R E TAIL CO NG R E SS A F R I C A
Enabling Retail Entrepreneurs to Accelerate Growth in Africa www.retailcongressafrica.com
RETAIL
CONGRESS
AFRICA
Enabling Retail Entrepreneurs to Accelerate Growth in Africa This year’s Retail Congress welcomed a new range of themes, features and formats, with more than 50 expert speakers providing insight into the continent’s burgeoning retail markets
etail Congress Africa launched in 2013 and, as the first of its kind on the continent, it brought together more than 270 of the most senior retail executives operating in the Pan-African region, as well as game-changing international leaders. In 2015 it continued its promise to provide a dynamic platform for
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discussion on the critical trends and opportunities in retail across the continent. This year it welcomed a range of new themes, features and formats to help a vast range of attendees connect with like-minded peers and take home valuable insights to inform future strategy. Dedicated to exploring new trends and tendencies of the market, Retail Congress’ theme for 2015
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was defined as: ‘Driving the pillars of growth: Expansion, Innovation, Operational Excellence and Consumer Knowledge’. The Congress featured in-depth discussions on key areas for growth such as progressing into new markets, updating mobile and online capabilities, and understanding how to connect with new consumer groups who have more discretionary
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income at their disposal. Taking place at the luxurious Westin Hotel in the vibrant city of Cape Town, sessions were challenging, powerful and provided actionable outcomes. Each speaker on this year’s programme shared their visions to inspire and to push for innovation. Retail Congress Africa, 2015 brought together more than 300 of the most senior members from both domestic and international retailer businesses; providing an invaluable opportunity to share ideas, be inspired by 50-plus expert speakers and network with those directing the future of the industry. As Africa represents the retail growth market of the future with unexploited opportunities for
first-movers, the Congress has long been a platform for problem solving and proactive collaboration, and attendees to this year’s event proved no different in providing revolutionary strategies to reach the new African customer. Attendance at the Congress facilitated the delivery of revolutionary strategies to reach the new African customer.
KEY SPEAKERS • Virgin Active SA • AttAfrica • Spree • Mars South Africa • McDonald’s • Pizza Hut • Massmart • Jaguar Land Rover • Groupon • KFC • Pick n Pay • L’Oreal • The Coca-Cola Company • Nando’s • The Walt Disney Company • Mondelez International
AFRICA OUTLOOK is an official media partner of Retail Congress Africa, 2015 and 2016, while also partnering with the wider World Retail Congress in the coming year. In this month’s edition, we take the chance to profile some of the speakers and attendees from the continent and sector’s premier gathering of experts, with Virgin Active SA, AttAfrica, Spree and Fruit & Veg City all sharing their comprehensive industry insights and personal success stories. Stay tuned over the next 12 months as our partnership continues in this vein, via even more features documenting the market leaders that are masterminding and dictating retail trends across Africa.
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ame V I R G I N
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Virgin Active is flexing its muscles in Southern Africa, boosted by an owner who considers local enrichment a priority, and an industry standing recently bolstered by its attendance at Retail Congress Africa Writer: Matthew Staff Project Manager: Callum Philp
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he Virgin Active SA (VASA) footprint was established in 2001 when Nelson Mandela phoned Richard Branson to ask him to save thousands of jobs by taking over the liquidated Health and Racquet Club. Branson agreed and set in motion what was to become one of South Africa’s most loved and instantly recognisable brands. Virgin Active’s success has been built on a strategy that focuses on three key factors: Location; the use of precise demographics to ensure the clubs are situated in large catchments where the demand will support building large facilities. Value: large facilities allow the company to drive economies of scale which provide the opportunity to offer outstanding value for money with comprehensive multi-use facilities at competitive prices. Service; Virgin Active is a dynamic business with one of the world’s most recognisable global brands, which enables the company to attract great people who are very passionate about customer service. An effective recruitment, performance and talent management process is critical to the success of the business, with emphasis placed
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on proactive identification of future talent that supports the organisation’s strategic plans and championing of VASA’s values. In turn, the Company proved to be an extremely attractive business proposition.
