How BevCo is tapping into SA’s township economy
South Africa’s informal trade sector has long been the backbone of our nation’s economy. With more than 70% of households relying on this market for their everyday needs, its influence is undeniable. The township economy, where spaza shops and informal retailers thrive, represents a significant portion of this sector, contributing billions of rands annually.
Image supplied
Recent studies show that the informal independent market within the FMCG sector has grown at an average rate of 6.7% between 2018 and 2023 – a trend that shows no signs of slowing.
By 2030, it’s anticipated that small retailers will create 70% of all new jobs in South Africa, underscoring the sector’s importance as a driver of economic growth and employment.
BevCo recognises the critical role that the township economy plays in the broader South African market. This is why they recently launched its ‘Route to Market Expansion Project’, in response to this growing opportunity.
Through this initiative, BevCo is working on enhancing its presence in the informal trade sector, particularly within the township economy.
They’ve partnered with The Brand & Beverage Company (TBBC) to deploy a team of 100 dedicated sales representatives focused on reaching thousands of spaza shops across key regions, including KZN, Eastern Cape, and Western Cape.
But this effort also goes beyond just expanding its market share — it’s about recognising and investing in the vibrant, dynamic economies that exist within our townships.
The numbers speak for themselves. The township economy is valued at approximately R900bn, with the informal sector alone contributing around R150bn in cash sales annually.
With an estimated 150,000 spaza shops operating across the country, these small businesses collectively contribute as much as 5.2% to South Africa’s GDP and employ 2.6 million people.
Shoppers frequent spaza shops on average four times a week, significantly more than traditional supermarkets, which they visit just once a week. These figures highlight the central role that township retailers play in the daily lives of millions of South Africans.
BevCo's commitment to this sector goes beyond mere product placement. They’re investing in the long-term success of the retailers they work with by providing them with the tools they need to thrive.
As part of they initiative, BevCo are placing thousands of coolers in spaza shops, ensuring that consumers can access our products at the ideal temperature. This multi-million rand investment is aimed at enhancing the consumer experience while supporting the business growth of our retail partners.
Moreover, BevCo's partnership with TBBC’s training arm, Phuthukisa, underscores its commitment to empowering those within the township economy. The Train-the-Trainer sessions go beyond product knowledge, equipping its sales force with essential business skills, such as financial skills and sales techniques.
By building business acumen alongside product knowledge, BevCo aims to contribute to the sustainability and profitability of the spaza shops they engage with.
Through the Route to Market Expansion project, BevCo are playing its part in the growth and development of South Africa’s township economy.
By improving its distribution channels and deepening relationships with informal retailers, they’re not only strengthening the business but also contributing to the economic empowerment of communities across the country.
As South Africa’s economy continues to face challenges, it’s initiatives like these that can make a difference. By supporting the informal trade sector and recognising the value it brings to our economy, we can help drive growth, create jobs, and build a more inclusive future for all South Africans.
The township economy is a vital part of our nation’s economic fabric, and by investing in it, we are investing in the future of our country.
About Pieter Spies
Pieter Spies, CEO of BevCo
Related
