Very often it’s the small ideas that leadto big successes. Take the story of Bandito’s Chile Company, for instance. In1993, co-founder and then-high school teacher Kian MacRae was working at aMexican restaurant on the weekends to earn some extra cash when the emptytequila bottles generated each night behind the bar sparked in him the idea tobottle a home-made chilli sauce.Modifying a chakalaka recipe from afriend’s mother in Zululand, he and his wife Doris borrowed two 50 litre potsand, on the balcony of his brother’s Yeoville flat, set about cooking up thefirst batch of what was to become a truly home-grown entrepreneurial successstory. What started out as a small cottage-industry, weekend-sideline businesshas, in the past 14 years, developed into a highly successful enterprise thatsupplies the major retail outlets in South Africa and exports to 20countries around the world.
But, as Kian and Doris relate, it didn’tstart out big. In fact, Bandito’s had very humble beginnings. Kian designed thevery first Bandito’s label and printed out black-and-white copies on the schoolphotocopier before pasting them on the tequila bottles that originally sparkedthe idea. “We sold the first batch to family and friends – in fact, the veryfirst bottle was sold to some guy in the elevator of the flat where we’d madeit!” he laughs, while Doris adds, “To be honest, we didn’t really have anythinglike a business plan. We just both love chilli and wanted to make a greatchilli sauce from fresh natural ingredients. We had no idea how big it would become.”
With the popularity of their chilli saucegenerating a growing demand (Doris explains that chilli is, after all,addictive) the MacRaes took a stand at a flea market in Fourways, recruitingMatric students from Kian’s school to man it. “That market closed fairly soonafterwards but the following year we took a stand at the Rosebank RooftopMarket, where you’ll still find us today,” says Kian. As Doris relates, it wasat that point, in 1994, that they realised they might just be sitting on apotentially successful sideline business and registered the Bandito’s ChileCompany. “But even then, even with the fan-base we’d developed, it was stillvery much a weekend thing,” says Kian.
The turning point came when a journalistfrom the Saturday Star newspaper expressed interest in doing a story onBandito’s. “Initially we weren’t all that keen, because this was reallysomething we were doing on the side, but she was so persistent and one daycalled us up to say she was coming the next day, so we didn’t really have achoice!” remembers Doris. The story appeared on the front page of theentertainment section and generated a big response. “It gave us fantasticpublicity,” she adds. The same year, the couple was offered astand at the Lusito Land Portuguese Festival. “We didn’t have enough money forthe whole stand so we shared it with a salami stand. We sold out on the firstday. We just couldn’t make enough sauce – it was so popular. I cooked throughthe night to try meet demand,” says Kian.
Unable to ignore the potential of the businessas a full-time concern any longer, Kian left teaching the next year and thecouple worked from home, converting a room in their house into a chillikitchen. Shortly afterwards they bought a house in Queen’s Street, Kensington,after being granted a bond by the bank. “We worked on it for six months,converting the front part into a deli and Mexican cantina and the back partinto an industrial kitchen. Doris studied at hotel school so she knew what wasrequired of the kitchen,” says Kian. Their consistently good turnover from themarket-trade sustained the business and the couple used the money made from theLusito Land festival to pay the builder. It was to be the business’s home forthe next seven years, before they outgrew it and moved into their current Kewpremises, which was purchased ready-made in 2003 as a food manufacturingfactory.
Looking back on those early years, Kian andDoris agree that some of their earliest and most significant challenges camewith their move into big retail chains. “We didn’t understand things like foodbrokers and listings and buyers so we outsourced these functions. Going intoretail outlets also puts enormous stress on your cash flow because you have tosupply the warehouses with two months’ worth of stock and you only get paid 90days later,” says Kian.
The couple sold 10% of company shares eachto two partners in order to manage the cash flow and growth. “Usuallydistributors want products with a long track record but a national distributorgave us a chance because they believed we had a product with great potential.They handle the distribution, warehousing, book and merchandising for us,” addsDoris.Spar, Pick ‘n Pay, Hyperama and Shopritewere among the first national retail outlets to stock Bandito’s followed byWoolworths two years later, and the business was well and truly on its way.
Setting high standards
Retail brought other lessons too. “The bigretailers audit your entire operation. Pick ‘n Pay audits us once a year andWoolworths does two audits – one operational and one ethical. The HealthDepartment also audits you and you have to be able to trace every ingredient inyour product, right back to the farm where it came from,” says Kian. But headds that while many manufacturers find such audits threatening, Bandito’s hasalways embraced them. “They only help us to be better, and to deliver a betterproduct to our customers,” he says. “Right from the word go, our passion hasbeen to create a natural-ingredient chilli product without colourants orpreservatives and we’ve never wavered on this. We’ve always remained fanaticalabout the quality of what goes into our products so any quality-based auditties in with what we stand for,” adds Doris.