Classic Collection
In April, 2015, CVC and Virgin Group announced that Brait had acquired a controlling interest in Virgin Active in
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a transaction that put an enterprise value on the business of £1.3 billion. Brait’s experience in long-term global investments, as well as in Virgin Active’s biggest market, South Africa, fitted with Virgin Active’s aspirations for international growth in both emerging and developed markets, and would enable the Company to accelerate its proven strategy. Today, Virgin Active South Africa is
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one of the success stories in the global portfolio with 122 clubs in SA, across a broad consumer offering consisting of three tiers. At the apex is the luxury Classic Collection; a portfolio of clubs designed for health and wellness enthusiasts who want year-round access to the latest fitness trends and innovations in a luxury health club environment. Members are also able
RichardBransonrecentlyrevisitedhisAfricanlegacy
to enjoy reciprocal access to other Classic clubs around the world, making membership a true passport to luxury. In South Africa, Virgin Active has three such clubs with two further clubs in the pipeline for 2016. All told, Virgin Active has 112 Health Clubs, on average more than 3,200 square metres metres in size, and
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constituting the largest proportion of the estate’s offering. These double storey health clubs offer a wide range of activities under one roof, from top quality cardio equipment and specialist cycles, four to eight-lane heated pools or a more gentle style of exercise, such as yoga and Pilates. The majority of these clubs also offer a Club V facility for children and are geared towards active play and growing membership from an early age.
Gym made easy
Virgin Active’s latest innovation was launched in mid-2014. Billed as “gym made easy”, the new Virgin Active RED clubs offer South Africans in the emerging market an enticing value proposition while delivering the latest and most innovative equipment. Seven clubs were opened between mid-2014 to the end of 2015, and eight to 10 more are planned in 2016 with a similar number in the pipeline for several years thereafter. One RED club celebrated a ‘red letter’ day in November with a visit to RED Jabulani in Soweto from Sir Richard Branson. The brand CEO,
who last visited four years ago for the launch of the first Virgin Active Health Club in Soweto, said he was “thrilled to be back and to experience the infectious atmosphere and energy of the club, the staff and the members”. “This is an exciting new market for Virgin Active,” agrees Managing Director (MD), Ross Faragher-Thomas. “An opportunity for all South Africans to join a club that caters to their financial and health needs. “This doesn’t mean low cost, but rather clubs geared around a unique consumer category underpinned by the strong Virgin brand.” In 2016, Virgin Active SA will open a further eight to 10 Virgin Active RED clubs and two Classic Collection clubs; one at the iconic new precinct at the V&A Waterfront, Cape Town and one in Pretoria, Gauteng province. Faragher-Thomas sees the strong growth as a result of opportunities offered by South Africa’s diversity: “We understand that South Africa is unique and have made it our business to understand our members, what works for them and then cater to them. The existing population is transitioning
BAM ARCHITECTS
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am Architects is a Cape Town based architectural practice providing its clients with a full spectrum of innovative and cutting-edge services across a wide geographical footprint. Founded in 1992, the practice boasts a significant depth of expertise in commercial property ranging from large corporate offices, high rise buildings, apartment blocks, industrial, healthcare, heritage and leisure facilities. Bam Architects is proud to partner with Virgin Active where it was instrumental in developing the Virgin Active Red concept and the practice continues to work closely with Virgin as it pursues its ambitious growth strategy across a range of formats. For more than 23 years Bam Architects have successfully delivered innovative solutions for a wide variety of clients throughout the subcontinent. Not only does this speak volumes about longevity, but as well as its sustained ability to perform creatively at the highest level over this period. Bam Architects are driven by a philosophy of unique solutions for each individual project, which is ultimately connected to context and function rather than per-determined stylistic ideologies. We believe that high quality architecture results from the continuity of the design process and intensive dialogue with the client, professional team, contractors and end-users. We continuously make the business case for good design through the belief that creativity shouldn’t cost more. CHRISTIAN BAM – Principal
T +27 21 4656007 E info@bamarchitects.co.za CSRisapivotalfacetofVirginActiveSA’songoingoperations,withitsFutureCrewprogrammeoneofmanylocal enrichment initiatives
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www.bamarchitects.co.za
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ORYX GROUP
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ryx GROUP offers a vast array of specialised cleaning and hygiene services to a host of clients across diverse industries. These include - but are not limited to – the retail, hospitality, health, commercial and industrial sectors. The oryx GROUP team is confident that the group will continue to make its mark, offering value-added excellence to a broad crosssection of industries. With a track record spanning two decades, oryx GROUP Managing Director, André Vermaak is confident of the Company’s ability to deliver. T +27 11 453 1111 E andre@oryxgroup.co.za
www.oryxgroup.co.za Helping to promote a healthy, balanced lifestyle for South Africa’s youth
through LSM levels and we have ensured that our clubs are positioned to attract each market segment.”
