Libstar shifts focus to food manufacturing

SOUTH AFRICA – South African FMCG manufacturer Libstar has announced a strategic pivot, exiting its non-food sectors to fully concentrate on producing affordable, value-added food products. 

The shift, which sees the company shedding its Chamonix bottled water and Chet Chemicals household care businesses, is aimed at simplifying its portfolio and enhancing its core food offerings.

At a recent presentation, Libstar’s CEO, Charl de Villiers, detailed the decision, highlighting the group’s objective to bolster its position as a producer of quality, low-cost food brands. 

“Our core offering has always been food,” said de Villiers. “This shift enables us to streamline operations, improve execution, and deepen our focus on value-added food categories.” 

He added that the restructuring allows Libstar to sustain and expand its foothold in both perishable and ambient food categories, areas the company views as poised for long-term growth.

With this change, Libstar will focus on expanding its market-leading dairy brand Lancewood, best known for its range of cheeses and yogurts. 

The company recently announced plans to launch a new line of natural cheese slices, an addition to Lancewood’s current range of hard and soft cheeses and yogurts. 

The brand is expected to drive continued growth in both the retail and food service channels.

Libstar’s market composition: Core brands and private labels

Libstar’s new approach reflects a concentrated effort on its high-performing brands, which include Lancewood dairy, Cape Herb & Spice, Denny sauces, and Goldcrest honey and sauces. These owned brands made up 38% of Libstar’s revenue in fiscal year 2023. Meanwhile, private label manufacturing, which has become an integral component of Libstar’s business model, accounted for 51% of its revenue in the same period. 

This includes products for major South African retailers such as Shoprite and Checkers under the Crystal Valley brand.

The remaining portion of its business involves distributing well-known international brands like Tabasco hot sauce, Kikkoman soy sauce, and Arla’s Lurpak spread, which accounted for 11% of Libstar’s FY 2023 revenue. 

This distribution segment allows Libstar to broaden its market reach while providing South African consumers with established international products.

Global expansion and export growth

One area of emphasis for Libstar’s future growth is its Cape Herb & Spice brand, which has made notable strides in international markets. 

The brand, which experienced a 50% surge in export sales this year, recently achieved significant retail penetration in the UK, where it is now available in 500 Tesco stores. 

Shelley Barnard, Libstar’s Sales and Marketing Executive for Cape Herb & Spice, noted that gaining shelf space in the UK market represents a major accomplishment, with Tesco set to expand the brand’s presence to Irish stores in the coming months.

Cape Herb & Spice’s entry into the UK market began informally five years ago when the wife of a UK distributor encountered the product during a holiday in South Africa. 

Today, the brand is sold through major UK retailers such as Asda, Morrisons, Sainsbury’s, and Ocado, with Tesco now emerging as a key distributor.

Path forward in food service and exports

According to Libstar, with its exit from non-food sectors, the company will develop and expand underrepresented channels within its food portfolio, especially exports and food service. 

The company currently exports to over 50 countries, including partnerships with global retail chains like Aldi, Trader Joe’s, and Tesco. With the heightened demand in export markets, Libstar aims to enhance its distribution capabilities and enter new regions to grow its market share.