Skip to main content

Supplier news Archive

Hundreds of thousands of outages reported as Facebook, Instagram crash

06 March 2024 | Ivana | Supplier news

By: Reuters & News24

Over 300 000 Facebook outages and nearly 50 000 Instagram outages were reported on Downdetector by Tuesday (05/03/2024) afternoon, Reuters reported. 

This included nearly 10 000 crash reports from South Africa. 

A further 200 outages were reported for messaging service WhatsApp, which - like Facebook and Instagram - is also owned by Meta. 

Meta spokesperson Andy Stone said the outages had been caused by a "technical issue". 

In a post on X, formerly Twitter, which remained unaffected, Stone said: 

Earlier today, a technical issue caused people to have difficulty accessing some of our services. We resolved the issue as quickly as possible for everyone who was impacted, and we apologise for any inconvenience.

The social media platforms started experiencing disruptions at around 10:00 E.T. (17:00 S.A.T.), Reuters reported. 

Users posting on Downdetector in South Africa reported trouble logging in and other error messages. 

In an earlier post on X, Stone had confirmed the outages but did not confirm or deny users' speculation regarding a potential security breach. 

"We're aware people are having trouble accessing our services. We are working on this now," Stone said. 

Stone's posts drew mixed reactions from users, with many expressing amusement at Meta having to post a statement using a competitor's platform. 

Several employees of Meta, meanwhile, said on anonymous messaging app Blind that they had been unable to log in to their internal work systems, which left them wondering if they were laid off, according to posts seen by Reuters.

The outage was among the top trending topics on X, formerly Twitter, with the platform's owner Elon Musk taking a shot at Meta with a post that said: "If you're reading this post, it's because our servers are working".

X itself has faced several disruptions to its service after Musk's $44 billion purchase of the social media platform in October 2022, with an outage in December causing issues for more than 77 000 users in countries from the US to France.

This article has been updated with additional comment from Meta.

 

Rainbow Chicken to be listed within months, says RCL

05 March 2024 | Ivana | Supplier news

By: Edward West - BUSINESS REPORT

RCL Foods’ board has approved the unbundling and separate listing of its poultry business, Rainbow Chicken, “sooner rather than later”, RCL CEO Craig Cruickshank said yesterday.

RCL Foods share price rose 4.5% to close at R10.45.

“On March 1, 2024 the board gave its preliminary approval to pursue the formal separation of Rainbow via an unbundling to shareholders, and a concurrent listing on the JSE,” RCL said in its interim results for the six months to end-December. Rainbow is one South Africa’s largest poultry producers.

“The board is of the view that the unbundling of Rainbow will enable both businesses to pursue their respective growth ambitions and investment theses in a focused manner and with improved alignment on capital allocation priorities,” a statement said.

Cruickshank said in an interview that the listing, which he hoped would occur in a matter of “months”, would give shareholders the opportunity to elect to invest in a pure chicken play through Rainbow’s listing, or to invest in RCL’s value-added branded products businesses.

Smalltalkdaily Research analyst Anthony Clark said the listing was a good move, as RCL had been disliked by the market for years because of its collection of “hodgepodge” interests that were not aligned to being a branded food-producing company.

He said the big question was whether Rainbow would have sufficient capital to stand on its own feet on the JSE, as poultry was a volatile business that required significant capital reserves.

Clark said the main shareholder, Rembrandt, had indicated it would not put any additional funds towards the listing, and a rights issue might not be well received by the the market, so “it will be interesting to see what RCL does”.

Anchor Capital investment analyst Stephan Erasmus said the fact that chicken was the most popular and affordable meat in South Africa, and that demand was growing, boded well for a locally listed poultry producer, but on the other hand, the other listed poultry company, Astral, had struggled of late due to issues such as avian flu and competition from cheap imported chicken.

Erasmus said although there was not enough information regarding the capital structure, it was conceivable that a stand-alone Rainbow Chicken business would need funding.

“We see it providing upside for both companies,” said Cruickshank.

