Business overview
Our stakeholders
Sustainable relationships with key stakeholders are essential to our long-term growth. Accordingly, shareholders, employees, consumers, customers and suppliers are all part of the chain that creates value.
In addition, we believe in creating shared value, specifically in areas where our operations intersect with society. As such, we have concentrated on developing long-term and sustainable relationships with communities through projects that allow us to bring our purpose to life. We do this by creating value not just for shareholders but for society through nurturing and nourishing lives every day. We have reviewed our socio-economic development approach to ensure we can create the most value and make the most difference.
We also depend on broader society to provide a conducive operating environment, and a consumer and talent base that we can reliably draw from in future. As such, stakeholders in our broader socio-economic environment – law-makers, regulators, industry groups, the media and communities – all hold a stake in our licence to operate but, more so, the freedom to operate. No licence will ensure our operating rights without the extended relationships and partnerships with our stakeholder community.
Stakeholder relations at Tiger Brands is, therefore, a strategic function. It is focused on constructive engagement to build positive reputational capital for the group to underpin our growth and sustainability.
Our aim is to maintain our social licence to operate and protect the reputation of Tiger Brands as a trusted, strategic partner.
Our FY17 stakeholder engagement survey provided a baseline understanding of how stakeholders perceive our engagement with them. This aligns with our strategic goal of increased stakeholder inclusivity, and meets the requirements of King IV.
Based on results from the survey (detailed in our prior report), we have developed stakeholder engagement training for internal issue owners. This began rolling out in October 2018. We have worked with key production sites such as King Korn in Potchefstroom, Tiger Milling in Hennenman and Albany Bakery in Secunda to develop stakeholder engagement plans, enhance stakeholder inclusivity, and co-create shared value with communities around us. In 2019, we will focus on rolling out our stakeholder engagement plans to the rest of our operations, and developing long-term relationships with key stakeholders nationally and in our operating areas.
Key elements of our stakeholder relations strategy include:
Consistent approaches to engagement throughout the group |
Mechanism to anticipate risk and opportunities |
Coordinated framework for stakeholder management |
Leadership actively engaging with stakeholders |
Values-based engagement |
Stakeholder-focused as opposed to compliance-based engagement |
Stakeholder issues in 2018
| Key issues in 2018 | Our response | Read more | ||||
| Customers (retailers/wholesalers) | ||||||
| Increased competition amid muted consumer demand | Developing joint business plans and growth workshops with key accounts to
implement relevant customer marketing campaigns and grow market share Driving in-store activation, on-shelf availability and distribution in modern and general trade to improve execution and overall availability Building relevant pack-price architecture and category management plans to improve ranging and assortment by chain/format to differentiate Tiger Brands and increase penetration and consumption Collaborating with key customers on shopper campaigns, data and insight gathering, customer service excellence and CSI opportunities |
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| Employees | ||||||
| New operating model and organisational redesign |
Regular, high-impact employee engagement sessions, one-on-one consultations and the recruitment of an in-house change management specialist The revised operating model and corresponding people strategy has directly considered and addressed these issues. Monitoring of existing and new issues has been included in updated HR processes, eg pulse (satisfaction) survey and a dedicated employee relations centre of excellence |
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| Performance and rewards | ||||||
| Talent and career development | ||||||
| Teamwork and collaboration | ||||||
| Enhanced internal communications | ||||||
| Wage negotiations | Wage negotiations were settled while regular regional leadership engagements will be introduced |
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| Consumers | ||||||
| Product affordability | Mitigate inflationary pressures through cost-saving initiatives and operational
efficiencies Smaller pack sizes and/or alternative, more affordable packaging formats – strong pipeline of innovation. New packs launched in Benny, Jungle, Morvite, Maize, Oros ready-to-drink |
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| Value proposition | Ensure our product quality meets consumer expectations and the brand represents value |
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| Health and wellness | Proactive communication on health benefits and claims such as fortified products, eg Ace, Jungle and Morvite; Preservative-free products, eg All Gold tomato sauce, sugar and salt reduction |
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| Listeria and food safety | Founding member of the Centre for Food Safety and relaunch of Enterprise, accompanied by public education on food safety |
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| Community | ||||||
| Food security and related nutrition issues | Maintain strong partnerships with governments and developmental agencies to support initiatives that promote nutrition, health and education, and contribute to the development of local communities and eradication of poverty |
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| Conduct social return on investment (SROI) review to assess the impact of our development initiatives | ||||||
| Increased demand for support with enterprise development and assistance in getting community members – particularly the youth – to be economically active | We emphasise community enterprise development programmes which are designed purposefully, where possible, to foster a seamless transition to formal enterprise and supplier development programmes (ESD). This in turn supports the transition from philanthropy to community development to entrepreneurship. In addition to this new approach from 2019, we will also conduct social mapping to ensure solutions are holistic and respond to community needs and realities |