Exportable formula
Virgin Active has had a significant impact on how South Africans view health and wellness. The clubs have become ‘third spaces’ (after the home and the office) and as such, have become destinations for much more than just getting fit. It is a place where families sign up to share a journey of wellness. The clubs have become a truly open and welcoming South African space. Every year, new products are designed and launched to not only reflect global trends but to create a unique South African offering. Notable products over the years have included The Grid, an innovative programme based on high intensity interval training designed to get people moving better, faster and more effectively using six primal
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By engaging these learners in sport and sharing knowledge, Future Crew can also identify, harness and tap into their raw talent and help create job opportunities
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Our healthy relationship
ensures hygiene of the highest calibre The Oryx Group is proud of its longstanding association with the Virgin Active Clubs across Southern Africa. We are passionate about promoting a healthy environment in which to work out, and do so by offering a seamless hygiene solution. The Oryx Group offers a one-stop solution from Oryx Health & Hygiene cleaning the clubs to Design Hygiene supplying all the hygiene and cleaning related products to all the clubs. The hygiene products include the water fountains, soap dispensers, hair dryers and the list goes on. Our hands-on management style and a highlytrained workforce set us apart as a true one-stop hygiene solution.
oryxGROUP. making our MARK. doing it DIFFERENTLY.
Tel: 011 453 1111 andre@oryxgroup.co.za www.oryxgroup.co.za
Mbatha Walters & Simpson is proud to be associated with Virgin Active Mbatha Walters & Simpson Pty Ltd: An empowered consultancy with well over 80 years’ experience in the African continent, specialising in the built and construction industry. MWS offers a tailored professional service that ranges from site acquisition up to and including handing over a fit for purpose completed project. We pride ourselves for getting it right, on time and within a set budget. Our service includes amongst others Quantity Surveying, Construction Cost Management, Lenders and Donors Agency Consultancy, Client Representative and Facilities Planning and Management. Our doors are opened countrywide for your project immediate assistance.
Virgin Active clubs boast an extensive array of state-of-the-art fitness equipment
Johannesburg Tel: + 27 11 234 2696 JHB@MWSQS.CO.ZA
Cape Town Tel: +27 21 423 6200 CPT@MWSQS.CO.ZA
Durban Tel: +27 31 310 6400 DBN@MWSQS.CO.ZA
Petermaritzburg Tel: +27 33 347 0035 PMB@MWSQS.CO.ZA
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movements. Classes combine strength, cardio and flexibility with members working out at their own pace and level. This formula has also proved highly ‘exportable’ to neighbouring African countries for several reasons. Botswana’s proximity to South Africa, the fact that the country’s economy is stable and flourishing, and the added incentive of government and business leaders being extremely welcoming to Virgin Active, were all compelling reasons for Virgin Active’s first foray into Africa after the success of its Namibian operation. Many countries now have the potential to host the Virgin Active brand in the future; particularly those with growing economies, stability and a real desire to make activeness a part of their lives. Virgin Active’s next destination will be Kenya, a development in the pipeline for 2016.
A Force for Good
From a corporate social responsibility perspective, Virgin Active has embarked on a journey termed ‘Business as a Force for Good’. As a force for good, any actions must be simultaneously environmentallysound, socially-just and economically sustainable. Business as a Force for Good is a strategy focused around creating opportunities to collaborate with as many stakeholders as possible to create synergies that impact people and the planet in a positive way, from suppliers to strategic partners and all the way through to members and staff. One of the most significant partnerships between Virgin Active’s Business as a Force for Good division and a supplier has been with Damascus Fitness Equipment, who supplies more than 180 fitness outlets in
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Branson’s recent visit to Soweto was in aid of celebrating the success of the Jabulani gym
South Africa. Virgin Active officially became Damascus’s enterprise development partners in 2013. Faragher-Thomas says: “We could see that our Company could play a strong role in growing and creating jobs, which is integral to our Business as a Force for Good strategy. “In turn, using a local upholsterer that maintained international standards meant we were spending less on
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importing goods with the added benefit of a better, faster service.” Virgin Active is also the official Health Club partner of SA rugby and cricket teams, the Springboks and the Proteas, as well as the SA men’s and women’s hockey teams. The Company strongly supports up-and-coming community sports stars and para-Olympians to help these sportsmen and women excel in their sports by giving them full access to their increasingly successful health clubs.
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ame A T T A F R I C A
On Course for
$1billion
Target
ttAfrica is edging closer to its $1 billion goal as the snowball effect of early successes in the retail property investment market look set to drive future international growth, key business partnerships and sustainable recognition on a continental scale. The $1 billion relates to property assets, and signifies a concerted strategy which has been in place for the Company since its inception in 2012 under the name Atterbury Africa. Off the back of its initial achievements in Ghana and Zambia, a recent rebranding to the name AttAfrica signifies the standalone reputation that has manifested within the sector over the past four years, with the newlook business still able to leverage the experience and expertise of its three shareholders - Atterbury, Attacq and Hyprop - in the process. “It all started in 2012 off the back of the acquisition of Accra Mall,” Chief Executive Officer (CEO), Kevin Teeroovengadum recalls. “It was the first grade A mall in the city and we saw an opportunity to expand it
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Property Investment Specialist, AttAfrica is reaching its goals by bringing the most sustainable and quality grade A retail developments to some of Africa’s biggest cities Writer: Matthew Staff Project Manager: Callum Philp
and use it as a gateway to do other developments in Ghana.” This is precisely the knock-on effect that occurred, with the purchased and revamped Mall setting the tone for Westhills Mall which opened in late 2014, Achimota set to open in October, 2015, and its Kumasi Development which will be up-and-running in early 2017. Adding the Manda Hill Centre opportunity in Lusaka, Zambia, AttAfrica is now truly an international Company and has ticked off phase one of its strategy in making its mark in the grade A retail development space; earmarking the leading facilities, in the most prosperous cities, in the most economically thriving sub-Saharan countries outside of South Africa.
