Connect with us

Entrepreneur Profiles

Peppadew International: Phil Ovens

Phil Ovens, MD of Peppadew International, speaks to entrepreneur about how a clear strategy, marketing innovation and a brand vision helped to turn around a struggling company.

Juliet Pitman

Published

on

Phil Ovens of Peppadew

Sometimes business success is derived from a unique idea – something new that takes the market by storm and, by virtue of its uniqueness, gains a competitive edge that few can touch. At other times, success follows superlative business practice and the implementation of sound operational systems, structures and strategy. In the case of Peppadew International, it’s been a combination of both. The discovery of a unique product delivered an entirely new taste to the world but it took innovative marketing, a focused strategy and some serious business suss to make a successful business out of the discovery.

The Peppadew story starts when Johan Steenkamp first discovered the sweet piquant pepper at his holiday home in the Eastern Cape. “Where the plant is native to is still open to debate but we think it’s from Central America. I also have my suspicions about how it came to South Africa because the previous owner of the house where Johan first discovered it was a botanist who had travelled quite extensively in Central America,” says Phil Ovens, managing director of Peppadew International. It was Steenkamp who first saw potential in the small red pepper and came up with the pickling recipe that today remains largely unchanged. He started off bottling and selling the product as a small cottage industry, but approached Ovens and his team for funding when he ran into financial difficulties. “The business was clearly in trouble and we have been responsible for turning it around, but let me never take away or understate Johan’s role in Peppadew. He did an enormous number of things right, discovering the product, registering the brand and getting plant breeder rights. He created what turned out to be a very good platform to build on, but the business just got to the point where it needed a serious capital injection, a strategy to take it forward and better financial controls,” says Ovens.

What started out as a 51% investment in 2000, ended up with Ovens and his team eventually buying out 100% of the company. Today Steenkamp is not involved in the business in any way, although he does receive royalties for his original product. Looking back on the decision to buy the company, Ovens relates: “I’ll never forget that I went home that night and told my wife we’d bought this company but that I wasn’t sure we knew what we’d bought and that I didn’t really want to be involved in it in any hands-on way.” The irony that he is now MD of the company is not lost on Ovens, but he has this to add: “It’s a really exciting product and the more I looked at it, the more excited I became. After all, it was entirely new – it delivered a new flavour to the world and it’s not every day you get to work with something like that. I knew we could do something really big, so I just went for it.” Hard work followed. Although the Peppadew product had potential, some serious changes were needed to take the business from the small cottage industry that it was to the internationally powerful brand position it enjoys today.

 Ovens outlines some of the key challenges: “There was a very small local market and the business needed to reach some kind of critical mass, which meant we were in for a period of sustained losses until we could build up to this position. The brand itself needed to be entirely revamped to take it from the cottage industry level to one where it looked slick and professional and could have international appeal.” At the outset, the company took the decision to drive Peppadew as a branded business. “If we wanted to get anything right, the brand was the place to start. We wanted to create a label that would show as much of the fruit in the jar as possible and that would be eye-catching and appealing. We were fortunate to have Switch Design work on the project and they created the Peppadew brand that exists today,” says Ovens. With a new look-and-feel in place, he turned his attention to the marketing strategy.

“In 2000, the Rand was really against us – it was about R17 to the Pound and R11 to the Dollar – so we knew that we needed to embark on an aggressive export strategy, but before we could do that, we needed to entrench the brand locally. Our philosophy was very much that you can’t play an away game if you can’t win at home first,” he explains. Peppadew already had some local market penetration and was listed in some supermarkets. The first so-called top-end ‘A stores’ listing came from Woolworths and Ovens is quick to highlight the loyalty that Peppadew International feels towards the company. “Today they are still the only store that we will do a home brand for – we even turned down Marks & Spencer. Woolworths helped to get the company off its feet in the early days and we’re very appreciative of that fact.” Today, Peppadew has a full listing nationwide. Exporting proved to be a challenge. “I had no experience in exporting whatsoever. It was entirely new to me. I knew we needed to do it and that was all. So was it a steep learning curve? Yes, it was a vertical learning curve!” says Ovens. Fortunately, Johan Steenkamp had already secured plant breeder rights in South Africa and in 2000, when Ovens took over, the EU, Australia and the US were about to be finalised. He explains how the rights work: “Very simply, it’s a bit like a patent in that it gives the person who discovered or created something protection from competition for a period of time to allow them to commercially exploit their discovery. And what’s important is that not only does it preclude other people from growing the product in those regions where we hold rights, but it also prevents people from other regions from selling the product in the areas where we have protection.”

