Founder and owner of one of South Africa’s leading natural and organic distributors, and publisher of the country’s top trade magazine for the food and beverage industry, Bruce Cohen is that rare breed, an entrepreneur- influencer – both deal-maker and commentator. Plugged into the South African natural products scene in a way few others are, he offers a unique 360 degree view of the market, with all its opportunities and challenges. He talks here with NPG editor Jim Manson
Natural Products Global: Did you get into the natural products industry for purely business reasons, or was it partly a lifestyle choice? And what was the idea behind Absolute Organix?
Bruce Cohen: I got into this industry by accident. In 2004, after 30 years in media, the last 10 on the dot.com boom/bust rollercoaster, I found myself jobless. For reasons that are still unclear to me, I impulsively decided that hemp had a great future (turns out I was right, just early), so I bought a tiny retailer/importer of hemp products. I soon realised that I had chosen a new career mostly in Rizla papers and brightly-coloured bongs with a loyal customer base of always-high but-poor Rastas (the business was called Irie Hemp).
In this haze, the one bright light was organic hemp seed oil we were importing from Austria and which had gained some traction in a few local health stores. So I packed away the bongs and started to build a wellness business around hemp oil, adding more products, and slowly Absolute Organix emerged as a lively natural and organic enterprise.
NPG: And if we fast forward to 2018?
Today AO distributes over 500 lines, most of them under our own brands, to health and food stores, pharmacies and health professionals countrywide. Each brand occupies a specific niche. So there’s Absolute Organix for (mostly) certified organic oils, Lifematrix (a range of specialist, clean protein powders), Truefood (a range of pantry basics … seeds, legumes, flours etc along with some superfoods like maca and moringa) and BioBodi (a bodycare range based on organic hemp seed oil – I haven’t entirely lost my roots!). We also import and exclusively distribute some top-end international ranges like Holle organic infant foods from Switzerland and Garden of Life wholefood supplements from the USA. In addition, we are agents for around two dozen other local/international ranges which tops up our wholesale basket.
But we’re not just a brand owner and distributor, we also have manufacturing capacity. We have our own oil press as well as blending/packaging lines for oils and dry goods (both of which are certified organic by BCS in Germany – we have been certified continuously for the last 14 years). We import ingredients from around the world, like organic coconut oil from Mozambique/Sri Lanka, organic coconut sugar from Bali and organic apple cider vinegar from Spain, and develop and package our own products.
And we have a digital label printing set-up, all of which makes us pretty nimble when it comes to developing new products and putting them into the market quickly. We can do a lot ourselves because of this vertical integration (from product idea to sourcing ingredients to blending, packaging, labelling and, finally, sales). It also means we can offer turnkey contract manufacturing, an area of future growth as we see increasingly that retailers want customers to take their brands home.
NPG: What do you enjoy most about running a business in the natural products arena – what gets you out of bed each morning?
BC: Being able to turn ideas into products quickly and test the market is what really turns me on about the business. I look at my factory as a toy box and feel really lucky that I get to play around with all these fabulous ingredients we work with. Of course, it’s never that simple in the food industry; over the years we have become increasingly obsessed with food safety, and compliance has become a big part of our daily lives. Being organically certified is small change compared to developing and implementing HACCP and other food safety protocols on a day to day basis.
“Being able to turn ideas into products quickly and test the market is what really turns me on about the business. I look at my factory as a toy box and feel really lucky that I get to play around with all these fabulous ingredients we work with”
Right now we are in the midst of a merger with another leading natural/organic distributor. When finalised, it will more than double our product offering and deepen our penetration of the wholefood/artisanal food segment of the market, which is relatively robust despite tough economic conditions.
NPG: You say you started out in media, but you’ve still got a hand in, haven’t you?
