When Tjaart Kruger walked into Tiger Brands’ Bryanston headquarters on November 1 2023, the company’s market value had been stuck in the doldrums for years. It had been badly scarred by the disastrous Dangote Flour Mills foray in Nigeria and the 2017-2018 listeriosis outbreak in South Africa that killed more than 200 people.
Now, 18 months later, the share price has almost doubled and the cash pile is hefty enough to fund a special interim dividend of R12.16 a share on top of the regular R4.15 payout.
“For me, one of the leading indicators of whether we’re on track is when people are starting to phone us for a job,” Kruger told analysts after unveiling half-year numbers. They show headline earnings per share up 34% and volumes in positive territory for the first time in half a decade.
Those phones had largely stopped ringing during a grim stretch in which Tiger lurched from one self-inflicted wound to the next. The R10bn Dangote write-off, the listeriosis class action and relentless volume declines under successive CEOs had erased the gloss that once made the group the JSE’s go-to consumer staples proxy.
Yet Tiger’s footprint in South African food remains vast. In bread, its Albany brand stands alongside Pioneer Foods’ Sasko and Premier’s Blue Ribbon as one of three giants that control roughly 80% of national volumes. In ambient groceries it is still the single largest supplier: brands including Koo, All Gold, Jungle Oats, Tastic, Black Cat and Crosse & Blackwell command roughly 13% of aisle value, ahead of PepsiCo-owned Pioneer on 11%, AVI on 5% and Premier on 4%. The remainder is shared by the big food retailers’ private-label brands, unlisted local producers and multinationals such as Unilever, Nestlé and McCain.
Kruger is a self-confessed “operations obsessive” who turned Premier Foods from perennial laggard to private equity darling. At Tiger he inherited a bloated portfolio, scattered decision-making and an ingrained assumption that South Africans would always pay a brand premium for Albany bread, Koo beans or All Gold tomato sauce.
His first act was to scrap the centre-heavy corporate matrix and install a federated operating model. “People need to sit in the business, know what’s going on and make the calls in real time,” he said, complaining that group-level silos meant managers only discovered they had “run out of vinegar when we run out of vinegar”.
Within months each business unit had its own MD, a dedicated commercial team and weekly dashboards tracking gross margin, operating margin and working-capital turns.
That discipline feeds into a deliberately simple capital allocation filter. “Whatever we do, we test it against gross margin, operating margin, working capital management and ultimately ROIC [return on invested capital],” Kruger said. “If surplus cash builds, we give it back to shareholders instead of chasing vanity acquisitions.”
With group ROIC now nudging 20% against an estimated after-tax weighted average cost of capital of roughly 12%, Tiger is clearing its own hurdle for the first time in nearly a decade.
CFO Thushen Govender, appointed in January 2024, said the numbers validate the early moves. “Our continuous improvement programmes are running ahead of target at R200m — the two-year target is R500m — and working capital days have come down far faster than planned because we renegotiated supplier terms and stopped paying for cargo the moment it left a foreign port.” He was speaking in an interview after the results presentation.
The outcome of the measures that have been put in place is a swing from R2.7bn net debt a year ago to almost R6bn net cash at the March 2025 half-year
The outcome is a swing from R2.7bn net debt a year ago to almost R6bn net cash at the March 2025 half-year.
That cash is not burning a hole in management’s pockets. The R1.8bn special dividend is being delivered alongside a measured share buyback programme, and on acquisitions Kruger insists Tiger will not “pay too much for something that doesn’t make strategic sense”.
His priority is to finish portfolio housekeeping, complete a R1.8bn capital programme that includes a Gauteng “mega” distribution centre, a consolidated candy plant and what he calls a “super-bakery”. Only then will Tiger look at bolt-ons that deepen core category positions where Tiger already has scale, such as dry pasta and oats cereal, rather than stray into untested niches where the odds of success are smaller.
Portfolio pruning is already well advanced. Over the past year Tiger has exited baby-care brands Purity and Elizabeth Anne’s, offloaded its stake in Chilean associate Carozzi, agreed to sell the loss-making Langeberg & Ashton canned fruit plant for a symbolic rand and, most recently, signed a deal to dispose of the Randfontein maize milling complex, including the Ace brand wheat mill.
Explaining the maize exit, Kruger told analysts that “the maize industry has just proliferated — there are 350 millers in the country”. Most of them are small regionals that buy local grain, mill it on site and sell it within a short radius, thus avoiding the distribution and head office overheads a corporate must carry.