Cream of the crop
Kevin Teeroovengadum, CEO, AttAfrica
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The hybrid approach of acquiring, investing in and constructing developments adds flexibility within what is understandably a niche space at the upper end of the market, and has already been epitomised by the variation in its projects thus far; balancing the initial acquisition of Accra Mall, and Zambian opportunity at Manda Hill with the construction
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ARE YOU KONNECTED?
Ghana Sierra Leone Cameroon Uganda South Africa
Full Turnkey Commercial Applications
Raising the level of available services...
Residential Solutions Generator Rental Long & Short Term Power Optimisation Full Repair Service Comprehensive Maintenance Packages Complete Range Of Original Spares
Toufic Haroun Ghana: +233 248 536 003
UK: +44 7774 520 514
Email: toufic@konnected.org
AFRICAN SUPPLIERS of world leading Power Solutions
A T T A F R I C A
AttAfrica is building a portfolio of retail assets in key cities on the continent
The vision from day one was to build a portfolio of retail assets, reaching $1 billion in four or five key cities and countries on the continent
Accra Mall
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and development of Westhills, Achimota and Kumasi. “The vision from day one was to build a portfolio of retail assets, reaching $1 billion in four or five key cities and countries on the continent,” Teeroovengadum explains. “With Manda Hill, the biggest mall in Lusaka, Accra Mall, Westhills, Achimota and Kumasi all either completed or under construction, we have really set up a presence in the best cities, the main catchment areas and the cream of the crop in terms of disposable income.” The primary strategy is now to take on development duties internally and is further recognition of the influence that each shareholder has too; epitomised by the experience of Atterbury Property Developments who played such a pivotal role in getting the operation off the ground in 2012. This naturally lends itself not just to the scope and finances that AttAfrica can bring to any given project, but the innovation, technological expertise,
K
onnected is an African service provider with strong roots in West Africa; striving to raise the standard of quality power generation by offering a seamless turnkey solution to power supply, installation and commissioning.
Products and services Konnected supplies, installs, commissions and manages a range of power generation solutions, from 5kVa through to 6MVa. Further to this, the Company is an authorised distributor of an internationally-reputed automatic voltage regulator (AVR). Recognised as an approved supplier to international brand names such as Cummins, Perkins and Generator Logic, Konnected is able to leverage its strong pedigree of internationally-recognised products to provide a high level of service and maintenance solutions. Moreover, the Company has a qualified team of factory-trained technicians who oversee the installation process and uphold the highest product and safety standards across the board. Relationship with AttAfrica Konnected has retained a longstanding relationship with AttAfrica through work with its Atterbury division, supporting the power infrastructure at Accra Mall for many years; in addition to a number of other projects which are currently being negotiated. The turnkey contract to upgrade the Accra Mall power system is a multi-million dollar project which will involve the supply of two additional 1,250kVa generators to be integrated within the existing power arrangement. The new units will be introduced seamlessly with the help of stateof-the-art touchscreen technology. As a result of its growing reputation in the retail scene, Konnected has been awarded a further
three major contracts in Ghana, including supply and installation of standby power for the Kumasi Mall project, as well as the supply, installation and commissioning of the power systems for Achimota Mall. Outside Ghana, Konnected also operates in Sierra Leone, Uganda, Cameroon, South Africa, Burkina Faso and the Ivory Coast. Managed support services In addition to its retail power generation projects, Konnected is a major supplier to telecom service providers across Africa; recently supplying Airtel Burkina Faso, IHS Cameroon and Eaton Towers Kenya with generator systems. In line with its strategic growth plans, the Company will soon be initiating its managed support services which will bolster the Konnected brand as a provider of a total power support solution; including consumables, parts, maintenance services and rentals. Peace of mind power solutions: • Full turnkey commercial and residential applications • Short and long-term generator rental services • Power optimisation and full repair service • Comprehensive maintenance packages with a complete range of original spares • Robust relationship with industry-leading companies and suppliers Are you Konnected?