The real challenge, as Ovens explains, was finding a route to market in the various regions the company wanted to penetrate. “You can’t simply go through the front door, so to speak, and take your product to a supermarket buyer and expect them to list it. The barriers to entry are significant. For example, if you went to one of the major supermarkets in the US, they’d want you to commit $50 million dollars to marketing to ensure the product moved off their shelves,” he says. Understandably, the challenge is even greater with a new and unknown product. It took innovative market penetration strategies specific to each region to get it right. In the UK, Ovens and his team were lucky enough to work closely with a small company that believed in the product and allowed them to “enter through the front door” but in every other country, a unique approach was required. “We don’t have a single territory that overlaps with another one in terms of how we’ve taken the product to market. We spent a lot of time visiting the various countries and going to the big international food fairs and developing a feel for what would work best.” In Germany, open air food markets proved to be the best solution. “The German consumer buys their basics at a supermarket but they buy all their speciality products and fresh produce at these huge open air markets, so we decided that’s where we needed to be. The German supermarkets are also highly discounted which didn’t fit in with our positioning,” he says.

In Holland on the other hand, the company drove the product exclusively through the HORECA (Hotel, Restaurant and Catering) sector, creating demand by allowing consumers to taste it. Over time, this strategy has changed. “When we started in Holland four years ago, 95% of our sales came from the HORECA sector, whereas 70% now comes from retail, which speaks to how well the strategy worked in creating consumer demand,” says Ovens. In Switzerland and Austria, the company employed a combined
HORECA and direct retail approach, while in Scandinavia, it targeted the industrial food sector, getting manufacturers to use the product as an ingredient in cheeses and other food items, thereby creating the necessary demand. Predictably, the United States was the most difficult country to break into. “We spent an enormous amount of time visiting the supermarkets in the US and working with a very good agent. All the big stores in the States have something known as an olive bar which is a deli-type self-service weigh-and-pay set-up – and that’s where we knew we wanted to be,” says Ovens. The strategy worked. Today, the United States accounts for 35% of Peppadew’s business and the brand is listed in every major metropolitan region from the east coast to the west. Globally, it has successfully penetrated 22 countries.


Ovens believes the company’s export success is due in part to its determined brand strategy. “If you want to get into exporting, it’s very easy to just do home brands for supermarket chains. But I don’t believe in the sale of widgets. We wanted to create something – to build an international brand. Why would we want to take something that is unique and new to the world and dilute it by allowing anyone to put their label on it? My advice to other people in this game is to not waver on the integrity of the brand. And that’s not to say it’s easy when a company like Marks & Spencer is offering you business if you’ll do a home brand for them,” he says. Sticking to his guns has paid off. Although Ovens is the first to point out that luck has played a role in getting the business to where it is today. “We would have had to do something really wrong to not make it work,” he says modestly. The company had the right product at the right time when it came to international food trends. At the time, there was a shift towards Mediterranean-style foods, hotter and spicier foods and a massive increase in the use of condiments. Peppadew’s sweet piquant peppers fitted perfectly with these trends and successfully leveraged its position as a new ingredient to capitalise on them.