In a channel where “it sells only on price”, Tiger hasn’t earned a return for years, he said, and had clung to the business largely because it absorbed stranded fixed costs.
“Maize isn’t a corporate business any more. We haven’t made money in maize forever, and there’s no reason to hang on.” Shedding the site enables Tiger to cut capacity in an oversupplied market and “sweat” the remaining Hennenman and Pietermaritzburg mills, where utilisation and yields are higher.
Still on the chopping block are Chococam in Cameroon, the legacy King Foods operation and the chocolate confectionery assets inside the snacks, treats & beverages division. Here, too, the rationale is brutally commercial. Tiger’s Beacon chocolate slabs and bars business has delivered subpar returns for years; it survives only because higher-margin lines such as Maynards gummies subsidise it.
“I don’t think in chocolate we really have the right to play,” Kruger admitted. Referring to Cadbury, owned by food giant Mondelēz International, and its signature purple-wrapped Dairy Milk range, he remarked: “Our big purple competitor is just bigger, I think their offerings are better, their chocolate tastes better than ours.”
With chocolate slabs and bars a shrinking, capital-intensive niche — Nestlé, for example, has already trimmed its offering — Tiger would rather redeploy resources into newer technologies for its sugar confectionery range, including Fizzers chews, Maynards jellies, Jelly Tots and the like, that promise better yields and lower costs.
None of the remaining chocolate assets meets the return thresholds set by the capital allocation model, and if buyers do not emerge at a sensible price, Kruger will run them for cash rather than accept fire-sale values.
Headcount streamlining under Kruger has been surgical rather than sweeping. A few dozen seasonal contracts at the Boksburg prepared foods plant were allowed to lapse when the low-margin baby food lines were sold, but no broad retrenchment drive followed. Management says permanent staff are being redeployed where possible, and any further reductions tied to the super-bakery, Gauteng mega distribution centre and Durban candy plant consolidation will be phased in over several years, offset by fresh hiring in logistics, data analytics and export sales. The idea is to keep a tight grip on costs without gutting operational talent.
The business segments tell the story of why investors are willing to pay up again. Milling & baking, historically Tiger’s biggest problem child, has swung from margin compression to expansion thanks to an aggressive fix-the-basics campaign.
Kruger’s team rolled out route planning software that geolocates every Albany truck and recalculates its path daily. What used to look like “trucks driving all over the place”, he said, now traces tight loops that cut thousands of empty kilometres and trim damages by half a percentage point — a saving of roughly R60m a year.
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Depot rationalisation has already closed three unprofitable drop points and folded their volumes into larger, better-located hubs, while subscale 600g loaves have been killed off in favour of the core 700g and 800g formats that turn faster and waste less. Those changes helped push the division’s operating margin from single digits a year ago to the high teens in the latest half-year, even though category volumes are slightly negative.
Market share is edging up. Kruger told analysts that Albany has clawed back about 80 basis points in the past six months. The gain is more visible in the informal channel, which accounts for roughly 65% of national bread sales, than in the better-measured formal trade.
Reliability is everything in the informal sector: “If you’re unreliable, the spaza store just buys from the first truck that shows up,” he said, adding that Albany now reaches 40,000 such stores daily and hits its promised delivery window more than 90% of the time, up from the low 70s before the software went live. The logistics wins feed straight into reducing costs: every 1% improvement in loads-per-kilometre saves about R12m in fuel and fleet wear, while lower returns and fewer “stales” add another R25m to the bottom line.
Those savings underpin the super-bakery being erected on Gauteng’s East Rand, scheduled for commissioning in October next year. Designed to bake 1.8-million loaves a day on three high-efficiency lines, the plant will allow Tiger to close five or six ageing inland bakeries whose combined overheads run to R250m a year. The business case assumes no extra capacity, merely a reshuffle of existing volumes into a lower-cost footprint.
If current volume growth momentum holds, Kruger said the group “would love the problem” of needing a second super bakery in the Western Cape. “The whole premise is not to increase capacity but to reduce costs,” he reiterated, estimating that once the new site and network changes bed down, milling & baking’s operating margin should push comfortably into double digits and stay there.
