Supply Chain performance
Our Supply Chain provides franchise partners with a competitive advantage through margin management, product innovation and an efficient supply of products and ingredients.
Our Integrated Supply Chain, which supports our Brands pillar in South Africa and a few other SADC countries, consists of our Manufacturing, Logistics, and Retail activities.
Most of our Manufacturing plants are wholly owned, however we do operate certain partially owned subsidiaries. The Retail business sells condiments (sauces, dressings, spices), frozen meat products, coffee (ground and beans), frozen potato chips and other value-added products.
Manufacturing
Logistics
Retail
Salient features |
2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
|---|---|---|---|---|---|---|
| Segment revenue (R million) | 3 371 | 3 288 | 5 226 | 5 021 | 344 | 368 |
| Segment operating profit (R million) | 371 | 297 | 71 | 94 | 1 | 6 |
| Operating profit margin (%) | 11.0 | 9.0 | 1.4 | 1.9 | 0.4 | 1.7 |
| Capex (R million) | 41 | 53 | 14 | 22 | 0.86 | 2 |
Manufacturing
Performance
Manufacturing revenue increased by 2.5% to R3.4 billion (2024: R3.3 billion) despite weaker front-end demand, including volume for core products. Operating profit improved by %25% to R371 million (2024: R297 million). Our investments in equipment to improve production yield and output, while reducing labour costs, helped to improve our profitability.
The operating profit improved to 11.0% (2024: 9%). The halting of load shedding for most of our financial year resulted in reduced diesel costs. These savings were somewhat eroded by Eskom's 12.7% electricity price increase introduced in July 2024. Our insurance premiums for the 2024/2025 cycle increased by 15%, a dramatic improvement from the 246% escalation experienced in 2024. Gauteng was affected by regular water shortages, which meant we needed to pay for alternative water supplies to top up our storage tanks.
Focus areas
Cost-saving initiatives were a major focus for Manufacturing in 2025. We reviewed our plants' operating structures and made changes to reduce management layers, reduce costs of casual labour and overtime. The reduction in employee expenses helped protect profitability in a challenging year. Our investments in manufacturing technology are enhancing production yields for our key products.
We have a continuous focus on managing our ingredient input costs. Food inflation slowed substantially during 2025 compared to prior years and is expected to remain below 5% for 2026.
Key inflation drivers
Coffee
Coffee prices rose as frost and subsequent droughts badly affected the supply in coffee-growing countries. Changing weather patterns due to climate change, combined with global growth in coffee demand. We have decided not to purchase green coffee beans until prices stabilise. We currently have good stock holdings of this commodity.
Soft serve
Soft serve prices increased due to higher costs of imported whey, buttermilk and specialised imported oils. Some of this pricing was alleviated by sourcing locally produced whey.
Cheese
Cheese prices lifted sharply over the winter months but have since moderated.
Hake
Hake pricing remains challenging due to poor catches, quota cuts in both South Africa and Namibia, and increasing global demand for Namibian Hake. We manage supply by ensuring large inventory holdings.
Pork
There has been a shortage of prime pork cuts, resulting in higher prices for pork bellies. This has been alleviated with our redeveloped streaky bacon.
Our efforts to develop our internal procurement capabilities enable us to manage the costs of core ingredients, including chicken and potatoes, and develop strategies to mitigate product shortages.
This year, we developed the Competence Acquisition Process (CAP) programme, which aims to provide employees with greater detail on their roles and responsibilities. Each responsibility has been defined, documented and converted into work instructions and assessment tools. This is supported by an online training system that provides employees with opportunities for continuous learning. We trialled this at one plant in 2025, with pleasing results as employees feel more empowered, resulting in fewer maintenance call-outs and improved morale. This will be rolled out across the Manufacturing and Logistics divisions.
Our food safety risk is well-managed, and no plant stoppages occurred in 2024. We have achieved 100% food safety accreditation across all our plants. The Group monitors complaints across all plants, and the complaints remain low.
Several plants faced water shortages and quality issues in 2025. All plants have water filtration systems in place, and water testing is done regularly to ensure that our water meets the required standards. All our plants have backup water on site, and we will allocate funds to increase that backup capacity over the next year.
From May 2025, the Famous Brands Coffee Company stopped selling coffee-related equipment and servicing and managing the spares for this equipment. These activities were taken over by two private companies. This was a low margin offering and did not align with the Group's manufacturing focus.
Capex
Digital transformation is reshaping the manufacturing sector, enhancing efficiency, reducing costs and improving product quality. Adopting newer manufacturing technologies will result in more sustainable operations.
We spent capex of R41 million (2024: R53 million) on improving our plants. Major capex projects for 2025 included:
- Newer manufacturing technologies to improve production yields. This includes a thawing unit at our meat plant and a specialised piece of equipment that improves the yield and processing of potatoes.
