Reviews & Profiles
A Good African Story: How Andrew Rugasira got into the South African Market
Posted Tuesday, February 19 2013 at 00:00
In the second part of the series on A Good African Story, Andrew Rugasira talks about winning over the help of Whitey Basson, the CEO of Shoprite Checkers and how he got into the South African market.
On Thursday 9 March 2004, we became the first Ugandan coffee brand to be sold in South Africa when Shoprite Checkers, the leading supermarket chain, agreed to retail our roast and ground coffees. Our three inaugural coffee products – ‘Prestige’, ‘Gold’ and ‘Classic’ – were branded under the ‘Rwenzori Finest Coffee’ label (which was the company’s original name before it became Good African in 2005), and the roasting and packing of the coffee was outsourced to a roaster in Cape Town.
The build-up to this entry into the South African market exposed us to the many challenges of a start-up export business and the realities of trading on the African continent. Trade between African states currently stands at less than 10 per cent of the region’s total trade. In comparison, 40 per cent of North America’s trade is with regional partners, and the rate soars to 63 per cent in Western Europe.
Over one hundred guests gathered on a cool March morning at the beautiful Arabella Sheraton hotel in Cape Town for our launch. After months of developing packaging designs, sourcing packing materials, finding a local roaster, getting the green light from Shoprite to list the product in their stores, what began a year before as a conversation with the Shoprite Checkers chief executive Whitey Basson in the back of my car from Entebbe airport to Kampala was now a reality.
Jackie and our kids had come down with me and so too did my mother and younger sister Judy. Several friends from Uganda also flew down to Cape Town. Henry Ngabirano, the managing director of UCDA, helped secure the attendance of the Minister of Trade and Industry from Uganda, Professor Edward Rugumayo, and his permanent secretary and the chairman of the UCDA, Paulo Mugambwa.
On the South African side, the trade minister at the time, Alec Erwin, and members of his ministry attended the event. The Shoprite team, led by their chief executive, were also in attendance. There were four brief speeches and the event gave me my first opportunity to unveil our ‘trade not aid’ message. Basson spoke about Shoprite’s commitment to promoting more African products in its stores and his pride in working to get Ugandan coffees on their shelves.
The importance of relationships
Our coffees could never have entered the South African market had it not been for my relationship with Shoprite Checkers. Social and commercial networks are so critical in building trading opportunities in any territory and it is one of the key determinants of market entry. Who you know and how you can leverage that relationship are critical elements in the building of commercial opportunities and highlight the importance of social networks.
While at VR Promotions, I did some consultancy work for Shoprite; helping them with their investments in Uganda. Part of this work involved identifying ideal locations for their retail stores. In mid 2003, CEO Whitey Basson arrived in Kampala with his team. Part of their itinerary was to visit the site they had recently acquired for their second supermarket and also to pay a courtesy call to President Yoweri Museveni of Uganda at State House, Kampala. I had not met Basson before, but I knew that his visit to Uganda was important and that I had to make a good impression, first by ensuring a smooth arrival and, second, by doing everything possible to avoid the long waiting times that guests usually endured before seeing the president. To make matters worse for me, Basson would only be in town for about five hours.
Together with the Shoprite team in Kampala, I began making arrangements for this visit weeks in advance. If the protocol issues were not complex enough, the question of security caused a downright stir in my office on the day of Basson’s arrival. That morning, three plain-clothes security personnel showed up at my office at 7.30 in the morning armed with AK-47s and asked my administrative secretary, Jennifer, where ‘Director Rugasira’ was. They were unwilling to discuss the reasons why they wanted to see me. On being told that I was not yet in, they then requested to be shown to a waiting room.
Jennifer called me on my cellphone and nervously told me that there were men with guns waiting to see me, and she didn’t know exactly what they wanted.
When I arrived I found three tall, slim young men seated in the boardroom looking very much out of place. Just then, as one of them introduced himself, I realised that they were the protective detail assigned to Basson for the duration of his visit. This was a privilege that was sometimes accorded to important VIPs visiting with the head of state. We headed to the airport.
Basson and his team arrived on their corporate jet and the immigration officials did a good job processing them quickly. As I rode with Basson in the back seat, I began to think when the right moment would be to ask him about whether he might consider retailing my coffee brand in his stores. Basson is a soft-spoken man with an unassuming manner. His eyes are focused and sharp but unintimidating. Sitting next to him, one would not imagine that this is the business titan that built Shoprite into a 600-plus-store retail giant across fifteen African countries and with an annual turnover equivalent to Uganda’s GDP. I had many questions I wanted to ask him. But I had to contain myself, remain calm and wait for the right moment. Our first stop was the Shoprite store in downtown Kampala, where he chatted easily with the local team and toured the store. A couple of hours later we made the short journey to State House in Kampala.
As soon as we arrived on the first floor, we were immediately ushered into a very large meeting room with a massive rectangular table that could accommodate close to fifty people. The president stood at one end of the table with his eyes fixed on us and his hand outstretched as we walked the fifteen or so paces it took to get from the entrance of the room to where he was standing. On his left was the minister of state responsible for investment in the Ministry of Finance, Hon Sam Kutesa, and one of the president’s assistants.
The president seemed relaxed and he started the discussion enquiring whether the Shoprite that Whitey Basson headed was indeed the US-based Shoprite. Basson politely said it wasn’t; this Shoprite was South African.
‘Really? I thought you were part of the American group,’ the president insisted.
Again, Basson gently said it was not.