Famous Brands extend its portfolio

Famous Brands has extended its Theatre of Foods portfolio with the creation of a new business, Creative Coffees Company (‘Creative Coffees’), and thereby introduced a new strategic direction for the Group’s House of Coffees and Juicy Lucy brands.  With effect from 1st May, the trademarks and franchise agreements of the House of Coffees and Juicy Lucy brands will be moved into Creative Coffees and merged with the business of Kairuz Holdings (Pty) Ltd, a company that specialises in servicing the retail and food offerings in the private hospital industry.  Famous Brands will retain a 61% controlling shareholding in the new company.
Darren Hele, Chief Operating Officer: Franchising for Famous Brands says, “The rationale of our Theatre of Foods division is to pair a strong brand with a strong partner in a joint venture arrangement.  Brent and his team are innovative and energetic and have achieved notable success in their niche category.  The combination of their experience and expertise with House of Coffees’ and Juicy Lucy’s well-loved offerings will ensure that these brands achieve their true potential.”

Kairuz currently operates restaurants in eight private hospitals countrywide, including the prestigious Coffee Couture café at the Morningside Medi Clinic, a premier hospital in Gauteng.

Kairuz says, “The hospital coffee shop is a convenience offering rather than a destination option for the consumer.  By adapting and enhancing well-known brands such as House of Coffees and Juicy Lucy into these trading environments we will be able to optimise the trading potential of the conventional offering and simultaneously improve client satisfaction.”
“The new joint venture instantly affords fully supported structures and resources to Kairuz Holdings nationally, thus adding great value to existing franchisees of the Kairuz network and the hospitals in which they trade,” comments Kairuz.

He adds, “South Africa’s urban footprint is continually developing and with it, an ever-growing need for premium health care. The multi-branded solution which we can now offer landlords is an attractive one and positions Creative Coffees well for opportunities which arise in this expanding market category.”

Hele notes that the establishment of Creative Coffees is part of the Group’s comprehensive strategy for the broader coffee category.  He says, “In 2009, Famous Brands acquired Mugg & Bean, the leading brand in the casual dining coffee themed category.  Given the size of that brand’s franchise network and its strong consumer equity in the mainstream environment, a deliberate strategy was employed by the Group to continue to grow the network, and where appropriate, convert certain House of Coffees’ restaurants to Mugg & Bean franchises.  Following this conversion programme, a total of 15 House of Coffees restaurants remain, which provided an opportunity to review the positioning of the brand and grow it within a new niche.”

“Creative Coffees will continue to leverage the presence that House of Coffees has in place, but will be positioned in a separate niche to that of Mugg & Bean.  The strategy will be to grow the business’s existing base and extend that presence into the private hospital arena, a sector which has traditionally been fragmented and dominated by independent operators,” comments Hele.

Hele adds “Consequently, while Mugg & Bean is our mainstream coffee brand, we are confident that there is significant opportunity for House of Coffees as a challenger brand in the category.  Key to the success of the business will be House of Coffees’ strong, recognisable positioning and the fact that its trading formula is easily adaptable to opportunities in the private hospital environment.”

In terms of Juicy Lucy, Hele says, “This brand has been in existence for 40 years;  Juicy Lucy pioneered a niche in the health-centred convenience food category, and whilst it has lost its way over time, the potential to restore this offering to its former status is evident, particularly given the current shift by consumers to health-conscious eating.”

Juicy Lucy currently trades out of 17 franchised restaurants nationally.

Hele says, “Within the new company, Juicy Lucy’s network will be expanded into the private hospital environment and other opportunities will also be explored in the broader healthy-living category, such as gyms.”

“This Creative Coffees transaction has tremendous potential.  It opens up a new market segment for the Group and under the dynamic management of Brent Kairuz and his team we foresee the business going from strength to strength,” concludes Hele.