Caffeine courage

Holdings for a pittance last year. It paid just R7m, compared with the R226m Taste paid for it in 2015.

Maizey is determined that a global pandemic and SA’S worst economic conditions since the Great Depression won’t derail his team’s ambition.

But independent analyst Anthony Clark says Rand Capital Coffee has “a lot of guts” to try to succeed with Starbucks in SA, given the costs associated with the brand.

“Starbucks didn’t work the first time because it’s expensive to establish in a country. The model involved expensive destination stores paying high rent. You need to invest a minimum of R250m to establish it in SA and I would question if the consortium has the funds to take Starbucks to that level.”

And Clark says the days of destination coffee stores look to be over, especially given the restrictions around operating while the Covid-19 pandemic persists.

“The social-distancing measures mean queues will be longer. I’m not sure how many people will want to queue for a premium coffee and pay R40 when they can go to competing coffee shops who may serve them quicker and whose branches may be closer to home,” says Clark.

The first Starbucks branches opened in Rosebank in Joburg, and the Mall of Africa in Midrand.

But Taste ran into challenges as it tried to make a success of Starbucks while also managing other assets, including Domino’s Pizza.

Eventually Taste’s food arm went into liquidation. A consortium led by Maizey, who was born in SA but now lives in California, snapped it up late last year. Maizey insists that Starbucks deserves a second chance. He is determined not to repeat Taste’s mistakes.

“Taste didn’t get enough scale with Starbucks. It was managing too many brands at the same time and had problems with its balance sheet. We believe Starbucks is a global brand which requires focus to get right in a new developing market like SA.”

Maizey sees Starbucks SA as a start-up that will need capital and attention. “I believe Starbucks can succeed and I’m personally invest