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| Investors | ||||||
| Lacklustre macroeconomic outlook | Confirmed the strategy approved in 2017 as sound and relevant |
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| Impact of aggressive competition and increased promotional activity on sector profitability | Articulated strategic progress to date and plans to address gaps Embed the operating model through revitalised ways of working |
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| Limited progress on strategy execution | Narrowed priorities to facilitate focused execution; dedicated resource to drive strategic portfolio decisions |
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| Remuneration | Considered investor feedback and addressed in remuneration policy |
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| Listeria outbreak | Kept market abreast of developments through SENS announcements and engagements. Conducted over 200 engagements (calls, individual meetings, conference attendance and results presentations) |
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| Succession pipeline | Prioritising the development of leadership capability and capacity to inspire winning performance |
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| Government |  See our sustainability report |
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| Regulations on sodium reduction; proposed tax on sugar-sweetened beverages | Complying with all relevant regulations; actively participating in dialogue before legislation is promulgated |
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| Promoting awareness of nutrition education | Keeping abreast of emerging issues |
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| Food security | Active partnerships to promote agri-sector development and greater inclusion of smallholder farmers |
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| Growth and development of local agricultural sector | Nutrition education programme with the Department of Basic Education In-school breakfast programme in partnership with Tiger Brands Foundation |
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| Media | ||||||
| Media management focus | Appointed a senior media and PR manager to deepen and broaden our engagement with the media and implement the media strategy |
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| Increase access to management and information | Dedicated media and consumer section on the website for major issues such as Listeria |
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| Strong emphasis on proactive and reactive media relations | Enhanced one-on-one media engagements – CEO, CFO interactions with key media |
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| Swift response to media enquiries | Manage all enquiries within deadline | |||||
| Fair treatment of consumers | Answer all media and social media queries on all consumer-related enquiries within timeframes |
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| Increased focus on newsroom interactions | Greater access to spokespeople and Executive committee members for editors and journalists |
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| Social media engagement | Increased Tiger Brands’ social media presence and engagement on Facebook and Twitter with media and consumers |
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| Media governance | Strengthened media governance and protocols when dealing with journalists and media houses
Approvals and media protocols now built into the media strategy to ensure swift responses |
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| Media analysis | Enhanced media monitoring and analysis ensure that reputational risks are identified and dealt with timeously, and proactive approaches to emerging opportunities are maximised | |||||
| Suppliers | ||||||
| Volatility of the rand against major currencies | Group-wide savings programme intensified to dilute impact of currency-related cost increases |
Overview of non-financial performance to Our people and our sustainability report |
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| Industrial pollution restrictions in China continue to affect raw material availability for flavours and other chemicals | Collaboration with strategic suppliers to secure requirements and contain cost increases | |||||
| Significant increases in global paper pulp pricing impact the cost of paper packaging | Augmenting supplies by identifying new global supply sources and alternative ingredients for recipes | |||||
White fly pestilence had a significant impact on the availability and price of fresh tomatoes |
Leveraged relationships with large-scale commercial farmers and international sources to secure quantities required | |||||
Adverse domestic weather conditions affected crops such as groundnuts, tomatoes and fruit |
Approved hedging policy governs price protection and sales and operations planning secures supply |
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Potential threat of El-Niño weather conditions |
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| Availability of oats supply constrained by drought in EU and Australia | Activated international sourcing to augment raw material shortages |
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| Introduction of sugar tax and higher duties significantly increased cost of using sugar across several categories | Continued to play a leading role in appealing for moderated duties to safeguard the impact to consumers and managed sugar cover ahead of price increases by the local sugar industry Reformulated key beverage brands to reduce sugar content |
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| Listeria in the value added meat products business | Validated that our suppliers/farmers have complied with requisite food safety/hygiene standards Leveraged trusted relationships with pig farmers to manage the risk of cost increases on start-up |
