Aces Brew Worx has enjoyed 100% year-on-year growth over the past year, which is all the more impressive considering the tough lessons its founders, brothers Lliam and Dyllan Roach, have had to learn over the course of the year – lessons that have necessitated changing the business’s name, and replacing 60% of its product line.
”It’s always difficult navigating a completely unexpected turn of events,” says Lliam. “Luckily, we were working off a strong base. We took a hit, but we’ve recovered well.” Here’s why.
In 2008, two things happened to the Roach brothers. First, like many entrepreneurs and employees around the world, the economic crash had a negative impact on their financial situation. But the second thing would be more positive. On a trip to the US, Lliam would be introduced to craft beer, a craze that was starting to take hold in a big way.
“I recognised the elements that would make craft beer a hit in South Africa as well,” he says. “South Africans love beer, but more importantly, they’re increasingly loyal to local brands and businesses.”
He saw the challenges as well, however. South Africans might love beer, but they tend to be very loyal to their brand, and so marketing would be incredibly important. The start-up capital required to set up a micro-brewery is upwards of R3 million, which the brothers also did not have.
The solution? “We began negotiations with Mitchell’s Brewery, a micro-brewery based in Knysna,” says Lliam. “Our focus would be building the brand in Gauteng and the North West. Mitchell’s was doing well in the Western Cape region, but it was unknown up here.”
Negotiations took a year, but the brothers would ultimately become the sole suppliers of Mitchell’s in their area, naming the business Mitchell’s Gauteng – and then the hard work began.
Slow and steady
“In any sector, you need to understand how the industry works, and how customers respond to brands,” explains Dyllan. “We had R220 000 start-up capital, which basically meant we were bootstrapping the business.”
Because they are competing with SAB and BrandHouse, which both instal taps as a value add at their clients’ pubs and restaurants, the brothers have had to follow suit for each client they sign up.
“When we launched, this was quite constrictive for us,” says Lliam. “We didn’t just need to convince pub owners to stock our product, but we needed to be able to purchase and instal kegs and taps as well.”
It meant growing a consumer base was slow, but the brothers were patient.
“We quickly learnt that this business is all about relationships. It can take months, even years before a pub owner is willing to stock new brands, particularly independent craft brands. Once you understand that there won’t be a quick turnaround though, you can plan for it. We’ve worked hard at fostering relationships built on trust, and always delivering on what we promise,” says Dyllan.
The team has also discovered a talent for introducing and growing new brands, which has played a pivotal role in growing the business.
“We’re at every food, beverage and lifestyle expo, getting consumers to taste the range we offer and introducing them to these great local brands. They’re organic, chemical free, and of course local.”
The slow growth has suited the fact that the brothers needed to invest in each new sale as well. “As cash flow has improved, so we have been able to afford the installation of more taps,” says Lliam. “It’s been slow growth, but very steady, stable growth.”
And of course, the brothers’ original expectations for craft beer materialised – over the past few years it’s become increasingly popular. “We don’t sell budget beer,” says Dyllan. “Craft beer can price anything from R25 to R50 a draft, which means it’s often more expensive than imported beer. The margins also aren’t high, which means we need to focus on volume.”
Within the first year, the business expanded its portfolio to include a range of other brands, including most notably Brauhauss amm dam, Nottingham Road, Standeaven, Aces Brew Worx, Clarens Brewery, Copperlake, De Garve Brewery, and Dragon Ginger Beer. Because of the nature of micro-brewers, many breweries cannot produce in high volumes, which meant the brothers needed a number of brands in order for supply to meet demand – particularly as the business and its clientele has grown.
“By the start of 2013 almost 60% of our sales were still Mitchell’s sales, however,” says Lliam.And then the unexpected happened.
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Learning the hard way
“By 2012 we had substantially grown our client base,” says Lliam. “We had great products, excellent relationships with pub and restaurant owners in our region, and craft beer was steadily gaining traction.
“Mitchell’s had new ownership, and recognised that we were doing well,” says Lliam. “Prices were raised, which we completely understood. The point of sourcing local craft beer is to support local businesses, and the brewery naturally also needs to do well.”
And then the new owners made an unexpected decision: They wanted to start distributing their products directly in Gauteng.
“By mid-year it reached a point where they stopped supplying to us altogether,” says Dyllan. The brothers went from a 60:40 Mitchell’s split, to 100% other craft brands. “We didn’t have a proper contract in place preventing Mitchell’s from stopping their supply to us.”
