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Africa Outlook

Pakco

PAKCO

Some like it hot



Pakco are renowned for their delivery of flavour through their food-enhancing product lines

Writer Emily Jarvis
Project manager James Mitchell

As a world class food manufacturer with proudly South African roots, Pakco has been adding flavour and quality to consumers' lives since 1948 and is a market leader in the manufacture of spices, condiments, instant meals and complementary products. The company manufactures 9 brands with over 200 SKU's, represented in more than 10 categories in-store. Pakco's family of brands is renowned for reliability, ease of use, and a well-loved, home cooked taste. Through ongoing research and product development, Pakco ensures that the latest international technology and trends are combined with local insights to keep products relevant and in high demand.

Pakco (Pty) Ltd. is wholly owned by Renaissance Brands (Pty) Ltd. Recently, after extensive negotiations, the Land Bank has joined as a 50% shareholder of Renaissance Brands (Pty) Ltd. The value in such a powerful banking partner is self-evident as Mr King cites: "There are benefits in having a big financial partner; this will facilitate rapid expansion, both organically and by acquisition." Pakco is located in Durban, KwaZulu-Natal, which is home to one of Africa's busiest ports and where founder, Pakkiri Pillay, bottled his first batch of spiced pickle over 60 years ago. The group manufactures packs and distributes staple, dry-packed, and tinned foods, both branded and private label.

BBBEE Standards
Pakco is committed to sustainable growth and development and the business meets South African Broad-Based Black Economic Empowerment (BBBEE) standards. As a community sensitive organisation, socio-economic development in line with national imperatives is a priority and the business is structured to assist previously disadvantaged groups and individuals while simultaneously improving its economic viability.

South African Markets
All four manufacturing facilities were either rebuilt or refurbished in 2008 and 2009, resulting in a globally competitive manufacturing operation, certified by the South African Department of Health and accredited by FSSC to global food safety standards.

Pakco currently has an established market in the SADC (Southern African Development Community) region, and is in the process of moving into Eastern and Western Africa. More recently the company has launched a global strategy starting in the Gulf and parts of Europe. This has been enabled by the achievement of global food safety accreditation.

The South African market is not growing at a rate that is comfortable. There is a trend towards convenience foods on one end, but also towards cost savings and commoditisation on the other. "Due to the change in lifestyle, people are searching for convenience, while at the same time looking for something that is affordable. Consumers tend to buy in bulk at the end of the month, to enjoy the discounts associated with this, but are looking to purchase smaller product sizes during the month, as this allows the consumer to buy products they enjoy, at a price that they can afford. Catering to these needs of the consumer is imperative to our success," King affirms.

Challenges
In the sophisticated and highly competitive SA FMCG Food Industry expansion is a challenge, hence Pakco's move into the African and global markets. The global recession has put a lot of pressure on the retail industry in general, both in terms of sales and margins. In South Africa, global food safety has gained momentum over the last 5 – 10 years and has driven the smaller players out of the market. This has opened up opportunities.

Voted Number one Sauce Choice in SA
Pakco scooped 'Product of the Year', one of the FMCG industry's most prestigious recognitions, in the 2014 Product of the Year Awards for Pakco Sauces; voted the country's number one sauce choice by South African consumers. Product of the Year is the world's largest consumer-voted award for product innovation. Established in France 25 years ago, Product of the Year currently operates in 28 countries. In South Africa, the Product of the Year seal is backed by the votes of 5000 consumers and has a significant influence in assisting future customers in their purchase decisions. "For manufacturers of the winning products, the award is a powerful marketing message, proven to increase product trial, awareness, distribution and sales," explains Mr King.

Pakco has launched a number of successful new products already this year, including extensions to their Curry Made Easy cook-in sauce, Bisto cook in sauce variants, a Bisto canister as well as an extension to Southern Coatings in the form of Southern Crumbs.

The Glamorous Side to the Food Industry
With the rise of popular television shows such as MasterChef, Come Dine with me and Top Chef, there is now a major trend in the food industry. This has encouraged business because cooking has now become part of the entertainment, whereas before, it was just the finished meal that provided entertainment. King explains how Pakco is benefitting from this trend: "Pakco creates spices and ingredients that allow people to become master chefs in their own kitchen. In addition to this, there is a long standing trend that has moved the Western world to a stronger taste profile, which is evident in the UK, as tikka chicken has over taken fish and chips as the number one selling fast food option." This puts Pakco in an advantageous position as this highlights spices and products that Pakco is most well known for, and more and more people want to try these types of dishes.

Secret Recipe to Success
Pakco is the only pickle manufacturer that uses a natural fermentation process in making its pickles; it is why they taste so much better than any other product on the market. "The recipes are decades old and we do not want to change this, as we want to maintain the high standards of quality our consumers have come to know and trust," remarks King. "We've maintained recipes using real vegetables cooked/ fermented in the traditional ways," King emphasis. With a plan to move into Africa, The Gulf and Europe, as well as continually offer new and innovative products to their consumers, Pakco remain at the top of the flavouring game.