BevCo has launched its 'Route to Market Expansion' project. BevCo says that it recognises the critical role that the township economy plays in the broader South African market and this initiative is in response to this growing opportunity.
South Africa's informal trade sector has long been the backbone of our nation's economy, says BevCo.
With more than 70% of households relying on this market for their everyday needs, its influence is undeniable. The township economy, where spaza shops and informal retailers thrive, represents a significant portion of this sector — contributing billions of rands annually, says the company.
As the informal market continues to grow, outpacing even modern trade, it becomes increasingly clear that this sector holds immense potential not only for economic development but also for job creation and community upliftment, says Pieter Spies, CEO of BevCo.
Recent studies show that the informal independent market within the FMCG sector has grown at an average rate of 6.7% between 2018 and 2023 — a trend that shows no signs of slowing. By 2030, it's anticipated that small retailers will create 70% of all new jobs in South Africa, underscoring the sector's importance as a driver of economic growth and employment.
BevCo says that through its new initiative, it's working to enhance its presence in the informal trade sector, particularly within the township economy.
BevCo says that it partnered with The Brand & Beverage Company (TBBC) to deploy a team of 100 dedicated sales representatives focussed on reaching thousands of spaza shops across key regions, including KwaZulu-Natal, the Eastern Cape and the Western Cape.
According to the company, this effort also goes beyond just expanding its market share — it's about recognising and investing in the vibrant, dynamic economies that exist within South Africa's townships.
The numbers speak for themselves. The township economy is valued at approximately R900-billion, with the informal sector alone contributing around R150-billion in cash sales annually. With an estimated 150 000 spaza shops operating across the country, these small businesses collectively contribute as much as 5.2% to South Africa's GDP and employ 2.6 million people, says BevCo.
Shoppers frequent spaza shops on average four times a week, significantly more than traditional supermarkets, which they visit just once a week. These figures highlight the central role that township retailers play in the daily lives of millions of South Africans, adds the company.
BevCo says that its commitment to this sector goes beyond mere product placement. BevCo is investing in the long-term success of the retailers it works with by providing them with the tools they need to thrive.
As part of its initiative, BevCo says that it is placing thousands of coolers in spaza shops, ensuring that consumers can access its products at the ideal temperature. This multi-million rand investment is aimed at enhancing the consumer experience while supporting the business growth of BevCo's retail partners.
Moreover, BevCo's partnership with TBBC's training arm, Phuthukisa, underscores its commitment to empowering those within the township economy. The Train-the-Trainer sessions BevCo has conducted go beyond product knowledge, equipping its sales force with essential business skills, such as financial skills and sales techniques. By building business acumen alongside product knowledge, BevCo says that it aims to contribute to the sustainability and profitability of the spaza shops it engages with.
Through BevCo's 'Route to Market Expansion' project, BevCo says that it is playing its part in the growth and development of South Africa's township economy. By improving its distribution channels and deepening its relationships with informal retailers, BevCo's not only strengthening its business but also contributing to the economic empowerment of communities across the country.
As South Africa's economy continues to face challenges, it is initiatives like these that can make a difference, says the company.
By supporting the informal trade sector and recognising the value it brings to South Africa's economy, BevCo concludes that it can help drive growth, create jobs and build a more inclusive future for all South Africans. The township economy is a vital part of South Africa nation's economic fabric, and by investing in it, BevCo is investing in the future of our country.
For more information, visit www.thebeveragecompany.co.za.
*Image courtesy of contributor