Market Report 2024: Growth of just-before sell date and expired food stores in South Africa

Big opportunity for entrepreneurs because of skyrocketing inflation (with figures far higher than officially reported), no economic growth and stratospheric unemployment.

Introduction:
The market for best-before and expired food stores in South Africa has experienced significant growth in recent years, with stores such as Best Before, Looters, and Foodeez leading the way. Additionally, numerous independent stores are emerging, indicating a burgeoning market trend. This report explores the reasons behind this growth, opportunities, pitfalls, legislation, competitors, estimated market size and growth, customer profiles, and concludes with insights for entrepreneurs looking to enter this market.

Reasons for Growth:

1. Consumer Awareness: Increasing awareness of food waste and sustainability has driven consumers to seek alternative options for purchasing food close to its expiry date.
2. Economic Factors: Economic pressures have led consumers to look for more affordable options, making discounted expired food attractive.
3. Entrepreneurial Innovation: Entrepreneurs are capitalizing on the opportunity to address food waste while offering discounted products to price-sensitive consumers.

Market Entry for Entrepreneurs:

1. Identify Niche Markets: Entrepreneurs can differentiate themselves by targeting specific customer segments or offering unique product lines.
2. Build Supplier Relationships: Establish partnerships with suppliers, wholesalers, and retailers to ensure a consistent supply of expired or close-to-expiry products.
3. Invest in Marketing: Create compelling marketing campaigns emphasizing the value proposition of discounted food items and sustainability efforts.

Opportunities:

1. Growing Consumer Demand: The increasing consumer interest in sustainable practices presents a significant opportunity for growth.
2. Expansion Potential: There is room for expansion into underserved regions and markets within South Africa.
3. Diversification: Stores can diversify their product offerings beyond food to include other perishable items such as cosmetics and household goods.

Pitfalls:

1. Quality Concerns: Maintaining quality standards and ensuring the safety of expired food products is crucial to avoid reputational damage and legal issues.
2. Regulatory Compliance: Adhering to food safety regulations and obtaining necessary licenses and permits can be complex and time-consuming.
3. Competition: The market is becoming increasingly competitive, requiring differentiation strategies to stand out among competitors.

Legislation:

1. Food Safety Regulations: Stores must comply with South Africa’s food safety regulations to ensure the quality and safety of products sold.
2. Expiration Date Labeling: Proper labeling of expiration dates and adherence to regulations regarding the sale of expired products is essential.
3. Licensing and Permits: Stores need to obtain relevant licenses and permits from local authorities to operate legally.

Competitors:

1. Established Chains: Stores like Best Before, Looters, and Foodeez have established a presence in the market.
2. Independent Stores: Numerous independent stores are entering the market, offering localized and niche products.
3. Traditional Retailers: Traditional grocery stores may also pose competition as they introduce their own discounted sections for close-to-expiry products.

Estimated Market Size and Growth:
The market size for best before and expired food stores in South Africa is huge. With the growing consumer interest in sustainability and affordability, the market is expected to witness significant growth in the coming years at a fast rate.

Customer Profile:

1. Price-Conscious Consumers: Customers seeking affordable food options without compromising on quality. Food inflation is grossly under estimated. Official figures put the overall inflation rate at 6% but this is a political figure, according to many. Some cynics believe it is used mainly to keep wage negotiations low. How can food inflation possibly be in the range from 6% to 8% when most food products have doubled in price and some have tripled and others, imported ones, have gone up four times in the past two years?
2. Environmentally Conscious Consumers: Individuals interested in reducing food waste and supporting sustainable practices.
3. Value Seekers: Customers looking for discounts and deals on everyday grocery items.

Conclusion:
The growth of best before and expired food stores in South Africa is driven by consumer demand for affordable and sustainable food options. Entrepreneurs can capitalize on this trend by identifying niche markets, building supplier relationships, and investing in marketing efforts. However, they must navigate regulatory challenges, quality concerns, and increasing competition to succeed in this evolving market landscape. As the market continues to expand, there are ample opportunities for growth and innovation in serving the needs of price-conscious and environmentally conscious consumers.

Disclaimer

Disclaimer: The report is for public distribution and has been furnished solely for information. None can use the report as a base for any claim, demand or cause of action and, also none is responsible for any loss incurred based upon. The author assumes no responsibility or liability for any errors or omissions in the content of this site. The author is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. All sources of information acknowledged.