Source: RTG’s agro strategy cuts costs and lifts margins – herald
Tawanda Musarurwa
LISTED hospitality group, RTG is demonstrating how sustainability-led operational changes can evolve into powerful profit drivers, after transforming a five-hectare tract of land into a strategic input hub that is reshaping its cost structure and strengthening margins.
At the centre of this shift is the group’s “RTG Agro” initiative, a vertical integration model designed to secure consistent, fresh and competitively priced food supplies for its hospitality operations.
RTG chief executive Mr Tendai Madziwanyika said the initiative was not conceived as a symbolic sustainability project, but as a practical response to supply chain and cost pressures.
“What we’ve done is in pursuance of the need to make sure that we assure our customers of quality foodstuffs on time and properly priced,” he said.
“We embarked on an agro-business where we grow our own various varieties… and it helps us with cost, it helps us just to make sure that all our food is fresh.”
The group has established structured cultivation of vegetables and integrated internal logistics supported by cold-chain transport partners, ensuring produce moves efficiently across its hospitality brands. This internalisation of supply has had a direct and measurable impact on food cost efficiency.
“When we started in 2012, food cost of sales was about 30 percent,” Mr Madziwanyika said. “Today we’re talking about 15 percent.”
That structural improvement has translated into meaningful financial gains. RTG reports that the initiative contributed approximately 8 percent in savings on the group’s overall cost of sales in the previous year – equivalent to about US$300 000 – with projected savings rising to US$1,5 million as the model scales further.
These efficiencies are increasingly reflected in RTG’s broader financial performance indicators, as outlined in the group’s annual financial report for the year ended December 31, 2025, which highlights improved operating resilience, stronger cost containment and margin recovery across its hospitality portfolio.
The report underscores that food and beverage input costs, historically a major pressure point for the sector, have been partially mitigated through internal sourcing initiatives such as RTG Agro.
Beyond direct cost reduction, the group’s sustainability pivot is also reinforcing its revenue base.
By guaranteeing freshness, consistency and traceability in its food offering, RTG is strengthening its value proposition in a competitive hospitality market where customer experience is tightly linked to food quality and reliability.
The “refreshing afternoon” and dessert offerings, which depend heavily on produce consistency, have become key contributors to repeat customer engagement.
According to the group’s financial disclosures, improved product consistency and supply stability have supported stronger customer retention metrics and helped defend pricing integrity in a volatile inflation environment.
Industry analysts say RTG’s model reflects a broader shift in hospitality strategy, where sustainability is increasingly being embedded into core operations rather than treated as a compliance or branding exercise.
Vertical integration in food sourcing, they note, not only reduces exposure to volatile agricultural markets but also insulates operators from transport bottlenecks and price shocks.
The 2025 financial results further indicate that this approach is contributing to improved gross margin stability, with cost-of-sales pressures easing relative to prior periods. The group has also benefited from reduced reliance on external suppliers for key food inputs, improving predictability in procurement planning.
Crucially, RTG’s approach also aligns with emerging ESG-driven operational standards, particularly around reduced food miles, lower embedded carbon emissions in logistics, and improved resource efficiency.
While the financial upside is evident, the environmental benefits are increasingly positioning the group as a forward-leaning player in sustainable hospitality practices.
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