16 Oct 19 No better time to start a small food business in SA!
No matter what the news media would have you believe – there is no better time to be thinking about starting a small business in South Africa than right now, argues Jonathan Cherry, well-known futures researcher and innovation practitioner.
The world, and South Africa, is going through some fundamental changes at the moment; and to the entrepreneurially-orientated mindset, major change = major opportunity.
But before we get into the specifics of where the opportunities lie, let’s just first take a few minutes to understand what changes are worth identifying as key drivers of these gaps in the market place:
Lack of trust
A lack of trust in government, big business, the media and even NGOs can be found in every country.
This means that purposeful small businesses that are founded on the principles beyond mere profit, that are also authentically transparent as to how they operate and benefit their communities stand a good chance of carving out a nice niche category of their own.
The world is starting to wake up to the fact that if we do not change our behaviour pretty soon; we’re going to end the existence of the very planet that we call home.
Big companies know this, but the great news for the entrepreneur is that big companies are way too large and slow to feasibly shift the way that they make money currently; to meet the growing call from consumers to use less plastic, stop abusing animals, to put less chemicals in our food and generally stop exploiting the earth.
Trade wars between the US and China mean essentially the forecast for the next couple of years is little to zero economic growth for SA’s commodity-based economy. To try stimulate the economy – the Reserve Bank will most probably reduce SA interest rates in 2020; so if you are needing to borrow some capital to start a business – this is good news for you.
Less is more
We now know that it’s consumerism and mass production of cheap goods that are really killing the world. The solution then is to buy less stuff and choose quality, locally produced products that are made well and will last a long time.
The world is beginning to realise that there is more to life than just using algorithms to make everything more efficient. People are attracted to business that actually care about a customer’s well-being; not just squeezing every last cent out of them. People want to support entrepreneurs who have an intention to make a positive difference in the world.
Criteria for success:
Right now that we have some context as to what the drivers are, what then are the criteria for success that we want this small business to achieve.
- We want to build a business that has its costs in ZAR and attracts the majority of its income in a stronger foreign currency.
- We want a business that leverages the cost and efficiency benefits of technology, without it being a ‘tech business’.
- We want to start a business that you can build into a strong brand.
Small food business opportunities to consider:
Develop a luxury food/beverage SA product: SA produces a lots of unique food and beverage products – biltong, rooibos tea, rusks, koeksusters, vetkoek etc; but we haven’t really explored the concept of taking these items to a luxury/export level.
Inverroche, the craft gin brand out of Still Bay that was recently sold to Pernod Ricard is perhaps a good example of this, but the field is still wide open for entrepreneurs to experiment and iterate a process of building luxury brands around these products that we generally take for granted.
A vegan/vegetarian breakfast cafe: Especially in Western Europe, these are types of restaurants and food outlets are everywhere. It’s a massive trend that’s being fuelled by an increasing level of awareness that the food choices we make have dramatic consequences for our own health and that of the planet.
Compared to Europe, there are miserably few comparable options in SA. If I were to pursue this business I’d keep it super small and just focus on breakfast/brunch/lunch options and keep the location close to the areas were foreign tourists congregate.
Street food: Travel to Taiwan, Thailand, India, Brazil, Turkey or hundreds of other emerging economy destinations and having the local street food is as much a part of the experience as is the more formal, touristy attractions. In contrast to this SA’s street food culture is non-existent, which is a crying shame when you consider our diverse and vibrant our food heritage.
As South African’s we know that as much as our history is a part of who we are – so, too, is our food. Cape Town is home to a growing selection of food trucks, but this is really just the tip of the iceberg.
CBD-related products: Something which has seen enormous growth in the last couple of years and is set to continue is the marketing of CBD oils and related products.
Scientists have isolated 108 different types of cannabinoids in cannabis. Considering that SA is one of the best places in earth to grow cannabis [apparently], it would make perfect sense that we should be in the forefront of marketing related products in this category.
I think the opportunity would be to keep the manufacture and prototyping of new products all ‘in-house’ for the export market. CBD is also just the beginning – SA is literally the home to hundred of thousands of different species of medicinal plants that are just crying for value-added processing. The opportunity is glaring, obvious and screaming for further investigation.
Insect protein products: Mopani worms, sausage flies, Parktown prawns are abundant in SA; and they are also a valuable source protein.
Just like us, animals that we eat for food also need protein to grow. There are currently two main sources for this – fishmeal and soya protein. The problem is that getting this protein – all to feed other animals – is bad news for the planet.
One possible solution is the processing of insects into animal feed and potentially even turning this protein source into exciting new options for human consumption. Again, what is needed here is not just selling the commodity to a foreign market, but in developing strong brands in the category that can successfully attract a favourable profit margin.
For the purposes of keeping this report tight, I literally edited out a further 10 super ideas for even more plausible business to start in 2020.
So if you think times are tough or there has never been a better time to live and work in SA – on both of these statements, you would be completely correct. Shift your mindset and you will change your future……
Cherryflava.com: Read the full article here