Skip to main content

Clover to launch low-sugar Tropika

| Supplier news

Clover, which controls almost 80% of SA’s dairy fruit juices market, will soon launch Tropika Slender, the low-sugar and low-calorie alternative to its bestselling beverage Tropika, as it seeks a safeguard against the looming sugar tax.

Speaking at the group’s annual results presentation on Tuesday, CEO Johann Vorster said Tropika Slender had already been rolled out in Botswana and had received good uptake.

Vorster expressed the hope that South Africans would warm to the low-sugar alternative when it hits the shelves of major retailers around February 2017, before the tax on sugary beverages is expected to kick in.

That way, when the tax is made law and results in an expected price increase of about 6% on Tropika, the subsequent loss of volume would be offset by increased sales of Tropika Slender, he said.

"We want to be ahead of the [potential] attack from the tax with this sugar-free offering.

"The idea is to get consumers to switch before the tax comes into effect," he said.

Clover would also review a possible low-sugar alternative for its flavoured milk products, Super M.

In the year to June, Clover grew total revenue 6% to R9.8bn, while annual profit rose only 1.8% to R351.9m, hurt by higher costs.

Clover increased sales and gained market share in its feta cheese, prepacked and processed cheese, maas, yoghurt and liquid custard products.

But traditional dairy products that include fresh milk, UHT (ultrahigh temperature processed) milk and cream came under pressure because of an overstocked milk market. The situation was particularly challenging for Clover, as the drought had created another headwind, causing feed prices to spike.

But Vorster said he expected the pressure on the group’s milk volumes to be alleviated in the 2017 financial year, as Clover has signed an agreement to supply Pick n Pay with milk for its house brand. Clover has finally phased out its supply agreement to French dairy maker Danone.

Clover lost R253m in income due to the termination of supply deals with principal agents such as Danone, Unilever and Nestle, Clover chief financial officer Elton Bosch, said. But their exit had been positive as it allowed the company to enter new product categories such as yoghurt and custards, which yielded higher margins, he said.

Lee Kern, assistant portfolio manager at Cratos Wealth, said Clover had done "quite well given the tough operating environment".

"It would be interesting to see what happens in the next set of results, as Clover has said there is an oversupply of milk of 3% at the moment. Producers are facing high costs [because of the drought], yet retail prices are coming off."


Related Articles

Festive family fashion alert - Pick n Pay unvei...

Forget fugly clichéd holiday-themed jerseys: matching family pyjamas is the latest craze for the holidays and is flying off the shelves, says Pick n Pay Clothing.

Liberty Accelerates Unclaimed Benefits Pay Outs 

As part of its ongoing Unclaimed Benefits Funds tracing efforts, this year, Liberty has identified in excess of 13 000 people and paid over R105 million to members and beneficiaries who had a legitimate claim.

Shoprite and Checkers support small suppliers t...

Shoprite and Checkers are helping small suppliers grow their volumes this Black Friday as customers flock to its stores looking for value on everyday essentials and groceries between Thursday, 23 November and Sunday, 26 November 2023. 

Supermarket chain set to appeal judgment in ‘si...

By: Chevon Booysen - IOL Retail giant Pick n Pay has indicated its intention to appeal a Western Cape High Court judgment to damage all print works, all printed materials, product packaging, and the like bearing the infringing get-ups similar to ...

Woolies pulls Israeli couscous after 'credible'...

By: Ahmed Areff – Fin24 Woolworths has pulled Israeli-imported pearl couscous from its shelves, but has emphasised that the move was preemptive due to threats it received and not because it supported a boycott of the country’s products or was pro...