Ü B E R F L AVO U R
ÜBER FLAVOUR
SA Craft Ice Tea
With CBD PRODUCTION: David Napier
Über Flavour is blending locally-sourced, all-natural ingredients, in a Cape Town-based manufacturing facility, to create a range of ice tea drinks that Founder Paul Simon is planning to combine with CBD. What’s not to love?
//
One of South Africa’s most exciting young beverage brands, Über Flavour – based in Green Point, Cape Town – is embracing global trends to deliver products that modern customers desire. Established in 2015 by entrepreneur Paul Simon (of YDE – Young Designers Emporium – fame), Über Flavour uses all-natural, locally produced ingredients in full to create ice tea-based beverages. There are no flavourings, extracts or additives – the manufacturing process involves brewing fresh rooibos tea from loose leaves and blending with real fruit juice pressed from real fruits. While many brands play on the idea of health and well-being, few are making products that truly have health-promoting ingredients. At Über Flavour, it’s all about local, natural, honest inputs for a chemical-free, tasty, healthy output. The current range includes four flavour variants: Apple and cinnamon, mango and vanilla, honey and lemon, and berry and buchu. The idea for the product came to Simon when he was travelling back to
2 / www.enterprise-africa.net
South Africa after a family trip to Europe. He was in a German airport waiting to board his flight when his young daughter asked for a drink. He didn’t want to give her something packed with sugar, hyping her up before a long flight, so he searched out a rooibos-based ice tea. After boarding his flight and taking his seat he looked at the bottle and saw that the product was manufactured in Germany using rooibos extract rather than actual tea. There was something that did not sit right with Simon. Rooibos, a South African product, being sourced from Germany, to make a drink but only using extract – it didn’t add up. So, he investigated the potential of using fresh tea brewed with a blend of freshly pressed fruit juices to add flavour. All the manufacturers he approached said it couldn’t be done – especially for export – as the product would have such a short life. Like a true entrepreneur, being told it wasn’t possible only spurred Simon on. Eventually, he found a local company that could handle the manufacturing process, using a method that would allow the product to have a shelf life
suitable for export, using 100% locally grown ingredients. After experimenting with branding and flavour combinations, the product range was completed and positioned as a niche offering – the craft drink of the ice tea market. Distributed widely throughout South Africa, but mainly aimed at export markets, Simon has succeeded in gaining traction in the USA, South Korea and Singapore. The brand is growing, and it is about to embark on a diversification strategy that will launch it to the forefront of another internationally growing trend. HIGHLY SUCCESSFUL It seems the future of the soft drink market is surrounding cannabis, specifically CBD (Cannabidiol). CBD is a product of the hemp plant and can be added into drinks reasonably easily. It has no psycho-active element and is not related to THC (tetrahydrocannabinol), the element in cannabis that gives the ‘high’. CBD has been claimed to have strong health benefits.
INDUSTRY FOCUS: FOOD AND DRINK
Many brands around the world are already adding CBD to their beverages and Simon is keen to take Über Flavour in this new direction after returning from a sales trip in America. “I have just returned from the USA where you can’t walk into a store without finding a CBD product of some kind. We want it to be a catalyst to get our product out there and scale it,” he tells Enterprise Africa. “We are launching our first variants that contain CBD. We are playing in the CBD space as it has many medical
4 / www.enterprise-africa.net
benefits and is the new trend in food and beverage. We are expecting very big things from this launch, we’ve created a very nice campaign and we are super excited. “We are starting with one variant, apple and ginger. We are starting with this variant to test the market and we will probably expand it across the range in the future.” Über Flavour is not the only company exploring this exciting new trend. In February, Enterprise Africa spoke to Poison City Brewing in Durban
about adding CBD to their beer. After its launch, the product flew off the shelves and out of the taps, demonstrating the appetite for CBD-based offerings. In September 2018, South Africa’s highest court legalised use and possession of cannabis in private places, and growing of cannabis for private consumption. Clearly, there is a growing cultural acceptance of cannabis, both locally and internationally. Über Flavour hopes to capitalise on this movement. “The challenge is that the legalities are different in every single country. The Health Minister in South Africa has given a one year go ahead for products with less than 20 mg – but it is only for one year; what happens after that if they change their mind? I can’t see it happening, but it is a reality that we have to consider.” Because of Simon’s position within the beverage industry, he is privy to knowledge about upcoming products. He is already aware of at least 20 other brands that are ready to enter the CBD beverage market but not all are as highquality as Über Flavour. “The challenge for us as a relatively small company is to educate the customer about what type of CBD we are putting in. It sounds strange but many people are taking hemp oil and putting it into drinks claiming that it is CBD – that couldn’t be further from the truth,” he explains. “Other brands are using CBDs that are substandard in quality. We have completed tests of CBDs that are available in the South African market and we found that many of them test positive for insecticides. It makes sense because if you are extracting anything from a plant that has been sprayed, you will extract some of that spray too. Like with all the other ingredients in our products, we use real materials; we don’t use vanilla extract - we use real vanilla pods from Madagascar. I like to source everything locally, but we have decided to source our CBD from a Swiss laboratory. It has all the necessary authorisations and certificates of
ÜBER FLAVOUR
analysis and we will be putting 10 mg into each bottle.” This is a bold step for Über Flavour. The company is building a strong brand, with a loyal following within the niche that it operates. The hope is that this move will bolster its already robust presence, complementing the hard work that has already been done. “I do believe it will become the nature of our business. We think it will be a catalyst for us to pivot. We are geared up from a manufacturing point of view to take the business to the next level. CBD is going to be all the rage but I’m not sure how long that will last,” says Simon. He describes the competitive environment as “like the space race” and says that Über Flavour wants to lead in terms of product development while gaining first-mover advantage.