It meant a massive shift in gears, but the brothers had two very important things going for them: Excellent relationships with pub and restaurant owners, and a number of other breweries already on their books whose brands they had been promoting.
Dealing with the unexpected
“We realised the best thing we could do was be completely honest with our customers. We explained why we didn’t have Mitchell’s in stock, showed them what we did have, and asked them to stay with us. All but two pubs agreed – they saw us as their vendor, not the brand. They like doing business with us. They trust us, and know we offer excellent brands at good prices, and always deliver on our promises,” says Lliam.
The second challenge was having enough product. “We have signed a deal with a local brewery to create our own proprietary brand, Aces Brew Worx, which we own, and they brew under contract for us. We have also sourced a number of other breweries. Most can’t — or don’t want to – upscale, so we need a number of different suppliers to meet our stock requirements,” adds Dyllan.
A true entrepreneur, Dyllan soon saw the revenue stream value in importing dispensing equipment and kegs that the business needed, and created a second business, The Tap Room. “Dyllan found a way to make a business of importing the kegs,” says Lliam. “We recognised there was a market for good quality kegs at an affordable price. The additional revenue of The Tap Room has certainly helped the cash flow during the transition period from Mitchell’s Gauteng to Aces Brew Worx.”
Going forward, the brothers have changed the business’s name and are much more careful about how contracts are created, what they cover and the signatories involved.
“It’s taken us four years to learn these lessons. We lost the brand that accounted for 60% of our turnover, and have had to recover from that. Our own brand, the range of other excellent products we offer and of course the relationships we’ve spent four years building will all play a role in our growth moving forward,” says Lliam.
Next up is growth in Durban. “Relationships are in place and we believe the craft beer craze will take off in that area soon – and we’ll be ready for it when it does,” says Dyllan.
- Players: Dyllan and Lliam Roach
- Company: Aces Brew Worx
- Est: 2009
- Contact: www.acesbrew.com
Lesego Maphanga of Standard Bank
Lesego Maphanga is young (he only graduated in 2014 with an Industrial & Systems Engineering degree), yet he has already made a name for himself in multiple industries. His secret to success? Always doing more than is asked of him.
- Player: Lesego Maphanga
- Company: Standard Bank
- Position: Manager: Card & Emerging Payments; Africa Regions
- About: At only 27, the maths & science whizz works at Standard Bank as an Emerging Payments manager responsible for implementing remittances products across multiple African Regions. He also has his own radio show on CliffCentral called the Urban Culture Drive, and is founder of social entrepreneurship movement called Unplugged and in Charge.
I studied engineering knowing right from the start that I would never work as an engineer. I just couldn’t see myself working at a mine, or something like that, but I knew that engineering would give me a solid foundation and allow me to keep my options open. A STEM (science, technology, engineering, maths) degree is a great base, as it shows that you have a mind for numbers and the analytic mindset needed to get things done. I don’t think you can go wrong with a degree in one of these fields, even if entrepreneurship is your ultimate aim.
How can I set myself apart?
You have to ask yourself this question. There’s a lot of competition out there. You might have a great academic history or work experience, but so do a lot of people, so you need to have a differentiator — something that makes you stand out. I entered Mr South Africa, for example, because I knew that it would increase my profile and add something interesting to my CV. I didn’t win, but I was a top-five finalist, which was good enough for me.
Find interesting things to add to your CV as well, since it’ll make it stand out in a massive pile of similar submissions.
Always go the extra mile
I had a lecturer who always said: “There are two kinds of bad engineers. There are those who don’t do what they’re told to do, and there are those who only do exactly what they’re told to do.” You need to add value and show that you are a crucial part of a team, so don’t just do what you’re told. Instead, look for ways in which you can go beyond the brief. Work hard and spend time coming up with your own ideas and projects. At the end of my studies, I interned at Standard Bank. I knew that I only had five weeks to make an impression, so I gave it my all. When you’re young, you don’t have many responsibilities apart from work, so that’s the time to put everything into your work.
Be audacious and make things happen
Seizing an opportunity that comes to you is great, but creating your own opportunities is even better. Don’t take no for an answer, and don’t wait for someone to give you a chance. A friend and I had an idea for a radio show and decided to put a proposal together. We had no experience and no contacts in the field, but we emailed our proposal to everyone we could think of. We spammed them, sending it out every single day. Eventually, CliffCentral got in contact with us.