For RCL, the separation was in line with its value-added branded products strategy, while for Rainbow, and given the volatile environment and the fact that the benefits from the breed transition were starting to take effect, it was a good time to list, he said.

There remained some preparation before the listing, but much work had already been done, he said.

RCL’s earnings before interest, tax, depreciation and amortisation (Ebitda) increased by a substantial 48.6% to R1.51 billion in the six months to end-December, largely driven by a turnaround at Rainbow and in RCL’s Sugar division.

This was in spite of a tough trading environment, where high input costs, load shedding and a weak rand/dollar exchange rate exerted pressure on prices and consumer demand.

Rainbow’s revenue increased 10.8% to R7.27bn in the six month, while underlying Ebitda increased by 364.8% to R286.8m due to a better agricultural performance, improved volumes and margins and sound cost control.

This result was even though the performance was compromised by load shedding and the impact of the avian flu outbreak.

The Hammarsdale Processing plant expansion was implemented, which resulted in increased volumes and the creation of 346 direct and 143 indirect job opportunities. Full capacity utilisation was expected in July 2024.

Rainbow’s Animal Feed business benefited from improved margins, although volumes were affected by avian flu and strong market competition.

Cruickshank said consumer demand was likely to remain soft in the coming months, with cost pressures persisting despite moderating from recent highs.

The Poultry Sector Master Plan was progressing slowly despite significant capacity investment by the industry.

Rainbow and its growers invested more than R600 million at Hammarsdale to double processing and grow capacity to return the jobs lost in 2017. Greater and more urgent government support was required to access new markets in line with the plan, he said.

Trade measures to support the local industry were a key pillar of the plan. Anti-dumping duties on chicken imports from Brazil and four EU countries were reimposed in August 2023 after a year-long delay in implementation.

But on January 26, the International Trade Administration Commission (Itac) recommended certain rebates of duties on frozen poultry imports be implemented as a temporary measure to mitigate potential impacts of the avian flu outbreak.

RCL said these rebates were “concerning” as the local industry had taken costly steps to ensure there was no shortage of poultry on the local market and that the supply chain was well stocked.

Last month, the Competition Commission announced an investigation into the broiler and layer industries over concerns their concentrated structure might lead to anti-competitive behaviour.

Cruickshank said globally, the poultry industry required vast scale to be able to drive down costs and be competitive.

“The scope of the Competition Commission investigation is wide and is likely to take an extended time to complete,” he said.

“Rainbow has made considerable progress with its turnaround. The final phase of ramp-up of production in Hammarsdale and the continued benefits of the breed change are expected to impact positively going forward,” said Cruickshank.

RCL Foods share price rose 4.5% to close at R10.45.

 

Game celebrates Leap Day by making history with a can of Koo beans

27 February 2024 | Ivana | Supplier news

South Africa’s rebellious retailer, Game, is known for colouring outside the lines when it comes to its marketing campaigns and activations. 

As part of its 2024 Leap Day campaign, the retailer is sending an iconic South African staple, Koo Baked Beans, to space - one giant leap for essential products just like Game’s giant deals this Leap Day weekend happening 29 February to 3 March.  

Game will be the first local retailer to do this, once again making history. The product will be launched from Game’s Potchefstroom store using a custom weather balloon, ensuring the launch and trip are eco-friendly. Once the product has reached a certain height - it will come back down, ensuring no damage and remnants are left behind. The whole trip will be filmed and monitored, and has been meticulously planned to ensure safety is maintained at all times.  

“Koo baked beans are unquestionably one of our customers' most favourite products, across the country. The sales of essential groceries and pantry items continues to increase, as our shoppers focus on stocking their pantries, feeding their families and treating themselves in the most cost effective way possible. This is what inspired us to use an essential product for this exciting activation,” explains Michelle Kemp, External Communications Manager for Game.   

Those wanting to see the footage of Game’s historic launch can access it on Game’s social media channels.  Please feel free to view the video through this link: https://f.io/N9X-mqka

We will be loading the video on Youtube, please let me know if you’d like to receive the link?

