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Farmer adaptation to retail demands.

Updated: Sep 22, 2020

Retail industry in South Africa.

Brief history: In 1927, one of the first concepts of an all-inclusive, centrally based, volume orientated retail organization in South Africa, opened as OK Bazaars. It was revolutionary at the time and laid the foundation for those to follow in later years.

It was with the establishment of Pick & Pay in 1967 where the ground rules and model for the modern retail organization was established.

The four largest of them, namely Shoprite/Checkers, Spar, Pick & Pay and Woolworth’s, are responsible for a substantial market share in retail lamb and mutton sales in South Africa. This centralized sales in certain areas while at the same time created a shortfall in others.

Retail challenges:

Such retailers are susceptible to consumer scrutiny and need to be on top of their game when it comes to quality and availability. In particular, seeing that they are the very institutions providing for the middle to high-end clients in the so-called niche market.

Opportunity, but also serious pitfalls are prevalent in such markets, which make them vulnerable if substandard products or stock shortages are experienced.

Mega retailers will have to find ways to protect their market share as well as their clients' demands. They will eventually demand changes to accommodate such measures.

Consumer-based strategies:

The time has arrived for the sheep industry to propel itself into the 21st century as far as adopting a more consumer-based strategy with an emphasis on technology.

A scientific approach will allow for staying abreast with the character and style of demands of the future. Current production-driven practices by farmers, oblivious to a fast and ever-changing world, will not suffice and will end in a rapid decline in quality, productivity and profitability in the industry as a whole.

No longer will fieldworkers, sourcing animals for slaughter, be acceptable and the current system of classification at abattoirs be sufficient.

An all-inclusive data system will become a requirement to provide for more informed criteria as a selection tool at acquisition level with full traceability back to the breeding point of every individual animal, inclusive of its ancestors.

Farming practices, animal health, producer profile, production region, sheep branded trademarks and logistical infrastructure will become central to the industry. Trademarking of breeds and regions will be all the more important. No longer will lamb, for example, be lamb. Which breed, how it was bred, managed, transported and region where it came from, will all be leading questions and requirements for purchase by such companies.

Producers failing to adapt to such requirements will fail to find valuable sales and continue to be price takers at the low end of the market where price making will dominate smaller profitability.

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