When it comes to growing a start-up, there are those businesses that experience very little growth until they reach a ‘tipping point’ – a defining deal, partnership or shift in the market that allows the business to take off into the stratosphere. It’s the kind of thing most business owners dream about. And yet there is another kind of growth that, while less dramatic, is no less impressive or effective.
Slow and steady, organic growth is what allows countless small businesses to evolve from the start-up phase into companies of significant size and market share.
Just ask Jeanne Groenewald, founder and managing director of Elgin Free Range Chickens. The company produces 70 000 birds a week, employs over 300 people and lists Woolworths, Pick ‘n Pay, Checkers and Spar among its clients, along with a host of independent stores and delis – an impressive achievement for any food brand.
Groenewald got to where she is today through passion for her product, an unfailing commitment to standards of excellence and a steady growth rate of 30% a year. “We’ve grown the business little by little, in line with increasing market demand and what we felt we could manage at each stage,” she says. It’s a sound philosophy and yet it’s one that countless entrepreneurs, impatient for overnight success, fail to follow.
Grass roots beginnings
“I wanted to produce free range chickens for my family to eat,” says Groenewald simply of how the business started. “We’d have friends over for dinner and they’d comment on how good the chicken tasted and when they found out I’d reared them, they’d ask me to breed some for them as well,” she says. With these informal ‘orders’ growing, Groenewald started to produce around 150 birds every eight weeks, then every four weeks and then weekly. “I realised there could be a business in this,” she says.
When production was up to 400 birds a week, she decided to test the market’s interest and called a Pick ‘n Pay buyer she’d previously worked with when she was rearing ducks. “He was definitely interested, so I bought a delivery vehicle, had it branded, and started supplying a handful of the top Pick ‘n Pays in the area,” she says.
Groenewald is adamant that the vehicle and its branding was the best money she’s ever spent. “It drove all over Cape Town with our phone number on it and although we weren’t actively trying to grow, we kept getting calls from people who’d seen the van and wanted to place orders,” she says. Production increased and the business quickly outgrew the single shed outside Groenewald’s farm kitchen door until her entire farm was given over to free range chickens.
At 2 000 birds a week, Pick ‘n Pay’s Blue Ribbon Meat approached Elgin Free Range Chickens to supply their butcheries. “This was beyond the farm’s capacity and I knew I’d have to take a decision to expand, so I took on four contract growers and built an abattoir,” Groenewald explains.
A critical mass of 15 000 birds a week was needed to justify this investment. Although the business reached these numbers within a couple of months, market demand didn’t keep up and in 2001 Groenewald found herself with excess birds.
Instead of scaling back, however, she turned the challenge to her advantage. “I got the cell number for one of the buyers at Woolworths. I didn’t know the person but I took a chance and left a message on their phone,” she says. The next day, she had three company representatives in her office wanting to inspect the farm and within two weeks was packing chickens for Woolworths.
Sticking to her standards
Talking to Groenewald you’d believe it was the simplest thing in the world to phone up a major supermarket retailer and get your product listed, but as many who have tried and failed will tell you, it’s not that easy. Groenewald herself will tell you as much. Part of her success derives from the fact that she produces a niche, high quality product and is unfailingly committed to maintaining the standards which got the business where it is today.
The Woolworths deal came in five weeks before Christmas and the estimated demand of 2 500 birds a week grew to four times that, but Groenewald refused to compromise on quality simply to meet lucrative short-term demand. “People suggested we source birds from other growers, but we weren’t prepared to drop our standards,” she explains.
She describes that period as ‘the roughest of my career’ but she’s also philosophical about what she learned. “I realised that the best you can do is to do your best. I stuck to my guns on standards and in the end, we rode it out,” she says. Looking to the future, Groenewald’s growth philosophy remains the same. “We have room for expansion and we always make sure we have everything in place for new sheds to be online within eight weeks. But we grow in line with increases in market demand,” she says.
Elgin Free Range Chickens
Player: Jeanne Groenewald
Contact: +27 (0)21 859 2795