 
Locally the brand has a 65% penetration in its target market and has diversified significantly. “The product was always going to lend itself to being a good flavour ingredient and because we have such good brand penetration in South Africa, we’ve been able to leverage this,” says Ovens. In addition to a Peppadew range of splash-on sauces, jams, marmalades, jellies and relishes, the ingredient appears in Lays crisps, Clover cream cheese and a wide range of other branded food items. The business has grown at a rate of 60% to 65% year on year and Ovens reports that in 2008, it expects to grow by 114%. “Some of this is obviously because the Rand has been kind to us but it doesn’t negate the real growth that has taken place,” he says. Apart from marketing and branding strategies, he and his team have revamped the entire production and processing system and the business currently has six factories. Although it doesn’t own the farms on which the fruit is grown, it has contracts with all the farmers to buy their entire crop each season. Standards are strict, particularly given the fact that Peppadew has to comply with the legislation of so many different regions around the world. “We’ve put in place a complete outsourcing team which is headed up by a senior manager who, together with the agricultural procurement officers, meets with the farmers once a week on average,” says Ovens. “This is vital to our export success as there are very stringent requirements for spray records and pesticides. Because we export so widely, we’ve had to find commonly-permitted sprays and the like.”
 
The company invests heavily in plant and agricultural development and looking to the future, Ovens alludes to new developments in the pipeline. But he won’t give away more than to say: “We want to diversify our range overseas, but within category, so not outside the pickled category range.” Inevitably, there’s more competition than there was when he started, and he points to the difficulties of enforcing the protection that the plant breeder rights afford the company. At the end of the day, however, he’s keeping his eyes on the prize. “Over the next ten years, our goal is to have an international brand.”

Getting export help from the DTI

“This company would not be where it is today were it not for the assistance of the Department of Trade and Industry (dti),” says Ovens, who believes more acknowledgement needs to be given to the department. The dti has a pavilion at the major international food shows each year, including Anuga in Cologne and SIAL in Paris. “When we were very small in the beginning, they paid for our airfares and even gave us a daily allowance so that we could have a presence at the South African Pavilion,” he says. “Although their support necessarily – and appropriately – diminishes as your business gets bigger, we would never have got our foot in the door were it not for them. After all, it was at those major international food shows that we identified most of our international partners and agents,” Ovens points out. The dti targets emerging local export companies. For more information visit www.dti.gov.za and click on Exporting.

Juliet Pitman is a features writer at Entrepreneur Magazine.

Continue Reading
Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Company Posts

Going The Extra Mile With Neil Robinson Of Relate Bracelets

In business, your offering is only as good as your relationships. Neil Robinson from Relate Bracelets explains how FedEx Express has helped the business grow into Africa and beyond.

FedEx

Published

on

By

relate-bracelets-neil-robinson

Vital stats

  • Who? Neil Robinson
  • Company: Relate Bracelets
  • Position: Managing Director
  • Visit: relate.org.za

Neil Robinson, MD of Relate Bracelets understands the importance of business relationships. While Relate is a non-profit organisation, it is run like a business. It does not rely on donors, but instead produces and sells a product.

For each bracelet sold, one third of the income goes towards the materials and operating costs, one third supports the people who produce the bracelets, and one third goes to the charity for which that particular bracelet is branded.

In order for the business model to work and be sustainable, Relate’s partners are incredibly important. These include the retail chains that stock the product and who provide prime point-of-sale positioning, the charities who Relate works with, and most importantly, Relate’s logistics service provider, FedEx Express.

“Retail is all about visibility and availability,” explains Neil. “A brand is a living, breathing thing. People can see it, use it, and comment on it, but if they can’t access it, it’s all for naught. And so, at the point of purchase, it’s both visible and available, or it’s not.

“Logistics is key. You need to get your product to the retailer on time, 100% of the time. The expertise and focus that FedEx displays in supply chain and logistics encompasses far more than just retail, they understand our specific needs, making them a strategic partner, rather than merely a supplier.”

Related: Zenzele Fitness’s Clever Tactics To Grow In Next To No Time

Building a relationship

The FedEx/Relate Bracelets relationship stretches back to 2009, when Relate Bracelets launched its first campaign with ‘Unite Against Malaria’ leading up to the 2010 FIFA World Cup.

“We did the first campaign in partnership with Nando’s,” says Neil. “Robbie Brozin was passionate about the cause, and he pulled in strategic partners to launch the campaign. Within two years we’d shipped hundreds of thousands of bracelets. FedEx was an incredible partner, ensuring the integrity of our product and time-sensitive deliveries, and we’ve worked with them ever since.”

