Historically, the food and beverage sectors of the JSE have been somewhat unloved. These have tended to be seen as defensive, dependable counters with analysts tending to make remarks such as ‘people have to eat, after all’. But interest is the sector has increased over the past 12 months.

Part of the reason is that SA food price inflation has steadied after peaking at 14% in early 2023. Stats SA figures show that monthly food price inflation was 4.4% in May, up from 3.3% in April. The Agricultural Business Chamber expects this uptick to be short-lived. Food price inflation tends to have a neutral impact on food retailers, which can pass the increases on to consumers, but can make life difficult for producers as passing on price hikes can lead to consumers trading down or reducing purchases.

The smaller farming, fishing, ranching and plantations sub-segment consists mostly of chicken and fisheries specialists, with some agriculture, but these have been the subject of considerable activity recently and the results are starting to show.

The biggest company in the segment is RCL, majority owned by Remgro (80.2%). RCL owns some of the best-known food brands in the country, including Ouma rusks, Yum Yum peanut butter and a range of flour, sugar and bakery products.

Last year RCL unbundled and sold off Rainbow Chicken, which was listed separately in the Food Products segment of the JSE. Independent analyst Anthony Clark immediately identified this as a positive move for the company. ‘Unbundling Rainbow removed what had become a volatile earnings unit within RCL’, he says. Remgro remains the majority shareholder in Rainbow.

The unbundling was good news for both players. RCL’s earnings before interest, taxation, depreciation and amortisation were up 25% in its interim results to December 2024. Rainbow reported a substantial increase in revenue and earnings for the same period.

Clark observes that ‘the market had never really understood the disparate assets [bundled together in RCL]’. The company, with its origins in poultry, had also held Vector Logistics, TSB Sugar and Foodcorp. As a result, ‘for many years, the RCL share price had underperformed the JSE Food Producers index’, he says.

RCL is now a much leaner and more focused operation. It sold off Vector Logistics – originally acquired to enhance the vertical integration of the company’s poultry operations – in 2023. RCL’s good recent results were driven by strong performances in its groceries and baking divisions.

This has left two large poultry producers in the segment, Astral Foods, SA’s biggest chicken producer, and therefore sometimes referred to as ‘Big Bird’ in the industry, as well as Quantum Foods, a diversified feed, poultry and egg business. Both have been under pressure for some time, with the local avian flu outbreak in 2023 affecting the availability of broilers and load shedding weighing on the industry generally.

Astral Foods reported a load shedding bill of R1.9 billion in 2023. The cost of operating diesel generators imposed ‘an embedded expense burden of approximately R45 million per month’, the company reported. The company was unable to process chickens for extended periods throughout the year and, as a result, had to spend extra money feeding its birds for longer.

Poultry is an extremely cyclical business anyway, owing to variable input costs (feed) and the threat of contagious disease as well as competition from imports. ‘In 2025, the poultry sector in South Africa has come under notable pressure due to a confluence of local and international challenges,’ says Sean Culverwell, an analyst at Anchor Capital.

‘One of the primary constraints has been the ban on poultry imports from Brazil, South Africa’s largest trading partner in this space,’ he says. SA imports about 20% of its annual poultry consumption, of which about two-thirds comes from Brazil. But Brazil is suffering an outbreak of avian influenza, which has led to a ban on its poultry exports.

‘The restriction has curtailed the availability of mechanically deboned meat and offal, key products in processed meat production,’ says Culverwell. He adds that the industry has also been affected by the collapse of Daybreak Foods, one of the country’s prominent poultry producers. ‘The resultant loss of broiler volumes has further tightened supply,’ he says.

‘As a result of these factors, the poultry market has entered a period of acute tightness. Prevailing trends in local poultry prices – particularly for individually quick frozen [IQF] chicken – have seen sharp price increases, underscoring the imbalance between supply and demand,’ says Culverwell.

This might be bad news for consumers, especially poor households where IQF is an important staple, but the firmer prices are good news for chicken producers still standing in SA. ‘For vertically integrated poultry producers such as Astral Foods, the current market dynamics are proving to be favourable,’ says Culverwell.

IQF chicken is one of Astral’s largest revenue contributors. ‘The combination of strong product pricing and lower input costs is expected to support a recovery in margins,’ he says. The prices of key feed inputs, notably soy and yellow maize, have declined meaningfully in 2025, further boosting the poultry sector’s position. ‘As a result, Astral is likely to post an improved earnings performance in the second half of its financial year, through to 2026,’ says Culverwell.

