|New kids on the food outsource block|
|Saturday, 04 October 2008|
Andrew Havinga and Sandy Ramsay are celebrating a year in business, having set up their new outsource food packing company, CoSo, last June. This article reviews this fledgling, but thriving, Midrand-based operation.
'Of course, we're still “laaitjies” in this game, but so far, so good . . . our machines are running 24/7, we have some great customers, we're about ready for external ISO 22000 and HACCP accreditation and we're on a fascinating learning curve,' comments Sandy Ramsay, co-founder and director of CoSo, on its first anniversary.
And he can well be pleased with their progress in founding a capital-intensive operation that is remarkably complex in several ways: in establishing customer trust and viable business contracts, as well as the management of food safety and supply chain issues.
Both set for successful corporate careers, Sandy (32) and business partner, Andrew Havinga (29), took the entrepreneurial plunge some 18 months ago in mutual recognition that there was major opportunity in outsourcing in this country, with South African manufacturers well behind Europe or America in recognising its value.
'The consumer needs of today and what manufacturers can deliver stand in stark juxtaposition,' says Sandy. 'Consumers want variety, flexibility, convenience, innovation, choice, speed, health and wellness. However, the historical structure of manufacturing operations – characterised by inflexibility, long lead times, long manufacturing runs, a focus on core product, production-led innovation, strained capacities and physical location limitations and so on – means the two just don't meet. Outsourcing fills this gap, and this is why it's becoming more prominent on the food industry landscape.'
The scope of outsourcing has expanded dramatically in recent years, and so too, has boardroom recognition of its benefits, adds Andrew: 'These range from simple cost reductions to dramatic improvements in efficiency and productivity. Many customers have started to appreciate that their value is inherently held within their brand, and to focus resources and time on maximising the brand's equity makes more sense, as opposed to diverting those same resources and time to manufacturing and packing all of the variants demanded by consumers. Outsourcing lets companies focus on core competencies and where their value can be maximised, to increase efficiency without having to invest in people and technology for non-core products or services.'
The two directors have yin-yang sets of skills and experience. Andrew is an industrial engineer and was previously national procurement manager at Simba, while Sandy, with a BA Hons in industrial psychology, was previously sales director of Nampak Flexible. A natural salesman, he brings with him key knowledge of the packaging industry, contacts and relationships with the decision makers in CoSo's multinational FMCG target market, while Andrew has astute understanding of engineering and supply chain issues.
CoSo's current focus is on dry foodstuffs, but this is not necessarily where it will stop. There's plenty of room for expansion within its 1 600m2 Midrand plant, with sufficient warehousing space and a production floor that has been modified to meet exacting hygienic standards. The company works to both outsourcing models: offering a fully-sourced, total solution from product concept to delivery to retail; or on a toll basis, where the customer provides all the raw material and CoSo converts/packs it.
More than 'who you know'
Business is all about networking, and Sandy's past relationships with large multinationals has seen them win the trust of several blue chip customers, Unilever, Tiger Brands, Entyce (National Brands), Nestlé and McCormick among them. In the food industry, it doesn't get bluer than that, but Sandy is quick to acknowledge that the 'who you know' is but part of equation: 'Essentially, we believe our point of difference is in offering a total packing solution that aligns to our customers' own internal standards around food safety – management of these risks has moved dramatically up the agenda in recent years. We have invested substantially in offering this peace of mind, and we'll soon be ready for our first external ISO 22000 and HACCP audits leading to accreditation.'
Another aspect of the CoSo equation, Andrew adds, is striving to service that exceeds expectations when it comes to flexibility and supply chain efficiency; and in effective partnering with customers: 'By doing this from NPD concept stage, we can help drive packaging decisions, product delivery timelines and differentiation on shelf within a reduced timeframe.'All co-packers and their clients will agree that establishing trust and open communication in an outsourcing relationship is vital. As Sandy says: 'You have to understand your customer's corporate culture and your own – consensus is much easier if you understand each other's point of view. And if there's bad news, you have to get it out in the open immediately. Communicate often and speak plainly is our mantra.'
One of the greatest challenges facing any entrepreneur is managing the uncertainty inherent in trying something new. In order for a venture to work, an entrepreneur must identify a good opportunity, possess the technical skill to develop the service, technology or product, have the business skill required to raise capital, manage day-to-day opportunities, and commercialise the opportunity. It would appear that Messrs Ramsay and Havinga have ticked all these boxes and taken the first vital steps in achieving their ambition to be a world-class company that offers a world-class service. PPM shall watch their progress with interest.
CoSo T +27 011 3147171
Horizontal sachet filling, minimum 100mm x 70mm sachet size, to 200mm x 140mm maximum.
VFFS filling, handling side-gusseted and block-bottom bags in volumes up to ten litres and bag widths of 260mm and lengths of 410mm.
Semi automatic line for rigid containers, in varying sizes from 50g to 2kg.
Stick-pack filling capability – 35mm sachet width with varying pitch.
Volumetric and auger feeding capability.
Safeline metal detector.
CoSo has a strategic partnership with an accredited seasoning house for raw material sourcing and blending. All quality and lab requirements are provided by this supplier.
First published in PACKAGiNG & Print Media magazine, July 2008, written by Brenda Neall.