Engen Petroleum judge, Zeeshaan Abbas, immediately asked Andile about his capacity. Andile reiterated that his current capacity is 400 units per month or 60 units per day. However, as stated earlier, with the average working month being 22 days, 400 units per month actually works out to 18 units a day. A big oopsie on Andile’s part.
Zeeshaan goes on to ask Andile about demand for his product. Can Andile sell the full production capacity of 4 000 units per month should he win the competition and purchase the equipment he needs to achieve this capacity? Andile answers the question well by naming the potential take-off agreements he has in place with retailers should he be able to produce the volumes they require. Zeeshaan interrogates this further to understand if Andile has simply had conversations with the retailers or if the retailers have in fact “signed up” for the volumes Andile is aiming to produce.
Andile finds himself in a catch-22
situation in which he cannot secure contracts from retailers until he has compliance certification for his premises, and he cannot afford the certification unless he sells the necessary volumes to the retailers. Should he win, he proposes to use a portion of the ENGEN Pitch & Polish prize money for this certification.
Following this exchange, Zeeshan expresses concern about Andile’s current standards of production if he does not have the necessary certification. Andile responds that his premises are compliant in terms of his current levels of production. Zeeshaan does not seem wholly convinced.
Incubation programme promiscuity
Nedbank judge, Monique Chinnah points out that Andile has previously participated in a business-development programme, and asks him if the programme had any impact on his business. Monique is probing Andile’s ability to apply new knowledge and skills he learns into his business. Given the financials Andile submitted as part of his entry into the competition, along with the current state of his business, on the surface it does not appear as though he has applied any learnings from the programme. Monique is likely wondering how the first prize – consisting of R650 000 in cash and a Raizcorp incubation programme – will help Andile. Andile responds that the Covid-19 pandemic and associated lockdowns impacted engagement in the programme and, by association, its effectiveness. Monique seems unconvinced.
Monique is trying to understand Andile’s brand architecture since there seem to be two brands, namely, Sasanti King and Well n Well. Sasanti King has a website but Well n Well does not. Andile says that Well n Well is the product while Sasanti King is the company. At the time of the pitch, though, the Well n Well products did not appear on the Sasanti King website. Andile goes on to explain that he plans to increase his Well n Well product range to include indigenous herbs. This is a confusing response as he does not relate his potentially expanded product line back to the Sasanti King brand. Andile is effectively building out two brands and, as a startup business, this will surely confuse the market and also dilute Andile’s focus and his budget.
Product shelf life
Raizcorp judge, Allon Raiz asks Andile about the shelf life of his product. The reason for the question is to understand the potential wastage that may occur over time. Generally speaking, the shorter the shelf life of a product, the more wastage is incurred. Allon would have been concerned about whether or not Andile has costed this wastage into his product. Many small businesses in the food sector neglect to cost wastage and, as a result, charge the wrong pricing and remain in a cashflow crisis indefinitely.
Allon follows up with an enquiry about Andile’s distribution strategy. Low volumes of low-value items become incredibly expensive to distribute – particularly if the product is perishable. Andile says that when he sells online, he will sell four-packs as the minimum order quantity. However, given the distribution cost of a four-pack and the probable lack of cold chain, his distribution cost is likely to be too high for consumers to purchase his four-packs online.