Quarterly Economic Review of the Food and Beverages ... · industry, wholesale and retail sectors...

Quarterly Economic Review of the Food

and Beverages Industry in South Africa

October - December 2017

Volume 4, number 2

DIRECTORATE: AGRO-PROCESSING SUPPORT

agriculture,forestry & fisheries

i

PREFACE

The agro-processing industry is among the sectors identified by the Industrial Policy Action Plan

(IPAP) and the National Development Plan for its potential to spur growth, development and

job creation via its strong backward and forward linkages with the other sectors of the

economy. DAFF established the Directorate: Agro-processing Support in 2011 to facilitate the

processing of raw primary agriculture, forestry and fisheries commodities into value added

products.

One of the functions of the directorate is to provide timely and updated economic information

regarding the agro-processing industry as part of monitoring and evaluating the performance

of the industry. Additionally, economic indicators provide an insight into the effects of

economic policies and other exogenous factors. To achieve this purpose, the directorate

publishes regular quarterly economic reviews of the agro-processing industry.

The main economic indicators reviewed are the changes in prices, production, capacity

utilisation, value of sales, formal employment and trade. An outlook of the industry for the next

quarter is also presented. In addition, some indicators of the food and beverages service

industry, wholesale and retail sectors are reviewed to evaluate the forward linkages of the

food and beverages industry.

Any comments and suggestions on the content of the publication are most welcome.

Mahlagedi Victor Thindisa

Director: Agro-processing Support

Pretoria

Disclaimer: The Department of Agriculture, Forestry and Fisheries did everything to ensure the

accuracy of the information reported in this publication. The department will, however, not be

liable for the results of action based on this publication.

ii

CONTENTS

PREFACE ................................................................................................................................................ i

1. INTRODUCTION ........................................................................................................................... 1

2. FOOD PRODUCTS ....................................................................................................................... 1

2.1 PRICE ..................................................................................................................................... 2

2.2 PRODUCTION ...................................................................................................................... 4

2.3 VALUE OF SALES .................................................................................................................. 6

2.4 INCOME FROM FOOD SALES IN THE SERVICE INDUSTRY .......................................... 8

2.5 TRADE .................................................................................................................................... 9

2.6 EMPLOYMENT .................................................................................................................... 16

2.7 OUTLOOK ............................................................................................................................ 18

3. BEVERAGES ................................................................................................................................ 19

3.1 PRICE ................................................................................................................................... 19

3.2 PRODUCTION .................................................................................................................... 20

3.3 VALUE OF SALES ................................................................................................................ 21

3.4 INCOME FROM BAR SALES IN THE SERVICE INDUSTRY ............................................ 22

3.5 TRADE .................................................................................................................................. 23

3.6 EMPLOYMENT .................................................................................................................... 31

3.7 OUTLOOK ............................................................................................................................ 31

4. CONCLUSION ............................................................................................................................ 32

5. REFERENCES ............................................................................................................................... 33

NOTES: ................................................................................................................................................. 34

Compiled by Directorate: Agro-processing Support

Department of Agriculture, Forestry and Fisheries

Sefala Building

503 Belvedere Street, Arcadia, South Africa

All correspondence can be addressed to:

Director: Agro-processing Support

Private Bag X416, Pretoria 0001, South Africa

Tel.: +27 (12) 319 8457

Fax: +27 (12) 319 8093

E-mail: [email protected]

This publication is also available on the internet at: http://www.daff.gov.za

mailto:[email protected]

http://www.daff.gov.za/

1

1. INTRODUCTION

The South African growth in the real value added by the primary sector decelerated notably

to 4,9% in the final quarter of 2017, following three consecutive quarters of double-digit

increases. The slowdown reflected a contraction in the mining sector and a slight moderation

in real output growth in the agricultural sector. For 2017 as a whole, the real gross value added

(GVA) by the primary sector increased by a firm 7,5% and contributed 0,7 percentage points

to overall annual gross domestic products(GDP) growth. This turnaround in the agricultural

sector was brought about by the end of the prolonged drought in the northern parts of the

country, which benefited field crop production as reflected by the 2017 bumper maize crop

and positive spillovers to some other sectors of the economy (Reserve Bank, 2017).

During 2017: Q4, the quarter-to-quarter physical volume of production of meat, fish, fruit, etc.

and dairy products rebounded as compared to the last quarter. However, grain mill products

and other food products grew during the period under review. The year-on-year meat, fish,

fruit, etc., dairy and other food products grew while grain mill products registered an improved

negative growth of 2,6% during the period under review. The quarter-to-quarter seasonally

adjusted value of sales of food products grew by 2,0%, following a 0,3% growth in the previous

quarter. Similarly, the year-on-year seasonally adjusted value of sales grew by 2,1%, as

compared to a growth of 0,9% in the previous quarter.

The trade balance of food and beverages grew from R2 241,6 million in the previous quarter

to R3 054,6 million in 2017:Q4. The employment in the food, beverages and tobacco divisions

rebounded quarter-to-quarter by 0,4% from 1,3% growth in the preceding quarter. However,

employment contracted by 1,9% year-on-year. As a result, 957 jobs were created in the division

during the quarter.

This quarterly review provides an analysis of the economic performance of the food and

beverages industry. The variables that are analysed are exports and imports of food and

beverages, employment, net balance survey, price index, volume of production, sales,

utilisation capacity, and wholesale and retail performances.

2. FOOD PRODUCTS

According to the Standard Industrial Classification, the food industry incorporates groups of

products that are categorised into the following four codes:

Code 301 refers to manufacturing, processing and preservation of meat, fish,

vegetables, fruit, oils and fats

Code 302 refers to manufacturing, processing and preservation of dairy products

Code 303 refers to manufacture of grain mill products, starch products and prepared

animal feeds

Code 304 refers to manufacture of other food products like bread, sugar, chocolate,

pasta, coffee, nuts and spices.

2

Hereafter, food products refer to those primary agricultural and fisheries products that have

undergone some form of change through manufacturing and processing or performed some

value addition activities such as preservation.