Quantum Food Holdings has also come through a difficult period. The company, which also has operations in Zambia, Uganda and Mozambique, is SA’s largest egg producer and is the owner of the Nulaid brand. In 2023, the company reported a loss of R155 million because of the bird flu outbreak. This led to the culling of 90% of its layer breeder flock and job losses.

However, Quantum’s interim results, released at the end of March 2025, showed a significant operating profit recovery (to R205 million), increased volumes and improved trading conditions.

The South African Poultry Association predicts that national egg production will reach pre-2023 outbreak levels by mid-2025. However, Quantum has chosen not to declare an interim dividend for the first half of the current year.

The company appears to be retaining a war chest against the possibility of a further avian flu outbreak. In addition, it says it is mitigating future risk by placing fewer layers in higher-risk geographical areas and geographically diversifying its sourcing of layer hatching eggs.

SA’s poultry producers have gone through a difficult period. They remain a critical component of the country’s animal protein consumption. Having survived the 2023 avian flu outbreak and seen off load shedding, matters are currently looking hopeful for the sector. ‘The pricing outlook for poultry remains firm,’ says Culverwell. Egg prices are expected to decrease slightly in 2025 as volumes recover.

The fishing industry, represented by the Oceana Group and Sea Harvest in the sub-segment, has also gone through a difficult period. Culverwell attributes this, in part, ‘to subdued catch rates and environmental disruption’. Sea Harvest, a major producer of Cape hake, said earlier this year that the company’s catch rates for 2024 were 25% below 2021 levels. This meant Sea Harvest was ‘significantly behind’ in catching the quota allowed by the SA government. The company’s uncaught hake quota was worth R121 million.

Catches tend to be variable owing to environmental conditions at sea, including matters such as heat waves, water temperature and rainfall. Much of this is driven by planetary-scale weather patterns. These appeared to have recently altered in favour of SA-based fish producers.

‘Leading firms such as Oceana Group and Sea Harvest have reported a recovery in fish populations, supported by cooler ocean temperatures following the retreat of the El Niño weather pattern,’ says Culverwell. ‘This has translated into improved catch rates and stronger volumes, particularly in the small pelagic category,’ he adds.

At the same time, Sea Harvest’s aquaculture business, which farms abalone for the export market, has been under pressure because of subdued demand from China, Chinese Taipei and Hong Kong. However, abalone is regarded as a delicacy – and economic uncertainty, including a slow recovery from Covid-19 and property market instability in China, has limited demand in Asian markets. SA’s legal abalone exports were valued at R400 million in 2024 although some observers estimate that illegally harvested product is worth even more. Sea Harvest is the second-largest abalone exporter in SA.

Sea Harvest CEO Felix Ratheb said earlier this year that ‘China has not bounced back the way we expected’. ‘Looking at the long term, we are in the right market, but looking at short term, it is a pain right now,’ he said.

The Oceana Group operates across SA, Namibia and the US. It has more than 50 fishing vessels and eight production facilities and sells products to customers in 41 countries. The company’s share price has moved sideways in 2025 after a trading statement, released in March, predicted a 40% drop in headline earnings per share. But this is a product of very strong earnings in the previous year, thanks to record-high fish oil prices.

In the event, Oceana was able to report improved revenue (up 2.5%) in its unaudited results released in June, although profits were indeed lower.

Oceana can be expected to benefit from the same following winds as Sea Harvest. The company reported improved catches in the second quarter. Where Oceana may benefit in particular is through its Lucky Star brand of canned pilchards, as cash-strapped local consumers may be moving into this budget household item.

The smallest counter in the farming, fishing, ranching and plantations segment is Crookes Brothers, originally a sugar producer which has now diversified into other agricultural products, notably bananas and macadamias.

The company, based in Scottburgh on KwaZulu-Natal’s south coast, also engages in property development and leasing. It reported a 27% increase in headline earnings per share for the year to end March and saw a satisfying (5%) upward movement in its share price.

Culverwell offers an important insight. ‘The South African protein market has experienced significant volatility in 2025,’ he notes. However, poultry and fish producers appear to have navigated the worst of the turmoil.

By David Christianson
Image: Gallo/Getty Images