Ghana +233 553 122 177 UK +44 777 452 0514 E info@konnected.org
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RAND MERCHANT BANK
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and Merchant Bank (RMB), a division of FirstRand Bank Limited, is a leading African corporate and investment bank and part of one of the largest financial services groups in Africa. We offer our clients innovative, value-added advisory, funding, trading, corporate banking and principal investing solutions. Our vision is to create sustainable value and bespoke solutions for our clients in Africa and beyond. Our investment banking talent and fixed income, currency and commodities experts have over the past two decades concluded many high-profile deals across multiple sectors in more than 35 African countries.
Kumasi Mall is to create more than 2,000 jobs for those local to the area
are the key facets which have helped instil the brand’s authority on the industry in Africa in such a short space of time, and are further compounded by its selling proposition of guaranteed longevity. When identifying such niche opportunities, embracing not only the prosperity of the city, but also the sheer size of the development and the amount of major tenants present in the mall, most competitors in the market look to take a leasing approach before moving on to new projects within five years. AttAfrica’s ambition of building its portfolio over a longer period of time is highly appealing to the Sustainable malls authorities granting such opportunities The significance of its Kumasi development, being situated in though, with the knowledge that Ghana’s second largest city, will almost the Company will look to develop certainly reap similar acclaim as a result with the future in mind, and with the intention of retaining ownership of the of its wider influence on the city, its people, its appeal as a retail centre and development for a matter of decades, its sustainability as a complex. rather than mere years. “This is really what differentiates These skill-sets, combined with the us,” the CEO states. “We look to build skill-sets of AttAfrica’s shareholders, supply chains and industry reputation that comes in tow. “In Ghana for instance, three out of the four malls are Greenfield developments, and these are the ones we have developed and opened rather than the one we acquired,” Teeroovengadum continues. “Westhills, which opened last year, has also been given an award by the South African Property Owners Association taking into account that the mall is not only well designed, but is also good from an infrastructure and accessibility perspective, and from a capacity point of view as well.”
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We structure the most appropriate financing solutions to meet the needs of our clients, whether for project finance, on-balance sheet lending or a combination thereof. We value mutually rewarding relationships, question existing models, and develop innovative solutions to deliver on our business philosophy and brand promise: Traditional values. Innovative ideas. As the corporate and investment banking arm of FirstRand Bank Limited (which is wholly-owned by FirstRand Limited) RMB has representative offices and branches in the UK, India, China, and the Middle East, and has access to a retail bank network in 25 African countries. Listed on the Johannesburg Stock Exchange (JSE) and Namibian Stock Exchange (NSX), FirstRand Limited is the largest listed financial services group (by market capitalisation) in Africa. The group is differentiated by its ownermanager culture and operates through a four separately-branded franchises: RMB; First National Bank (FNB); WesBank; and Ashburton Investments.
T +27 11 282 8000
www.rmb.co.za
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sustainable malls so we can build an ownership portfolio for the next 15-20 years and beyond. “Because of this, we are willing to spend more money up front, or to take on a Greenfield project, knowing that we want these developments to be durable and state-of-the-art for more than just three or four years.”
International criteria
We would always rather be choosy and have one great mall in a city, rather than five smaller ones...
Manda Hill Mall
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The main benefit of this approach may be even more evident in the second half of AttAfrica’s strive for $1 billion, however, with the existing malls under construction or completed now paving the way for the Company’s international growth. Kenya and Nigeria are two natural options across Nairobi, Abuja and Lagos, with these cities likely to be attracted not only to the aforementioned longevity, but also to the reputation that has been built as a consequence of early successes and its shareholders’ market presence. Teeroovengadum says: “Firstly, when we go into these countries, they know that everything we do from a design and infrastructure standpoint is quality. Africa is a relatively small place, so word spreads, and we’ve already seen this with Nigeria identifying Westhills Mall in neighbouring Ghana as the best mall development in West Africa. “This makes it a lot easier for us to go into Lagos or Abuja and make our pitch to the authorities with them knowing we will be there to build sustainable products and to be there for the long-term. “Secondly, it’s good for the retailers as well because a lot of them are looking to expand internationally, with malls inevitably being a sweet spot. And we will meet their international criteria.” AttAfrica has consequently already been courted by international retailers, building important relationships in the process and gearing the Company up perfectly for its next stage of
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Westhills Mall is the largest single-phase modern shopping mall in Ghana
evolution. This will be compounded by a similarly sustainable commitment to retaining a local focus in each new country entered, once again ensuring that its adherence to the long-term comes through loud and clear when the next major city’s decision-makers decide to edge AttAfrica closer to its $1 billion target. “We would always rather be choosy and have one great mall in a city, rather than five smaller ones, so to meet these expectations it’s very important to be localised and build local talent, to design with the future in mind, and to make sure we produce something which investors and retailers will like in the long-term,” Teeroovengadum concludes. “In threefive years’ time, we envisage that we will have achieved and exceeded that $1 billion of gross assets, we’ll be in at least four countries and we will have done so by building strong teams of local talent.”
