SOUTH AFRICA – Investment giant Remgro, one of the toughest operators in the country’s hard-boiled corporate sector, is showing a sweet side.
On Monday, it was confirmed that Remgro’s venture capital arm InVenfin has taken a significant minority stake in DV Artisan Chocolate, a Paarl-based chocolatier.
The deal probably represents a sliver of Remgro’s R150bn investment portfolio, and is unlikely to sweeten yields to shareholders in the short term.
But Remgro sees “significant potential” in the specialist chocolate market, and views DV Artisan as an “excellent investment opportunity”.
DV Artisan produces chocolate from cocoa beans sourced directly from African cocoa farmers, and CEO Pieter de Villiers hopes — with the help of InVenfin — to grow the company’s retail footprint.
DV Artisan’s chocolates are already in Woolworths and there are talks to develop the company’s own concept stores.
Remgro has been a major investor in food brands — holding a controlling stake in JSE-listed RCL Foods and an influential stake in consumer brands giant Unilever.
Interestingly, InVenfin — which is largely seen as a technology investment hub — already has exposure to food investments via interests in Rooibos tea-based soft-drinks specialist BOS and Le BonBon, a confection specialist.
Although DV Artisan is clearly a small investment, Remgro’s ability to build up brands from scratch cannot be discounted.
The company built its fortune on creating best-selling tobacco brands — but also enjoyed enormous “start-up” investment success in businesses such as MediClinic International, Vodacom and Seacom.
“One of the biggest trends in the confectionary world right now is the bean-to-bar chocolate movement,” InvenFin director Stuart Gast said.
The trend was for chocolate manufacturers to produce organic, certified, single-origin chocolate bars made from whole beans sourced directly from the cocoa farmer.
“Specialist companies like DV Artisan are the kind of food and beverage producers we want to support, not only to unlock the potential of their individual businesses, but also to create a worldwide awareness of the spectrum of intimate, original and personally run food and beverages operations in SA,” Gast said.
June 14, 2016; http://www.bdlive.co.za/business/retail/2016/06/14/remgro-hits-sweet-spot-with-chocolatier