Yes, I wear two hats. On the one hand, I run the Absolute Organix business; on the other, I have been (for the last three years) the editor/publisher of Food & Beverage Reporter, the leading B2B magazine for the foodbev industry in South Africa. It’s been around for 20 years and reaches deep into the mainstream of the industry. So I guess I’m fortunate in that, through both businesses, I have a pretty unique window onto the entire industry, not just the natural sector. I’m curious, I have a short attention span and like learning new stuff, and it’s been an eye-opener, for example, to discover how big and important the flavour industry is, or to see new technologies like HPP (high pressure pasteurization) extend shelf life and food safety.
NPG: Can you tell me about the natural and organic market in South Africa, and perhaps place that into a slightly wider context?
BC: The reality is we straddle both the first and third worlds from a food perspective. We have savage unemployment and dire poverty on a large scale, with a huge “informal” sector of food production and distribution that sits largely outside of the regulatory environment.
But we also have a sophisticated, regulated manufacturing/retailing/hospitality sector (you just have to visit Cape Town for a few days to see how globally “on-trend” the city’s food buzz is). And inside this sector sits the wholefood/organic/artisanal foobev scene (you really want to try our craft gins!).
So natural/organic is a relatively small – but vibrant – sector, and it’s elitist in the sense that the vast majority of the population simply cannot afford options like free range/organic. Real food, like real health, just does not come cheaply these days.
This leads us to one of the biggest challenges facing the country. Obesity levels are through the roof while other lifestyle illnesses (heart disease, type 2 diabetes, cancer) are climbing at terrifying rates; all this on the back of a health system overwhelmed with diseases like TB and AIDS.
Underpinning this shocking health profile is a shocking national diet: the staple food of the majority of South Africans is a nutritionally-poor (some would say nutritionless), refined porridge made from genetically-modified maize, topped up with the cheapest of cheap proteins (processed meats – recently linked to the worst recorded listeria outbreak that killed 200 people) and all washed down in an ocean of sugar-drenched soft drinks. For snack time, there’s tartrazine-laced “naks” made from extruded GMO-corn. It’s a diet from hell, and millions of people are trapped in it, and I just don’t see how we break this viscous cycle. It just going to get worse until we have a government with the balls to face the ugly truth and not hide behind FAO/WHO missed targets and platitudes.
So that’s a major trend that scares the hell out of me.
NPG: So where is the new thinking about health coming from in South Africa, and what have been the biggest trends you’ve seen in recent years?
A much more positive trend has been the emergence of South Africa as a real leader in the low-carb-high-fat diet trend, thanks mainly to the work of Cape Town scientist, Professor Tim Noakes, who coined the term “Banting” to popularise the ketogenic diet. His book The Real Meal Revolution became a huge bestseller in South Africa, getting tens of thousands of South Africans to abandon their high-sugar diets and start eating “good fats” like butter and that have for decades been demonised as artery-clogging poisons.
Noakes was pilloried by the medical and dietary establishment for his views, and he endured a medical kangaroo court for two years before being exonerated earlier this year.
So keto diets are big in South Africa. Because they work for a lot of people. They shed weight. Their diabetes evaporates. They get off their meds. It’s resulted in huge growth in demand for animal fats like butter and lard, as well as for “good” oils like coconut and macadamia. And a slew of low-carb products have entered the market, variously described as “Banting-friendly” or “carb-clever”. Grain-free is a big part of this diet, too, so demand for almond/coconut flours as well as seeds and nuts has been pretty impressive, which has been good news for the health food sector (interestingly, one of our most successful lines is an MCT oil which helps “Banters” get into and stay in ketosis).
“ … keto diets are big in South Africa. Because they work for a lot of people. They shed weight. Their diabetes evaporates. They get rid of their meds. It’s resulted in huge growth in demand for animal fats like butter and lard, as well as for “good” oils like coconut and macadamia”
I suspect that as the evidence against sugar continues to grow (and there’s no sign of it slowing down), low-fat, high-carb products (ie sugar-drenched) will quietly recede from the middle-class diet though it never ceases to astonish me to see how packed the supermarket aisles still are with high-sugar breakfast cereals and low-fat – i.e. crazy amounts of sugar – yoghurts.
NPG: And do you see other trends pushing through?
