Beefing up the brand
One of only two SA meat exporters to have achieved EU accreditation
FOR OBVIOUS REASONS, the sprawling Krugersdorp facility of iconic SA meat company Bull Brand Foods is not a favoured destination for vegetarians. Built on its “bully beef ” brand, Bull Brand has become synonymous with red meat.
To add economies of scale to the company, over the past few years, Bull Brand has diversified into fresh meat and new value-added product ranges.
Lou Campher, Bull Brand MD, says the injection of capital by KAP International four years ago saw the group recapitalised, with a renewed focus on building economies of scale, rationalising certain elements of the business and consolidating all the company’s operations under the Bull Brand Foods name.
Added to its canned meats under the Bull Brand, Spekenam, Gants and Apex labels, the company now boasts a full shopping basket of fresh beef products, as well as lamb, sheep, and pork products. These are sold under the Sam’s Tender Beef, Bull Brand Grainfed and Bull Brand Tender brands.
The expansion into the fresh meat sector has paid dividends, and today the company is the lynchpin of KAP’s consumer division, representing more than 63% of its revenues.
In 2006, the group boosted turnover 21,3% to R881m on the back of higher canned sales and rising meat selling prices.
The driving force behind production is found at the Krugersdorp premises, which processes and packages both the canned and fresh meat products. Campher explains that the operation is laid out according to European Union specifications, in terms of an exportapproved certification. “We are one of only two SA meat exporters to have achieved EU accreditation, enabling us to increase exports into Europe and other international markets.”
The facility has also been accredited for Kosher slaughtering by the Beth Din and is affiliated to the SA National Halaal Association (SNHA) for Halaal slaughtering. To enhance efficiencies, a great deal of attention is being paid to upgrading technology and bringing in the latest equipment.
Outside of its Krugersdorp factory, the company also runs two feedlots, Hurland in Magaliesburg and Taaiboschbult in Potchefstroom, which have standing capacity for almost 40 000 cattle. It’s a massive undertaking, involving investment in feed formulation technologies, the maintenance of an environmentally secure environment, and contracted specialist veterinarians.
Farming performance has been excellent in the past year, Campher notes, with the group investigating the possibility of further increases in the herd. However, with meat prices volatile, the timing must be correct and any investment must also justify the influence on working capital, he emphasises.
Another move that could have a positive effect on Bull Brand going forward is KAP’s pending acquisition of a 60% stake in Brenner Mills.
The milling business, which is still subject to approval by the Competition Commission and due diligence, would supply feed directly to the herds, leading to lower costs. At the same time, the two groups have synergies in their distribution channels that could also be exploited, explains Campher.
In tandem with the production logistics behind the country’s most dominant tinned meat company, Bull Brand is continually looking to increase its range of products focused on the “convenience” end of the food chain. This includes recently launched fibre-added products such as “Cowboy King” burgers, as well as Bull Brand Biltong, Salami and Dry Wors Snax.
“Margins are wider in these value-added products,” Campher points out.
He says the company is moving away from being strictly product-driven and is now focused more on satisfying the needs of its customers. “The trends towards convenience meat products are very evident.
South Africa has an expanding middle class, and we are positioned at the head of the class. We’re confident our brand will move from strength to strength,” adds Campher.
And that’s not bull.
Expansion into the fresh meat sector paid dividends. Lou Campher