Sustainable Growth of Clover’s Premium Product Portfolio in South Africa’s Lower Income Market Segments

Abstract

Clover Industries Limited has a long and successful history in South Africa whilst playing a definitive role in the development of the local dairy and FMCG industries (Clover, 2017b). The organisation has been a household name in South Africa for over 100 years with roots stemming as far back as 1898. On the 14 th of December 2010, Clover enlisted on the main board of the Johannesburg Stock Exchange (JSE) and continues to be a leading player in the South African dairy market (Marketline, 2017a).This article explores business strategies and provides insight into the sustainable growth potential of Clover Industries premium beverage portfolio within the LSM 1–6 segments aligning with the organisations growth aspirations. The justification for this article is based on the paradoxical nature of the LSM 1– 6 segment that has income constraints, aspirational attributes and brand attraction. The objective of this article is to provide insight into the key factors affecting consumer purchasing habits in this segment of the market. A cross-industry analysis provides insight into innovative trends and developments. The themes identified in this article have been categorised and have helped provide clarity on the existing gaps in literature. There are specific factors that influence how business can be carried out responsibly within the LSM 1–6 segments without having an undertone of being exploitive. There are trends that have emerged which profile the typical LSM 1–6 consumer and businesses need to understand their specific needs and behaviour and be cognisant of this. The conclusions and recommendations that have been distilled, were derived from interviews with SME’s (Subject Matter Experts). This then provided the foundation for research questionnaires that were administered in the identified high LSM 1 – 6 density areas in KwaZulu-Natal, Gauteng and the Eastern Cape.