The devastating impact of the covid-19 pandemic on the South African economy has induced an unprecedented shift in consumer spending patterns as people try to keep their heads above the water, feed their families and buy the personal protective equipment (PPE) needed to protect themselves against the virus.
Experts say the move by consumers to buying longer shelf-life, processed products and prioritising staples above luxury foods is set to stay as the coronavirus lockdown eases.
This economically-driven change in buying patterns presents an opportunity for producers, especially for small-scale farmers who can more easily make changes on their farms.
Farmers will be faced with a demanding task to meet consumer demands, warns Dawie Maree, head of agriculture information and marketing at FNB. He notes that during the extended coronavirus lockdown, consumers have shifted to long shelf life foods from fresh foods. They are finding cheaper protein alternatives and are now consuming more basic, staple foods that are affordable.
Caroline McCann, Slow Food International’s Southern Africa councillor, says she expects these altered spending patterns to continue even as lockdown measures are eased. This is due to reduced household incomes.
“What’s happened is that government made announcements progressively through the lockdown that they would be very strict on price control and profiteering during this period. However, you’ve still seen food prices rising and with that you’ve got the double whammy of people’s income being affected,” she says.
People who lost their jobs or took pay cuts had no choice but to start thinking a lot more carefully about how they spend their money, says McCann. “The automatic go-to place, whether you are in suburban, township or rural South Africa, your thought is to cheaper products which are highly processed, that come with a longer shelf life. I don’t see us getting out of that in a hurry,” says McCann.
Challenge and opportunity for farmers
McCann says home vegetable growers have gained some support selling to local consumers during the lockdown. She expects that these growers would be able to retain their supporters if they started showing that their food safety systems are in place and they were able to crack the financial side of their business.
“Growers don’t understand enough about financial systems to understand things like compounded interest and why bank charges are the way they are,” she says. “If you are going to be dealing with cash, how are you going to get in the habit of putting cash aside for the next season? This would be an ideal opportunity for them to learn about business, but I’m not a hundred percent convinced that they will be able to.”
She says some of these farms can more accurately be considered gardens but are run very successfully. “I have seen in some of these farms that are small, but they are very well-run, profitable enterprises because the person in charge is the farmer.
“They know how to grow their products and sell it and do it with a proper, sophisticated understanding of business. They know how to account for overheads and how to account for dips in turnover in the middle of the month, when people don’t have much money, but producers still have expenses like water, wages etc. For those farmers I think this is the opportunity for them to capitalise.”
Maree says that, although small-scale farmers will be impacted by these changes in consumer behaviour, they are much more adaptable than commercial farmers to these changes.
“Large commercial farmers on the other hand have a lot more infrastructure and implements that they must change before they can adapt, whereas small-scale farmers can do that much more easily and quickly,” he says.
He says that the small-scale farmers are also set to benefit from cash-strapped consumers eating more staple foods, like maize.
“Small-scale farmers normally produce staple foods like maize. With consumers under pressure they will definitely eat more maize in the form of pap and various other maize products. Small-scale farmers will actually benefit from that again,” he says.