June 13, 2018 / 5:20 PM / 6 days ago

Food producer Libstar bets on yoghurt to boost market share

* Libstar launched on the Johannesburg bourse in May

* Yogurt market dominated by bigger players

* Company also expanding in convenience foods space

By Nqobile Dludla

JOHANNESBURG, June 13 (Reuters) - South Africa’s Libstar Holdings Ltd is launching a new range of yoghurt in a bid to gain market share from French group Danone and local leader Clover Industries in the country’s competitive dairy sector.

The new yoghurt ranges and shakes, traded by Libstar unit Lancewood will be launched by July, Chief Executive Andries van Rensburg told Reuters in an interview.

Yoghurtmakers are increasingly trying to market yoghurt as a health-conscious and nutritious food or shake, which can also be consumed as a snack on the go, tapping into rising demand for convenience food.

Libstar launched on the Johannesburg bourse in May. Its shares have fallen more than 20 percent since their debut, underperforming the local all-share index, which has inched up more than 1 percent in the same period.

The company had sales of 8.8 billion rand ($665.93 million)in 2017, an increase of 10 percent.

“We plan to grow our market presence significantly with our new range of yoghurts,” van Rensberg said, but did not give figures.

Libstar has made a flurry of acquisitions over the years to compete in various food sectors. It bought Sonnendal Dairies in 2017 to enhance its capacity, especially in yoghurt.

The company is also expanding into the convenience food sector, targeting South Africans who have fast-paced lifestyles and require quick and healthy meals.

It bought Millennium Foods last year to bolster its convenience meal offering.

“People are getting busier and busier. If they are cooking at home they are looking to buy prepared ingredients. So convenience is a big trend,” Financial and Commercial Director, Robin Smith said during the interview.

The higher-margin convenience foods space in retail is dominated by upmarket Woolworths, while Shoprite has been expanding its higher-end Checkers chain of stores and doubling its offering of convenience foods.

Libstar also plans to expand its product offering to the food service industry by offering prepared meal ranges like lasagne to pubs, hotels and restaurants.

“That hasn’t been penetrated so we see that as a big growth area for us in food service with convenience,” Smith said. ($1 = 13.2147 rand) (Editing by James Macharia and Alexandra Hudson)

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