2.1 PRICE

Consumer Price Index (CPI)1

During 2017:Q4, with the economy boosted by growth in consumption expenditure by

households, the quarter-to-quarter consumer price index of all items grew by 0,9%, following a

growth of 0,6% in the previous quarter. Some of the items that grew in this period were: milk,

eggs and cheese by 1,5% from a 1,0% growth in the last quarter. Fruit moderated by 3,9%,

vegetables and fish moderated by 4,2% and 0,1% respectively. Oils and fats rebounded by

0,6%(See Table 2.1). Similarly, the year-on-year consumer price index of all items moderated

by 4,5% in 2017: Q4, following a 4,6% growth recorded in the previous quarter. Food items that

moderated year-on-year were: meat; sugar, sweets and desserts; and fish, which moderated

by 15,1%; 4,8% and 2,6%, respectively. However vegetables rebounded by 1,8%.

Table 2.1: Consumer price index of food products

Indices % change between

Food products

Weight 2016: Q4 2017: Q3 2017: Q4

2016: Q4

and 2017:

Q4

2017: Q3

and

2017: Q4

All items (CPI

Headline)

100 99,6 103,2 104,1 4,5 0,9

Food and non-

alcoholic beverages

15,4 99,3 103,0 103,9 4,6 0,9

Food 14,2 99,4 102,9 103,9 4,5 0,9

Processed 6,8 99,9 103,1 102,9 3,0 -0,1

Unprocessed 7,4 98,9 102,8 104,6 5,8 1,8

Bread and cereals 3,5 99,7 96,0 94,3 -5,4 -1,8

Meat 4,6 98,1 110,6 112,9 15,1 2,1

Fish 0,4 100,6 103,2 103,3 2,6 0,1

Milk, eggs and

cheese

1,7 100,1 102,6 104,1 4,0 1,5

Oils and fats 0,5 100,3 96,9 97,4 -2,9 0,6

Fruit 0,2 98,3 90,5 94,0 -4,3 3,9

Vegetables 1,6 99,7 97,4 101,5 1,8 4,2

Sugar, sweets and

deserts

0,6 100,1 106,7 104,8 4,8 -1,7

1 Stats SA defines CPI as a current social and economic indicator that is constructed to measure changes over time in

the general level of prices of consumer goods and services that households acquire, use, or pay for.

3

Other food 0,9 99,8 101,5 100,1 0,1 -0,1

Source: (Stats SA, 2017a)

Producer price index (PPI)2

The quarter-to-quarter and year-on-year producer price index for all final manufactured goods

registered a positive growth of 1,8% and 5,1% respectively during the period under review.

Sugar, oils and fats; fruits and vegetables; food products; and dairy products grew by 2,5%,

1,4% and 0,7%, 0,3% and 0,2% respectively. However, grain mill products, bakery products,

meat and meat products, and other food products registered a negative growth of 3,3%, 0,6%,

0,6% and 1,2% respectively in 2017: Q4. Fish and fish products remained unchanged during the

period under review. Grain mill products; sugar; Starch and starch products, animal feeds; Oils

and fats; other food products; and meat and meat products registered negative growth of

17,3%, 10,7%,10,6%,1,3%, 1,2% and 1,2% respectively during 2017: Q4.

Table 2.2: Producer price index of food products


Food products Weight 2016: Q4 2017: Q3 2017: Q4

2016: Q4

and

2017: Q4

2017: Q3

and

2017: Q4

Final manufactured

goods (Headline PPI)

100 99,5 102,8 104,6 5,1 1,8

Food products 26,3 85,0 85,9 86,2 1,4 0,3

Meat and meat

products

4,5 89,2 88,6 88,1 -1,2 -0,6

Fish and fish products 1,6 82,2 83,1 83,1 1,0 0.0

Fruit and vegetables 2,4 98,9 102,9 103,7 4,9 0,7

Oils and fats 0,5 99,8 97,1 98,5 -1,3 1,4

Dairy products 3,3 100,0 101,8 102,0 2,0 0,2

Grain mill products 1,8 100,7 86,1 83,3 -17,3 -3,3

Starch and starch

products, animal

feeds

1,6 100,1 90,4 89,5 -10,6 -1,0

Other food products 0,9 100,6 99,7 99,4 -1,2 -0,3

Bakery products 6,9 100,4 101,3 100,8 0,3 -0,6

Sugar 1,9 102,1 88,9 91,1 -10,7 2,5

Source: Stats SA (2017b)

2 OECD defines the Producer Price Index (PPI) as a measure of the change in the prices of goods either as they leave their place

of production or as they enter the production process. The PPI can be used as an economic indicator of inflation, as an escalator in contracts and as a deflator in the calculation of the national accounts.

4

Import unit value index3

Table 2.3 presents the import unit value of selected food products. On a demand perspective,

an increase in unit value is an indicative of a growing demand. During the period under review,

the import unit value of food products registered a positive growth of 1,4% quarter-to-quarter

and negative growth of 6,8% year-on-year. The fats and oils registered a negative growth of

6,8% year-to-year and 1,4% quarter-to-quarter, while grain mill products grew by 0,5% year-on-

year and 1,6% quarter-to-quarter.

Table 2.3: Import unit value index of food products

Source: Stats SA (2017c)

2.2 PRODUCTION

Source: Statistics SA (2017d)

3 IMF defines export and import unit value index as a measure the overall change in the prices of transactions in goods and

services between the residents of an economic territory and residents of the rest of the world. The average unit value is obtained by dividing the value of exported/imported goods in monetary terms with the respective volume/weight of the goods.

50

60

70

80

90

100

110

120

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4Ind

ex (

2010 =

100)

Figure 2.1: Seasonally adjusted physical volume of production: food

products

Meat, fish, fruit etc Dairy products Grain mill products Other food products

Food products


2016: Q4 2017: Q3 2017: Q4

2016: Q4

and 2017:

Q4

2017: Q3

and 2017:

Q4

Food (total) 100,6 92,5 93,7 -6,8 1,4

Fats and oils 100,6 92,5 93,7 -6,8 1,4

Grain mill products 104,4 103,3 105,0 0,5 1,6

5

Figure 2.1 presents a physical volume of production of the food products. The quarter-to-

quarter physical volume of production of meat, fish, fruit, etc. and dairy products rebounded

by 0,7% and 0,3% from a 0,1% and 0,6%, respectively in the last quarter. Grain mill products and

other food products grew by 1,5% and 1,7% as compared to a growth of 0,6% and 1,0%,

respectively in the last quarter. Conversely, meat, fish, fruit, etc., dairy and other food products

grew by 4,0%, 5,3% and 9,7%, respectively year-on-year, while grain mill products registered an

improved negative growth of 2,6% as compared to a 6,3% contraction in 2017: Q3. The growth

in food production could be a attributed to an increase in households expenditure in 2017:Q4.