I don’t want a ‘normal’ life
I want an extraordinary life, so I demand a lot of myself. I think Elon Musk is a great example of this. He’s doing things no one thought possible. Of course, it requires extreme levels of dedication and hard work. If you’re aiming for the top, I don’t think work/life balance is possible. You need work/life integration. You need to be pursuing your passion all the time. If you’re on a path you’re truly interested in, work doesn’t feel like sacrifice.
Exercise is important to me
I go to gym twice a day. It’s significant to me, as it allows me to relax and clear my mind. It also provides structure to my life. When I get up early and go to gym, I find that the rest of my day falls into place. It sets the tone. As long as I maintain focus in this part of my life, I find that things overall stay under control. Sometimes, though, I need to take a day off and just sit in front of the TV. Generally speaking, however, I find that routine helps maintain focus and momentum.
Joel Stransky Shares His Insights On What Makes A Great Leader
Enter Joel Stransky just as friendly as the rest of the team, also casually dressed, also wearing a smile. As a founding director of the innovative Pivotal Group, he explained that their value proposition particularly in Pivotal Talent.
Posters displayed on companies’ walls representing the business’ Vision and value system are a common occurrence. A general value that numerous companies share is to be client centred and to provide excellent service. Yet, unfortunately a proportion of companies do not live according to their values as tools to actualize their collective Vision.
An observant individual would take only a few seconds to notice that the Leadership group at Pivotal has gone to great lengths to establish a definitive and value driven culture as well as a motivating climate for their team members. As I waited in the reception area I was met with smiles from several people passing by and there was generally no way to assess what their position was as they were all casually dressed, friendly and approachable.
Enters Joel Stransky just as friendly as the rest of the team, also casually dressed, also wearing a smile. As a founding director of the innovative Pivotal Group, he explained that their value proposition particularly in Pivotal Talent, is the use of Augmented Intelligence and data analytics within the “human capital space”. The application of AI and data makes talent acquisition and career guidance much less of an enigma and challenge as opposed to the recent past where traditional talent acquisition and career guidance methods became less and less successful and more and more time consuming.
The “pivot” of the 1995 Victorious Springbok world cup team shared that he always starts off an employee-employer relationship with the assumption of mutual trust and respect. He believes that once you have put in the sincere effort to understand people better, bigger belief in them is a natural result.
“The greatest asset in business is people,” Joel passionately explained and added that it is possible for a brilliant product to fail in the long run when the wrong people are employed.
“Hiring the right people that would not only help sustain the current culture but add more value to it is critical to any team or companies’ sustainable success,” Joel explained. The Millennial generation think differently and have different expectations from a working environment, therefore it is a critical factor for any manager and/or Leader to understand what drives the emerging generation and also how to manage the polarity of generational gaps.
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As a result of diversity and generational gaps Leadership and management has become a fascinating space to operate within South-Africa as not only cultural and language barriers might offer a challenging HR environment, the millennial generations unique behaviours amplify the need for useful adaptations within all spheres of work.
As a practical example, employee X is twenty-three years old. Some of the key questions that management needs to figure out, that is if they sincerely want the best for, and the best out of employee X, are:
- Is X motivated by monetary rewards and/ or does she/he need a regular hug to feel part of and add to the company culture?
- Does X need to interact with management socially for example be taken out do dinner?
- What skills does X have or lack that impacts his/her performance?
- It is impossible to motivate someone else. In what way can I create an environment for X wherein he/she can motivate himself/herself and excel?
How you satisfy Xs’ needs and manage all related factors to his or her needs has become critical success factors in how we as leader’s approach career development in general.
Reflecting on the development of his own sports and business career, as well as his family life Joel is adamant that whatever drives you in sport also drives you in business and within your family life. Whatever he has achieved within all aspects of his life came as a result of setting goals and making those goals a reality.
Both in sports and in the business world within South Africa there is a general tendency towards over structured management and coaching. Although a structure and daily management is an integral part of business and sports, a paradigm shift towards inspirational Leadership that empowers other leaders to succeed is key in terms of serving others and creating a motivating and sustainable environment within which all team members can thrive.
Reflecting on Joels’ observation: “Our countries’ value chain is broken” the moment has most certainly arrived within which more and more value driven and ethical Leaders, emerging from all generations must arise and collectively work towards an improved future.