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Freshness and Value at a Premium Fruit & Veg City has earmarked the DRC, Zambia, Kenya, Ghana and Nigeria as its next expansion routes as it continues to introduce a fresh approach to food retail to an increasingly large audience Writer: Matthew Staff Project Manager: Callum Philp ruit & Veg City has spent more than two decades bringing new levels of freshness to South Africa and the surrounding sub-Saharan region, and has maintained its strong entrepreneurial flair in broadening its presence further in 2015. Incepted in 1993 by brothers Brian and Mike Coppin, the business remains a family one to this day, facilitating the kind of
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flexibility that has been required for a Company striving to continuously update and innovate its model in order to keep ahead of grocery trends and retail opportunities. This is further driven through the attendance of continentallysignificant events such as the African Retail Congress which helps keep the business firmly ahead of the industry curve, but any knew knowledge is always applied back to its core values established from day one. “Since the beginning it has always been a family business, with emphasis placed on good old family values such as wholesomeness, trust, honesty and integrity,” the Group states on its website. “The brothers’ vision was to create a store that would resemble a marketplace of old, where farmers brought their fresh
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produce from their farms to be sold to the public. This was how their first store in Kenilworth, Cape Town was run, and this is how every Fruit & Veg City store that has opened since is also run.” Nearly 23 years later, and 130 stores throughout Southern Africa - as well as Australia - have followed this philosophy, with the refusal to rest
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on its laurels evident each year via a series of new store openings, business expansions or international ventures. In 2015 alone, 15 new stores have been introduced, taking its total to 130 in South Africa; complemented by 40 franchised stores, 200 convenience stores and 30 international outlets outside of South Africa. All of which strongly symbolise the ethos on which
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130 stores
In 2015 alone, 15 new stores have been introduced, taking its total to 130 in South Africa
the initial business model was built by the two brothers all those years ago. The Company continues: “The dedication to freshness at an affordable price has always remained one of the cornerstones on which Fruit & Veg City is built. “Today there are more than 100 Fruit & Veg City stores throughout Southern Africa, and even as far afield
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as Australia. Yet, it remains a family business with brothers Brian and Mike still running the day-to-day operations of the Company. “Their vision is still visible in every Fruit & Veg City store, where freshness and value are placed at a premium.”
Theatre of food
Not only has Fruit & Veg City expanded in literal terms via its ever-expanding outlet portfolio, but it has done so under an equally diversified range of brands in order to fully capitalise on the acclaim that its core service offering was receiving in the region. The first of this four-pronged evolution was seen through its Food Lovers Market, as the Company explains: “The next step in the evolution of Fruit & Veg City was to create a modern eatery where food aficionados could indulge in a range of gourmet foods. “It was this vision that finally gave
The next step in the evolution of Fruit & Veg City was to create a modern eatery where food aficionados could indulge in a range of gourmet foods
The Fruit & Veg City team crossed the globe in search of the hottest international trends in food
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birth to the Food Lover’s Market, a theatre of food that was designed specifically with connoisseurs in mind. The Fruit & Veg City team crossed the globe in search of the hottest international trends in food.” Visiting places as far afield as the US, Europe, Australia and East Asia, Fruit & Veg City ultimately brought back a stylish and modern food emporium incorporating the freshest tastes from around the globe for the benefit of the most refined pallets in South Africa. It is this balance of meeting customer expectations, while also bringing them something a little bit different that continues to make the Company such an appealing prospect, while also endearing itself to high profile business partners in the process; as was seen through the formulation of its Fresh Stop subsidiary which came about via a strategic alignment with Chevron. “These trendy stores, located at selected Caltex service stations,
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“Over the years we have established strong relations with farmers who have vast experience in growing, harvesting, storing and packaging fresh produce for exporting. Our buyers oversee operation at the pack houses, closely monitoring that the fruit is packed according to specifications, and cooled at the correct temperature. “FVC international also has its own logistics company in partnership with two of South Africa’s largest fruit growers, which ensures that orders reach their destination in the shortest possible time, in perfect conditions.”