Production capacity

Table 2.4: Utilisation and reasons for underutilisation of production capacity by large

enterprises: Food products (percentage)

Period Utilisation Reasons for underutilisation

Total

under-

utilisation

Shortage of Insufficient

demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2016: Q4 82,2 17,8 1,8 1,5 0,3 9,9 4,3

2017: Q3 82,0 18,0 2,6 1,4 0,3 10,8 2,9

2017: Q4 82,7 17,3 2,0 1,4 0,6 10,4 2,9

Source: Statistics SA (2017e)

The utilisation of production capacity by large enterprises of food products showed a marginal

growth year-on-year and moderate growth quarter-to-quarter (see Table 2.4). Insufficient

demand and other reasons such as low productivity and shortage of raw materials are the

main reasons of underutilisation during the period under review.

6

2.3 VALUE OF SALES


During 2017: Q4, in line with respective increases in food production and households’

expenditure, the quarter-to-quarter seasonally adjusted value of sales of food products grew

by 2,0%, following a 0,3% growth in the previous quarter. Similarly, the year-on-year seasonally

adjusted value of sales grew by 2,1%, as compared to a 2,1% growth in the previous quarter

(see Figure 2.2).

Figure 2.3 below shows the performance of meat, fruit and fish; dairy products; grain mill

products; and other food products. Meat, fruit and fish and ‛‛other food products’’ grew by

1,7% and 3,4%, respectively, quarter-to-quarter. Dairy products moderated by 1,3%, while grain

mill products rebounded by 0,5% quarter-to-quarter. However, meat, fruit and fish; dairy

products and ‛‛other food products’’ grew by 5,3%; 7,7% and 8,7%, respectively year-on-year.

Moreover, dairy products registered an improved negative growth of 15,1% in 2017:Q4 as

compared to a 15,5% contraction recorded in the last quarter.

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

20

12:

Q4

20

13:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

20

15:

Q2

20

15:

Q3

20

15:

Q4

20

16:

Q1

20

16:

Q2

20

16:

Q3

20

16:

Q4

20

17:

Q1

20

17:

Q2

20

17:

Q3

20

17:

Q4

R m

illio

n

Figure 2.2: Seasonally adjusted value of sales (current prices): food

products

7


Wholesale and retail sales4

The current value of wholesale and retail sales of food, beverages and tobacco are given in

Figure 2.4. The quarter-to-quarter wholesale and retail sales of food, beverages and tobacco

accelerated by 15,3% and 21,0%, as compared to a 0,5% and 3,8% growth, respectively, in

2017: Q4. However, the year-on-year retail sales of food, beverages and tobacco moderated

by 9,2%, while wholesale grew modestly by 6,1%. As a result, the current value of income from

wholesale and retail sales of food, beverages and tobacco increased from R26,2 billion and

R7,0 billion in the previous quarter to R30,3 billion and R8,5 billion, respectively in 2017: Q4. This

is boosted by an increase in households’ expenditure, which is the case during festive seasons.

4 Statistics South Africa (Stats SA) conducts a monthly survey covering enterprises in the wholesale and retail trade industry. The results of

the monthly wholesale and retail trade sales survey are used to compile estimates of the gross domestic product (GDP) and its components, which are used in monitoring the state of the economy and formulation of economic policy. These statistics are also used in the analysis of comparative business and industry performance.

50

2,050

4,050

6,050

8,050

10,050

12,050

14,050

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

Ind

ex (

2010 =

100)

Figure 2.3: Seasonally adjusted value of sales (current prices): food

products

Meat , fish, fruit etc Dairy products Grain mill products Other food products

8

Source: Statistics SA (2017f, 2017g)

2.4 INCOME FROM FOOD SALES IN THE SERVICE INDUSTRY6

Table 2.5 below shows the income from food sales in the service industry, which includes food

sales in restaurants and coffee shops, take-away and fast food outlets and catering services.

Source: Statistics SA (2017)

The total current income from food sales in the service industry moderated by 9,2% in 2017: Q4,

from a 9,5% growth in the preceding quarter. The quarter-to-quarter increase can be

attributed to moderate growth in restaurant and coffee shops and catering services by 7,7%

and 5,0% from 13,7% and 5,4% in 2017: Q3. However, take-away/fast food accelerated by

12,5%, as compared to a 5,6% growth in the last quarter. Similarly, the year-on-year income

from food sales moderated by 5,4% following a 9,5% growth in 2017: Q3. Restaurants and

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

201

2: Q

4

201

3: Q

1

20

13

: Q

2

201

3: Q

3

201

3: Q

4

20

14

: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

R m

illio

nFigure 2.4: Wholesale and retail trade sales of food, beverages and

tobacco (current prices)

Wholesale Retail

3,000

3,500

4,000

4,500

5,000

5,500

201

2:…

201

3:…

201

3:…

201

3:…

201

3:…

201

4:…

201

4:…

201

4:…

201

4:…

201

5:…

20

15

:…

201

5:…

201

5:…

201

6:…

201

6:…

201

6:…

201

6:…

201

7:…

201

7:…

201

7:…

201

7:…

R m

illio

n

Figure 2.5: Income from food sales in the service industry

9

coffee shops and take-away/fast food moderated by 5,8% and 5,2%, respectively, while

catering services rebounded by 4,9% year-on-year. As a result, the industry grew by R4 698,9

million in the current quarter, from R5,131,3 million in the last quarter (see Figure 2.6)

Source: Statistics SA (2017h)

2.5 TRADE

Main food export destinations and products

Figure 2.7 shows food export destinations’ share of continents. Asia was the main export

destination during 2017: Q4. It accounted for 36% of the total share of exports, which is followed

by Africa at 26%, then Europe and Asia with a share of 26% and 21%, respectively. The

Americas’ share was 10%, while Oceania’s share is minimal at 1,0%. The dominance of Asia is

likely linked with its population size and a move towards the consumption of processed food

driven by an increasing e in households’ income.