For any further information required, please reach out, over and out!

Shrinkflation nation: Yes, your ice cream tub is getting smaller

27 February 2024 | Ivana | Supplier news

By: Nick Wilson –News24

Next time you buy yourself a tub of ice cream to refresh yourself in the sweltering heat, take a close look at the contents label, particularly the information relating to size.

You could find the standard two-litre ice cream tub has suddenly become 1.8 litres as food manufacturers, under the whip because of rising input costs and a strained consumer, cut the size of the product rather than increase the price.

Strictly speaking, shrinkflation - as this practice is known - generally involves keeping the sticker price exactly the same. But the price of the product can also be reduced to reflect the new size regime.

Analysts have said SA food producers have clearly been pursuing this tactic, but relief may be in sight as inflation finally eases. SA's biggest food producer Tiger Brands, meanwhile, confirmed to News24 it had sought to introduce smaller-sized options to keep products affordable and provide options, while it constantly reviewed its recipes and packaging.

But it added keeping "table-friendly" sizes of iconic products available, such as Mrs Balls chutney or All Gold tomato sauce, remains important too. 

In the case of Country Fresh, the ice cream brand owned by Dairymaid, a reduced pack size has also come with a lower price.

Dairymaid, which is owned by UK-based Froneri, confirmed to News24 that while its Country Fresh brand has reduced the ice cream tubs from 2L to 1.8L, the change had also come with a "reduction in shelf price" so it could offer its customers an "affordable product" in a tough economy.

"The product packaging design has been updated to reflect the change and moved the volume declaration to the bottom of the tub next to the ingredients list, where consumers will see when reading the ice cream content ingredients."

"The Country Fresh change was made with the consumers best interests, to mitigate inflation pressure."

As far as SA's National Regulator for Compulsory Specifications (NRCS) is concerned, there's nothing wrong with this as long as the label reflects the change. 

Other products that have been shrinking in size in recent years include the 500ml Coke "buddy" bottle, which is now only 440ml. Shrinking pet food  products have also been reported.

Future trends?

With consumers expected to continue struggling at least until the second half of the year, Sasfin Wealth senior equity analyst Alec Abraham believes the market will see more cases of "classic shrinkflation".

Explaining the thinking behind it, Abraham says companies generally have a price target that they believe consumers will be willing to pay for a product.

If, because of a substantial increase in input costs, they have to consider raising the price of the product beyond that, they weigh up whether consumers will be willing to pay that premium. If they believe customers won't be willing, they then look to reduce the package size and generally keep the price the same.

Other methods companies may consider in their bid to keep prices palatable for customers include swapping out more expensive ingredients for cheaper ones.

Abraham says this is also happening increasingly in the market due to rampant input cost increases, pointing out his recent disappointment of finding a favourite sweet was on offer at a low price. He added:

Then I read the new ingredients and discovered they contained wafer, caramel and what they called a cocoa-flavoured coating.

"Obviously, real cocoa powder or chocolate would cost too much, so they wanted to keep the price point very low, so they simply replaced it with something else. Because they didn't have the required level of chocolate or cocoa, they couldn't legally call it chocolate."

Casparus Treurnicht, portfolio manager and research analyst at Gryphon Asset Management, says shrinkflation has most decidedly been a feature of the market in recent months as a consequence of a prolonged high inflationary environment. This is all about "making the consumer feel he is better off, even though he is actually not".

Consumers can expect to get less for their money in an inflationary environment, he added.

Though he believes there could be some relief in sight for consumers, with the worst probably behind them, this does not imply that consumers will immediately be loosening their belts.

This is why he doesn't necessarily believe the market will see significantly more cases of product shrinkflation – save for a few producers that may have fallen behind with the development of smaller package sizes, which are already in the pipeline.

Food producers may still opt to keep offering reduced-size offerings, for the short-term at least, as they try to claw back some lost margins, he added.