Interview With Khaya’s Kitchen Founder And Chef Khayakazi Kepe! Khayakazi Kepe hails from Mlamli Village in the Eastern Cape. She started her company Khaya’s Kitchen in 2019 with assistance from Government Funding and were recently included in the Presidents Buy Local speech at the Proudly South African Summit.
Khaya’s Kitchen is the first Black Female Owned Retail Production kitchen that manufactures ready-to-eat meals for SPAR. Their range is an African inspired range of products with the aim of introducing more African indigenous meals to mainstream retail. Things like Chicken Feet, Stuffed Dombolo, Curried Tripe and Samp.
We recently had a chat with the founder to talk entrepreneurship in the food industry, challenges and securing major clients. Check it out below.
How did you come up with an idea for this business?
I entered the first season of Masterchef SA in 2012 and made it to top 6 of the competition and after that I knew I wanted to run a food business but not a restaurant. So when I moved to the Eastern Cape in 2016 I was catering and writing a food column for the Sowetan. I stared selling my food at the Valley Market here in PE then when I went to work for SPAR Eastern Cape as a Retail Operations Advisor I did a lot of traveling to stores around the province working with their Deli’s and I saw a need for a pre-packed ready-to-eat range of African inspired food because that what most of the stores were already selling just not pre-packed. And that’s how our food brand was born
What inspired you to get into the food industry?
I’d always loved cooking and playing around with food since a young age so I guess it’s always been a passion. My grandmothers cooked, so did my dad and my mom. So my passion was inspired by them and over the years it’s just been fuelled by my love of entertaining and cooking for loved ones.
Please describe how your journey was in the beginning stages of the business.
Because I already had an established presence if I can call it that through the various work I’d done for TV and Radio after Masterchef SA, getting recognition for the business wasn’t that difficult.
The challenges were mainly transitioning from being a caterer dealing one on one with clients to now having a retail supply business where the rules of engagement are totally different. My client is now a retailer who has to think of his margins and whether my product will sell on his shelf or not because he is not the end user of the product. Also navigating the legislative requirements which are completely different from catering.
I had soo much to learn and still learning everyday about the finer details that go into production. Because when you supply for retail its not just about the end product but the journey to getting the end product. How we select our suppliers, product testing and lab testing, how we clean our kitchen and what we use to clean our kitchen. Something as simple as a mop you use could stand in the way of you passing or failing a food audit. So for me the journey has been learning how to rely on other people. How to lead and manage a team towards ensuring that we meet our organizational goals.
How did you manage to secure Spar as a client?
When the idea first hit me about what direction I wanted to take with the business I was still working for SPAR Eastern Cape and so I approached our MD and he gave his blessing and said if I could come up with the capital to setup a kitchen SPAR would support us. We signed a MOU in late 2018 and I then went out in search for funding to start the business.
Are there any other stores that you supply besides Spar?
At present no. We only have a contract with SPAR. We obviously would love to expand to other retailers with our brand and that’s what we are working on in our expansion strategy.
How have people received the business, is it getting recognition and support?
The support has been amazing. Not just from the SPAR retailers but also from customers who buy our products in store.
What challenges would you say you faced in your journey as a business?
I think the biggest challenge was launching during a pandemic which resulted in cashflow issues. We spent an 9 months working on renovations getting the kitchen ready, product testing and making sure that we were ready to launch in April 2020, then in late March 2020 lockdown due to COVID 19 started in the country. We couldn’t operate for 3 months yet we still had all our overheads to cover. By the time we were able to start with the pilot store rollout in July we were low on cashflow. It was challenging but I have a great team that saw the potential in the business and even with severe pay cuts agreed to see it out with me and make sure that we make a success of this vision and I m grateful to them for that.
What are your strategies for making the business viable for the long term?
We have a unique product offering that does not exist anywhere else in the country and for us our focus over the next 12 months is to execute the SPAR contract to the best of our ability as we start the roll out into all their stores in the province (144). And then from there look at a gradually look at expansion opportunities into other retailers within the Eastern Cape and in 2 years look at a National rollout of our products.
But also keeping things interesting and fresh by introducing more unique product offering. We want to celebrate African Indigenous Food so that our food also has a voice and platform on retail shelves.
How did the business manage to secure funding from the government?
After that SPAR MOU, we approached several government funding institutions one of which was SEDA. After several meeting with myself and with the SPAR Eastern Cape Executive SEDA was happy with our business plan and our funding was approved. And in April 2019 we received the funding for the Equipment and Renovation of our warehouse.
Where do you see the company in five years?
Our 5 year strategic plan is to grow our foot print to a National Footprint and also growth in our retail foot print. I want to be able to walk into any major retailer in the country and pic up a Khaya’s Kitchen product.
What message would you give to people who also want to enter the food retail industry?
Retail is a tough space. Legislatively especially in the food space. I would say get to know the legislative side of supplying retail, educate yourself on all requirements. The space is saturated with products, find your niche and perfect it.
For us once we got going the production element because easier because it repetitive but the legislative requirements change all the time so you have keep on top of them.
How does the business manage to make its profits?
Retail is a numbers game. Unlike restaurants and catering where you can make 100% Markup 150% markup on products. Margins in retail are lower per product. So every single cent counts. How you buy and negotiate you costs with suppliers impacts your margins. Volume of what you are able to sell in store also matters. So its important to look at what is out there. Whether your product packaging and price point is competitive with what is available in the market.
Its best to aim for lower margins (30%) and move larger volumes than to aim for large margin (50% up) and sell less volume. Unlike a restaurant or caterer you are not selling your product to the end user. You are selling your product to a retailer who still also wants to add his own margin on the product. And if your margins are too high you might end up out pricing yourself from the market.