Source: Quantec EasyData (2017)

500

1,000

1,500

2,000

2,500

3,000

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

20

15

: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

R m

illio

n

Figure 2.6: Income from food sales in the service industry

Restaurants and coffee shops Take-away/fast food outlets

Catering services

Africa

26%

Americas

10%

Asia

34%

Europe

21%

Oceania

1%

Others

8%

Figure 2.7: The food export destinations'share of continents in 2017:

Q4

10


Figure 2.9 shows the food export destination’s share of the main regions5 in 2017: Q4. Among

the main regions, Eastern Asia accounted the highest share of food exports (21%), followed by

the European Union (20%), SADC (Excluding SACU) (11%), while SACU (Excluding RSA)

accounted for 11% share. NAFTA accounted for 8%, while South central Asia, Western Asia and

South-Eastern Asia accounted for a combined share of 14% during the period under review.


5 The main regions which are included in the analysis are the top eight regions: SADC, Western Africa, EU; NAFTA (North Atlantic

Free Trade Area consists of USA, Canada and Mexico); Eastern Asia (includes China, Japan, North Korea, South Korea); Western Asia (mostly middle east countries); South Central Asia (include India, Pakistan and Bangladesh) and Australia and New Zealand.

05

10152025303540

20

12:

Q4

20

13:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14

: Q

3

20

14:

Q4

20

15:

Q1

20

15:

Q2

20

15

: Q

3

20

15:

Q4

20

16:

Q1

20

16:

Q2

20

16:

Q3

20

16:

Q4

20

17:

Q1

20

17:

Q2

20

17:

Q3

20

17:

Q4

%Figure 2.8: The food export destination's share of the continents

(2012: Q4 – 2017: Q4)

Africa Americas Asia Europe

SADC

(excluding

SACU)

11%

SACU (Excluding

RSA)

11%

NAFTA

8%

South-central

Asia

7%

South-eastern

Asia

3%

European Union

20%

Eastern Asia

21%

Western Asia

4%

Others

15%

Figure 2.9: The food export destinations's hare of main regions in 2017:

Q4

11


Figure 2.10 shows that the eight countries that accounted for food exports share during 2017:

Q4 were from: China (11,1%), the United states of America (7,9%), India (5,2%), Japan (4,5%),

Botswana (4,4%), the United Kingdom (4,1%), Namibia (4,0%), Mozambique (3,2%), the

Netherlands (3,0%) and the Republic of Korea (2,5%).

Table 2.5 presents the major exported food products during 2017: Q4, while Table 2.6 shows

the high and low export performers of food products during the quarter under review by

comparing the export values of the present quarter to the same quarter of the previous year

(year-on-year).

Table 2.5: Major exported food products in 2017: Q4

HS Code Food product

Total amount

(R million)

HST230400 Oil-cake and other solid residues 587,0

HST190531 Sweet biscuits 108,0

HST170410 Chewing gum 90,1

HST180400 Cocoa butter, fat and oil 76,8

HST151620 Vegetable fats and oils and their fractions 62,4

HST190230 Other pasta 57,0

HST180500 Cocoa powder 51,4

HST110100 Wheat or meslin flour 49,2

0

2

4

6

8

10

12

Ch

ina

Un

ite

d S

tate

s

Ind

ia

Ja

pa

n

Bo

tsw

an

a

Un

ite

d K

ing

do

m

Na

mib

ia

Mo

zam

biq

ue

Ne

the

rla

nd

s

Re

pu

blic

of

Ko

rea

%Figure 2.10: The share of top ten food export destination countries in

2017: Q4

12

HST190532 Waffles and wafers 29,1

HST210500 Ice cream and other edible ice 19,5

HST190410 Prepared foods obtained by the swelling or roasting of

cereals or cereal products 13,5

HST160100 Sausages and similar products, of meat, meat offal or

blood 8,7

HST190420 Prepared foods obtained from unroasted cereal flakes 8,3


Table 2.6: Export performance of food products

HS Code Food products

% Change

compared to a

year ago

High performers

HST180610 Cocoa powder, containing added sugar or other

sweetening matter 218,5

HST040510 Butter 122,2

HST210230 Prepared baking powders 84,1

HST160100 Sausages and similar products of meat, meat offal or

blood; food preparations based on these products 72,0


HST190220 Stuffed pasta, whether or not cooked or otherwise

prepared 40,8

HST190532 Waffles and wafers 37,1

HST170240

Glucose and glucose syrup, containing in the dry state at

least 20% but less than 50% by weight of fructose,

excluding inverted sugar

35,9

HST040310 Yogurt 27,1

HST210500 Ice cream and other edible ice, whether or not

containing cocoa 21,6

HST190230 Other pasta 21,2


HST190520 Gingerbread and the like 9,4

HST190540 Rusks, toasted bread and similar toasted products 9,0

Low performers

HST170230

Glucose and glucose syrup, not containing fructose or

containing in the dry state less than 20% by weight of

fructose -12,7

13


Main source of food imports and imported food products

South Africa’s main source of food imports by continents during 2017: Q4 is presented in Figure

2.11. The Americas accounted for a large share of food imports of 61% in the period under

review, followed by Europe with a 23% share, Asia and Africa with a share of 6% each, while

Oceania accounted for 4% share.


Africa

6%

Americas

61%

Asia

6%

Europe

23%

Oceania

4%Unallocated

0%

Figure 2.11: The share of continents as a source of food import

(2017: Q4)

HST040690 Other cheese -21,8

HST210130

Roasted chicory and other roasted coffee substitutes and

extracts, essences and concentrates thereof -25,9

HST190240 Couscous -29,3

HST210310 Soya sauce -30,8

14


Amongst the trading regions, South America accounted for a large share of South African food

imports , which is approximately 47%, followed by the European Union with 23% share, while

NAFTA, SACU (Excluding RSA), Eastern Asia and Australia and New Zealand have a share of

14%, 6,0%, 5,0% and 4,0%, respectively (see Figure 2.13).


0

10

20

30

40

50

60

70201

2: Q

4

20

13

: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

20

15

: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

Figure 2.12: The share of continents as a source of food import

(2012:Q4 – 2017:Q4)


SACU (Excluding

RSA)

6%

South America

47%

NAFTA

14%

Eastern Asia

5%

European Union

23%

Australia and

New Zealand

4%

Unallocated

1%

Figure 2.13: The share of regions as a source of food import

(2017: Q4)

15


The top ten countries that accounted for a large share of food imports are: Brazil (39,2%), the

United states of America (11,4%), Argentina (6,2%), Germany (5,1%), Ireland (4,9%), Denmark

(4,7%), Australia (3,9%), Namibia (3,3%), Spain (2,8%) and Botswana (2,7%) (See Figure 2.14).

