SA Best Peanut Butter Business Plan — Aflatoxin: The Question That Defines the Business

Why aflatoxin control decides whether a peanut butter plant is investable, what certified batch-tested kernels cost, and the testing regime behind them.

Aflatoxin: The Question That Defines the Business

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2.1 What the regulation requires
2.2 What happens when it goes wrong
2.3 The control programme
2.4 The two grades of raw material

2.1 What the regulation requires

Aflatoxins are produced by Aspergillus fungi that colonise crops including maize, groundnuts and tree nuts in warm, humid conditions. They are acutely toxic and carcinogenic; chronic exposure is associated with liver cancer. The Department of Health’s Regulation R.1145, which governs the tolerance of fungus-produced toxins in foodstuffs, sets the limit for peanut butter at 10 parts per billion.

2.2 What happens when it goes wrong

In February 2026 a Paarl-based manufacturer initiated a voluntary recall after its own routine internal testing identified elevated aflatoxin. The reported results were 46 parts per billion on the initial test and 28 on re-test in the highest affected batch. In total 1 019 units were affected, of which 168 units had reached the market across four provinces. The National Consumer Commission published the recall and called on all producers, manufacturers and suppliers of peanut butter and peanut-containing products to test their goods urgently.

That episode followed a larger wave of peanut butter recalls the previous year. Two conclusions follow for anyone entering this category. The first is that the risk is real and recurrent, not theoretical. The second is more encouraging: the manufacturer found the problem through its own routine internal testing, which is precisely the control this plan funds.

The arithmetic of testing against recalling	Amount	Note
Stock written off	9 703 173	One month of production at Year 5 volumes, at cost
Sales lost while delisted	2 627 943	Contribution forgone during the delisting period
Regaining listings and rebuilding trade support	2 400 000	Listings are bought back, not restored
Retrieval, investigation and communication	1 150 000
Total cost of a one-month recall	15 881 116	1.21 times Year 4 EBITDA
Certified kernel premium	6 742 400	R3 136 a tonne above commodity grade
Aflatoxin testing and laboratory cost	1 913 500	R890 a tonne within conversion cost
Total annual control programme	8 655 900	The recall costs 1.8 times the annual programme

2.3 The control programme

Control	Design
Supplier qualification	Contracted suppliers only, audited, with a certificate of analysis for every lot
Pre-shipment testing	Independent testing before the lot leaves the supplier, at the supplier’s cost
Intake sampling	Statistically valid sampling protocol at intake; aflatoxin is heterogeneous within a lot
Intake rejection	Budgeted at 3.8% of certified deliveries rejected outright
Conditioned storage	Moisture and temperature controlled; aflatoxin develops in storage as well as in the field
Optical sorting	R4 900 000 of colour and defect sorting; discoloured and damaged kernels carry the risk
Batch testing before release	Every production batch tested and held until cleared
Retention samples	Retained samples per batch for the shelf life of the product
Traceability	Lot-level traceability from kernel intake to despatched pallet, enabling a narrow recall
Recall procedure	Documented, tested at least annually, with National Consumer Commission notification protocol

Note the role of traceability. The February 2026 recall affected 1 019 units rather than a month of production, because the manufacturer could identify precisely which batches were implicated. Lot-level traceability is what converts a catastrophic recall into a manageable one, and the R1 900 000 spent on it should be understood as insurance rather than administration.

2.4 The two grades of raw material

Grade	Price per tonne	Intake rejection	Effective cost per tonne of product	What it means
Commodity, sundry and splits	R22 600	11.5%	R23 111	The grade most peanut butter is made from, and the grade most often recalled
Certified, batch-tested kernels	R27 900	3.8%	R26 247	Contracted supply, certificate of analysis per lot, pre-shipment testing
Difference	R5 300		R3 136	R6 742 400 a year at maturity

The gap between the two grades is narrower than the headline prices suggest, because commodity-grade material is rejected at intake far more often. A 19 per cent discount on the purchase price becomes an 11.9 per cent saving once rejection is accounted for. Buying cheap peanuts is not as cheap as it looks, and it is not cheap at all once a recall is priced in.

Figure 5. Contribution per tonne against the kernel purchase price.

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