Kit Kat Group by East Coast Promotions

COMPANY PROFILE

2015

Kit Kat Group

+27 (0)12 32 76100 | www.kitkatgroup.com

company profile

Family owned, business run

Editorial: Harriet Pattison

With its very first corner shop opening in 1953, Kit Kat Group has come a long way to establish itself within the South African market, supplying smaller businesses up to the end consumer. IndustrySA speaks to Ahmed Gani, Group CEO, who lets ‘the cat out of the bag’ when he tells us the company’s plans for the future and its expansion into e-commerce

First and foremost a family business, Kit Kat Group established its roots over half a century ago with a small corner shop in Asiatic Bazaar run under Osman Mohammed and Osman Gani. This legacy was forged ahead by his two sons AK Gani and AR Gani. Today, one of his grandchildren, Ahmed Gani, Group CEO, tells IndustrySA why, when so many family businesses fall short, this one has not only survived, but thrived in a market which faces continuous economic struggles. From the age of ten, Ahmed Gani explains he and his siblings were actively involved in the business, participating after school and helping their fathers during the holidays and on Saturdays. “This experience was priceless, as our fathers equipped us with their knowledge and skill to make us formidable traders for the future.

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“So from a very young age, we had those entrepreneurial skills taught to us and we were involved with the business.” In South Africa, there are three retail options for the end consumer – the big retailers, the informal traders and the Cash & Carry businesses. When Gani, at 19, officially joined the family business, he explains that he began to think of ways in which he could add value to the company, helping to place it in a competitive position within the industry. The focus for Kit Kat Group is to service and look after the smaller independent companies that buy from it whilst supplying to the end consumer. Whilst the stores that opened prior to 1992 were purely small retail outlets and stretched to no more than 200 sq. meters, Gani explains his passion for trading led him to grow the wholesale side of the business. A hugely viable concept, just months after

Kit Kat Group

joining the company on a full-time basis. My father in his infinite wisdom moulded this opportunity and together, Kit Kat Group opened its very first Cash & Carry store in October 1992. A huge leap for this family business, the new store measured 2,000 sq. meters. Enjoying increasing success within the wholesale market over the coming years, and with the help of the younger siblings joining the business, Kit Kat Group opened its flagship Cash & Carry store in 1999, measuring 20,000 sq. meters, it signifies just how far this family-owned business has come since its very first corner shop opening. “So we now have three Cash & Carry stores with two based in Pretoria and one in Johannesburg. They all vary in size but cater for a huge market. When we first opened our Cash & Carry in 1992, we saw roughly 80% wholesale results and 20%

retail but today it is more like 50/50 – showing how the retail side of our business has grown tremendously,” explains Gani. “In addition, in 2004, we also ventured into the building industry and now have three successful hardware and building departments all operating within our Cash & Carry stores and under one roof - the building department is named Build Mart.”

AN EXPRESS SERVICE Standing as a regional based business in Gauteng, Gani explains that the next growth cycle for the company, largely due to the economic changes, is to introduce express stores under its three Cash & Carry stores, helping to regionalize the business even further. “Our three large Cash & Carry stores will service the smaller express businesses of which we plan

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company profile

to open 100 in the next 24 months. Our first express store was opened two months ago and in June we have two more opening. Once the model starts rolling out, we want to achieve our goal of 100 stores. The demographic of these stores is positioned so each of the three big stores can service the smaller express stores effectively. “The Cash & Carry in Pretoria West will have 30 stores to look after in its region, helping to service bulk and distribution of products. So that’s what we’re trying to do, become our own customers,” Gani adds. With PwC as its auditors, Kit Kat Group has been advised and kept up to date with the world statistics and standards that it should follow in order to follow suit and keep abreast of what is happening in the global market. “We attend tour trade shows and know all the latest trends in distribution and display. The local larger chain companies are also following these standards by introducing express stores into more rural locations. I’m pleased to say we are not playing catch up on this, we are already on the same bandwagon.” With an industry that is continually changing

