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Going niche is not always a viable strategy for South African manufacturers

3 May 2017

Going niche is not always a viable strategy for South African manufacturers
  • Niche food markets are relatively small in South Africa when craft beer, pure-ground coffee, Fairtrade coffee and organic foods are used as proxies.
  • According to Global Advisors analysis, niche products account for between 0,38% and 19,60% of total market volumes and have a potential consumer size of just over 900 000 adults if Gauteng, Kwazulu-Natal and the Western Cape are targeted.
  • Companies within the niche market space must therefore carefully consider the size of their particular niche market, in terms of the potential volumes that they should produce, the number of potential consumers, in terms of the targeted LSM group, and where these consumers are located.
  • For companies already producing mass market products, niche products might require a different business model and could become a distraction to their core product offerings.
  • The size of these niche sectors are expected to increase in South Africa in the near future due to the rise of the middle-class.

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