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Kauai set for major revamp under new owner Real Foods

Kauai, South Africa’s leading healthy fast food franchise, will be transformed into a global health and wellness brand declares new owner, Real Foods, who has acquired total control of the business in conjunction with a private equity partner for an undisclosed fee, 

Kauai was established on the Hawaiian islands by three friends who wanted a tastier, healthier way of life, incorporating elements of an island lifestyle.

The first Kauai restaurant opened 19 years ago in Cape Town in 1996, and the chain has grown from five outlets in 2001 to 154 today: 59 full retail stores, 85 Kauai in Motion outlets within the Virgin Active facilities, two Kohu concept stores and five ‘Kauai at School’ stores. Kauai has expanded its number of outlets and reported double-digit sales growth since 2009. It has also expanded into the international market with outlets in the United Arab Emirates (UAE), Namibia and Mauritius. System-wide sales from the Kauai business are R400-million.

Dean KowarskiDean Kowarski, Real Foods founder and new Kauai CEO (left) says: “We’re excited to combine our strengths with Kauai and continue accelerating growth. This acquisition provides immediate benefits to both businesses. Kauai not only aligns well with Real Foods’ aim to inspire a ‘real food’ revolution in South Africa, but also has brand equity with a nationwide footprint, giving us instant access to great locations countrywide.”

The parent company to Nü Health Food Café, a premium restaurant specialising in fresh and healthy food with a conscience, this strategic deal will strengthen Real Foods’ position as a premier multi-brand food group in South Africa. Founded in 2013, Real Foods is owned by Kowarski and Genesis Capital Partners (60%)* and is set to expand its food offering in the future.

Kowarski is passionate about health issues and good food. He has extensive experience across many business disciplines and in addition to his various business interests, is the founder of Nü Health Food Café. In March 2015 he was appointed Kauai CEO following the acquisition.

The company plans to start by redesigning and transforming all of the existing Kauai franchises into trendy fast-casual restaurants – a sector that, according to this article in The Economist, is eating into the fast food industry’s market share.

Kowarski explains: “Real Foods is capitalising on this global trend. To be at the forefront of this movement we will be re-looking Kauai’s entire healthy food eco-system to build a supply chain that supports sustainable farming practices and sources the best quality local fresh produce. Ultimately, Real Foods aims to grow Kauai to be the leader in shaping the healthy fast casual food industry and to educate people on the benefits of healthy eating and living.”

The changes coming in store will impact menu, look and feel, design as well as adding a theatre of foods concept. Ingredients will be seasonal, nutritious, delicious and free from harmful chemicals. An increased focus on the supply chain, from farm to fork, as well as the cold chain in between is a particular focus. Where opportunities exist, Real Foods will look at strategic acquisitions within the supply chain, where suppliers differentiate themselves and offer key ingredients.

Breakfast and lunch are important day parts for Kauai, and children’s needs are also taken into account. With the brand already in several schools, Kowarski is keen to continue educating children and their parents on the importance of healthy food and lifestyle.

The first two new era Kauai restaurants will open in Johannesburg in mid-June, in Rosebank and Dainfern. A roadshow to franchisees has been successful, with franchisees keen to convert to the new offering.

Growth is certain

Kauai’s strategic partnership with Virgin Active – in which Brait SE recently announced it would acquire an 80% stake – means Kauai’s growth is inevitable, at least from a ‘number of outlets’ perspective, as the two brands are intertwined and Virgin has already undertaken to open 29 new clubs by the end of 2016, Kowarski says.

“Each one of those clubs will have [the new Kauai]. So, without looking at our own retail model, there is already an expansion plan that is in place. This is in addition to the six new stores for Kauai and Nü Health Food Cafés that we’ll open this year,” he adds.

Real Foods will convert some of the Kauai stores into Nü Health Food Cafés, while it will also look to increase the number of Kauais within schools. Currently there are five.

The holding company also has a Master Franchise agreement in the UK with a target to open 10 to 12 new stores within the next three years.

For more information, visit www.nufood.co.za and www.kauai.co.za.

* Genesis Capital Partners is a privately-owned investment company. The business has a partnering approach and invests alongside trusted, professional partners and management teams. The group has investments in Australia, the UK, US and Africa and is involved in education, industrial services, properties, media and consumer-related businesses.

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