As with all good B2B relationships, the FedEx and Relate Bracelets teams understand that regular strategy sessions and updates are important.

“FedEx understands the inner workings of our business,” says Neil.

“A successful campaign has multiple elements, from planning and strategy, to marketing support, pricing and distribution planning. Of these, distribution planning is the most critical. For us, the bridge between our brand and the consumer is logistics. FedEx have delivered beyond expectations. They literally and figuratively go the extra mile for us.”

Protecting a brand

FedEx has customers across different industries and each of their needs are different. In the case of Relate, who operate in the retail sector, buying patterns are important. “Retailers run a tight ship,” explains Neil.

“They have planning cycles and seasons. Besides the fact that penalty clauses are built into contracts, you can’t miss a deadline by two days, or you’re in the next cycle, and that might be two weeks later. Not only are you missing out on valuable shelf time, but this can affect an entire campaign. Lost sales can also influence the retailers’ buying decision the following season. FedEx has made it their business to understand our business, so they know what’s at stake and what’s important to us.”

Supporting growth

FedEx has also played an integral role in the overall expansion of Relate Bracelets, particularly into new markets. “As a global organisation, FedEx has been absolutely critical in supporting us to grow our business into Africa, the US, Australia, the UK, Western Europe, and now New Zealand. They play an enormous role in the delivery of our products, with sophisticated tracking systems ensuring that the quality and integrity of our products are maintained.”

Through the relationship with FedEx, Relate experiences the benefits of working with a globally recognised and credible brand. “When you work with quality, you get quality.”

Related: Entrepreneur BB Moloi’s Inspiring Story of Rise To Success Through Grit And Hard Work

The business

If you’ve ever bought a beaded bracelet that supports a cause (for example: United Against Malaria, Operation Smile SA or PinkDrive), chances are it was a Relate Bracelet. If you bought it at Woolworths, Clicks, Sorbet or Foschini, it most definitely was.

To date, Relate Bracelets has raised more than R40 million, which supports various charities and ‘gogos’, women living on government grants and supporting their grandchildren, and who desperately need the additional income Relate Bracelets provides.

Continue Reading

Entrepreneur Profiles

Slikour’s Moto: If You Dream It, You Can Be It

Rapper and entrepreneur Slikour believes his success is the result of one key element: The aspiration to make something of himself, and create a platform for his voice to be heard. Now he’s bringing that mindset to South Africa’s black urban youth.

Nadine Todd

Published

on

116-if-you-dream-it-you-can-be-it

VITAL STATS

Take note

Before you can achieve great success, you have to believe in the possibility of success. This is the single greatest secret to changing your circumstances — you have to believe it’s possible.

Did music or entrepreneurship come first? Siya Metane, aka rapper Slikour, isn’t sure himself. The two have worked hand in hand for him since he started selling cassette tapes of his own music when he was 12 years old.

What has developed over time however, is an innate and deep understanding that with his success comes a responsibility to pay it forward, and help his community and kids like him see that they can be anything they put their minds to.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

If they can dream it, they can be it — provided they realise they can dream it in the first place. This is his challenge, and greatest driving force.

Start small, but dream big

I bought cassette tapes on Smal Street in the CBD for R5. My best friend, Lebo and I recorded our own rap music onto them and sold them in our neighbourhood for R15. We needed the mark-up — it meant we could buy more tapes, and also that we were making a profit.

Related: Zuko Tisani Learnt These 7 Invaluable Lessons On His Path To Success

I’m not sure if we were trying to start a business or launch our rap careers, but if you’re living in a hood like Leondale you don’t always recognise that there are opportunities open to you. No one is going to do it for you — you have to have your own aspirations, and find a way to make them happen.

Keep dreaming big, no matter what

That was one of the biggest and earliest lessons I recall growing up: The ability to dream big can be stifled out of you. I lived in a hood where there were no aspirations past our neighbourhood — the neighbourhood and its opportunities were everything. If 90% of the people you know are suffering, who are you to not suffer?

It’s a very limiting mindset, and one that does a lot of damage to our youth. I knew kids who had incredible potential, but could only look at their immediate environments for opportunities. So a budding young scientist doesn’t find a way to change the world — he finds a new way to make drugs.