A synergy of values
Byestablishingaone-stopofferingatselectedCaltexservicestations,Fruit&VegCityexpandeditsconsumerreach
feature a variety of innovative departments and products that focuses on the ever-increasing, time conscious demands of consumers,” the business notes. “True to its name, Freshstop at Caltex is a one-stop shop for fruit and vegetables, with an extensive fresh produce section that is supplied and stocked by the Fruit & Veg City distribution network.” A 50 percent stake in Diamond’s Discount Liquor in July, 2012 resulted in a similarly successful joint venture under the new Market Liquors brand a retailer and wholesaler of both liquor and soft drinks - while the Company’s vision to be the best import and export Company in Southern Africa was driven by the introduction of FVC International, which has subsequently led the business as far afield as Australia. Fruit & Veg City adds: “Our vision is to...offer a complete hands-on facility, and ensure that our products are grown, picked and packed in perfect conditions.
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We felt very strongly that we wanted to offer a range of Waitrose products in our stores. We saw a synergy with the brand as their core retail values of offering high-quality food products and innovation in retail are so closely aligned to ours
Constantly looking for potential gaps in the market for new, lucrative opportunities on which to capitalise, the aforementioned franchising and wholesaler routes have proved especially prominent for Fruit & Veg City in recent years as a way to expand its influence in a quick, yet relatively risk-free manner. Arguably the most significant of all these examples, however, was its 2012 decision to expand its grocery range to include international food products from British retailer, Waitrose. Strategically introduced as a way to once again differentiate the business in an increasingly-competitive food retail industry, the South African operator took on more than 200 of Waitrose’s food products in order to not only meet consumer demand, but to once again unveil something a little different to the ordinary offering. “We felt very strongly that we wanted to offer a range of Waitrose products in our stores. We saw a synergy with the brand as their core retail values of offering high-quality food products and innovation in retail are so closely aligned to ours,” said Chief Executive, Brian Coppin at the time. “The retailer expanded its range from fresh food to include non-food grocery items in 2012 and plans to
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convert all Fruit & Veg City outlets to its premium brand, Food Lover’s Market,” added a business report analyst. “In some locations Food Lover’s Market competes with Woolworths Food stand-alone stores, which have stocked fresh produce, groceries and non-food products for more than a decade. “Food Lover’s Market will be stocking a range of Waitrose’s ambient and frozen products, including frozen ready meals, tarts, cakes and ice cream, as well as rice, pastas, coffee and canned foods.” While this slide away from the traditional Fruit & Veg staple seemed drastic at the time, Coppin assured that this was a diversification and expansion rather than a transformation, and this has subsequently set the tone for the Company’s more recent strategic acquisitions, partnerships and expansions; with a more wellrounded consumer offering to rely on in entering new domains.
A lovely business model
Looking forward, and this bedrock of unrivalled reputation in the region, coupled with the same entrepreneurial, family-driven ambition that has propelled the Company for the past two decades, will undoubtedly see Fruit & Veg City become a household name on an even vaster scale in the future, with countries across Central, East and West Africa all in the crosshairs. Kenya, Ghana and Nigeria are very much areas of interest moving into 2016, building upon a very recent announcement of its decision to set up a wholesale centre in Kasumbalesa, the border town between the DRC and Zambia. The Company’s Head of African Operations, Frans van der Colff explained in a recent interview: “I have stood at that border and [watched] trucks arrive and stand there, and they are emptied; they sell
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It is about establishing a base in a country first and then growing from there... It doesn’t all happen overnight...
everything on the truck before they even cross the border. “And people don’t come through the border post, they just run through the bush on the side, buy… and then simply run back and sell on the other side.” Described as a “phenomenally busy” border crossing, this decision is yet another example of the kind of out-ofthe-box thinking Fruit & Veg City has become so renowned for, and the plan may come into fruition just as quickly as the decision was made, while the retailer consolidates its Zambian operations. “Almost everything in the DRC is brought in. So the thinking is one sets up a more wholesale type operation – like a Fruit & Veg City ‘Makro’ (South African wholesaler) – where people can buy in bulk whatever they want
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for their smaller shops on the other side,” Van der Colff continued. “I think it is a lovely business model, and in that area specifically it will work very well.” Sector analysts anticipate that this latest move will be another subtle tweak on the established Fruit & Veg City model; opening itself up to a large array of local retailers as opposed to opening one or two of its own Food Lover’s Market outlets in each new country as it establishes its supply chain networks. However, with the African footprint vast, farming partnerships across the continent firmly established and the vertical integration capabilities to fall back on, the Company is seemingly on the verge of unveiling yet another string to its tantalising bow. “It is about establishing a base in a country first and then growing from there,” Van der Colff concluded. “It doesn’t all happen overnight... [but] we’ve got the space, the ground, the fertile soil and there is water in most instances. It is just literally about supplying the seeds.”
