Considered one of the most developed countries in Africa, South Africa has the second-largest economy in the continent, valued at around USD 351 Billion in 2019, with one of the highest GDP per capita, reaching more than USD 6,000 (Source: World Bank Data). Johannesburg is the major contributor to the economy, generating 16% of the national GDP, and offering a yearly average household income 60% higher than that of the rest of South Africa. Cape town comes second and has an average annual GDP growth rate estimated at 1.3% in 2018, higher than the average annual national rate standing at 0.8%.

Today, the country is home to more than 59 million people of which approximately 45% are aged below 24 and 67% are urbanized, and the population is expected to grow further to almost 66 million in 2030. The Lebanese diaspora accounts for 40,000 people only and is dispersed throughout the country.

The ethnically diverse groups in South Africa having different tastes and preferences create a wide demand for various kinds of foods and beverages. The majority of consumers enjoy eating meat, knowing that not everyone can afford it given major income disparities in the country, and only a few minorities are vegetarians. Given that the population does not earn a high disposable income on average, consumers are found to be price sensitive. Highly processed, low in nutrients, saturated in fats and sugars foods are the most available and affordable options in the South African industrialized food system. Indeed, healthy food could cost up to 65% more than junk food. However, dietary preferences are changing as the youth generation is increasingly health-conscious, opting for healthier food products.

An expanded tourism sector, which witnessed an 11% growth in 2018 compared to an 8% global growth, is also driving up the demand for healthier and more sophisticated packaged food. Modern grocery retailing is trending more than ever in the country, with e-commerce sales remaining low, yet improving. Although able to supply a vast range of agri-foods through its productive capacity, South Africa is increasingly importing food products, with an increasing demand for imported poultry meat and beer.

Products with high growth potential

Food Preparations: South Africa is known for importing ready-made food preparations from the European continent, as well as from the US. Products with good sales potential in this category include sugar confectionery, chocolate and other food preparations, malt extracts, pasta, cereals, cake mixes, syrups, and soup mixes.

Craft Beers and Spirits: South Africa also imports Beer, Spirits, and distilled products, mostly from Nambia, and is thus considered a net importer for beer. This trend towards craft beers and spirits is favorable for many Lebanese SMEs that are developing and manufacturing various alcoholic and non-alcoholic beverages inspired by the Lebanese taste.

Enzymes and Prepared Enzymes: South Africa is a net importer of enzyme and prepared enzymes, a market expected to grow at a CAGR of 3.4% between 2020 and 2025. Food and drink enzymes are major food additives that convert complex molecules into simpler ones in our diet and include products such as modified starch products and whey.

Consumer Profiles

The unequal income levels across consumers primarily define their consumption habits. Accordingly, three major consumer categories can be identified in South Africa:

• The upper-income class, which constitutes 1.8% of the population only, mainly consists of skilled people with a high consumer buying power and who are more inclined towards higher quality and imported products;
• The middle-income class, which represents 29% of the total population and is found to be growing, tends to live in urban areas, thus getting exposed to more imported food products. However, given that these consumers don’t earn wages as high as in other middle-income societies, they are price sensitive;
• The working class, which earns relatively low salaries, has very limited spending power and seeks value for money.

Millennials, making up about 65% of the South African population, constitute a key consumer base. This segment of the society is the most connected to digital technologies and social media and has developed a rising appetite towards healthier food options and habits. However, the high unemployment rates among these consumers, make them more price-sensitive than other young generations elsewhere.

What does South Africa Import? And from where?

In 2020, South Africa spent 3.4 billion USD on importing agri-food products. Top imported products include:

• Animal and vegetable fats and oils – accounting for 21% of total imported agri-food products. These are mainly imported from Indonesia (33%) and Malaysia (18%)
• Beverages, Spirits and Vinegar – accounting for 13% of total imported agri-food products. These are mainly imported from the United Kingdom (24%), France (15%) and Mexico (14%).
• Sugar and Sugar confectionary – accounting for 12% of the total agri-food imports. These products are mainly imported from Eswatini (71%).

South Africa- Lebanon Trade

Based on Lebanese Customs data, top exported agri-food products from Lebanon include:

• Coffee, tea, maté and spices (89%).
• Preparations of vegetables, fruit, nuts or other products (3.49%)
• Miscellaneous edible preparations (3.20%)

Based on ITC data, promising Lebanese agri-food products with the greatest export potential to the South African market are:

• Nuts and seeds
• Chocolate, Cocoa and Sugar confectionery
• Water and prepared foodstuffs.