Critical to the actualisation of a collective future vision is the development of Leadership skills therefore one of the keen interests of the author is to recognise and learn from other Leaders’ character traits. Joel’s’ highly effective communication skills underpinned by the core people skill of active listening quickly came to the fore as he could quote part of my question and comments in each of the very insightful answers that he provided. His keen willingness to innovate and to create inspiring working environments makes his enthusiasm and skill as a Leader tangible.
Let us all challenge ourselves to learn from prime Leadership examples offered by individuals such as Joel Stransky and leave more and more Leaders behind for only in such a way can an inspiring future be built.
Nhlanhla Dlamini Not Only Has Guts, But Grit – In Spades
An alumnus of WBS and Harvard Business School, Nhlanhla Dlamini did some soul searching when he was doing his MBA at Harvard, and knew that the corporate ladder, although tempting, was simply not going to be enough.
It takes guts to venture into entrepreneurship. And when you’re in a ‘cushy’ job with a top global auditing firm who are grooming you for partnership, it takes even more guts.
Nhlanhla Dlamini not only has guts, but grit – in spades.
An alumnus of WBS and Harvard Business School, Nhlanhla did some soul searching when he was doing his MBA at Harvard, and knew that the corporate ladder, although tempting, was simply not going to be enough.
“I started thinking, ‘what is the best thing I can do with my life?’”, recalls Nhlanhla. “I always felt a pressing need to get involved in lowering the unemployment rate in South Africa. It’s a notoriously difficult space, but entrepreneurship is the real engine of job creation and I felt compelled to rise to the challenge.”
When he left his job at McKinsey in March 2015, Nhlanhla decided to explore the agricultural sector – having no idea what product or what part of the value chain he would end up in. He spent until December that year exploring the agri-food sector, gaining as much understanding as he could about the entire industry by talking to famers, co-ops, agricultural associations and various other stakeholders.
“I wanted to export products to the US and I looked at tree nuts, blueberries, dairy products or meat. Because of stringent FDA regulations, meat wasn’t an option – but a friend of mine from WBS days suggested meat in the form of pet food.”
And so Maneli Pets was born, and Nhlanhla moved his fledgling business into a factory, which he re-purposed for meat processing, in October 2016. By June 2017, he had started operations with 30 employees on board, and by September he had 50 employees.
What makes Maneli different from other US-bound pet food products in an already saturated market? The answer is high protein meat from animals that are unique to South Africa.
“I discovered a market for the off-cuts of meat from specialist butcheries – so crocodile, warthog, ostrich etc,” Nhlanhla explains. “The result is a very high quality, high protein pet snack with a difference – and US pet owners are willing to pay for the best they can get.”
Under the brand name ‘Roam’, Maneli Pets products are exported to a pet food wholesaler in Boston, US, owned by the family of Nhlanhla’s former WBS classmate, who had planted the seed of the idea in the first place. Nhlanhla is now preparing to launch the products under another brand name for distribution in South Africa and export to the EU.
But pet food is only the start. Maneli Pets is an offshoot of the Maneli Group, a diversified food company which is looking ooking to build further businesses in the green energy sector, while boosting black entrepreneurship.
According to a City Press report, South Africa has relatively few black-owned food production businesses, which is why government is actively promoting agro-processing and the manufacturing sector in general to spur economic growth.
Nhlanhla has worked tirelessly to secure government funding, and was thrilled to obtain R26 million from the Industrial Development Corporation (IDC). Just last month, he received the news that Maneli Pets had been awarded grant funding of R12.5 million from the Department of Trade and Industry’s Black Industrialists Scheme (BIS).
Nhlanhla, who was also a Rhodes scholar at Oxford University, considers his PDM at WBS a “superb” way of preparing a student for the real world of work. “The group dynamics was an essential learning experience in terms of delivering on a mandate with a group with entirely different skill sets.”
Describing himself as a “passionate and active WBS alumnus”, Nlhanhla still stays in regular contact with a core group from his PDM class, proving that one of the enduring benefits of a PDM (and an MBA) is the opportunity to connect and network with like-minded people and form life-long friendships.
Apart from what he learnt in the Entrepreneurship Management module of the PDM, such as the pillars of entrepreneurship, macro trend support and financing an idea, Nhlanhla considers the keys to success are threefold: Recognising the value of a social network, tenacity – and just a little luck!
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