DEVLAND CASH & CARRY (PTY) LTD
FMCG THE NEW KINGS OF
After 44 years of trading Metcash has been forced by creditors to sell off its stores. Rivals have been cashing in. Indeed, several stores were brought by one of South Africaâ€™s fastest growing FMCG distributors, Devland Cash and Carry. Managing director Yoosuf Gathoo tells us more. By Marie Toms
Devland Cash and Carry foCus RETAIL
evland Cash and Carry is one of South Africa’s fastest growing distributors of fast moving consumer goods (FMCG). It is benefiting from higher disposable incomes and a middle class that is growing to the next level. Within that context, consumer goods companies can make huge profit – they’re selling products on large scale quickly and at relatively low cost. Family man and renowned businessman S. Gathoo runs the firm. He knows this all too well. Devland Cash and Carry is his family’s business, started by himself and his brother in Devland, Soweto. It started small, modest. But now it is embarking on an exciting new expansion having acquired several Metcash stores. “We’ve been around for the last 20 years and we’ve had a little small cash and carry which has grown organically over time,” managing director Yoosuf Gathoo says, taking up the story. “We did a little acquisition of some of Metcash’s Trading Africa PTY retail and whole stores in April of this year. Eight stores to be precise. www.southafricamag.com
Devland Cash and Carry foCus RETAIL
New Clover long-life milk packaging way better than before Long-life milk is set to receive an elegant new makeover thanks to the recent launch of Clover’s new long-life milk packaging. Designed with improved functionality in mind, Clover long-life milk will not only continue to taste great, but will offer enhanced opening, pourability and resealability features making it way better to handle than the previous pack too. Packaging Perfect “At Clover, we consider our products from our customer’s point of view, which is why we decided to address the spillage that sometimes occurred with the current Clover long-life milk packs. We conducted research in various countries around the world to evaluate the functionality of different packaging. The new packaging which will be found on-shelves soon was deemed to be the best option for our long-life milk,” explains senior brand manager at Clover, Sherian King.
“It is a big forward step. The catalyst for the growth I think has been the grace of god for the most part. But we’ve also been ambitious and wanted to grow.” Local retailers’ expansion into under-serviced areas such as townships led to the collapse of Metcash. It was once the biggest wholesale business in Africa. But after 44 years Metcash is no more. It leaves a gap for astute players to step into, Gathoo says. Indeed, from 59 stores earlier this year, Metcash now has only about 12 stores left to sell as years of poor trading conditions and sales declines led to its financial backers refusing to extend further credit. In 2005, the company boasted sales of about R16 billion, but as more and more retailers such as Shoprite and Pick n Pay set up in wholesalers’ traditional markets, sales growth stalled. As these retailers gained momentum, street vendors and spaza shops that purchased mainly from cash-and-carry-type stores were forced to close. “It is now an opportunity for us to grow,” Gathoo admits. “Metcash has been selling off a lot of 4
Easy to Open, Easy to Pour and Easy to Store The unique and elegant shape of the new pack is simpler to hold and weighs less than our current long-life milk packaging. The larger cap is another innovation that is more comfortable to grip, it also cuts the inner foil seal as you twist it and tucks the foil neatly under the lid, negating the need for a ring pull opening. The seal is also tamper proof and features a tamper proof evidence ring. With a 30-percent larger pouring area, less gulping occurs allowing for smoother product ﬂow. In short, Clover’s new packaging is easy to open, easy to pour and easy to store. Clover, Way Better Clover’s full cream, 2% low fat and fat free variants will soon be found on shelf in the new and improved packaging. While Clover has the wellbeing of your family at heart, convenience, ease of use, quality and hygiene are also top of mind for the dairy brand that cares. So give the new long-life packaging a try; it’s way better than before.
Devland Cash and Carry foCus RETAIL
stores. We saw an opportunity there to procure some of those. We acquired some of their smaller stores and we did so because we needed to get a footprint into regions. What has happened is that because the chain stores in SA have grown so huge they’ve essentially grown too big and have put some smaller stores up for sale. “Before the Metcash store purchases we had two retail stores, which obviously wasn’t a lot, so when we saw they were shedding their stores and selling off their businesses we saw it as a great opportunity to expand across the country. It was a big investment and we’ve been doing everything that was needed to turn these into our own shops. “We needed to get a foothold in the townships and this was a perfect opportunity. This industry is so competitive so we and to expand to accommodate our margins “We’re poised for big things going forward,” he says. “There is huge growth in the wholesale market model. Metash didn’t realise that.” According to Gathoo, Devland Cash and Carry also operates internationally and “Zimbabwe is a growing market”. “Zimbabwe is one of our big markets, a huge market,” he says. “We’ve also got our own operations in the country. The challenge we see here is that there is a huge credit risk. But we are able to pursue opportunities like this because we are a family business, we’ve got strong management and we know how to grow a business. We have a strong team of people behind us.” 6
The catalyst for the growth I think has been the grace of god for the most part. But we’ve also been ambitious and wanted to grow
Tiger Brands is proud to be associated with Devland Cash & Carry, and wishes to thank them for their continued support.
Tiger Brands is the proud manufacturer of leading brands in a wide range of food, home care, personal care, baby and stationery categories in Africa
Tiger Brands Limited 3010 William Nicol Drive Bryanston Tel: 011 840 4000 Email: firstname.lastname@example.org Web: www.tigerbrands.co.za
Devland Cash and Carry focus RETAIL
He is very happy with how things are turning out. “We’re very happy with where we are at the moment. Obviously we’ve invested a lot of capital into the new stores and it’s about maximising what we have there and maybe we’ll look at adding more in the future.” What’s the secret? “We’ve put in a good culture that allows us to communicate efficiently and make efficient moves. Our structure, being familyowned and operated, enables us to work very well and make decisions. That has played a significant part in our growth. It is not like with a multinational corporation with several management layers and many shareholders to please. We’re small and able to adapt.” 8
We’re very happy with where we are at the moment. Obviously we’ve invested a lot of capital into the new stores and it’s about maximising what we have there
You wont find Devland Cash and Carry on the web. The reason for that is simple Gathoo says. “People understand what we do and we’ve never really had to market it. Every now and again we do something to raise the profile. Basically we try to be as efficient as possible and get the job done and customers recognise that. We work with many big names like Tiger Brands and Clover Industries.” Devland Cash and Carry has also been involved in several charitable initiatives in the past, helping those beleaguered with poverty. We wish it every success and look forward to bringing you an update on the expansion. END
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