INTERNATIONAL PRODUCT One of the cornerstones of the Über Flavour business model is the company’s focus on export markets. The company has developed an extensive international presence and the team is always on the road, displaying products, talking to buyers, and exploring markets in an effort to take the Über Flavour idea into new territories. Paul Simon explains that the reason for focussing on export is because he saw the economic challenges, that have plagued the country, before they hit. Slow economic growth, high unemployment, lacking confidence – all have caused the country to slip to a 3.2% GDP contraction in the first quarter of 2019. The one positive of a situation like this is exporting becomes attractive as the price of the Rand encourages foreign importers.
“There is no question that we have economic challenges at the moment. It was one of the reasons for starting a business like this and hedging our bets so we could look at overseas customers as well,” says Simon. “Even if it gets tough here, it just makes it easier to sell into the UK, USA and Europe. We feel that was intentional and we did see it coming. We are nicely positioned now to take advantage of that. The fluctuations are the difficult part.” Exporting has not always been plain sailing. Previously, Über Flavour was negotiating a deal to supply 120,000 bottles a month into China. After initially agreeing the deal following a successful trade show, it took six months to get the products approved by the authorities for the Chinese market. During that sixmonth period, there was political change
What is the product without the label? From humble beginnings in 2007, Sign and Seal Labels has shown that organic growth through continuous improvement has formed a major part of their success story. The business has grown exponentially and has consistently kept up with the latest label printing machinery and technology (both flexo- and digital) to keep pace with the ever growing customer expectations and demands
The company is in the envious position in having recently won 3 Silver Awards in the prestigious GAPP Awards - making the name of Sign and Seal Labels worth remembering Contact them for all your label requirements Unit 5, 6 & 7 - Winelands Park, Pontac Road Saxenburg Park 1, Kuils River, 7580 Telephone: +27 21 905 8640 | www.signseal.co.za
www.enterprise-africa.net / 5
INDUSTRY FOCUS: FOOD AND DRINK
in South Africa and the Rand appreciated significantly. This left Über Flavour’s pricing close to cost and made the deal unsustainable. “It’s very difficult to plan a business when you have fluctuations of as much as 22% in the exchange rate. We learnt lessons there and we did ultimately lose the deal,” says Simon. Relationships have also broken down with distributors in the UK, the Netherlands and Dubai but every effort is being made to discover new contacts so the Über Flavour flow can continue. “Currently we do not supply into the UK, despite having strong interest in the product from various companies. It is certainly a market we would like to export to in the future. South Korea and Singapore remain strong for us and we
// WE CERTAINLY HAVE INTENTIONS TO GROW THE BUSINESS BUT WE ARE NOT A COMPANY THAT WILL GO AND BUILD A LARGE CORPORATE HEAD OFFICE // 6 / www.enterprise-africa.net
have just sent new orders out. The USA, we are working on a new order for a chain called Cost Plus World Market. In the Netherlands, we are trying to build new relationships. “We have previously been involved in supply into the UAE but relationships broke down and so we are in the process of signing new deals for the UAE. Canada is on our radar but we are exploring the legalities of importing products into that country,” explains Simon. “I have been in the USA at a trade show and we have been asked to begin a review process with Walmart. Obviously, for any relatively small company, that is great news. We are at the very beginning of the review process but they are looking at the CBD product and it is clear that it is becoming very mainstream,” he adds. Even with international success, the company never wants to move into the mainstream mass-market. The intention is always to remain niche, craft focussed. Simon is passionate about using ‘real’ ingredients and will not compromise on this. “Our product is different from other ice teas in the market – the majority of other brands operate in what I call the ‘Coca-Cola space’. Effectively, they are flavoured waters that have a tea extract in. We have turned that idea on its head
