Mzansi’s deciduous fruit canning industry, which includes canned peaches, pears, apricots, and mixed fruit, has been a significant global player since the early 1960s. Despite its long-standing competitive edge, the industry has faced a troubling decline since 2016.
If this trend continues, it could lead to job losses, reduced livelihoods, and a significant drop in foreign exchange earnings – all of which South Africa can ill afford. To address these challenges, experts are calling for a comprehensive Deciduous Fruit Canning Industry Recovery and Competitive Plan (DFCIRCP) to revive the sector.
A recent study by Stellenbosch University (SU) underscores the urgency of developing such a plan. The study recommends a collaborative approach involving industry leaders and the government to enhance the sector’s competitive performance and foster growth across the entire value chain.
Aligning the DFCIRCP with national policies, such as the National Development Plan and the National Agro-Processing Master Plan, is considered essential to creating a foundation for sustainable growth.
Dr Heinrich Jantjies, group risk, safety and security director at Tiger Brands, who recently obtained his doctorate in agricultural Economics from SU, has highlighted the importance of a shared vision for the industry.
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“The DFCIRCP can build a shared vision and strategic actions with government support, public-private partnerships, and alignment with the National Development Plan and the National Agro-Processing Master Plan to stimulate competitive growth in the industry,” Jantjies stated.
His research focuses on analysing the competitive performance of the deciduous fruit canning sector from the 1960s to the early 2020s, with comparisons to other major local fruit and vegetable export enterprises like apples, plums, citrus, wine, and avocados.
Jantjies’ findings reveal that while the deciduous fruit canning industry has shown resilience and competitiveness, there have been significant fluctuations. The industry exports about 85% of its products annually, with canned fruit exports valued at $112 million (approximately R2 billion) in 2021.
Boosting competitiveness through innovation and market expansion
Canned peaches accounted for $47.6 million (around R870 million) of this total. However, the industry’s competitiveness rating, based on the Relative Trade Advantage (RTA) formula, dropped from 23.03 in 2016 to 17.02 in 2020.
Pears were an exception, showing an improvement from an RTA of 33.96 in 2016 to 40.40 in 2020. “This explains the industry’s strong and resilient character,” noted Jantjies.
The study identifies several factors that enhance the industry’s competitiveness, such as a well-developed infrastructure, access to renewable energy, strong relationships with international markets, and robust competition in global markets.
However, challenges persist, including outdated canning technology, limited local market access due to new competitors, concerns over land expropriation without compensation, the impact of climate change on fruit yields, and negative health perceptions associated with canned fruit. These factors, according to Jantjies, pose significant constraints on the industry’s ability to maintain its competitive edge.
Jantjies proposes several measures to help the industry remain competitive.
“The industry should focus on reducing high transaction and administration costs and effort; intensifying efficiency through smart technological innovations; creating business-friendly environments; continuously upgrading the skills of employees; enhancing the efficiency and effectiveness of processing firms; improving growth in the local market by making canned deciduous fruits more accessible to lower-income groups; and targeting emerging markets like India and China, while maintaining a strong presence in established markets,” he suggests.
Improving distribution and logistics infrastructure is also crucial, particularly in enhancing access to railway facilities and upgrading harbour facilities to support the industry’s growth.
“The industry should also assist with the promotion of improved distribution and logistics infrastructure and constant maintenance thereof,” Jantjies adds.
“Conducting a thorough and integrated analysis of the entire value chain can lead to better information sharing, cost efficiencies and control, and governance as well as foster innovation and build trust among all participants in the industry.”
Jantjies warns that without these interventions, the industry could face a sharp decline.
“If such proposals are not implemented, the industry will decline, farmers will move on to other crops such as citrus, and service facilities will contract. This will lead to job losses,” he cautions.
As South Africa is one of the key suppliers of canned fruit from the Southern Hemisphere, such a decline would negatively impact international trade partners and reduce the country’s foreign exchange potential.
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