Those are the limiting aspirations I was surrounded by. I call it the Trap, and it’s the driving force behind everything I do today. I want South Africa’s urban youth to recognise the Trap, and understand that they should have aspirations beyond it, because they have the abilities and potential necessary to break free.

Work hard, be determined and believe in yourself

I was lucky, I wasn’t a victim of the Trap. What so many people don’t understand is that I could have been. Hard work, drive and discipline aren’t enough to break free of the Trap. You need to believe you can break free — to look beyond your current circumstances. In my experience, that seemingly simple mindset shift is the biggest hurdle to overcome. It’s more complicated and pervasive than you can imagine.

Two things showed me a different way. First, my mom got me bursaries at Holy Rosary Convent and then St Benedict’s College. I was surrounded by rich white kids, full of privilege, and it struck me that here were the same talents and opportunities, but with a wealth of aspiration in the mix.

Related: Self-Made Millionaire At 24 Marnus Broodryk On How To Build A R1 Billion Business

That was the real difference — not ability, but recognising that ability and having the aspiration to do something with it. It was eye-opening. The second was meeting my best friend, Lebo Mothibe. Lebo, or Shugasmakx, as he’d later be known in the music world, had one foot in the privileged world, and one foot in our world.

His mom lived in the hood, his dad was a wealthy entrepreneur who lived in Illovo. And Lebo straddled both worlds effortlessly, and with humility. But he looked beyond the limiting beliefs held by many of his neighbourhood peers.

Find people to inspire you to reach success

His dad was also the first self-made, wealthy black man I met. But when I heard his story, I realised that it wasn’t overnight success. He’d slept on Lebo’s mom’s couch while he slowly but steadily built his business. It gave me an understanding that success is earned. You need to work at it, and push on against adversity. This had a huge impact on me.

Lebo was the ying to my yang. Even though we didn’t think of each other as business partners, that’s what we were, from the age of 12. We formed Skwatta Kamp, we hustled and shook up the music industry together, and changed the face of rap music in South Africa.

I was the dreamer, the visionary, and Lebo was the executor. He found a way to make my crazy schemes and ideas come to life. This is exactly what a partnership should be — helping each other grow, and complementing diverse skill sets.

Build your success, one step at a time

We built our success, brick by brick. I entered a TV show competition, Jam Alley, and won. I used the cash and Dions vouchers to buy recording equipment. Lebo’s dad helped with speakers and a keyboard. My brother, who was studying IT, downloaded software and helped us with our recording quality. Everyone pitched in with what they could. 

Be your own biggest cheerleader

We tried the recording contract route for a while, but realised that the only people who cared about our success were us. And so we hit the streets — hard. We had street crews, we sold our own CDs and negotiated with music stores to carry our albums.

Recording studios kept saying they’d sign us, but they never had a studio available. They just didn’t see the value in rap and hip hop. They didn’t believe there was money in it in South Africa. We needed to prove there was.

Gallo finally approached us and signed us after we won at the South African Music Awards (SAMAs) as an independent act. We used real guerrilla tactics to get our name out there — on stage, with that platform, we told our fans that if a music store didn’t carry our album, to burn it down. We wanted the attention — that’s how you build a name.

Related: Entrepreneurial Powerhouse TBO Touch On How Success Is Built From Small Acts

Our first album went gold, and we used that to push the idea of rap into mainstream media. If 20 000 people bought the album, another 200 000 had bootlegged it. There was money here; and slowly brands and advertisers started realising we were right.

Drive a movement with your business

We were musicians, but first and foremost we were driving a movement, and that meant we needed to be businessmen as well. We hosted end of year parties, and got brands on board, realising we had a captive audience that aligned with their target market demographics. We started our own label, Buttabing Entertainment.

Our goal was to find and nurture young musicians from the hood to get them established in the industry, and show other kids in the Trap that it could be done: Anyone can create their own destiny. One of the things I’m proudest of is discovering a kid in Katlehong, Senzo Mfundo Vilakazi, who would develop into Kwesta.

