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Delicate touch

Dec 21 2010 09:24
Svetlana Doneva
SOUTH Africa's biggest supplier of specialist Mediterranean deli products is a business born out of necessity. Thirty years ago, Tony Nichas was working in the chemical business. He was Greek and, by default, loved to cook.

The problem was that in the 1990s SA was in the grip of severe trade sanctions and many Greek ingredients were virtually impossible to come by in supermarkets. And the local market's undeveloped demand for foreign cuisine meant little was produced for domestic sale.  
 
Mediterranean Delicacies was born in Nichas' kitchen in 1988. It started out supplying just one ingredient to catering companies and restaurants in the Western Cape: tarama – the fish roe used as a base for the oily dip taramasalata, almost always part of Greek meze spreads.

After a few months, Mediterranean Delicacies gained a second shareholder in the form of Nichas' son-in-law, John Lourandos. The pair expanded their home industries business into olive curing, which they sourced from farms around Paarl.
 
Mediterranean Delicacies' focus took a 180 degree turn three years later, when Nichas' nephew Costas Vayanos joined the company. He launched an aggressive foray into the consumer market, determined to turn what were then somewhat conservative South African tastes to the joys of tzatziki, dolmades and feta cheese.

"We were a bit ahead of our time. People who had travelled to Greece knew the products, but on the whole the market was underdeveloped," says Vayanos.

"But there was a big retail trend that worked in our favour - and that was supermarkets increasing their freshly prepared foods. We fitted into that segment perfectly."  

Mediterranean Delicacies products began appearing in Western Cape supermarkets in 1992, and its management team embarked on what would be a five-year marketing drive to educate consumers.

"We invested huge amounts of time and money on marketing in that period," says Vayanos, who qualified as a chartered accountant at the University of Cape Town and completed a stint in retail in the 7/Eleven Group before joining the family enterprise.

Ready to go global


The company was growing fast, thanks to an entirely new consumer market. Vayanos set about formalising business processes and structuring the former home industries business into a company that now owns two factories and a custom-designed distribution system, and employs 400 people countrywide.

Mediterranean Delicacies' sales and distribution infrastructure happened after a merger with salad manufacturer Bettafresh in 2000.

None of the original founding members of the company were willing to relocate to Johannesburg to oversee the manufacturing and distribution of the products for that region, so a joint venture was the most obvious way forward.

"We used Bettafresh's existing infrastructure as a base into the northern parts of the country and southern Africa," says Vayanos. "The joint venture has been very successful for us."

Mediterranean Delicacies recently expanded into value-added seafood products, such as pickled herrings and smoked fish, after its acquisition of a small Cape-based company called Garon Foods. Vayanos says the demand for ready-to-eat specialty seafood is growing.

Meanwhile, the traditional offerings of Mediterranean Delicacies expand each year, with five to 10 new products added to its existing line. "We had to work really hard at keeping consumers interested during the recession."

International expansion is a current pipedream for the company, but it may face stiffer competition in those developed markets on its wish list. "We're looking for partners to help us enter those markets," says Vayanos.

 - Finweek
entrepreneurs
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