DC Foods boosts growth in U.S. market through Agoa advantage

SOUTH AFRICA – DC Foods, a South African food producer based in the Coega Special Economic Zone (SEZ) in the Eastern Cape, has experienced notable growth in recent years, thanks to its access to the U.S. market under the African Growth and Opportunity Act (Agoa).

Specializing in frozen fruit and ice cream products, including the well-known Island Way Sorbet, the company has tapped into U.S. retail chains like Costco, where it has found its most considerable success.

Agoa has been instrumental in DC Foods’ expansion. The preferential trade agreement has enabled the company to gain a foothold in the competitive U.S. market, which has fueled the need for operational growth. 

According to DC Foods financial manager Marc Larter, this growth caused the company to need to expand its factory to create more space for manufacturing.

“The company has also had to adopt a double shift production system, leading to a need for the additional labour force,” he said.

The company’s success in the U.S. market has driven significant developments, including job creation and capacity expansion.

DC Foods’ performance reflects a broader trend in South Africa’s ice cream export industry. 

In July 2024, South Africa’s ice cream exports reached ZAR50.7 million, with the United States being the top destination, accounting for ZAR32.3 million of these exports. 

This shows the direct impact that Agoa and market access have on companies like DC Foods, contributing to South Africa’s positive ice cream trade balance, which stood at ZAR37.9 million in July 2024. 

While DC Foods is thriving in the U.S. market, the broader South African ice cream export market saw a year-on-year decrease of 48.8%, from ZAR99.1 million in 2023 to ZAR50.7 million in 2024. 

However, despite the decline in overall exports, DC Foods’ focus on the U.S. market has enabled the company to capitalize on this lucrative opportunity.

The global ice cream market remains competitive, and South Africa’s ice cream exports were valued at US$52 million in 2023, a 3.71% increase compared to 2022. 

While DC Foods exports to other regions like Japan, the U.S. market remains its largest driver of growth. 

The relationship between DC Foods and South Africa’s overall ice cream export industry illustrates how market access, facilitated by agreements like Agoa, can bolster both individual companies and the broader export sector.

As South Africa awaits a decision on the renewal or expiry of its participation under Agoa, the future of companies like DC Foods, which rely on access to the U.S. market, could be profoundly impacted. 

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