He’s doing phenomenally well, and recently appeared on Sway in the Morning, one of the biggest hip hop shows in the US. Our success spilt over into Kwesta, and now his meteoric rise will hopefully inspire a whole new generation to dream bigger than they ever thought possible.

Pivoting to further growth

All success has its pinnacle. By 2010 we had achieved so much as Skwatta Kamp. We’d brought rap music into the mainstream and opened opportunities for countless kids, as music labels actively sought rap and hip hop acts. I realised that I’d hit a ceiling. I needed to step back, regroup and figure out what to do next.

What I did was something I’ve only ever associated with privilege. I moved home, spent a lot of time lying on the couch, and wrote. I wrote my life, my lessons, my dreams, my ideas. I don’t know how I reached a point where I was able to do that, but I’m grateful. I started collecting my thoughts and understanding my purpose.

During that time I was approached to join a few marketing agencies. I had no formal marketing training, but we’d worked with big brands at our parties and activations.

Sprite was the first to recognise that they had an opportunity to authentically connect with the black urban youth through us, and so we partnered up. I learnt above-the-line marketing in a Coca-Cola boardroom, and built onto what we’d learnt on the streets about below-the-line marketing.

Take a step back, and rediscover your purpose

That experience had drawn attention, and so for a while I joined an agency. But its mandate was sponsorships, and my heart was with the black urban youth. I’d discovered my purpose, even if I’d subconsciously been living that purpose for almost 20 years.

I wanted to create a platform that gives young black artists a voice; established artists a way to reach out to the youth that other platforms don’t offer; and brands a way to authentically connect with that audience — not just to sell products, but to show black urban youth that their culture is important, that it holds value, and that they, in turn, hold value.

Related: Shark Tank’s Romeo Kumalo Weighs In On High-Impact Entrepreneurial Businesses

Adidas’s support of Run DMC in the US showed that kids from the ghetto had a message worth listening to. Big brands have the power to connect the unheard and voiceless to the mainstream, if it’s done correctly. I had the marketing experience to understand the ROI that brands need, as well as what I could do with that to support black urban youth.

All I had were dreams and a URL, but that was enough. I quit my job and launched my website, Slikouronlife.

Reveal opportunities and create aspirations with your message

This is my politics and CSI. If we can get marketing to marry culture, and change the positioning and perception of young black South Africans, we can show there are opportunities out there, and create aspirations.

But we need to put culture first and tap into the authenticity of who we are as South Africans. We need to recognise and acknowledge the mental traps that exist in our neighbourhoods, and that we are victims of limiting beliefs, and then show that there is another way.

Everyone told me I was nuts. That black people don’t go online. I did it anyway. With Skwatta Kamp we had created a market for our music. Kids supported us; my name added value — and then brands came on board. We now average between 200 000 and 250 000 unique visitors a month, which is impressive for a mainstream website, let alone a niche music site.

Ten months ago we were a team of three operating from my house with one desk. Today we’re a team of ten with one focus: To make a real difference on the ground. To give the voiceless a voice. To prove that if we can drive the aspirations of South Africa’s urban youth, the sky will be the limit.


Related: Watch List: 50 Top SA Small Businesses To Watch

Continue Reading

Entrepreneur Profiles

Edward Moshole Founder Of Chem-Fresh Started With R68 And Turned It Into A R25 Million Business

Edward Moshole started a business in 1999 with just R68 in his pocket. Today he has a company that not only has a turnover upwards of R25 million, but is also on the cusp of expanding to the next level. Here’s how he’s turning clients into partners.

GG van Rooyen

Published

on

edward-moshole

Vital Stats

In 1999, Edward Moshole was a cleaner with just R68 in his pocket, but he noticed a business opportunity.

Good quality detergents and disinfectants could make a tough cleaning job much easier, so he started buying quality products in bulk and selling them to his fellow cleaners. He wasn’t satisfied, though. He wanted a business that made and sold its own products. So, he tackled the long and arduous process of creating cleaners and detergents that could pass strict regulations and compete with the best products on the market.