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ame S P R E E
ince launching in April, 2013, online retailer, Spree, has successfully established its name and brand within both the fashion industry and amongst major retailers. Initially launched as a womenswear retailer, and leveraging Media24’s target audiences and partnerships with publications to take its ecommerce offering to market, the brand and product offering has grown and expanded over the past few years to include a full menswear offering, children’s and baby clothes as well as well-known international brands. The launch of its new mobile application marks a further commitment to the seamless and convenient online shopping experience. As part of South Africa’s largest traditional media Company with more than a century of publishing experience, Spree has been able to take it’s understanding of customer demands and translate these into bringing the best brands and fashion apparel to consumers; displayed through what Head of Customer Service and Business Intelligence, Nic Robertson, calls “beautiful look-books and editorial styled photo shoots”, that create a “digital shoppable magazine offering”. “Spree was a welcome addition to the already diverse Media24 portfolio, comprising more than 60 magazines and 90 newspapers, offering a mixture of news and lifestyle stories. In recent years, the Group has diversified into the digital media and services space, and Spree is one of these divisions which embraces the Group strategy to reshape its contentcentric offering so as to remain relevant and useful to consumers and clients,” Robertson recalls. Marking Media24’s first foray into the
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ecommerce space, Spree was initially launched to directly support the popular Afrikaans women’s lifestyle publication, Sarie magazine. “The success of the Sarie Winkel and understanding the role that magazinestyle content plays in creating demand to purchase, formed the catalyst for creating Spree, South Africa’s first content-driven ecommerce site,” he further highlights. After launching its curated women’s range in the first year, Spree recorded growth of 500 percent, followed by more than 200 percent growth in 2014, which demonstrated the Group’s comprehensive understanding of its target audience; taking the best aspects from the magazine and pairing similarities to bring an online glossy magazine experience to consumers that was both familiar yet recognisably new. “We found ourselves riding the coattails to keep up with South African consumer demand and subsequently increased our product and brand ranges,” he says. Since its launch two and a half years ago, Spree has become South Africa’s most fashionable online store.
Convenience
Writer: Emily Jarvis Project Manager: Callum Philp
Unlo Gro
Within Spree’s majority target demographic of internet users between the ages of 20 and 44, Robertson estimates that the Company currently has access to between three and four million consumers; but with both smartphone ownership and the emerging middleclass touted to rapidly increase, the demand for ecommerce is set to grow. “20 to 25 million people own a smartphone in South Africa, and as the price of data decreases and the appeal for our offering grows in line
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Spree strives to be the fashion ecommerce destination of choice among South African men and women by offering a convenient and seamless digital shopping experience with easy transition between the website, mobile site and app platforms
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with larger consumer spends, mobile internet usage is set to increase. We’re therefore very focused on ensuring our platform is ready for this change by making it easy to use and adopt the right branding to catch the consumer’s eye. “The online fashion industry is really starting to scratch the surface of the market potential, so it is vital that we remain ahead of the competition,” he explains. To do this, Spree is supporting a number of local fashion designers through its Spree Boutique, while also working with larger local and international brands who can utilise the ecommerce platform as a means to expand and provide market accessibility. He adds: “For instance, we were given rights to retailer, Mango online in South Africa, fulfilling fast delivery times through our usual logistics partners. The partnership allows Mango to strengthen their presence in South Africa while building awareness and reach to the whole country.”
Brand investment
As a technology-based Company who is present in the fashion vertical, Spree will continue to dedicate a significant amount of its continuous investments into reinforcing its platform backbone so that can be scaled further to cater for the exponential growth the Company is hoping to continue.
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Investing in platform reinforcements
On the brand awareness side, we have been focused on transactional marketing that we can measure, by using digital channels such as social media - namely Facebook, Snapchat and Twitter
Robertson adds: “On the brand awareness side, we have been focusing on transactional marketing that we can measure, by using digital channels such as social media - namely Facebook, Instagram and Twitter - to interact with the millennial demographic; which currently makes up 75 percent of our audience. We believe the future of our business, in terms of those who will typically engage with the latest fashion will be within this demographic, so that is where our focus is.” Further increasing engagement in this market, Spree launched a new mobile app in November, 2015. Within the Media24 Group, mobile applications are exceptionally important and subsequently heavily promoted. “The Spree fashion app offers a seamless shopping experience for customers and we are very excited about its launch. We are at the tipping point of growth for ecommerce in Africa, but many macro-economic factors are at play that need to be addressed for us to truly unlock growth.
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“The convenience and ease of shopping online with various payment and delivery methods will open consumers up to new markets. Right now, we are focused on consolidating our platform, making sure that it is easy to use and has a good variety of brands,” Robertson emphasises. He concludes: “In South Africa, ecommerce is to exponentially grow by 25-30 percent, but internationally this figure has historically been much higher. As a reflection of this, we strive to target 60 percent growth over the next two-three years and will continue to leverage the Media24 consumer base to tap into growth, becoming the brand destination of choice.”
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