adminJohannesburg — Actis is investing R760 million into Food Lover’s Market to boost its local growth potential and is acquiring a substantial minority stake at the same time. Actis, which invests in emerging markets, announced the move in a statement on Friday. The company notes Food Lover’s Market is one of the last few independent food retailers of scale on the African continent.
“It has a strong brand and a growing footprint across Africa.” The trendy fruit, and vegetable retailer has more than 120 outlets in 11 countries and has been adding additional offerings such as bakery, grocery, butchery and deli foods.
The retailer started out in 1993 as Fruit & Veg City and was founded by brothers Brian and Mike Coppin and is now thought of as the largest independent food retail group in Africa.
The group also operates more than 200 FreshStop convenience stores in Caltex service stations, Market Liquors, a convenience liquor offering, an import export business and has recently acquired artisanal coffee brand, Seattle Coffee.
Actis’ investment in Food Lover’s Market includes funding into the business to continue its growth in South Africa and other countries within sub-Saharan Africa.
Actis director David Cooke says “Brian and his team have carved a niche in the South African food retail landscape, offering a distinguished value proposition to aspirational consumers looking for high quality products at real value. We look forward to working together to continue the group’s growth story and expanding further within Africa.”
Actis notes food has great growth potential as it is the largest retail sub sector in the South African economy, valued at $35 billion, or the equivalent of (R471 billion as it historically grows at 9.5 percent a year.
However, the sector is under pressure as South Africa’s worst drought in more than two decades means staples such as wheat have to be imported, which is pushing prices up. Retailers have been absorbing some of the hikes, but cannot do so indefinitely given the very weak levels of the rand.
Actis has a history of backing high-quality food retail businesses in other emerging markets including supermarket chain, Companhia Sulamericana de Distribuição in Brazil and Nigiris, one of India’s best known food retail brands.
The latest deal is its fourth investment in South Africa in 18 months, following its recent investments in Coricraft, Tekkie Town, and CSH, a credit bureau and information services business.
Actis will be backing the Coppin brothers as they grow the business further.
Actis, which has been around for more than 65 years, has a growing portfolio of investments across Asia, Africa and Latin America and $7.6 billion in funds under management. — IOL
Online Reporter
Londile Moyo