Finding new ways to grow an established services-based business requires out-of-the-box thinking and solid partners.
- Players: Shareen Parker and Silvana Dantu
- Company: African Equations and ZARI Sparkling Grape Juice
- Launched: 1998
Silvana Dantu and Shareen Parker met in 1996 when they were part of the task team appointed to set up the Robben Island Museum. Parker’s background was education and tourism development; Dantu’s was marketing and media. Together, the women saw an opportunity if they partnered up, and African Equations was born.
Their first long-term project was to manage the Western Cape Tourism Enterprise Partnership for almost ten years. It was designed to provide assistance to SMEs in the tourism economy.
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Your partnership has proved to be very successful. How have you pursued growth opportunities since launching 18 years ago?
We launched the business based on our respective strengths, experiences and skill sets. Shareen had been involved in policy development and research. I focused on innovative communication strategies and identifying strategic partnerships. Together that synthesis makes us a formidable team.
In a short time we managed to build a respectable company brand, but yearned for new challenges. We felt it was time to go beyond merely providing consulting services to clients. Instead we were looking for an opportunity to take ownership of a product.
That economic opportunity presented itself in the agro-processing sector, and was a culmination of our past experiences, current research and knowledge, and a business hunch.
We’ve found that growth comes when you step out of your comfort zone and explore gaps and opportunities around you.
Where has your growth path taken you?
Our research in the tourism industry alerted us to the absence of appropriate supply-side products. The profile of South African tourists has changed over the last few years. Today, many of our tourists come from non-traditional regions, including the Middle East and Africa, and a large percentage of these do not consume alcohol.
We realised that the tourism industry was not geared to provide an alternative beverage to these visitors that was on par with our award-winning wines. Traditionally, these audiences have been offered water or fizzy drinks instead.
South Africa is the seventh biggest producer of wine in the world, and yet our vineyards have made little to no investment in the marketing and branding of non-alcoholic beverages. Grape juices exist, but as we’ve mentioned, they’re not equivalent to our world-class wines.
We saw an opportunity for a premier product for the high-end market that was non-alcoholic, of good quality, ethical, and beautifully branded.
Many established businesses would jump in, believing they had enough business experience to make any new venture work. How did you approach this new business idea?
Very slowly. We needed to do our market research. We tested 106 grape juices by driving to every wine estate from the Northern Cape to the Cape Winelands to gauge an understanding of what was on offer, the quality of various product ranges, presentation and taste.
Based on this research, we produced our first bottle of ZARI, a high-quality juice made from the Cape Seedless Muscat cultivar, in December 2010.
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This was the first time you had partnered outside the business. Were there any lessons you took from the experience?
We faced many challenges trying to secure a reliable producer/supplier who would mentor and support a new entrant into agro-processing. In order to secure volumes, we had to find a producer who could supply on a big scale.
Retailers demand agreements with reliable producers, but the larger producers are wary of taking risks, and want upfront payments, forecasts and distributors in place.
They also provide little mentorship or guidance. It’s a catch-22 situation. We needed the retailers to find a good producer, and a large established producer to secure agreements with the retailers.
How did you address the problem of scale?
To get around this problem we secured more than one producer to meet the demand from retailers. We also appointed a distribution company that could assist us with forecasts and planning with three major retailers. Large distributors were reluctant to list SMEs and their new products.
We realised that the right producer would have its own network, relationships and supply chains set up with retailers, which would be extremely valuable to us.
Armed with this knowledge, we identified a partner with these resources. We needed to present a mutually beneficial partnership to them though.
Were you able to find the right partner?
We have a producer partnership with Van Loveren, the biggest family-owned wine business in the country. We are in the process of securing the majority shareholding in their processing plant in Bonnievale.
Van Loveren produces high volumes across multiple brands, and has the facilities and networks with big distribution companies to sustain our demand for the local and export markets.
Distribution companies find comfort in our partnership with an established brand such as Van Loveren and we are able to optimise these benefits. Finding the right partner is often the key to growth. You need to be very clear about what you need from the partnership though, and what you bring to the table that they can benefit from.
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An excellent reputation goes far and wide. If you want to grow, and you need partners along your journey, your reputation will be one of the biggest bargaining chips you have.
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