Once an Ital­ian, al­ways an Ital­ian

Just in time, the mark of Scoot­ers’ suc­cess

Finweek English Edition - - Business Strategy - CHIMWEMWE MWANZA

Wrea­sons for Scoot­ers’ suc­cess.

But given that its de­liv­ery ser­vice would stretch the bot­tom line of a po­ten­tial en­trant in this com­pet­i­tive mar­ket, how did Gon­zaga plan to mit­i­gate that? “Scale was al­ways go­ing to be crit­i­cal. We had to ex­tend our foot­print to cater for even the most out­ly­ing ar­eas. The idea was to have at least a Scoot­ers out­let closer to our tar­get mar­ket so that our de­liv­ery peo­ple didn’t have to drive far.”

Soon af­ter open­ing the first Scoot­ers fran­chise in Dur­ban, Gon­zaga was open­ing new out­lets at a fast rate. “On av­er­age we opened one store ev­ery 22 days and this went on for about six years,” he says. Eight years into the busi­ness Scoot­ers now has 126 pizza fran­chise out­lets through­out SA.

The suc­cess of Scoot­ers un­earthed Gon­zaga’s brand­ing skills. In ad­di­tion to the fledg­ing Scoot­ers, he pitched a suc­cess­ful of­fer in April 2005 to buy Maxi’s, a 23-out­let restau­rant chain. He re­cently added NWJ, a re­tail jew­ellery chain, to his port­fo­lio of com­pa­nies. (In its 17 April 2008 edi­tion Fin­week re­ported on this ac­qui­si­tion, which does not form part of the group’s core op­er­a­tions.) HAT WOULD COM­PEL a grad­u­ate lawyer to dump his de­gree for a less plum job in the vastly over­traded food re­tail sec­tor? That’s a ques­tion Carlo Gon­zaga, CE of AltX-listed Taste Hold­ings – made fa­mous by, among oth­ers, its Scoot­ers Pizza prod­uct – bat­tles to an­swer. That Gon­zaga barely had any ex­pe­ri­ence in the fast food in­dus­try when he de­cided to be­come a De­bonairs Pizza fran­chisee in 1996 baf­fles the mind.

“You need not take an Ital­ian to school to teach him how to cook,” he chuck­les. Gon­zaga is right. Ital­ians are known world­wide for their love of pizza and pasta. “And they’re bet­ter cooks, too,” he’s quick to add. That per­haps is a fit­ting ex­pla­na­tion for his de­ci­sion to part­ner his fa­ther in a De­bonairs fran­chise busi­ness soon af­ter he com­pleted his law de­gree at the Uni­ver­sity of Natal.

Four years into his stint at the De­bonairs fran­chise, Gon­zaga and his fa­ther sold the busi­ness to ex­plore other op­por­tu­ni­ties. He briefly toyed with the idea of set­ting up a busi­ness to sell hair cos­met­ics to blacks, but the fact he didn’t have di­rect knowl­edge of that con­sumer mar­ket prompted him to aban­don the idea.

“I’m pas­sion­ate about food,” he says. But Gon­zaga knew that pas­sion alone wouldn’t be enough of a pre­req­ui­site to crack the com­pet­i­tive fast food in­dus­try. In fact, De­bonairs – which has turned out to be Scoot­ers’ big­gest ri­val – had the mar­ket al­most sewn up, thus clos­ing ev­ery pos­si­ble op­por­tu­nity for new en­trants.

Aware of the chal­lenges, Gon­zaga’s busi­ness strat­egy fo­cused pri­mar­ily on po­si­tion­ing Scoot­ers in the broader mid­dle LSM mar­ket. But to achieve that he had to be in­no­va­tive – hence the con­cept of a free de­liv­ery ser­vice when buy­ing his piz­zas.

“From a con­sumer per­spec­tive, we’re fun­da­men­tally a pizza de­liv­ery busi­ness – which ex­plains why we aren’t con­cen­trated in shop­ping malls. Our recipe is also dif­fer­ent from the com­pe­ti­tion. How­ever, most im­por­tant is that our de­liv­ery wait­ing pe­riod is a max­i­mum of 39 min­utes, or it’s free,” says Gon­zaga, adding the con­ve­nience of free de­liv­ery has been one of the most telling “The strength of our busi­ness lies in the depth of tal­ented peo­ple we have.”

To fund his ag­gres­sive ac­qui­si­tion and growth drive, Gon­zaga opted to list Scoot­ers, Maxi’s and NWJ on the AltX through its hold­ing com­pany, Taste Hold­ings. The com­pany’s com­bined staff head­count now stands at 47 and it in­di­rectly em­ploys 3 300 peo­ple. Taste’s pro­jected rev­enue is ex­pected to top the R500m mark this year.

Looking back, Gon­zaga cites his de­ci­sion to launch Scoot­ers as the turn­ing point. “I had a choice to ei­ther take on the es­tab­lished ser­vice providers in the fast food in­dus­try or get to prac­tise my law ca­reer – and I opted for the lat­ter. Looking back, I wouldn’t do any­thing dif­fer­ent. In fact, I don’t re­gret the path I took.”

Did Gon­zaga have a men­tor? “I didn’t have one. I’m just grate­ful my fa­ther al­lowed me to make mis­takes – some too grave – when we part­nered in the De­bonairs ven­ture. My ad­vice to emerg­ing en­trepreneurs is that they mustn’t lis­ten to all sorts of ad­vice when em­bark­ing on a ven­ture.”

Pas­sion­ate about food. Carlo Gon­zaga

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