and we are one of the only ice tea brands in the world that actually brew tea from loose tea leaves. If our product tastes of apple, it’s because it has apples in it, not apple flavouring,” he says. Complementing the company’s international success, Über Flavour is realising fantastic growth in the local market. South Africans have taken to a product that is made with real, locally grown ingredients. “We have just signed up with DisChem who have a good 150 stores – that should be coming online in the next few weeks. We are doing some really nice business with Seattle Coffee Company where we are the cold beverage of choice across all of their stores. Things are going really nicely locally but winter is always a difficult period for the beverage market, however we are almost 20% up on last year.” Recently, Über Flavour started manufacturing in a new facility, one that is highly committed to local societal development. The Goedgedacht farm, close to Malmesbury, is owned by the Templeton family and has been set up as a trust of which the beneficiaries are the children of the area. To date, the trust has built five schools and is highly regarded in the area. On site, Goedgedacht runs a farming operation and a manufacturing
ÜBER FLAVOUR
// WE ARE LAUNCHING OUR FIRST VARIANTS THAT CONTAIN CBD // business – a Woolworths Blue Flag facility where olive tapenades and cordials are produced. Über Flavour delivers all of the raw materials, including bottles and caps, to the site and the manufacturing centre bottles and packs ready for distribution. ÜBER OR UBER Asked about the naming of the product, considering it is the same as the global e-hailing taxi service that has taken the transport world by storm, Simon explains that the two have no relation and his company started using the name before ever hearing about the taxi business. “Uber the taxi service was not in South Africa when we were coming up with names and developing,” he says. “We used Über as the German adjective of ‘better than, great, premium’ and it has always linked to our word, flavour. Just before we were about to launch the Uber taxi e-hailing service arrived in the country and we didn’t know what to do. We didn’t have money to change all the work we had done so we decided to run with it. Our lawyers
looked into and discovered that Uber don’t own the word Über – it’s a word that cannot be owned by one particular brand or party. They are Uber taxis and we are Über Flavour, and in South Africa there are three others that use the name Uber but with different spellings.” Ultimately, the coincidence caused no problem for either business and Simon ensures there is no love lost. There was even a plan to run a JV programme where Über Flavour would supply cool boxes and drinks for the back of Uber cars in the premium service, but that deal never materialised. ÜBER GROWTH Operating in a market that is about to boom locally and globally, with a product range that is already well received, and a brand that is harnessing the power of all-natural ingredients, Über Flavour is a company with an exciting future. Still young, and very nimble, the business is targeting growth in the coming years. “We certainly have intentions to grow the business but we are not a company that will go and build a large corporate head office. Having a top down structure with big costs is a business style that is coming to an end,” says Simon. “We want to be the niche mainstream drinks brand. People
want the real thing. They don’t want something that is full of extracts. If it’s supposed to taste of peach, people want to taste real peach. Of course, it has to make commercial sense. It has to be in enough outlets and people have to be able to get hold of it.” Because of the success the brand has achieved to date, Simon is bullish about the future and is excited about export opportunities. “We are working of a low base, but we are seeing nice growth. Things are challenging but we like to think that we will continue manufacturing and creating jobs locally in South Africa – that is what we need to turn the economy around – but the idea for now is to get the product exported more than sold locally.” The combination of real ingredients, exciting marketing, local input and an ethical and honest approach to business have helped Über Flavour to deliver what a changing consumer palette wants, both in the bottle and from a business perspective. This is a South African export that has all the potential to become globally renowned.
WWW.UBERFLAVOUR.COM
www.enterprise-africa.net / 7
Published by CMB Media Group Chris Bolderstone – General Manager E. chris@cmb-media.co.uk Rouen House, Rouen Rd, Norwich NR1 1RB T. +44 (0) 1603 855 161 E. info@cmb-media.co.uk www.cmb-media.co.uk CMB Media Group does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. Š CMB Media Group Ltd 2019
AS FEAT UR ED IN
ENTERPRISE AFRICA
SEPT EMBER 2019
