Tiger Brands, South Africa’s largest food producer, has warned that it may be forced to raise food prices as escalating geopolitical tensions, including the Middle East conflict, continue to disrupt global supply chains and drive up input costs.
The food producer announced its financial results for the first half of the year on Monday, revealing its overall revenue growth was R17.9 billion, primarily driven by volume growth of 2.6% and price deflation 1.3%.
CEO Tjaart Kruger acknowledged the business was able to achieve impressive results despite the ongoing macroeconomic volatility, continued pressure on consumer spending and a competitive environment.
Tiger Brands warns of tougher times
The food producer is of the view that it might not perform as impressively in the second half of the year, as the ripple effects of geopolitical uncertainty will likely be felt during that period. Tiger Brands’ second half of the year is from April till end of September.
The maker of All Gold tomsyo sauce and Jungle Oats has been actively expanding its footprint in the informal market to counter declining volumes, increasing distribution by adding more transport routes.
Tiger Brands CFO Thushen Govender reportedly said the business is looking at spending around R25 million per month in fuel.
Tiger Brands can weather the storm
The food producer said it remains confident that it can manage potential supply-chain risks by offsetting inflationary pressures through further operational efficiency initiatives and selective price adjustments designed to protect profitability.
Kruger highlighted that all business units improved operating income, with Grains and Culinary delivering a standout 91.7% and 26.9% increase respectively.
The Milling and Baking unit saw its revenue increase to R4.2 billion during the first half of the year, driven by volume growth of 0.3% and price inflation of 0.3%. Operating income increased 15.3% to R376 million and margins increased to 8.9% versus 7.8% in the prior year.
Grains and Culinary stand out
According to the food producer’s financial results, grains saw revenue of R3.5 billion driven by volume growth of 6.9%, offset by price deflation of 10.8% in soft commodities. Operating income increased by 91.7% to R441 million, with margins nearly doubling to 12.7% from 6.4%.
“This growth was driven by effective pricing strategies, a stronger product mix, logistics optimisation, and improved profitability at King Foods,” said Kruger. It is understood that Tiger Brands will retain King Foods, reversing earlier plans to dispose of the unit.
When it comes to culinary, its revenue increased to R5.7 billion, driven by 6.0% volume growth and 2.7% price inflation. Operating income at R562 million, which was 26.9% higher than prior year, with operating margins at 9.9% versus 8.5% in the prior year.
Brands delivering successes
“Improved operating income [for culinary] was driven by topline growth from the Condiments category as well as CI initiatives of recipe value engineering in Condiments, packaging value engineering and logistics optimisation,” said the food producer.
The grains units house brands like Jungle Oats, Tastic (rice), Albany (bread and baked goods), Golden Cloud (flour and mixes), Fatti’s & Moni, King Korn (Mabele, Mabele Soft Porridge, and Malt), Morvite (energy porridge).
While culinary unit houses KOO, All Gold, Black Cat, Colman’s and others.
“The board of Tiger Brands has declared an interim ordinary dividend of 430 cents per share for the six months ended 31 March 2026,” said Kruger.
