03 Nov 2011 Now Famous Brands serves up pap and vleis
Famous Brands is a company on a serious growth mission – and this week it announced its intention to tap into the burgeoning bottom-end of the market with the opening of Blacksteer Home of Shisanyama, a R20-price point restaurant that will serve “tummy-fill” offerings like pap and vleis, Russian sausages and stews.
The quick-service restaurant franchise group’s first foray designed to capture the appetites of living standards measure (LSM) 3 to 6 consumers, positions it both in the lower-end branded food service category as well as the “unbranded” sector, which includes operators ranging from street vendors and informal traders to traditional food retailers selling hot meals.
“The sheer volume of the target market is enormous. There are about 20 million people in that part of the market, with a limited amount of money to spend, looking for a good wholesome meal.
“Until now we’ve played in the middle-income, upper-income bracket – this is our attempt to try and participate in a category which is huge in terms of size but low in terms of average spend,” Kevin Hedderwick, CEO of Famous Brands said.
The franchisee of the pilot restaurant, which is located in the Johannesburg suburb of Malvern, is Peaceful Ngcube (above), a former long-standing employee of Famous Brands.
“My focus is on growing this restaurant and ensuring it delivers. In the long term I’d like to own three or four Blacksteers restaurants, but right now we must make a success of this one,” Ngcube said.
According to Hedderwick, the new venture had an important empowerment component.
“Blacksteer’s offering, market niche and low start-up costs – in the order of R500,000, position the business favourably for investment by black entrepreneurs with finite capital but a keen insight into the LSM 3 to 6 market,” he said.
He added that the biggest issue in the food service industry was the high cost of entry for entrepreneurs.
“It’s always been prohibitive. You’re talking R1.2-R3 million for any normal retail brand franchise,” he commented.
Famous Brands acquired the trademarks and franchise agreements of Blacksteer last year, and has since either closed, or converted stores to alternate brands within its stable.
“The Blacksteer vehicle was thus available for use. The imagery of the Blacksteer is extremely powerful and its association with flamed grilled red meat is obvious.
“Consumers gravitate to an offering that is fresh, has home-cooked flavour, and is quickly and hygienically prepared – we’ve taken those elements and combined them with an appealing, sociable setting, centred on communal seating and eating,” Hedderwick said.
Shisa nyama is a Zulu phrase meaning to “burn the meat”.
Though early response has been encouraging, Hedderwick said the group had yet to decide to what extent it could ratchet up its new offering.
“If you get it right the market is significant, but we don’t want to get ahead of ourselves,” he said.
Famous Brands has big appetite for expansion
Famous Brands last month reported it has set itself an ambitious target of rolling out 90 new restaurants in South Africa, and a further 30 in the rest of Africa over the next six months, adding to its already bulging portfolio that includes Steers, Wimpy and Debonairs Pizza, among others.
Famous Brands which has been credited with introducing the franchise model for the local food industry, recently celebrated the opening of its 2 000th restaurant.
The group would hope to open 24 restaurants per month as part of its aggressive expansion plan, despite a cut-throat trading environment.
“The market place is very competitive and it will remain that way for a while. Pricing, which was never really an issue in the business, is becoming more of a factor.
“We’re seeing some very big brands do some strange things like seafood businesses opening at 8am, selling bacon and eggs – that’s the type of thing people do to try and get feet through the door,” CEO Kevin Hedderwick said.
McDonalds SA, planned to double its local 150-store footprint over the next five years. And Taste Holdings (TAS), whose food division included Maxi’s, Scooters Pizza and St Elmo’s Woodfired Pizza brands was targeting between 10-15 new stores per brand over a twelve month rolling period.
Famous Brands like other retailers in the food space, was also making a concerted effort to spread its footprint northwards.
With Africa’s consumer spending forecast to hit US$1.4 trillion in 2020, market players were hoping to cash in on a burgeoning middle class, whose disposable income was rising rapidly.
“We are doing a lot of work in Mauritius, Zambia and Nigeria,” Hedderwick said.
The group would open 12 restaurants in Zambia and eight in Mauritius, in the coming months. It currently had presence in 16 African countries.
Source: Business Report