Natural place to be
How fast is the middle class growing in Africa, and where is it growing? What is it spending, and on what?
SA companies such as Shoprite, Tiger Brands and Nampak would love to know the answers to these questions.
After all, Tiger bombed out of Nigeria in a big way after divesting its 65.7% stake in Tiger Branded Consumer Goods in Nigeria — previously Dangote Flour Mills — to Dangote Industries for a nominal US$1.
Tiger bought a majority stake in the flour, rice and pasta business for R1.6bn in 2012 from Nigerian tycoon Aliko Dangote, but has since written down R2.7bn in the subsidiary, after extensive new capacity in these products came on line. The huge impairments put a heavy damper on solid gains from the core SA operations, and damaged the group’s reputation.
Business statistics are the heady stuff in which the Economist Group’s intelligence unit (EIU) sees value. So in 2015 it bought the database of Canback, which describes itself as an “elite management consulting and related services firm anchored in management science, predictive analytics and consumer market knowledge”. Canback, now called EIU Canback, says it has grown 27%/year since it was founded in 2004.
Staffan Canback, an electrical engineer of Swedish background with a Harvard MBA, who co-founded Canback — and is “now an employee” of the company with an “attrac- tive earnout” due in 2018 — says the company’s forecasts indicate there will be steady growth in the numbers of consumers across Africa over the next 10 years.
However, most of sub-Saharan Africa’s population will remain economically marginalised.
Specialising in global fast-moving consumer goods and retail trends, including telecoms, the company has done consulting work in 77 countries and has offices in Boston, Chicago, Johannesburg, London, Dubai, Shanghai, Beijing and Singapore – with satellite offices in Tokyo, Mexico City, São Paulo and Jakarta.
Despite employing only about 50 staff worldwide, it competes with global consultants such as Boston Consulting Group,