Tiger Brands (TBS) – Price premiums must fall

Encouragingly, gross profit margins improved in 1H18 along with Grains operating margins despite a highly competitive environment. Unsurprisingly, TBS’ Consumer Brands division was hurt by the listeriosis scandal. We explore the deflationary environment in bread and review long-term trends of price premiums in the category. In baby food, we evaluate functional differences in Purity (TBS) and Squish (RFG) and show prevailing price premium dynamics.