BC: The vegetarian and vegan trends are also on an upward trajectory here, and vegan is especially “cool” these days as consumers raise red flags against animal farming and its effect on global warming and planetary survival.
Of course, there’s also a strong personal health motive as well, backed by a growing plant-based diet activism. Put it all together with a revulsion against industrial-scale farming methods and the resultant cruelty to animals, and you have a compelling push towards vegan and vegetarian diets that reaches far beyond the yoga-loving hard-core. Vegan alternatives to meat and cheese and milk are increasingly appearing on the shelves and it all ties in well with the “discovery” of nutrient-dense plant “superfoods” (maca, moringa, cacao, quinoa, chia, turmeric etc), all of which have helped keep health stores busy.
At the same time, plant proteins have come into their own. We are successful with a number of “clean amino” options such as brown rice, hemp and yellow pea. One local company. Fry’s, has taken its vegan “meat” offering international with an innovative range of meat-look-alikes.
On the protein front, my business has also carved a niche for itself with specialist animal proteins, such as colostrum, egg-white and collagen. Our latest offering is a collagen blend (type I and II from beef and chicken) in a ready-to-drink broth (a cuppa collagen). And I’m watching the insect protein opportunity carefully, too, and recently joined the board of a start-up in Cape Town manufacturing “ento-milk” from larvae (www.gourmetgrubb.com).
NPG: Can you talk about how distribution works in South Africa, and the type of retail mix you have?
BC: There’s one supermarket chain here, Woolworths (not the same as the UK version), which has spearheaded the mainstreaming of organic and natural products, and has been remarkably adept at capitalising on trends like low-carb and vegan, putting good quality (expensive) own-brand products onto their shelves to meet demand. Out of nowhere we are seeing wasabi seaweed and broccoli chips in the snake aisles! (They are also a key outlet for Holle organic infant formulas which we distribute in SA).
Recently the Spar supermarket group entered the wellness category with a “Spar Naturals” programme for a number of upmarket franchisees who have opened up aisles of health foods typically only found in health stores. Another player to watch is a fast-growing chain called Food Lover’s Market, which also has ambitions in this “real food” space, but whose CEO recently laughed off organic as simply being unaffordable for his customers.
The star of the health food show in the last decade has been a discount pharmacy chain called Dis-Chem, which now has over 125 stores countrywide. They early on spotted the opportunity in the natural/organic category and started offering a big range of branded and own-label products at low prices. The discount model has worked very well for them.
At the premium end of the retail spectrum is Wellness Warehouse, a specialist independent chain (around 30 stores) that stocks high quality natural and organic products. They have carved out a niche with exclusive international imports like the UK’s Rude Health and Biona. Although the tough economic climate has tempered their expansion, they are a key trend-setter in the sector.
NPG: And what about the traditional independent health food stores, how well are they faring in fast changing retail environment?
BC: The old style, owner-operated suburban health store has been under pressure for some time. But they are by no means dead. Well-run stores staffed by people with real knowledge continue to do well, especially those who have blended retail with a restaurant offering. If anything, the weaker ones have been thinned out and what’s left is a pretty robust band of “wellpreneurs”.
As consumers increasingly question the conventional wisdoms about diet and health and start taking control over their own wellbeing (a truly global trend), so the market for natural/organic continues to expand, and we are daily getting new customer applications from people either opening health stores (often in smaller towns or online pureplays), or from a growing cadre of “foodies” opening healthy eateries who want to combine their hospitality offering with retail, or just source key ingredients from us for their kitchens.
NPG: And from your own business’s perspective, and the wider industry too, what do prospects for the future look like?
BC: Overall, despite the hideous business climate, the political uncertainty, the terrible poverty and the jaw-dropping crime, South Africa is an exciting place to be an entrepreneur and the natural/organic sector offers pretty decent scope for growth and innovation, especially when you consider that it is only now that a health-conscious black middle class is emerging out of the wreckage of apartheid. There is business to be done with the hope that things will get better, and whatever does not kill us will make us stronger.