Table 2.6 presents the major imported food products during 2017: Q4. Oil cake (HST230400)

was the leading imported product with an import value of around R587,0 million.

Table 2.7: Top 10 imported food products in 2017: Q4

HS code Food product Total amount

(R million)

HST230400

Oil-cake and other solid residues, whether or not ground

or in the form of pellets, resulting from the extraction of

soya bean oil

587,0


HST170410 Chewing gum, whether or not sugar coated 90,1


HST151620 Vegetable fats and oils and their fractions 62,4

HST180500 Cocoa powder, not containing added sugar or other

sweetening matter 51,4

HST110100 Wheat or meslin flour 49,2

HST151800

Animal or vegetable fats and oils and their fractions,

boiled, oxidised, dehydrated, sulphurised, blown or

polymerised by heat in vacuum or in inert gas or

otherwise chemically modified, excluding those of

heading 15.16; inedible mixtures or preparations

8,1

HST151710 Margarine, excluding liquid margarine 2,1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Bra

zil

Un

ite

d S

tate

s

Arg

en

tin

a

Ge

rma

ny

Ire

lan

d

De

nm

ark

Au

stra

lia

Na

mib

ia

Sp

ain

Bo

tsw

an

a

% s

ha

reFigure 2.14: The share of top ten countries as a source of food

import in 2017: Q4

16



Figure 2.15 shows the quarterly trade balance of food products. The quarter-to-quarter and

year-on-year exports and imports of food products grew by 5,7% and 16,5% from a 1,8% and

10,7% growth, respectively. Conversely, the quarter-to-quarter imports moderated by 4,0%

from a 10% growth in 2017: Q3, while year-on-year exports registered an improved negative

growth of 2,7%, as compared to a 5,3% in the last quarter. As a result, the trade balance

widened from R456 million in the last quarter to R598.7 million in the current quarter. An increase

in domestic demand could be a reason for growth in imports.

2.6 EMPLOYMENT

Source: Statistics SA (2017i)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

20

15

: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

R m

illio

n

Figure 2.15: Quarterly trade balance of food products

Export Import

150,000

160,000

170,000

180,000

190,000

200,000

210,000

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

20

17

: Q

3

201

7: Q

4

Figure 2.16: Total number of formal employment: food products

17

Figure 2.16 shows the total number of formal employment in the food products division. The

quarter-to-quarter food products rebounded by 0,8% as compared to a contraction of 2,5%

registered in the previous quarter, however, it grew marginally by 3,9% from 3,4% in the last

quarter. The division created 3 478 jobs during the period under review, which is likely as a result

of an increase in food production.

Source: Statistics SA (2017i)

Figure 2.17 shows the number of formal employment in food products division. The quarter-to-

quarter formal employment of meat, fish, fruit, etc. and other food products rebounded by

5,2% and 0,8% from a 2,9% and 2,5% respective contraction recorded in the previous quarter.

Dairy products registered an improved negative growth of 2,2% as compared to 3,0%

contraction in the last quarter. However grain mill products moderated by 1,8% from 3,8%

growth in the last quarter. The year-on-year formal employment of meat, fish and fruit, etc.,

decelerated by 5,5%, dairy products contracted by 3,4%, grain mill products grew modestly

by 3,3% and other food products grew marginally by 3,9%.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

20

15

: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

20

17

: Q

2

201

7: Q

3

201

7: Q

4

Figure 2.17: Number of formal employment: food products

Production, processing and preservation of meat, fish, fruit, vegetables, oils and

fatsDairy products

Grain mill products, starches and starch products and prepared animal fat

Other food products

18

2.7 OUTLOOK

Table 2.7: Net balance6 of BER manufacturing survey: food products

2017: Q2 2017: Q3 2017: Q4 2018: Q1*

Domestic sales volumes -3 -12 9 42

Export sales volumes 3 14 20 43

Production volumes 9 17 30 49

Domestic order volumes received -3 6 42 64

Export order volumes received 0 23 37 44

General business conditions -44 -35 0 -3

Number of factory workers -45 -30 -24 9

Fixed investment -27 21 43 -23

Business confidence7 29 32 53

Expected volume of goods imported in

12 months’ time

-35 -8 -6

Expected volume of goods exported in

12 months’ time

17 42 29

Expected real investment in machinery

and equipment in 12 months’ time

-15 22 -37

Expected business conditions in 12

months’ time -28 9 -31

*Expected Source: BER (2017)

A survey of food manufacturing by the Bureau for Economic Research (BER) is presented in

Table 2.7. The survey shows that the year-on-year outlook for 2018: Q1 is positive for all the

variables, except for general business conditions and fixed investment.

6 BER calculates the net balance statistics by subtracting the percentage of the respondents replying “down” from

the percentage replying “up” to a particular question. Respondents are asked to compare the current quarter’s

experience to that of a year ago. A positive net balance implies an improvement (i.e. positive year-on-year growth)

and vice versa. Therefore, the net balance varies from -100 to 100 where -100 is the most negative response; zero is a

situation of no change and 100 is the most positive response.

7 BER calculates the business confidence index by asking respondents to rate current business conditions as “satisfactory” or

“unsatisfactory”. Then the index is derived as a gross percentage of the respondents replying “satisfactory.” A value of 50 is

indicative of neutrality, 100 indicative of extreme confidence and 0 of extreme lack of confidence. An index greater than 50 shows

the majority of respondents are satisfied with the prevailing economic conditions.

19

3. BEVERAGES

Beverages according to SIC classification is code 305 and comprises of the following beverage

products:

Distilling, rectifying and blending of spirits; ethyl alcohol production from fermented

materials

Manufacture of wine

Manufacture of beer and other malt liquors and malt

Breweries, except sorghum beer breweries

Sorghum beer breweries

Manufacture of malt

Manufacture of soft drinks; production of mineral waters.

3.1 PRICE

Table 3.1 below shows the consumer price indices, producer price indices and export unit

value of beverages. The year-on-year and quarter-to-quarter consumer price inflation for

alcoholic beverages grew by 4,5% and 0,9% respectively. The beverages products that grew

during the period under review were: wine, spirits, beer, hot beverages and cold beverages

by 2,0%, 1,1%, 0,2%, 0,2% and 0,2%, respectively, quarter-to-quarter. Similarly, hot beverages,

spirits, beer, wine and cold beverages registered positive growth of 6,9%, 6,9%, 5,2%, 4,5% and

3,5%, respectively, year-on-year. The growths are likely a result of an increase in demand

during the quarter under review.

