THE Ruperts, the Stellenbosch-based family that controls investment giants Remgro and Reinet, as well as luxury goods specialist Richemont – is well known for successfully capitalising on consumers’ (sometimes bad) habits.
Anton Rupert, the founder of the Rembrandt Group, was a master brand builder in the local (and international) tobacco sector – and played a key role in building highly profitable cigarette group Rothmans International, which eventually was merged into global giant British American Tobacco (BAT.)
The Rupert family also played key roles in building the iconic wine and spirits brands in Stellenbosch Farmer’s Winery (Fleur du Cap, Graca, Durbanville Hills) and Distillers Corporation (Klipdrift) – which is now a merged entity under Remgro-controlled liquor giant Distell. Distell has carried on that tradition in recent decades when successfully launching best-selling brands like Amarula as well as ciders Savanna and Hunter’s.
These days Remgro also holds a host of well know consumer brands under RCL Foods (Nola mayonnaise, Salati sugar, Rainbow chickens, Ouma rusks, Bobtail pet food) and through its significant investment in Unilever (Robertson’s Spices, Lipton, Knorr, Rama, Flora, Joko and Glen.)
Although Remgro – the Rupert’s SA-based investment company – has gone onto bigger investments like private hospitals Group Mediclinic and its financial services cluster (which includes FirstRand, MMI and RMI) there clearly is still a craving the sweet returns that can be garnered by investing in businesses that produce specialist brands that are irresistible to consumers.
Last month Invenfin, Remgro’s low key venture capital arm, looked to latch onto the growing ‘conscious consumption’ trend by acquiring a significant minority stake in Paarl-based confectioner DV Artisan Chocolate (DVAC.)
DVAC is one of the few confectioners in Africa to produce chocolate (bean-to-bar’) from cocoa beans sourced directly from the continent’s cocoa farmers. A rather telling statistic reveals that Africa grows 70% of the world’s cocoa beans, but produces less than 1% of the world’s chocolate.
The company – headed by entrepreneur Pieter de Villiers - operates out of retail and production premises at Spice Route in Paarl. It also operates a production facility at Simondium (between Paarl and Franschhoek.)
The value of the deal or the size of the investment was not disclosed – but both parties made very clear that the partnership was aimed at increasing DVAC’s retail footprint, brand awareness and production capacity.
De Villiers reckoned the partnership with Invenfin would help build the brand in terms of scale and profile without compromising on the founding principles of DVAC.
“I wasn’t interested in an investment that would turn DVAC into an artificial, mass-produced brand, and I wasn’t willing to budge on the heritage and style of what DVAC has become known for. I didn’t want a dictating partner – I wanted the right partner that saw the potential of the business, shared our values and could allow us to add scale throughout the operation, which is the major challenge.”
Invenfin already has experience in backing fledgling food and beverage brands, having already backed the founders of BOS Brands, a rooibos tea based beverages company, and Le Bonbon, a Cape Town based producer of hand-crafted confectionery and snacks for Woolworths.
Remgro itself has extensive food sector experience, having turned around Rainbow Chickens in the late nineties, merging the old Hunt Leuchars and Hepburn food brands into Unilever and more recently merging Rainbow (and TSB Sugar) into Foodcorp to create new look RCL Foods.
The DVAC story is intriguing. The company started in 2009 in a double garage fitted with an old masala grinder, a hairdryer and a recycled washing machine. Today DVAC has its brand listed in Woolworths stores, and there are talks of the company starting up its own concept stores.
DVAC (excuse the pun) seems to pitch right into Invenfin’s sweet spot. Invenfin Foods’ mandate is to invest in brands with the potential to engage consumers who deliberately seek out authentic experiences and products.
De Villiers notes, “Invenfin understood that I wasn’t willing to compromise on the credibility of the DVAC brand. Our focus is to remain a sustainable, single-origin, premium chocolate.”
“Invenfin brings important skills to the table to support me – their strong governance coupled with extensive knowledge of business strategy, product development, marketing and sales means that I can keep focused on the quality of the product.”
Invenfin executive director Stuart Gast pointed out that one of the biggest trends in the confectionary world was the bean-to-bar chocolate movement.
“This trend sees chocolate manufacturers produce organic, certified, single-origin chocolate bars made from whole beans they have personally sourced directly from the cocoa farmer.
He said the “significant potential” in this space is why Invenfin saw DVAC as an excellent investment opportunity.
Judy Sendzul, head of Invenfin Foods, contended that ‘bean-to-bar chocolate’ artisans were changing the way people consume the world’s most popular treat. Former banking heavyweight Michael Jordaan, an Invenfin board member, has also invested in DVAC through his investment company Montegray Capital.
Jordaan believed the South African boutique food and beverage sector was awash with innovation and originality.
“Consumers are actively seeking out authentic experiences and authentic products, which makes this a good time for food start-ups driven by integrity.”
By Jenni McCann