When it comes to food manufacturing companies in South Africa, Cape Town is an established hub for the national production and distribution of produce and beverages. In fact, it boasts some of South Africa’s largest companies in the food and beverage manufacturing industry. Add to this the creation of a proudly Cape Town branding campaign by the City and it’s no surprise that entities such as Wesgro have begun to strongly promote Cape Town food and beverage offerings on an international scale too. Not just to greater Africa, but the world at large.
“Cape Town already boasts some of South Africa’s largest food and beverage manufacturing companies, making the city a well-established hub for the sector. This has contributed to the establishment of Cape Town as a forward-looking, globally competitive business city.” Ian Neilson (Deputy Mayor)
Investors and enterprises who invest or operate locally will find that they’ve joined a city that places great emphasis on sustainable, ethical food and beverage manufacturing. This is particularly pertinent in regards to scaling the supply chain to meet greater demand locally and abroad.
Food and beverage is now the largest of Cape Town’s manufacturing industries. It contributes 3.6% of Cape Town’s GVA and 4.1% of its formal employment. The industry has a metro location quotient of 1.3, meaning that it is relatively more important to Cape Town’s economy than it is to other metros (Project Camissa Report 2019). This is considered a comparative advantage industry for the city within South Africa.
Why manufacture food & beverages in Cape Town?
Cape Town has always been incredibly competitive in the South African economy. In large due to a booming food and beverage manufacturing industry that’s supported by distinctive agricultural yields in the region (including grapes, deciduous fruits and ostriches). Not to mention its proximity to many agricultural landscapes, agri-businesses, a large international port, as well as ever-growing consumer population and a relatively strong skills base. These elements all contribute to the positive business climate experienced by food and beverage manufacturing companies in Cape Town. There is a lot of scope for food and beverage manufacturers to tap into the increasing demand for diversified, value-added food and beverage products.
The speed at which the manufacturing industry is rapidly changing and evolving is only increasing, it’s imperative for food and beverage manufacturers also aim to keep up with the challenges. These are largely driven by shifting consumer attitudes, retailers’ demanding more, tighter regulations and more pressure from business owners. Cape Town offers a business oasis from many of these challenges for food and beverage manufacturing companies.
The growth of Cape Town’s food & beverage industry
The food and beverages industry has recorded growth rates in excess of 2% per annum in the 2014-2018 period. In fact, it was the largest non-tertiary sector contributor to Cape Town’s economic growth (6%) between 2014 and 2018 too (Project Camissa Report 2019).
Recent growth in food and beverage exports provides a reason to believe that the sector is well placed to realise the opportunities presented by a growing demand for food and beverage products on the African continent. In fact, beverage exports from Cape Town grew by 21% between 2015 and 2016 and fish exports grew by 22.7%. This is a relatively labour-intensive industry and growing faster than average for Cape Town sectors. It’s also one of the few manufacturing industries in Cape Town that is showing a positive trade balance and has become a very important earner of foreign exchange for the region (Project Camissa Report 2019).
Competitiveness of Cape Town’s food and beverages manufacturing sector
Cape Town hosts several competitive clusters in terms of the manufacturing of spice and saucing products, as well as the processing of fish products, the manufacture of grain mill products (especially cereals), the brewing of craft and commercial beers, as well as soft drink production.
In fact, one of only two license holders for the bottling and distribution of Coca-Cola products in South Africa is based in Cape Town. However, the competitive advantages certainly don’t end there, for example:
- Cape Town has access to the country’s richest stocks of fish, as well as a mature fishing industry. The city is even managing to plug the gaps in global supply, especially in the sale of hake.
- Growth of the African middle class in and around the city has led to an increased demand for diversified food and beverage products. This diversification of the industry is nurturing more stability in the sector.
- Cape Town has an established history in the food and beverage industry, home to some of the country’s largest firms in the sector. It also has good proximity to a vast agricultural hinterland.
- There is an international port right on Cape Town’s doorstep. Not to mention, increased direct flights and improved air freight capacity for the export of perishable products. This has led to further opportunities for food and beverage companies in Cape Town.
- The city and its broader region have a fast-growing consumer population. Many enterprises are using Cape Town’s e-commerce platforms to attract a new generation of consumers within the food and beverages supply chain.
- Cape Town is the largest producer of craft beer and is also the South African city with the largest per capita filter coffee consumption. Also, leveraging off of Cape Town’s strong lifestyle brand, the trend is moving towards healthy, artisanal and whole food products in this region.
With booming tourism and a strong visitor economy, the city of Cape Town has also invested in providing a welcoming climate for food & beverage festivals. These attract not just tourists but also locals from all around the city and surrounds too.
Interested in investing in Cape Town’s growing food and beverages manufacturing sector? Contact us for even more information!