- Upgrading an access control system at our Cater Chain plant to improve plant security.
- Upgrading our ammonia plants at Cater Chain to improve refrigeration performance.
- More efficient generators at the Famous Brands Cheese Company to provide increased resilience during load shedding or power outages.
Focus areas for 2026
- Introducing newer manufacturing technologies to increase production capacity, improve yields and reduce waste.
- Extracting greater value from our Manufacturing data.
- Investigating the feasibility of a water recycling plant at the Famous Brands Cheese Company.
- Investing in solar plants at two sites to improve our energy resilience.
- Implementing the CAP programme across our plants.
- Increasing our access to additional backup water supplies.
Logistics
Performance
Logistics revenue increased 4.1% to R5.2 billion (2024: R5.0 billion) while operating profit declined to R71 million (2024: R94 million). We made significant savings in diesel due to the cessation of load shedding for most of our financial year. The operating profit margin was marginally lower, due to changes in product mix, higher staffing costs, fleet expenses and stock losses. We experienced a decline in product categories with higher revenue per case and an increase in categories with lower revenue per case.
Our case volumes grew by 3.7% year-on-year. We continued to benefit from our upgraded route planning system and improved driver behaviour, resulting in fuel consumption (28.63 ℓ/100 km) that was 5% less than budgeted and 3% less than in 2024.
Focus areas
We continued to benchmark our processes, costs, and margins to ensure efficiencies and reduce operating costs. This included closely managing expenses related to employee allowances and overtime. In 2025, we aligned our delivery time windows to industry standards and are tracking our performance against industry standards for on-time delivery, in full, with no errors.
We implemented the new warehouse management system at the Crown Mines Distribution Centre in September 2024. This completed the rollout of this system across all sites. We experienced stock losses associated with transitioning to the new warehouse management system. Corrective measures, including warehouse management system enhancements, have been implemented to address these issues. Although the implementation had teething issues, it has improved productivity and enhanced business insights. Our focus is on using the system to improve productivity, including through automation, improved stock controls and labour reporting.
The new cold storage facility, commissioned in June 2025, will significantly reduce transport and energy costs by using more efficient refrigeration technologies. We exited our Crown Mines Distribution Centre lease at the end of May 2025.
We have begun upgrading our bespoke franchise partner online ordering system to improve the user experience and boost purchasing from franchise partners. This project is expected to be completed by 2026. We have expanded the range of products offered to franchise partners.
We have improved our fire protection and smoke detection systems to meet our insurer’s requirements. Three of our sites are now fully certified by the Automatic Sprinkler Inspection Bureau (ASIB), with three sites in progress. All six of our sites are fully certified by the Fire Systems Inspection Bureau (FSIB). These certifications have helped to reduce our insurance costs.
All six distribution sites achieved five-star ratings from Nosa for safety.
Capex
Capital expenditure of R14.0 million (2024: R22.1 million) was incurred, with the largest allocation for the refurbishing our truck fleet and investing in fire sprinklers and detection equipment. To improve our operational resilience, we invested in water harvesting at our Western Cape Province Distribution Centre. We harvest approximately 144 litres per day. The development of our new cold storage facility is not included in the Manufacturing capex figure but is allocated as an investment property capex item.
Focus areas for 2026
- Optimising our operations with the new warehouse management system to improve productivity, insights and efficiencies.
- Extracting greater value from our Logistics data. Read more here.
- Expanding floor capacity at our Gauteng and Eastern Cape Distribution centres.
- Exporting products to Angola and Namibia from June 2025.
- Better forecasting of our labour and shift requirements with the use of a resourcing tool.
- Implementing the CAP programme across our distribution centres.
- Complete the upgrade of the franchise partner online ordering system.
Retail
Performance and focus areas
The division's revenue declined by 6.6% to R344 million (2024: R368 million), and operating profit decreased to R1 million (2024: R6 million). These weaker financial results are due to substantially lower volumes of frozen potato chip sales. A competitor re-entered the market following product shortages in 2024 and offered discounted prices. Retailers purchased these in large quantities and are now clearing this stock at a discount due to its poor quality, which is depressing our sales. This situation normalised in the second half of our financial year. There were no material product write-offs for 2025.
With lower disposable income, consumers are becoming increasingly price-sensitive and seeking better deals. Our reputable brands and competitive pricing have supported our Retail division in growing its sales and distribution network. We have appointed a specialist trade marketing agency to support the development of our marketing strategy and secure additional retail listings. We have also invested in boosting our product development and innovation capabilities through hiring dedicated resources.
In 2025, the division launched four new products and plans to introduce additional products in 2026.