South Africa Food & Drink Q3 2018
The food and drink sector looks set to expand strongly over the coming five-year period to 2022, with high growthrates stemming from favourable demographics and a recovery in consumer confidence. This is highlighted by two IPOs that wereheld during the March-June 2018 period, as Libstar and Distell listed on the JSE to raise more capital for further expansion. Thatthese two companies represent food (Libstar) and drink (Distell), signals an appetite for investment in this sector after a difficult fewyears. While this bodes well for the overall industry, we note that the food safety scandal that took place in the first quarter of 2018and the tax on sugary drinks that came into effect in April 2018 could have long-lasting effects. Following these two events,companies will need to react quickly in order to re-direct products to suit consumer demand for healthier, premium goods.
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