Table 3.1: Price indices of beverages


Beverages products

Weight 2016:

Q4

2017:

Q3

2017:

Q4

2016: Q4

and

2017: Q4

2017: Q3

and

2017: Q4

Consumer price indices

All items (CPI

Headline)

100 99,6 103,2 104,1 4,5 0,9

Alcoholic beverages 3,9 99,9 103,4 105,0 5,1 1,6

Spirits 0,8 99,8 105,5 106,7 6,9 1,1

Wine 0,7 99,9 103,0 105,0 5,2 2,0

Beer 2,5 99,9 104,2 104,4 4,5 0,2

Non-alcoholic

beverages

1,2 99,4 104,0 104,2 4,8 0,2

Hot beverages 0,3 100,1 106,8 107,0 6,9 0,2

Cold beverages 0,9 99,2 102,4 102,6 3,5 0,2

Producer price index

20

Beverages 8,5 100,0 103,5 104,5 1,0 4,5

Export Unit value

Beverages 135,2 100,6 92,5 93,7 1,4 -6,8

Source: Stats SA (2017a, 2017b, 2017)

3.2 PRODUCTION


Figure 3.1 presents the seasonally adjusted physical volume of production for beverages.

During 2017: Q4, as demand for beverages products improves, the quarter-to-quarter

seasonally adjusted physical volume of production for beverages registered an improved

negative growth of 0,5% as compared to a 3,0% contraction in the last quarter. However, the

seasonally adjusted physical volume of production for beverages rebounded by 3,5% year-

on-year as compared to a 0,8% contraction in 2017: Q3.

50

60

70

80

90

100

110

201

2: Q

4

20

13

: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

20

17

: Q

3

201

7: Q

4

Ind

ex (

2010 =

100)

Figure 3.1: Seasonally adjusted physical volume of production:

beverages

21

Production capacity

Table 3.2: Utilisation and reasons for underutilisation of production capacity by large

enterprises: Beverages division (percentage)

Period Utilisation Reasons for underutilisation

Total

under-

utilisation

Shortage of Insufficient

demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2016: Q4 88,1 11,9 2,1 1,0 0,3 6,3 2,1

2017: Q3 84,7 15,3 4,0 0,9 0,3 7,6 2,5

2017: Q4 87,6 12,4 1,4 0,9 0,6 6,6 3,2

Source: Statistics SA (2017e)

Table 3.2 shows that the year-on-year utilisation capacity moderated during 2017: Q4.

However, it increased modestly as compared to the previous quarter. Insufficient demand

remains the main reason for underutilisation, followed by other reasons such as seasonal

factors.

3.3 VALUE OF SALES


During 2017: Q4, in accordance with improvement in demand, the quarter-to-quarter and

year-on-year seasonally adjusted value of sales for beverages grew by 1,9% and 3,6% in the

quarter under review, following a growth of 0,1% and 1,9% in the previous quarter, respectively

(See Figure 3.2).

8,000

8,500

9,000

9,500

10,000

10,500

11,000

11,500

12,000

201

2: Q

4

20

13

: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

R m

illio

n

Figure 3.2: Seasonally adjusted value of sales (current prices):

beverages

22

3.4 INCOME FROM BAR SALES IN THE SERVICE INDUSTRY8

Figure 3.3 below shows the total income for bar sales in the food and beverages service

industry in 2017: Q4. The income from bar sales in the food and beverages service industry

grew by 18,0% as compared to 8,2% in the previous quarter. However, it moderated by 3,9%

year-on-year. The total income during the period under review stood at R451,2 million from

R382,3 million in 2017: Q3.


Figure 3.4 below shows the performance of the bar sales in the service industry, which include

restaurant and coffee shops, take-away/fast food outlets and catering services. During 2017:

Q4, restaurant and coffee shops and catering services grew by 17,5% and 22,4%, following a

growth of 9,1% and 2,5%, respectively, in the last quarter. However, during the period under

review, take-away/fast food outlets moderated by 6,1% from a 15,8% growth in the last quarter.

On the other hand, the year-on-year income for restaurants and coffee shops, take-away/fast

food outlets and catering services moderated by 1,1%, 18,3% and 20,4% from a growth of 1,9%,

21,0% and 15,3% in the last quarter, respectively.

8 Income from bar sales refers to income from liquor sales.

0

50

100

150

200

250

300

350

400

450

500

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

R m

illio

n

Figure 3.3: Total income from bar sales in the service industry

23


3.5 TRADE

Main export destinations of beverages products

Figure 3.5 below shows that during the quarter under review, Africa was the largest export

destination for beverages. Africa accounted for 44% share, followed by Europe (36%), the

Americas and Asia accounting for 9% and 10%, respectively. Oceania has the least share of

about 1%.


0

50

100

150

200

250

300

350

400

201

2: Q

4

201

3: Q

1

20

13

: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

20

16

: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

R m

illio

nFigure 3.4: Income from bar sales in the service industry

Restaurants and coffee shops Catering services Take-away/fast food outlets

Africa

44%

Americas

9%

Asia

10%

Europe

36%

Oceania

1%

Figure 3.5: The beverage export destinations' share of continents in

2017: Q4

24


Among the main trading regions, the European Union (34%) accounted for the largest share

of the total beverages exports, followed by SACU (Excluding RSA) (21%), SADC (Excluding

SACU) (17%), NAFTA (8%) and Eastern Asia (6%). Eastern Africa and Western Africa accounted

for a combined share of 5% (see Figure 3.7).


0

10

20

30

40

50

60

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

%Figure 3.6: The beverages export destinations' share of the continents in

(2012:Q4 – 2017:Q4)


Western Africa

2%SADC

(excluding

SACU)

17%

SACU (Excluding

RSA)

21%

NAFTA

8%

Eastern Asia

6%

European Union

34%

Eastern Africa

Rest

3%

Others

9%

Figure 3.7: The share of top beverage export destination regions in

2017: Q4

25


Figure 3.8 above shows the share of top ten beverages export destinations during 2017: Q4.

The main export destinations for beverages are: Namibia (10.4%), Botswana (4,9%), the United

States of America (4,3%), China (4,1%), Zambia (3,8%), Lesotho (3,2%), Canada (3,1%),

Swaziland (2,6%), Angola (2,4%) and Sweden (2,4%).