The grains sector has staged an even more dramatic comeback. By switching from premium wheats to a lower-protein blend that still bakes acceptably but costs nearly R700/t less, the team shaved four percentage points off raw material cost and then forced suppliers to drop toll milling fees by a further R250/t. That saving was channelled straight to shelf: the flagship 500g Fatti’s & Moni’s pack now lands at a tightly researched R14.99 price point — exactly where a consumer pantry study said volume elasticity flips from negative to strongly positive.
As a result, throughput has exploded. What had been a half-lit, semi-mothballed pasta line in Atlantis is running seven days a week, and the Pietermaritzburg press that stood idle twice last year is scheduled for a second shift. Management expects pasta volumes for FY2025 to finish more than 20% higher than pre-turnaround levels, with operating margin back above 12%.
Deflation in imported rice told the same story. Thai 5% broken rice — the benchmark grade that traders follow, much as oil desks track Brent crude — fell from $650/t to the low $500s between September and February, giving Tiger the headroom to reset Tastic’s core stock-keeping unit (SKU) at R39.99 for 2kg without conceding a cent of gross margin. The lower sticker price accelerated a deliberate consumer migration from the cheaper Aunt Caroline label into Tastic, where the gross-to-net spread is 260 basis points wider.
At the same time, the grains trading desk imposed new daily mark-to-market rules, after the infamous 2023 shipment of poor-grade Thai rice that was bought at about R10,000/t, dumped to a competitor at R5,000 and then replaced at R12,000.
“You need to be on top of the rice market every day. You can’t sit at head office and hope for the best,” Kruger told shareholders, pointing out that rice sourcing teams now speak to Bangkok brokers twice a day and track vessel lineups in real time. The tighter discipline means no stock has been written down because of quality or price since April 2024, and Tiger’s credibility with retailers and growers is finally on the mend.
In the culinary business, an aggressive value-engineering agenda has delivered lighter PET bottles for Crosse & Blackwell mayonnaise that cut plastic weight by 12%; new can profiles for Koo that shave off 3g of tinplate per unit; and the removal of cardboard backers on All Gold labels. These steps have insulated margins against a 40% spike in vinegar prices and the highest cocoa prices on record.
Recipe tweaks did the rest. Sugar levels in All Gold have been trimmed to qualify for the lower tier of South Africa’s sugar tax. A redesigned Kasi tier-two mayonnaise now uses a cheaper oil blend without sacrificing mouth-feel. (“Kasi” refers to brands that are popular and well-regarded in township communities.) And the forthcoming Black Cat peanut butter “creamier” variant achieves a 15% peanut-inclusion reduction through emulsifier optimisation.
Snacks, treats & beverages posted double-digit profit growth despite a 35% jump in orange concentrate costs. Technologists reformulated Oros to a more concentrated 3+1 dilution ratio; and shrank gram sizes on selected Jungle energy bars and Maynards gummies, where elasticity studies showed no volume risk. Work began on consolidating the ageing Jacobs and Mobeni candy factories near Durban into a single high-efficiency site.
That move, coupled with the construction of a purpose-built primary warehouse at Roodekop near Germiston, is expected to strip at least R70m a year from overheads once the projects go live in FY2027. The new warehouse will be right next to Tiger’s beverage plant, so drinks such as Energade and Oros can be dispatched straight from the bottling line instead of detouring via an outside depot.
The home & personal care sector remains the laggard. An unexpected aerosol can shortage at the height of the mosquito season gutted Doom volumes. Problems at a local can supplier saw the Doom production line go down for five weeks. Tiger was forced to airfreight partial loads at high cost, instead of shipping full container loads, and to ration promotional stock. The team has since shifted to a global packaging supplier with guaranteed buffer inventory, but those lost summer sales will not be clawed back.
Ingram’s Camphor Cream, meanwhile, has been squeezed by nimble budget brands that undercut its winter-only positioning. A return to growth hinges on functional cream innovations — Moisture Plus, Triple Glycerine and a vitamin-E line — that de-seasonalise demand by moving the brand into year-round skin care.
Packaging “value engineering” is critical. A move to in-mould labels, where a pre-printed plastic film is fused into the container during moulding, eliminates separate paper labels and glue. And a new 50ml sachet format allows Tiger to hit a R9.99 Ingram’s entry price — low enough, informal traders say, to nudge shoppers into making that all-important first trial purchase.
Gross margin modelling suggests the combined formula and pack tweaks can shave 140 basis points off cost of goods, enough headroom to fund a stepped-up digital marketing push.