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“We provide a higher level of service with a much more personal approach at very competitive prices”

Kit Kat Group in market trends, product releases and consumer needs, Gani explains that businesses must evolve to stay afloat or face redundancy – perhaps it is the strong entrepreneurial flair in him he acquired as a boy, but Gani seamlessly understands the necessity and importance of the customer. “You have to be abreast of the market trends and you have to give the consumer what they want and not what you want to give them. We are finding that rural customers are looking for better services – and in South Africa, we have a lot of Spaza stores but they don’t serve the consumer effectively; the right products are not offered and many are over-priced. So that’s where we come in with the Kit Kat brand, which has effectively positioned itself in the Gauteng market. People trust us and believe in our products – we want to ensure they get the same level of service in our larger stores as they do in our express stores, so we are growing with the market changes.” Since the economic crisis struck in 2008, many households have felt the pinch with disposable incomes now at a much lower rate. Gani explains that its consumer has become far more cost effective and is buying products with more caution and often, in bulk. Offering better prices for bulk buy products, this new method of consumer trade works favourably for Kit Kat Group and for the customer too. While many of the larger retailers only offer retail product prices, Kit Kat Group offers immediate savings for bulk items – a prime selling point of the business. “End consumers are now looking for value and I think we’re well positioned to offer that,” adds Gani.

motivation or necessity here for them to earn it and work for it as any professional would. Gani explains that for a successful family business operation, corporate identity is key. “It is not my son’s birth right to take my seat in the company when he is ready to do so, it is upon his ability as to whether he can run the organization. It should still be family owned but not necessarily family-run, that’s the trick to running the family business into future generations successfully.” With that in mind, the advantages of a successfully run family business can far outweigh the disadvantages – most prominently perhaps, is the lack of corporate red tape which can entangle many of the larger chains when making even the smallest of decisions. Without these restrictions, Gani explains: “It has helped us to become what we are and allowed us to make simple decisions that can be sorted within a day, where with corporate companies it can sometimes take two weeks. For us, this allows a speed-to-customer approach which is much more effective than other chain groups.”

Amka Products wishes Kit Kat Group all the best for a successful 2015

FAMILY OWNED, BUSINESS RUN Taking into account the traditional time frame of a typical family business, it doesn’t often extend much beyond three of four generations. Of course, there are many reasons as to why a business may fall into redundancy, but while a family-run business has its advantages, it can also prove disastrous if not managed effectively and collectively. While heirs to many family businesses will naturally follow suit, taking up managerial roles with little to no experience, there is no

Consumer Tel: +27 (0) 860002652 E-mail: info@amka.co.za

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company profile

“You have to be abreast of the market trends and you have to give the consumer what they want and not what you want to give them” And while many of the larger chain groups have the advantage of money at their disposal, allowing them to undertake significant expansions on a quicker time-scale, Gani admits: “I still think the physical trading element and physical service we can give our consumers is far superior to what you would get from a large chain group. “We provide a higher level of service with a much more personal approach at very competitive prices and with over 40,000 line items under our roof, we offer the end consumer pretty much all that they require,” he explains. Now with over 600 employees, Gani explains that the company has followed through with its

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intention of keeping it as a family business by ensuring it employs the expertise to maintain its success and reputation. “We have headhunted people from the chain groups to run specific departments in the business and have learnt to bring in the experts from the corporate world. Don’t think you know it all because you don’t - we have expert managers that run the stores and expert buyers. You definitely need the right people to run the business and remember: If you’re not adequate enough then stay at home!”

