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Getting ready to braai abroad

Jun 10 2016 07:00
Lameez Omarjee
Stelio Nathanael, chief operating officer of Gold

Stelio Nathanael, chief operating officer of Gold Brands Investments. (Picture supplied).

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Since the establishment of the first ChesaNyama, formerly known as Butcher’s Grill, at Wits University’s Matrix food court in 2012, the fast-food “traditional braai” offering has grown its footprint to over 300 across Southern Africa.

Over the past four years, the franchise’s holding company, Gold Brands Investments, has diversified its food offerings to include 1+1 Pizza, Mediterranean offering Opa!Pitaland, Chicken Wild Wings and rib and burger joint Blacksteer.

Gold Brands Investments listed on the JSE’s AltX earlier this year, raising R25m. Chief operating officer Stelio Nathanael says this will fuel the South African fast-food franchise’s plans to expand to the USA later this year, and acquire a few international brands. The company currently boasts a market capitalisation of R110m.

Despite the diversification strategy, ChesaNyama remains the star of the group, says Nathanael. 1+1 Pizza currently has 12 stores, owned corporately by Gold Brands.

There are six Chicken Wild Wings stores, four in South Africa and two in Botswana. Gold Brands acquired Blacksteer from Famous Brands in April 2015; it is currently growing at a rate of two stores per month and there are now 14 of these outlets. 

“My vision and goal was to provide customers with value for money with a good-quality product,” says Nathanael, who’s been in the food business since the age of 16. After working as a waiter overseas, Nathanael returned to SA at the age of 21 and got involved with the Squires steakhouse brand.

"That was my passion and I believe if anything is your passion, stick to that. You will become successful where your passion lies.”

Business advice

Nathanael describes himself as an innovative businessman who listens to what the customer wants. “I put myself in the customer’s shoes to see what is missing in the market [to decide] what we can offer, and will be a success story.”

After recognising that there was no braai offering in the fast-food market, ChesaNyama was formed to fill that gap, he explains.

Taking this innovative approach is risky, he admits. But having  drive and passion will lead you to success, most of the time, he adds. The best business advice he ever received was to “be hands-on in whatever you do”.

Keeping up with the competition

The increasing number of international brands – recent entrants include Burger King and Krispy Kreme – in the local fast-food market is not a threat to local players, says Nathanael. “I believe it’s keeping us on our toes in SA.”

Having international brands brings a lot of “knowledge” into the food industry, and it drives local brands to continue improving the quality of their offerings. “We’ve also got a lot of local brands that are of the same calibre as international brands.”

Not every international brand that enters the South African market will make it. The opposite is true about South African brands entering foreign markets, he says.

“It depends on the country if the brand is going to succeed.” Having witnessed international brands fail to make a mark in SA over the past 20 years, and seeing South African brands remain successful, shows that local brands are competitive too, he says.

Acquisitions

Gold Brands is in negotiations to bring in a few international brands. It is finalising negotiations to acquire UK-based fish and chips restaurant, Harry Ramsden’s.

This will be an opportunity for Gold Brands to tap into the middle- to upper-LSM market, says Nathanael. Gold Brands will take two approaches, one will be a family restaurant and another will be an “assisted-diner” service.

“There is a gap for fresh fish and chips in the South African market. That’s why I believe it will do well in the middle-to upper-LSM market.” Harry Ramsden’s differs to the Fish and Chip Co., which Nathanael sold to Taste Holdings in 2012, in that it was targeted to the lower- to middle-LSM consumer, he says.

Listing on the AltX has also solidified Gold Brands’ expansion plans. “It provides future incentives for our franchisees…and it motivates every single staff member,” he says.

It has given Gold Brands the opportunity to improve its logistics chain to reach outer provinces such as the Eastern Cape and Limpopo by expanding its distribution points beyond its Centurion-based kitchens, he explains.

Lessons learnt

Nathanael tells finweek that sticking to his goal of providing customers with value for their money has led him to constantly find ways to improve the product offering. It is possible to cut costs, while still providing consumers with a quality product, he says.

Due to the drought, the prices of meat and vegetables have ballooned. “We’ve had to find ways and means to still offer consumers the same quality product without cutting corners,” he explains.

Keeping franchisees on par with his vision has also been challenging over the years. The success of Gold Brands depends on the success of the individual franchisees. “They have to work the business the way you do, with the same drive, and always be hands on,” he says. 

Expansion plans

As for future goals, Gold Brands plans to expand into the US over the next five years, where “barbecue is big”, he says. The first ChesaNyama will be opened in Tennessee in October this year. Tennessee has over ?150 000 South African families, but the aim is to reach middle-income earners, says Nathanael.

“Our vision is to open 50 stores over the next two years in the US.” These will be assisted diners, with a “South African feel”, says Nathanael.

Each store will be themed around a South African tribe. “Our aim is to show the American market what the South African market is about.”

ChesaNyama represented South Africa in the Jack Daniels barbeque competition in 2013 and won the best international barbeque brand award. ChesaNyama also scooped the Restaurant Association of South Africa’s Best Take Away award for 2015. The secret to the success of ChesaNyama lies in its strong ties to culture and tradition. “It’s what South Africans are about,” he says.

This article originally appeared in the 16 June 2016 edition of finweek. Buy and download the magazine here

fast food  |  braai  |  business  |  entrepreneur  |  franchise
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