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November 18, 2020updated 03 Aug 2021 8:16am

South Africa’s RCL Foods launches strategic review

South Africa's RCL Foods said it is in the early stages of a review to assess options for its diversified portfolio.

South Africa’s RCL Foods said it has engaged the services of Rand Merchant Bank to assist with a strategic review of its portfolio.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
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The publicly-listed branded and private-label food manufacturer for the retail and foodservice channels said the review process is at “an early stage” and will evaluate whether “the collective portfolio is optimally configured to achieve growth”.

RCL Foods, which produces a range of products from Nola mayonnaise to peanut butter, bakery items and chicken, has issued at least two profit warnings this year, both associated with the negative impact from Covid-19. However, the company’s finances have faced challenges in the past, including from a listeria outbreak in South Africa in 2017-18 and higher prices for ingredients.

In a filing with the Johannesburg Stock Exchange, RCL Foods said: “The strategic review includes an assessment of various categories underpinning the RCL Foods businesses which have different value drivers, whilst preserving the scale and efficiency benefits achieved.

“Whilst each of the component parts of the group represent attractive exposures to their respective sectors, and whilst valuable synergies exist in the shared services that RCL Foods offers to the portfolio as a whole, the Board is evaluating whether the collective portfolio is optimally configured to achieve growth and to provide expression to investor preferences.”

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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