ONLINE SHOPPING Online shopping has certainly become big business in recent years, with many retailers jumping on board to promote optimum convenience for the consumer. With advice from PwC, Kit Kat Group is looking to implement e-commerce into its system over the coming months. Already an R8 billion market in South Africa, it is growing at an exponentially fast rate. “We are already in the development stages of e-commerce for our website so at the moment, we are going to trial it before launching it into the market.” While the European markets are better equipped for online shopping, largely

Centriq Insurance Company

Premier supporter of the Kit Kat Group

Gauteng-based Premier Foods (Pty) Limited was founded over 160 years ago, strategically repositioning itself in 2012 as a leading FMCG player by expanding from traditional milling and baking into confectionary, home and personal care brands. Premier has operations and distribution facilities operations throughout South Africa, Lesotho, Swaziland and Mozambique, and a home and personal care business in the United Kingdom. Today, Premier produces and markets iconic South African brands such as Snowflake, Blue Ribbon, BB Bakeries, Star, Mister Bread, Impala, Iwisa, Super Sun, Nyala, Invicta, Manhattan & Super C, Lil-Lets, Vulco & Dove cotton wool. In line with its strategic intent of “Growing Together”, Premier’s vision is to grow its people, customers and brands.

Contact details:

Managing Executive - Strategy & Marketing: Siobhan O’Sullivan +27 11 565 4623 | +27 82 561 5676 | siobhan.osullivan@premierfmcg.com Corporate Communications Officer: Nodumo Novuka +27 11 565 4484 | +27 76 942 0581 | nodumo.novuka@premierfmcg.com

company profile

due to shorter distances between housing and shops and a greater understanding of computer literacy, the benefits for introducing the system into the South African market are undeniably large. Looking to the future Gani explains that the company has decided to take the e-commerce venture one step further: “While our Cash & Carry stores sell on average 40,000 items, the express stores will only sell a small proportion of this at just 2,000 items. However, the trick is once we have e-commerce up and running online, we will offer any of the items from the large Cash & Carry stores and deliver them directly to the nearest express store for that customer. “Although I have let the cat out of the bag on this one, it is a selling point I’m trying to incorporate and I do believe it’s going to be one of our most unique selling points.” While standard e-commerce may not get directly to the customer due to location challenges - a common issue in South Africa - Gani assures their deliveries will, due to the added bonus of its express stores providing a more convenient collection point for customers.

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A FAMILY UNIT With a bright future ahead, Gani explains that the family aspect of the business and the “unbelievable support” it has provided has been paramount to its success. The group believes in unity with every idea that is put forward – “We always get everybody on board, there’s five of us, my father, A R Gani and my brothers, Riaz, Junaid and Nabeel and if we’re not on the same page, we won’t do it. Once we are all on board, we give it our utmost to make it a success “ U l t i m a t e l y, for a n y fa m i l y bus i n e s s , t h a t ’s my a dv i c e : w h e n you a re s uc c e s s ful a s a n ind i v i dua l a n d t h e n e x t g e n e ra t i on i s c om i n g throug h , t h e re i s a n e w w a v e of v i g our a n d youn g bl ood a n d you n e e d t o us e t h a t t og e t h e r wit h your e x pe ri e n c e , a n d t a k e i t t o t h e n e x t le v e l . “ O ur fut ure pl a n s a re t h e e x pre s s s t ore s an d t o g e t t h os e up a n d run n i n g a c ros s t h e rura l a re a s a n d c i t y c orn e rs t o be a bl e t o tra de w i t h t h e e n d c on s um e r m ore e ffe c t i v e l y. E - c om m e rc e i s our n e x t bi g e x pa n s i on proje c t tha t w i l l s e e us t h roug h ov e r t h e n e x t 5 -1 0 ye a rs ,” c on c l ude s G a n i

Centriq Insurance Company

KHANS CHEMICAL INDUSTRY

Manufacturers and suppliers of quality household detergents over two decades.

Looking for reps and agents in the African Market +27 11 933 4021 PAGE 9

+44 (0) 1603 411569 info@industrysa.com East Coast Promotions Ltd, 2 Ardney Rise Norwich, Norfolk NR3 3QH