local market.

In the case of avocados that remain in South Africa, DeLyser noted the retail space given to the fruit in markets such as the Food Lover’s Market. This space provides potential to capture shopper interest and market the fruit in new ways.

"We saw packaged avocados in tray packs with one, two, four or six. Then we saw polybags, which I have not seen in the U.S. On the packaging there was an opportunity to create some recipe information and even information on the different varieties," she said.

DeLyser also pointed out the South African industry’s innovation not only in research but also in product development.

"The major producers, they’re taking control of the clonal rootstocks they’re working with. Many of them have nurseries and many of them have secondary companies that work with lower quality fruit. They’ve got an outreach with avocado oil. They also do frozen guacamole products. I’m very impressed by their ability to market to different sectors," she said.

Food service potential

Regarding growth for products such as guacamole, DeLyser pointed out the case of major product expansion on the U.S. market. Rising consumption has been partly attributed to restaurant promotions – another marketing possibility as South Africans have increasingly more cash to eat out.

"When tableside guacamole was introduced at restaurants [in the U.S.], there was an incentive for them to take a tray with two to four avocados on them with some tomato, garlic and onion. People who had never thought to make guacamole all of the sudden saw how easy it was and put it on the map," she said.

Contact with new foods at restaurants provides an easy way to introduce previously unknown products to the consumer market, Silbermann explained.

"Food service is much more impactful on people's conscience than retail is ever going to be. Not too many retailers have an interactive experience with their customers and that’s how people typically try something new for the first time," he said.

He explained a sort of symbiotic relationship tying restaurants back to retail and looping around to traditional consumer formats.

While retailers will look to restaurants for their stocking tips, Silbermann said informal street sellers will also have their eye on the retail sector.

"Many people in Africa are used to relying solely on the informal sector for their fruits and vegetables. As the modern retailers have expanded, hawkers see people like these things and that the tastes have changed," he said.

"So the informal sector starts off with that. Think of the supermarket as being in the vanguard to get people to expand their range of foods that they try."

Although modern markets are expected to creep in on these informal spaces, Silbermann explained that they will still be very much a part of the African shopping experience. As we see new formats arise, the old will take note.

"There are opportunities in the non-retail channels of distribution. One that has always been present here are the so-called hawkers. That’s actually the fastest growing sector and continues to be," he said.

"But as you get a burgeoning middle class, people expect more quality and they go from the informal sector to the formal."

Photo: Steven LeRoux Photography

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