Mzansi Agriculture Talk

Agriculture

The raisins industry; 2 years and growing stronger

South African agriculture is impeccably landing itself in global niche markets especially the fruits industry. Global Dried Fruits markets are growing in demand and it is estimated by Global Newswire the industry could generate close to $12.7 billion by 2026. In an ever-competing global dynamic markets such as the dried fruits, Raisins SA has come out of the works to compete for this global market share. Our CEO, Tshepo Phaahla held an exclusive interview with Raisins SA Chief Executive Officer Ferdie Botha to get his thoughts on the development of the dried fruit industry. 

Tshepo: You previously went by the Dried Fruit Technical Services and now changed to Raisins SA, since this shift how has been the reception like? 

Ferdie: The Dried Fruit Industry has repositioned itself over recent years. The ‘old’ Dried Fruit Technical Services (established in 1997) was restructured to better serve its grower members. This restructuring included a name change to Raisins SA (2019) as more than 80% of SA’s dried fruit comprise of raisins. The restructuring has been accepted positively by our grower members (1000 growers), as activities are focussed and aligned to industry needs.

Tshepo: Locally, we see pockets of stores selling dried fruit and consumers tucking into them, on behalf of your members, are you seeing  any substantial sales improvements? 

Ferdie: We are looking to grow the local demand for our product. Local consumption has remained flat at between 8 000 – 12 000. We hope to see that SA can catch on to growing international trends, where key benefits of raisins such as health, convenience and long shelve life can increase to growth in consumption. The aim is to grow the local market by 30% over the next 5 years.

Tshepo: Talking of the international market, why so much focus there?   

Ferdie: Our markets have a historical 80/20 split (international / local). The same efforts, to expand our international markets, is also done for our local (the South African) market. Traditionally our per capita consumption, is much lower than the international per capita consumption. As an example, recently we’ve secured Bongi (Springbok hooker and world cup player) as our brand ambassador, which is one of our attempts grow local consumption.  We hope through sharing information on the benefits of our product, we can grow local consumption in SA.

Tshepo: From your reports, you mention that Germany was SA’s biggest export market, how have you managed to keep this market? 

Ferdie: SA arguably produces the world’s best raisins. The German market is very sensitive to residues levels on products, SA produces fruit with zero on very low residue levels.

Tshepo: You had mentioned earlier increasing local demand. What strategies has Raisin SA put in place to increase local production of dried fruit and reduce dried grapes imports from Turkey and Namibia? 

Ferdie: SA production has doubled over the past 8 years. Namibian products are imported because they do not have any raisin processing facilities, hence the product is shipped to SA for value addition purposes and distribution. Imports only represent less than 5% of our total product.

Tshepo: Someone reading this article may be interested to enter the industry because of the growing demand of dried fruits. Just on observation, what level of capital would one need to start/or enter the market? 

Ferdie: Grape production is a capital-intensive exercise, irrespective of wine/dried or fresh being high value product. A range between R200k/ha – R500/ha would be required, depending on various factors such as inner- or outer soils, irrigation type, drainage of water, product category to dry, mechanisation opt etc.

Tshepo: On the transformation part of it, how do you assist new entrants? 

Ferdie: Raisins SA appointed a dedicated Transformation Manager, with an active drive for our new entrant / transformation agenda. Our program is based on 3 focus areas, namely Enterprise development, Skills development and Socio-economic development actions. In further support, the sharing of critical industry information on technical (cultivars, rootstock, practices) and economics (market intelligence, benchmarking) aspects.  

Our partnership with the Department of Agriculture, Land Reform and Rural Development is also aimed at increasing capacity to advise new entrants/growers. Currently we have two programmes, one for extension officers of the Department and a second with young unemployed graduates.

Tshepo: You had punted that raisin industry will grow by 3% in 2019/2020, has this materialised and how has COVID-19 impacted your industry? 

Ferdie: Sales have increased despite the coivd19. The reason for this occurrence is the fact that consumers have ever grown conscious to consuming healthy foods/snacks. Home cooking increased during lockdown restrictions, with raisins being a versatile and healthy ingredient, the application grew during this period and therefore so has product demand.  

Of course, the uncertainty going forward is to what extend will buying power of consumers be impacted upon over the medium- to long run.

For more information on the Raisins Industry visit; https://raisinsa.co.za/

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