It wasn’t easy, but he kept at it. In fact, he only got his first real breakthrough in 2006 when a supermarket agreed to start stocking his products. Today, his Chem-Fresh products can be found all over Africa, and he counts Pick n Pay as one of his main clients. How did Moshole manage to turn R68 into an empire?

Here are his rules for building a large and sustainable operation.

1. Find the right clients

“Very early on, I identified Pick n Pay as a must-have client. I could see that the company was changing its strategy — it was starting to move into townships and rural areas, places where it hadn’t been operating until then — and I thought it would be the perfect place to sell Chem-Fresh products,” says Moshole. But getting in wasn’t easy.

“As a small business, you don’t get to sit down with decision- makers. Becoming a supplier to a large retailer is a difficult process. It took me years to get a foot in the door, but I didn’t give up. I just knew that Pick n Pay was the right company to do business with, so I kept at it.

I refused to take no for an answer. Today, Pick n Pay operates more like a partner than a client.

Related: Attention Black Entrepreneurs: Start-Up Funding From Government Grants & Funds

Thanks to my partnership with Pick n Pay, I’ve been able to scale Chem-Fresh quickly and access a distribution channel that allows Chem-Fresh products to be sold all over the continent. Once you have the right clients, you gain instant clout and reliability.”

2. Own the manufacturing process

chem-fresh-products

PC: risingafrica.org

When starting out, entrepreneurs often have little choice but to buy other companies’ products and resell them. It’s not necessarily a bad thing — it can be a successful strategy. However, it can eventually limit your growth.

Firstly, buying and reselling products places a cap on your margins. When you own the manufacturing process, you can increase your margins, since making and selling products tends to offer wider margins than merely buying and reselling.

That said, you have to keep in mind that this is only true when you operate at a certain scale. Making and selling something in small quantities can often be more expensive and time consuming than simply buying it from a supplier. You need to crunch the numbers and make sure that the expense of a manufacturing facility is actually worth it in the long run.

Secondly, it allows you to keep control of the quality of your product. “The secret to any great brand is consistency,” says Moshole.

“People should know what they can expect from the brand, and one of the best ways to ensure this is to have total control of your product. If you make it yourself, you’re in charge of the quality.”

3. Be willing to diversify

Some companies can grow while sticking to a very specific niche, but most have no other option but to diversify. Although Chem-Fresh started out selling just one or two products, Moshole soon started to expand the range. The company now has more than 100 products.

“Generally speaking, you can only capture so much of a market. Sometimes it makes sense to actively try to grow your market share, but it’s also a good idea to diversify. Not only does this open more revenue streams, but it also protects the business against market changes. So, if the sales of one product slows down, another speeds up and everything evens out,” says Moshole.

Related: Sibongiseni Mbatha’s Top Collaboration Techniques To Grow Your Business

But the important thing is not to stray too far from your comfort zone. Chem-Fresh now has a large product range, but it has stuck to an industry that it is knowledgeable about. The company has built a name for itself within a specific industry.

4. Build a strong foundation

“Don’t wait too long to start thinking about the long-term life of your business,” advises Moshole. “The stronger the foundation of the business, the easier it is to grow it, so you need to implement the right systems and processes early on. If you don’t, the business will fall apart without you.

“You will always be very involved at an operational level. You’ll be so busy with the daily grind, that you’ll never be able to take a strategic view and focus on building the company.

So, you need the right systems and the right people. You need to know that the business can keep going without you. If you do this, you will be able to grow the company while others deal with the operational demands.”


Key Insights

There’s no substitute for perseverance

It took Edward years to get his product onto Pick n Pay’s shelves, but he wouldn’t take no for an answer. Today, the relationship is more like a partnership.

Own the process

In the right quantities, producing and selling your own product can significantly increase your margins over selling someone else’s products.

Strategically increase revenue streams

Diversifying your product range within your niche allows you to offer the same clients a greater range, tap into new markets, and protect the business against market changes.


TAKE NOTE

Take a long-term view when contemplating the growth of your company. It’s never too soon to prepare a business for growth. Implementing the right systems and processes right now can make it much easier to scale the operation down the line.


Related: 6 Of The Most Profitable Small Businesses In South Africa

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending