Finding Value in Food Service
Upholding entrepreneurs, enterprises and communities alike, Checkers Food Services is showing how effective, efficient operations translate into mutual benefits for all
Writer: Jonathan Dyble | Project Manager: Lewis Bush
Africa’s economic ascent is set to continue throughout 2019.
A quick glance at the African Development Bank’s latest continental economic outlook report reveals that the region’s projected GDP growth rate is set to accelerate to four percent this year and 4.1 percent in 2020.
Couple this with the UN’s commonly referenced population predictions, forecasting that Africa could have more than 1.3 billion additional inhabitants by 2050, and it’s easy to see why the continent is rapidly emerging as a global powerhouse for the future.
Amidst such a climate, the region’s leading businesses such as Sonatrach and Shoprite Holdings are thriving, successfully capitalising on the abundant array of opportunities that span a vast multitude of sectors.
The latter of these corporations provides the perfect evidence of this, its 146,000 employees now serving 35 million people everyday across more than 2,700 outlets. Home to a monumental food retail portfolio, Shoprite has grown from strength to strength, owed to continuous organic growth and innovative expansion strategies – strategies that Lance van der Spuy is all too familiar with.
“I joined Shoprite in 2009 as a Projects Officer in the Operational Projects department, reporting to the then COO, now CEO, Pieter Engelbrecht,” he reveals.
“After two years with the firm I was asked to investigate the feasibility of Shoprite entering the food service sector by Whitey Basson, the Group CEO. Whitey was not only instrumental in founding the Group, and building it into the success it had become; he was always on the outlook for ways to increase its influence. A few months later, with the viability study and business model approved, we founded Shoprite’s newest division, Checkers Food Services (CFS), in December 2011.”
Almost eight years on, and CFS has already begun to follow in the footsteps of its parent company.
Starting small and scaling rapidly in the Western Cape, the division initially focused on marketing predominently dry groceries and perishable products before expanding to become the first true broadline food service distributor in South Africa.
“By the start of 2015 our range had expanded to include fresh fruit and vegetables, a fresh butchery, cutlery, crockery, equipment, packaging and consumables, wine and liquor,” van der Spuy, the GM, explains. “From this base, our distribution footprint expanded into the greater Gauteng region at the start of 2016, covering South Africa’s largest market.”
A fresh approach
CFS is still a relatively young company in the grand scheme of things, but this is not to say that it isn’t a formidable player in South Africa’s food service market.
A rapid, sustained rise has seen it become renowned as no less than South Africa’s preferred hospitality and catering supplier, a status that van der Spuy himself is particularly proud of.
“None of our competitors locally can compete with the competitive offering we have,” he says. “Besides our low price leadership, owed to the backing that we have from Africa’s largest retailer, we are also able to offer our customers access to our retail stores through a linked business card that allows for emergency top up purchases at any of our 2,700 retail outlets at a discounted price. This, paired with our quick order turnarounds (on average between three and 24 hours), means that our customers enjoy not only the best prices, but the widest access to the products they need.”
While Shoprite’s support is a key tool that CFS leverages to differentiate itself, so too is technology, the business already established as a food services industry disruptor.
“We were the first in the industry to transition online and have recently opened up our services to include unregistered SMEs and individuals in our ecommerce offering,” van der Spuy adds. “Although the Shoprite Group itself has yet to formally enter the retail ecommerce sphere, we’re proud to be providing key learnings to the group, particularly regarding last mile delivery.”
CFS launched the ecommerce website tailored to non-food service customers, promoting access to wholesale products and pricing. Created to assist small businesses and entrepreneurs, it has proven to be the innovation that is valuable in enabling such enterprises to grow from competitive foundations.
“We’re helping to reduce the barrier of entry for persons with a limited credit history, or where transportation or location has previously been a prohibitive factor,” affirms the GM. “This service is free, as we charge no delivery or account fee, but we require a minimum order value of R1,000 ($72). The minimum order value is there to ensure that we are attracting the entrepreneur or small business and not merely providing a home delivery service to end consumers.”
Further, technology has not only helped to differentiate the enterprise in the way of delivering the last mile and managing customer engagement.
Equally, cloud computing has become crucial to CFS, enabling it to maximise operational efficiencies and ensuring its stock of over 8,000 different products are managed in a dependable, accurate and scalable way.
“We’ve improved our platform over the years by adding bolt-on applications, and have coupled our use of the cloud with both international and local learnings and best practices in the area of storage and distribution,” van der Spuy affirms.
“We now have the necessary robust controls and reporting functionality that is required to manage by exception, giving us the ability to increase our scale without affecting the customer’s service level.”
Technology aside, CFS is not maintaining the status quo, but is committed to maintaining its stock according to constantly changing consumer tastes and trends. Efforts to this end are threefold, the company actively aligning its offerings within emerging trends; working closely with existing partners and suppliers; and establishing new, innovative relationships when opportunities arise.
“The world’s largest food service distributors are based in the USA, and we’ve spent time there to learn from them,” reveals van der Spuy. “We also base a lot of our insights on the consumer retail information that we have access to, and then leverage our existing supplier relationships which allow us to have a relevant range of private label and exclusively imported products.”
A key banner that CFS has become allied with to this end is Flavour & Co, a food and beverage sourcing firm that offers premium niche fine foods tailored towards more discerning and creative chefs. Through this, the company is able to continuously introduce exciting new products that can be found in its regularly released catalogue and promotional leaflets.
Van der Spuy continues: “We rely on our local suppliers and specialist partners (who remain our largest procurement base) to introduce new products, flavours and solutions that are authentic and relevant to the South African market. We act as a service provider linking manufacturers and customers, so our suppliers and partners are of the utmost importance. Ultimately, we are custodians for the last mile, the last link in a much larger value chain.”
Concocting a culture
CFS’s local emphasis translates from supplier relations to employment strategies, the firm looking to provide jobs to the local communities throughout Gauteng and the Western Cape where the warehouses are located.
In more recent times, it has also launched a sales graduate programme, proactively offering training to newly qualified university graduates, developing their skills and providing them the foundations for a sound career.
“Additionally, we have a monthly and annual ‘Super Service’ awards programme that recognises and celebrates individual and team achievements throughout the year in all departments. We are also attuned to their physical wellbeing and offer staff wellness initiatives and incentives,” van der Spuy reveals.
“We recognise that training is crucial for personal development to allow the staff to grow with the business. Annually we determine a development programme for the entire team based on the individual’s needs and requirements, and these are rolled out over the course of the year.”
In the way of CSR, all staff members are encouraged to engage and support either the group’s initiatives or their own social initiatives.
There is a particular focus on the community it serves, tying in to a renewed customer service culture that has been imbedded to uphold the wider group’s CSR efforts.
“Personally, I assist Triga Ventures, a South African non-profit organisation that helps to equip entrepreneurs in the building of redemptive ventures,” van der Spuy states. “The idea is to solve some of Africa’s most pressing challenges while bridging the inequality gap that pervades our society.
“Triga Ventures has a world class accelerator that provides entrepreneurs from various verticals with access to a network of inspiring peers, generous mentors, value-aligned investors and donors.”
The Shoprite Group has established itself as a socioeconomic stalwart, helping to nurture entrepreneurs, enterprises and communities in South Africa, enabling prosperity in its existing geographies – and this will remain the primary ambition of CFS throughout the remainder of 2019 and 2020.
“Our objective is to continue to grow our market share off the resilient base that we’ve created in the last two years by continuing to deliver a strong value proposition to an ever-increasing customer base,” van der Spuy affirms.
Asked about whether the company will achieve this, the GM remains confident, citing buoyant optimism towards its overriding ethos that stands to be mutually beneficial to all parties.
He concludes: “Currently South Africans are experiencing a protracted period of slow and stagnant economic growth with salary and wage inflation that hasn’t kept pace with rising cost pressures.
“That said, CFS’s growth is still accelerating and is forecast to maintain double digit growth in the coming financial year as we continue to gain market share with a strong and relevant value offering to our customers.
“Our customers seem to be resonating with our value proposition that preserves their margins and finds innovative ways to keep their businesses healthy and competitive without sacrificing quality, something that we’re both proud of and excited about.”