Table 3.3 presents major exported beverages products in 2017: Q4, while Table 3.4 shows high

and low export performers of beverages during 2017: Q4. Export performance compares the

export values of the present quarter to that of the same quarter of the previous year (year-on-

year).

Table 3.3: Major exported beverages products in 2017: Q4

HS Code Beverages products Total amount

(R million)

HST220830 Whiskies 838,5

HST220300 Beer made from malt 408,7

HST220210

Waters, including mineral waters and aerated waters,

containing added sugar or other sweetening matter

or flavoured

218,8

HST220820 Spirits obtained by distilling grape wine or grape marc 131,5

HST220410 Sparkling wine 104,5

HST220870 Liqueurs and cordials 77,4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Na

mib

ia

Bo

tsw

an

a

Un

ite

d S

tate

s

Ch

ina

Za

mb

ia

Leso

tho

Ca

na

da

Sw

azi

lan

d

An

go

la

Sw

ed

en

%Figure 3.8: The share of top ten beverages export destination countries

in 2017: Q4

26

HST220710 Undenatured ethyl alcohol of an alcoholic strength by

volume of 80% vol. or higher 52,6

HST220600

Other fermented beverages (for example, cider,

perry, mead); mixtures of fermented beverages and

non-alcoholic beverages, not elsewhere specified or

included

49,3

HST220850 Gin and Geneva 41,4

HST220860 Vodka 30,8

HST220840 Rum and other spirits obtained by distilling fermented

sugar cane products 19,6

HST220900 Vinegar and substitutes for vinegar obtained from

acetic acid 19,6

HST220110 Mineral waters and aerated waters 8,9


3.4: Export performance of beverages in 2017: Q4

HS Code Beverages

% Changes

compared to a

year ago

High performers

HST220850 Gin and Geneva 94,4

HST220600 Other fermented beverages (for example, cider, perry,

mead); mixtures of fermented beverages and mixtures

of fermented beverages and non-alcoholic beverages,

not elsewhere specified or included

86,3

HST090220 Other green tea (not fermented) 45,8


HST090240 Other black tea (fermented) and other partly

fermented tea

32,5

HST220840 Rum and other spirits obtained by distilling fermented

sugar cane products

32,0



HST090230 Black tea (fermented) and partly fermented tea, in

immediate packings of a content not exceeding 3 kg

21,3


27


HST220720 Ethyl alcohol and other spirits, denatured, of any

strength

6,7

Low performers

HST090300 Maté -73,9

HST220860 Vodka -11,8

HST220210 Waters, including mineral waters and aerated waters,

containing added sugar or other sweetening matter or

flavoured

-5,6

HST220410 Sparkling wine -1,9


Main imported beverage products and their source

Figure 3.9 illustrates the share of continents as a source of beverages imports in 2017: Q4.

Europe was the largest source of beverages imports and accounted for 72% share, followed

by the Americas (13%) and Africa (11%), while Asia and Oceania have a share of 3% and 1%,

respectively. Figure 3.10 shows that during the past five years, Europe, followed by the

Americas, accounted for a huge share of beverages imports, followed by Africa and Asia,

while Oceania accounted for a 1% share.


Africa

11%

Americas

13%

Asia

3%

Europe

72%

Oceania

1%

Figure 3.9: The share of continent's as a source of beverages import in

2017: Q4

28


Among the top trading regions, the European Union (69%) still accounts for the largest share

as a source of imports, followed by NAFTA (12%), SACU (Excluding RSA) with 10%, then Western

Europe by 2% and SADC (Excluding RSA) by 1% (see Figure 3.11).


0

10

20

30

40

50

60

70

80

90201

2: Q

4

201

3: Q

1

201

3: Q

2

20

13

: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

Figure 3.10: The beverages import destination's share of the continents

(2012:Q4 – 2017:Q4)


SADC (excluding

SACU)

1%

SACU (Excluding

RSA)

10% NAFTA

12%

Western Europe

Rest

2%

European Union

69%

Unallocated

6%

Figure 3.11: The share of top regions as a source of beverages import in

2017: Q4

29


Figure 3.12 above shows the share of the top ten countries as a source of beverages imports.

During 2017: Q4, the United Kingdom accounted a huge share of beverages imports (36,9%),

followed by France (15,4%), Namibia (9,4%), Mexico (8,2%), Belgium (4,0%), the United States

(3,2%) Germany (2,8%), Austria (2,6%), the Netherlands (2,3%) and Switzerland (2,2%).

Table 3.5 below shows the main imported beverages in 2017: Q4.

Table 3.5: Main imported beverages in 2017: Q4

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Un

ite

d K

ing

do

m

Fra

nc

e

Na

mib

ia

Me

xic

o

Be

lgiu

m

Un

ite

d S

tate

s

Ge

rma

ny

Au

stria

Ne

the

rla

nd

s

Sw

itze

rla

nd

%Figure 3.12: The share of top ten countries as a source of beverages

import in 2017: Q4

HS Code Beverages products

Total

amount

(R million)



HST220210 Waters, including mineral waters and aerated waters,

containing added sugar or other sweetening matter or

flavoured

218,8


HST220410 Sparkling wine 104,5


HST220710 Undenatured ethyl alcohol of an alcoholic strength by

volume of 80% vol. or higher

52,6

HST220600 Other fermented beverages (for example, cider, perry,

mead); mixtures of fermented beverages and mixtures of

fermented beverages and non-alcoholic beverages, not

elsewhere specified or included

49,3

30



During 2017: Q4: The quarter-to-quarter import of beverages moderated by 8,7%, following a

50,4% growth recorded in the last quarter. However, the year-on-year exports rebounded by

12,1% from a 3,2% contraction in the preceding quarter. Quarter-to-quarter imports, on the

other hand, rebounded by 22,5% from a 0,6% contraction, but grew by 12,4% year-on-year. As

a result, the trade surplus widened from R1 758,6 million in the previous quarter to R2 455,9

million in the current quarter.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

20

12:

Q4

20

13:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14

: Q

1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

20

15:

Q2

20

15:

Q3

20

15:

Q4

20

16:

Q1

20

16:

Q2

20

16:

Q3

20

16:

Q4

20

17:

Q1

20

17:

Q2

20

17:

Q3

20

17

: Q

4

R m

illio

n

Figure 3.13: Quarterly trade balance of beverages

Export Import

HST220850

Gin and Geneva 41,4

HST220860 Vodka 30,8

HST220840 Rum and other spirits obtained by distilling fermented sugar

cane products

19,6

HST220900 Vinegar and substitutes for vinegar obtained from acetic

acid

14,5


31

3.6 EMPLOYMENT

Source: Quantec EasyData (2017i)

Figure 3.14 shows the number of formal employment in the beverage and tobacco products

industry. The quarter-to-quarter formal employment in the beverages division contracted by

6,1% from a 1,0% growth in the last quarter. However, it decelerated by 10,9% year-on-year

from a 3,4% contraction in the preceding quarter. As a result, 2 521 jobs were shed in the

division this quarter.

