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The Restaurant, Fast Food and Catering Industry
BY Carole Veitch
South Africa
15 November 2017
R 14 400.00 (ZAR)  
estimated $ 1 127.52 (USD) *
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The South African Restaurant, Fast Food and Catering Industry


The South African restaurant, fast food and catering sector generated revenue of more than R57.25bn in 2016. According to the most recent figures published by Statistics South Africa, the restaurant/coffee shop segment generated just over 51% of the sector’s total income during the period 1 May 2017 to 31 July 2017, while the fast food and catering segments contributed 35.5% and 13.36% respectively. Although premium establishments catering for foreign tourists and niche upper-income customers continue to be well supported, the independent restaurants remain under pressure, as cash-strapped consumers endeavour to cut back on luxury spending. In addition to dwindling customer numbers, local food and beverages service providers report higher overheads and narrowing profit margins.


Cost containment strategies


In an effort to improve cost efficiencies several of the country’s leading franchisors have adopted vertical integration strategies. Famous Brands’ partnership with the Coega Dairy Company means that milk sourced from the dairy is used to make cheese, which is supplied to the Group’s franchisees. The group also has a majority stake in the roasting and packaging business, Java Lava Beverage Manufacturers, and has become one of the country’s largest coffee-roasting businesses. As centralised procurement facilitates quality control and allows for economies of scale in terms of purchasing and sourcing, Taste Holdings, through its Buon Gusto Food Services division, is able to manage the supply chain that serves its food franchisees.


Report coverage


The Restaurant, Fast Food and Catering Industry report examines current conditions and key trends in the industry, reviews the performance of local players and discusses the factors that influence the success of the sector. Profiles are provided for 46 companies including Kentucky Fried Chicken (KFC) which is the leading fast food brand in South Africa. Also profiled is dominant player in the catering sub-sector, Tsebo Catering Solutions. In February 2017 Wendel, a leading European-listed investment firm, announced that it had acquired 65% of the share capital of Tsebo Solutions Group valued at R5.25bn.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Value Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 16
4.1. Local 16
4.1.1. Corporate Actions 23
4.1.2. Regulations 25
4.1.3. Enterprise Development and Socio-Economic Development Initiatives 29
4.2. Continental 32
4.3. International 33
5. INFLUENCING FACTORS 36
5.1. Government Intervention 36
5.2. Economic Environment 37
5.3. Rising Input Costs 38
5.4. Technology, Research and Development (R&D) and Innovation 41
5.5. Retail Developments 42
5.6. Cyclicality 43
5.7. Labour Resources 43
5.8. Environmental Concerns 47
5.9. Advertising and Social Media 48
6. COMPETITION 49
6.1. Barriers to Entry 49
7. SWOT ANALYSIS 50
8. OUTLOOK 51
9. INDUSTRY ASSOCIATIONS 52
10. REFERENCES 53
10.1. Publications 53
10.2. Websites 53
COMPANY PROFILES 55
ADEGA RESTAURANTS CC 55
AIR CHEFS (SOC) LTD 57
ANAT FOODS (PTY) LTD 59
BIDVEST CATERING SERVICES (PTY) LTD 61
BURGER BISTRO FRANCHISING (PTY) LTD 63
CHICKENLAND (PTY) LTD 65
COMPASS GROUP SOUTHERN AFRICA (PTY) LTD 67
DELMONT CALDOW CATERERS (PTY) LTD 71
DULCE MILKWOOD (PTY) LTD 73
ECLECTIC BRANDS TRADING (PTY) LTD 75
ELIXIR CONCEPTS (PTY) LTD 77
FAMOUS BRANDS LTD 79
FEEDEM GROUP (PTY) LTD 84
FOURNEWS DEVELOPMENTS (PTY) LTD 86
GOLD BRANDS INVESTMENTS LTD 89
GOLDEN FRIED CHICKEN (PTY) LTD 92
GRAND PARADE INVESTMENTS LTD 94
HENTIQ 2517 (PTY) LTD 97
HOT DOG CAFE (PTY) LTD 99
IMPERIUM FRANCHISE HOLDINGS (PTY) LTD 101
KFC (PTY) LTD 103
KING PIE HOLDINGS (PTY) LTD 106
KRUGKOR FRANCHISE (PTY) LTD 108
LE FERA (PTY) LTD 110
LSG SKY CHEFS SOUTH AFRICA (PTY) LTD 112
MIKE'S KITCHEN FRANCHISING (PTY) LTD 114
MOCHACHOS FRANCHISE MANAGEMENT (PTY) LTD 116
MSA DEVCO (PTY) LTD 119
NINO'S GROUP (PTY) LTD 122
OBC GROUP (PTY) LTD 124
OCEAN BASKET FRANCHISE COMPANY (PTY) LTD 126
PIZZA HUT (PTY) LTD 128
POPEYES LOUISIANA KITCHEN 130
PRIMI WORLD (PTY) LTD 131
RETSOL STORES (PTY) LTD 133
ROMAN'S PIZZA (PRETORIA) CC 135
SEATTLE COFFEE COMPANY (SOUTH AFRICA) (PTY) LTD 137
SODEXO SOUTHERN AFRICA (PTY) LTD 139
SPUR CORPORATION LTD 141
STREAMLINE BRANDS CC 146
TASTE HOLDINGS LTD 148
TRADE-OFF 78 (PTY) LTD 152
TSEBO SOLUTIONS GROUP (PTY) LTD 153
WHY COOK (PTY) LTD 156
WIESENHOF COFFEE ROASTERY (PTY) LTD 157
XANTIUM TRADING 471 (PTY) LTD 159