Exports are already showing green shoots. Zambia, the beachhead market, is running 18% ahead of last year in Doom aerosols and 24% up in Ingram’s Camphor Cream mini-tubs, while early container lots into Mozambique and Malawi have sold through faster than forecast.
We know we have brands that are loved and our brands deliver, but we must be relevant
— Tjaart Kruger
Kruger’s mantra, repeated across every presentation slide, is “affordability”.
“We know we have brands that are loved and our brands deliver, but we must be relevant,” he said. “If we set up a premium to a competitor — house brands included — the consumer must be willing to pay that premium. If not, we’ve lost it.” That is a realistic stance in a country where real disposable income has scarcely grown for a decade, and four in 10 shoppers say they will buy more private-label goods this year than last.
Paradoxically, most of that private-label volume is produced by the very companies it threatens. Tiger, PepsiCo South Africa (ex-Pioneer), Premier, AVI and Rhodes Food Group all take on contract runs for Shoprite, Pick n Pay and Spar, filling retailer tins and jars on the same production lines that make Albany, Koo or Sasko. True “private-label-only” specialists scarcely exist at scale.
Yet Kruger treats the work as a gap-filler, not a growth engine. “We’re quite happy to fill gaps,” he told analysts, “but the price must meet our gross margin and ROIC tests.”
Tiger has little idle capacity and no appetite to chase low-margin volumes that could cannibalise flagship brands. Though private-label’s value share is only about 18% locally, every percentage point gained shows up almost instantly in Albany or Tastic numbers, and Europe’s 38% penetration is the cautionary tale Kruger keeps in mind.
Rather than fight the tide, management is targeting what Kruger calls a “good-better-best” ladder: core SKUs hold the mid-tier; tier-two Kasi brands attack house-brand price points in mayonnaise and peanut butter; and innovation pushes Jungle Oats bars and Energade into premium snacking niches.
Marketing spend, long criticised as anaemic, is being rebuilt, but every rand must be consumer-facing. “We measure how much goes to TV, social media, activations and how much disappears into research overheads,” Govender said.
Balance sheet strength gives Tiger room to settle old liabilities without crimping that marketing push. In early May the company and its insurers tabled a formal offer to resolve the listeriosis class action, promising “full compensation for verified damages” while keeping exact quantum and payment mechanics confidential. The offer follows the 2017-2018 outbreak traced to Tiger’s Enterprise polony plant in Polokwane, which made more than 1,000 people ill and resulted in at least 218 deaths — the largest listeriosis episode ever recorded. A nationwide recall, a months-long factory closure and earlier interim settlements have already cost the group close to R700m.
The high court must still approve the new settlement framework before individual claimants can be paid, but Govender insisted Tiger’s product contamination cover and excess layers are “more than adequate”, so no extra balance sheet provision is needed. Analysts who once pencilled in a wide range of potential liabilities now treat the lawsuit as a manageable tail risk rather than a valuation swing factor.
Kruger prefers to focus on the next operational levers: a Western Cape multiplant “mega site” that will collapse several small factories under one roof; automation and yield improvements in pasta and rice; and rolling out the control tower logistics software to every division. He is also eyeing category-adjacent bolt-ons — perhaps a health-orientated snacking brand, or an out-of-home food service play — but only “when the core is humming and the price is right”.
Investors like what they see. Since Kruger’s appointment was announced, Tiger’s market capitalisation has swelled by roughly R29bn, almost doubling the share price and lifting it back to levels last seen before the listeriosis crisis. This has heartened long-suffering believers in the company’s underlying fundamentals.
Cash flow is already outstripping operating profit, with further headroom for margin expansion, tighter working capital turns and rising ROIC — all targets still in play until Kruger’s contract ends on December 31 2028. Tiger is morphing from “serial disappointer” into a credible cash flow compounder that, on roughly 16 times earnings and a net cash balance, is hardly expensive.
With the self-inflicted setbacks now largely in the rear-view mirror, the bigger threats are macro. A business this large inevitably rises or falls with the country’s fortunes, and its milling & baking arm — responsible for about 20% of operating income — remains exposed to wheat price shocks in a category where pricing power is thin.
For Kruger, the real test is cultural. He closed the results presentation by thanking the managers who “had to start running on day one” and repeated that headhunters are again circling Tiger’s middle ranks. “That tells me we’re doing something right,” he says with a smile.
If the federated model keeps delivering margin points, if ROIC stays above the cost of capital and the remaining disposals fetch respectable multiples, Tiger’s stock is likely to receive sustained investor interest too.
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