3.7 OUTLOOK

Table 3.6: Net balance of BER manufacturing survey: Beverages

2017: Q2 2017: Q3 2017: Q4 2018: Q1*

Domestic sales volumes -6 -11 -44 -14

Export sales volumes -69 -32 -67 -11

Production volumes -17 -38 2 37

Domestic order volumes received -12 -34 7 -19

Export order volumes received -69 -29 -67 89

General business conditions -51 0 -75 -54

Number of factory workers 3 17 -27 -5

35,000

36,000

37,000

38,000

39,000

40,000

41,000

42,000

43,000

44,000

45,000201

5: Q

4

201

6: Q

1

201

6: Q

2

201

6: Q

3

201

6: Q

4

201

7: Q

1

201

7: Q

2

201

7: Q

3

201

7: Q

4

Figure 3.14: Number of formal employment: beverage and tobacco

products

32

2017: Q2 2017: Q3 2017: Q4 2018: Q1*

Fixed investment -28 17 -74 -86

Business confidence 7 31 15

Expected volume of goods imported in

12 months’ time 21 -45 -7

Expected volume of goods exported in

12 months’ time 45 0 -35

Expected real investment in machinery

and equipment in 12 months’ time -24 -17 -24

Expected business conditions in 12

months’ time -83 -21 -86

*Expected Source: BER (2017)

The survey of the beverages division by BER shows that the year-on-year outlook for 2018: Q1

is negative for all variables except for production volumes.

4. CONCLUSION

The real gross value added (GVA) by the primary sector in 2017: Q4 increased by around 7,5%

and contributed 0,7 percentage points to overall annual GDP growth. This turnaround in the

agricultural sector was brought about by the end of the prolonged drought in the northern

parts of the country, which benefited field crop production as reflected by the 2017 bumper

maize crop and positive spillovers to some other sectors of the economy (Reserve Bank, 2017).

In terms of trade, Asia as a continent accounted for a large share of food exports during 2017:

Q4, while regions such as Eastern Asia accounted for a large share followed by the European

Union and SADC countries. The countries that accounted for a huge share of food export

destinations are China, the US, India, Japan, Botswana, the UK, Namibia, Mozambique, the

Netherlands and the Republic of Korea. In terms of imports, the Americas, accounted for 61%

of the huge share of food imports. The region that accounted for a huge share was South

America (47%), followed by the European Union and NAFTA with a share of 23% and 14%,

respectively.

The beverages division trade saw Africa as a continent accounting for larger share of imports

during the period, while regions that accounted for a larger share were: the European Union,

followed by SACU (Excluding RSA) and SADC (Excluding SACU). In terms of exports, the

European Union still accounts for the largest share of exports, followed by NAFTA, SACU,

(Excluding RSA) then Western Europe rest and SADC (Excluding SACU).

The quarter-to-quarter and year-on-year seasonally adjusted value of sales of food products

grew under the period as compared to the previous quarter. The trade balance of food and

beverages grew from R2 241,6 million in the previous quarter to R3 054,6 million in the current

quarter. Employment in the food, beverages and tobacco divisions rebounded quarter-to-

quarter by 0,4%, however, contracted by 1,9% year-on-year.

33

REFERENCES

BER (2017), Manufacturing Survey. Bureau for Economic Research, University of Stellenbosch.

Quantec EasyData (2017), RSA International Trade. Accessed in December 2017.

Statistics SA (2017a), Consumer Price Index, various issues. Statistics South Africa.

Statistics SA (2017b), Producer Price Index, various issues. Statistics South Africa.

Statistics SA (2017c), Export and Import Unit Value Indices, various issues. Statistics South Africa.

Statistics SA (2017d), Manufacturing: Production and Sales, various issues. Statistics South

Africa.

Statistics SA (2017e), Manufacturing: Utilisation of Production Capacity by Large Enterprises.

Statistics South Africa.

Statistics SA (2017f), Wholesale Trade Sales, various issues, Statistics South Africa.

Statistics SA (2017g), Retail Trade Sales, various issues, Statistics South Africa.

Statistics SA (2017h), Food and Beverages, various issues, Statistics South Africa.

Statistics SA (2017i), Quarterly Employment Statistics, various issues. Statistics South Africa.

Reserve Bank (2017), Quarterly Bulletin, December 2017, South African Reserve Bank.

NOTES:

34

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

------------------------------------------------------------------------------------------------------------------------------ ---------

-------------------------------------------------------------------------------------------------------------------------- -------------

----------------------------------------------------------------------------------------------------------------------------- ----------

------------------------------------------------------------------------------------------------------------ ---------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

----------------------------------------------------------------------------------------------------------------------------- ----------

--------------------------------------------------------------------------------------------------------------------- ------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

------------------------------------------------------------------------------------------------------- --------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

35

---------------------------------------------------------------------------------------------------------------------------------- -----

----------------------------------------------------------------------------------------------------------------------------- ----------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------- -----------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

-------------------------------------------------------------------------------------------------- -------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

----------------------------------------------------------------------------------------------------------------------------- ----------

------------------------------------------------------------------------------------------------------------------------- --------------

----------------------------------------------------------------------------------------------------------------------------- ----------

----------------------------------------------------------------------------------------------------------- ----------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

--------------------------------------------------------------------------------------------- ------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

-------------------------------------------------------------------------------------------------------------------------------------- -

----------------------------------------------------------------------------------------------------------------------------- ----------

----------------------------------------------------------------------------------------------------------------------------- ----------

-------------------------------------------------------------------------------------------------------------------- -------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

------------------------------------------------------------------------------------------------------ ---------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------- ----------

---------------------------------------------------------------------------------------------------------------------------------------

Quarterly Economic Review of the Food and Beverages ... · industry, wholesale and retail sectors...

Documents

Transcript of Quarterly Economic Review of the Food and Beverages ... · industry, wholesale and retail sectors...