Staying close to the consumer
While getting into retail stores is onething, ensuring you have a product that moves off the shelves and generatesrepeat orders is another thing altogether. “It’s critical that your product isunique and special enough to stand out from everyone else’s when it’s on theshelf next to all the others. You also have to keep up the consumer’s interestin your brand,” Kian says.Often, the latter is achieved by expandingthe product range, but Kian has a word of warning. “Food trends tend to go incycles and often there’ll be a glut of different product variants from a wholelot of ranges, but then the retailers will cut these down to include only theones that move off the shelf.” This can mean a lot of money wasted on newproduct development.
“The way we’ve done it is to listen veryclosely to consumer requests. People came to us and asked for a milder or asweeter sauce or a relish and we developed new variants based on this feedback.In this respect, keeping a stall at the Rosebank market has been veryimportant. It’s helped to ensure we stay close to the coalface, close to ourcustomers,” says Kian. “It’s also given a human face to Bandito’s and this isimportant for the brand’s personality.”
Creatingan export brand
Brand personality was to prove central tothe company’s export success. Bandito’s is sold under the Mama Africabrand-name overseas, and Doris explains why: “There are so many chilli sauceproducts on the overseas market that we just felt it would give us an edge tomarket an African product, hence we created the Mama Africa brand. We are aProudly South African company and believe – and have proved – that our chillisauce can compete on the world stage with anything from Mexico. So ourAfrican-ness was very important to us.” The brand’s pay-off line, “Made Southof Mexico in Africa” cleverly draws on the Mexican chilli reference whileentrenching the product as South African.
Passingthe export test
The company’s first foray into exportingtook place in Australia in 1998 on a small scale after Doris launched theproduct line at an international chilli festival. She highlights the importanceof having a presence at international food trade shows and expos to anyoneinterested in exporting a food product. “There are three main ones that youhave to go to – one is called Sial and is held in Paris every second year, witha Cologne show called Anuga held every other year. Then there’s also the FancyFood Show in New York every year.”
Kian adds, “You’re in a market you knownothing about initially and you can’t assume that because a product works hereit will work elsewhere. Being on those shows gives you exposure to the entireworld because every buyer from every supermarket chain in the world goes to thebig shows. In addition to this, if you want to launch a product on theinternational stage, you have to have a unique product with seductive packagingand a strong brand personality.”Both of them agree that the partnershipsformed with overseas distributors are critical to export success. “You want topartner with experts who know what they’re doing and are willing to carry someof the financial risk,” says Kian. “We nearly got our fingers badly burnt oneyear when our food broker ordered around R800 000 worth of stock for Sainsbury,which we sent over. But he didn’t pay us and wouldn’t return our calls –eventually we sent him a fax threatening to hand him over to an internationalcredit bureau and we got our money. If we hadn’t, the company would have beenin big trouble. So you need to be careful about who you choose as partners,”Doris cautions.
Today the Bandito’s Chile Company exportsto New Zealand, Canada, USA, Japan, Russia, Malaysia, Poland, Sweden, Finland,Norway, Denmark, Germany, UK, France and Austria, and the Kew factory has a dailyoutput of 8 000 bottles. “This year, we’re focusing on growing our profit andgetting HACCP certification, which is an international food standard. We’realso very interested in the prospect of a restaurant or food outlet partnershipthat will leverage the Bandito’s brand,” concludes Kian. With a track recordand brand strength like theirs, there can be no shortage of takers.
Exploiting other opportunities
With a foot in the retail door,Bandito’s was able to exploit other opportunities that existed in the retailspace, creating home-brand ranges for outlets such as Woolworths and specificproducts for Pick ‘n Pay.
Diversifying the product range:today Mama Afrika and Bandito’s ranges consist of six hot sauces, threerelishes, salsa, pickled jalapeno, three flavours of corn chips, tortillas andtwo cooking sauces.
Chilli is one of thefastest-growing food types in the world. Consumers are more aware about thedifferent types and strengths of chilli than ever before, as well as thedifferent combinations, such as chilli and chocolate, or chilli and mint. Theyare also more creative in their cooking.
Bandito’s is well aligned withthe move towards healthy and fresh food. Chilli is known to be high inanti-oxidants and vitamin C and is reported to improve metabolism.
International trade shows areinvaluable in helping you to test potential market response and in giving youexposure to buyers from supermarket chains all over the world
Get in touch with theDepartment of Trade and Industry – they provide a lot of assistance toexporters
Be aware of the differentlabelling laws that pertain to each country. The United States, for example, isvery specific about what you need to include and where on the label theinformation needs to appear.
Finding the right internationalpartner in each country is probably the biggest challenge. Only formpartnerships with importers who are willing to carry some of the risk becauseit means they will be motivated to move your product. They should also have aproper set-up and the right connections.
Take baby steps because youhave to be able to keep up the supply. You want sell-through and repeat orders,not just sell-in.