Profile

2022
An Integrated Retail
Model.
 002 <<<< Business Plan 2020

Background & Inspiration

Matome Maponya Investments’ foray into the retail market Mr. Maponya, even in this age of rapidly changing technology
was spearheaded by Matome Maponya and his wife Mahlako and consumer buying behaviours, remains firmly committed
in 1976 with a particular bias towards the meat industry. to engaging as many of our client base physically and insists
Even under the discriminatory regime of the time, Maponya on his team to do the same as no amount of academic
Meat Market found creative avenues of delivering meat to research can replace insights gathered by engaging day-
hospitals, universities, prisons and schools. to-day consumers of the vast catalogue of meat and meat
processing products.
It was during this period that a young Kholofelo Sekepe
Maponya refined his knowledge of optimising small One of the best investors of our times ,Mr. Warren Buffet ,has
warehouses, as blacks were not allowed to trade in larger the same philosophy about companies he ultimately invests
warehouses. This experience honed Mr.Maponya’s skill of in which loosely explained is:”
capacitating small space for meat processing as demand
grew when the business secured large trading and catering
contracts mostly by word of mouth.
"Meet the management teams
of possible investee companies
These contracts also stretched Mr. Maponya’s ability to
deliver quality meat products at scale, with superior quality to measure how far they are
,competitive pricing and more importantly, at the right
time. In most instances, Mr. Maponya exceeded customer
willing go for their customers
expectations by also embarking on direct deliveries.
but do not just stop there,
Armed with this knowledge, Mr. Maponya is not only well- engage their customers directly
positioned to execute Just-In-Time deliveries but is also
one of the pioneers of what is now designated as last mile
to identify the gaps”
deliveries and with the advent of technology, is primely-
It is for this reason that Mr. Maponya remains actively
placed to not only compete in that space but to continue
involved in all companies which fall within the Matome
to exceed customer expectations as someone who has
Maponya Investments structure as not just a Chairman but
executed product delivery without technology while “on-the
as custodian of investor and funder interests.
ground” with the added benefit of an in-house designed ERP
system informed by lessons from his past.
Business Plan 2020 >>>> 003

About Us
Who we are.

Learn from 2UFoods (Pty) Ltd is retail

borne out of need for a solution to
group 2UFoods was Co-Founded by Mr.
Kholofelo Maponya and Ikosi Sipho

the mistakes
solve the long history of disparities Mahlangu. Mr. Maponya, as Chairman
in how the most marginalized of our of 2Ufoods has extensive retail
population have been served and experience which began in what

of others.
mostly underserved by major retailers was known as Lebowa when he was
in South Africa. The rural and township involved in deliveries from his family
population have always been the meat market.

You can't live pillar on which the South African retail

market has been anchored on. His passion for retail did not end

long enough
there. He purchased an intergrated
2UFoods was established in various
poultry company which was
forms in 2014/15 in order to service this
financially struggling and turned it

to learn
hugely disregarded and underserved
around and reintroduced branding
part of the South African population.
in a market where the products
Our unique model is premised on
were commodified. Today, DayBreak

from yours taking essential products

a delivery mechanism at no extra
through
farms stands out and competitors
are now also branding. In the
costs to the customer. This service

only.
same spirit, 2UFoods is creating a
is standard and even expected in
respectable direct route to market
more affluent parts of the country
for an otherwise unrecognised and
and the lack of this type of service
previously considered faceless client.
in rural areas speaks to the level of
WE CARE, BECAUSE WE ARE. IT IS 2U,
indignity low-income shoppers has
BY YOU AND FOR YOU.
been subjected to for years.
004 <<<< Business Plan 2020

“Buy from a place where what you give, always

comes back to you.”

Our Promise
To You

2UFoods is premised on the commitment to deliver to our As part of 2UFoods’ contract with Muhari Logistics, the
buying member group and modular structures on a daily company has mandated Muhari to on-board other black
basis. This is achieved through an extensive retail and route suppliers with means of transportation and assist in
planning study and technology to support this commitment. capacitating them. In normal instances this would be termed
Our main supplier of logistics services is Muhari Logistics, Supplier Development however, since the growth of and
who through the efforts of Mr. Maponya in the past have inclusion of black suppliers forms a core part of our vision,
become stand-alone 3rd party logistics provider in their own this is business as usual for 2UFoods.
right with uncompromising service level agreements.
Business Plan 2020 >>>> 005

Our People
Meet Our Founders

Kholofelo Sekepe Maponya Ikosi Sipho Mahlangu

Mr Maponya is a talented businessman His Royal Highness started his own

who was forced to give up his business Vezubuhle Business Furniture
studies to fast track his foray into from 1998 before succeeding his father
the business sector due to the illness in 2005 and lead the community of
and subsequent passing of his father. Ndzundza Mabusa. He was elected
He managed to turn the business to as a member of the Mpumalanga
being a strategic shareholder in key Traditional Leaders and was elected as
South African businesses such as Afgri the Leader of the Mpumalanga House
Limited, Daybreak Poultry (formerly of Traditional Leaders to the National
Afgri Poultry) and SA Home Loans. House of Traditional Leaders.
006 <<<< Business Plan 2020

Meet Our Management

Zach Mogotsi Solly Tsiane Ramesh Masina Lindiwe Mthembu Tumi Langa
Chief Executive offcier Marketing & Aftersales Youth Enterprise Agri Business & Administration
Development Development

The 2UFoods team comprises of talented individuals Our diverse skill sets and background makes us a melting pot
whose passion for the development of rural and township of an unstoppable force, ready to take on the giants of the
communities is showcased through action. We are not only retail industry. We believe that good leadership is leading by
responsible but accountable for seeing through the vision of example an dunderstand the core of every business to be its
a changing the lives of our people for the better. people.
 Business Plan 2020 >>>> 007

Introduction
Executive Summary

The South African retail market is growing but

at subdued levels with retail spending hovering
around 2%.
The South African retail market is growing but at subdued market is located in Gauteng. This is an attractive target
levels with retail spending hovering around 2%. However, the market as the informal markets in Gauteng have the highest
specific target market of the 2U Foods Outlet Movable Panel spending power per capita of other informal markets, are
Store; which is the township & rural retail market, is growing growing the fastest compared to other markets and have the
at a much faster pace. Furthermore, the informal markets in biggest absolute size. In addition, because these informal
Gauteng are set to double by 2022. markets are relatively concentrated, 2U Foods stands to
gain greater benefits from utilising economies of scale to
According to Shoprite Group Integrated Annual report
leverage its value offering.
for 2019 : “80% of South Africans shop with the Group
(Establishment Survey 2018) with more than 90% of those
The 2U Foods business concept is made up of four businesses:
shoppers being township and rural markets. In addition
the 2U Foods Movable Panel Store, the 2UFOODS Direct
to this, the group has reported some its highest historic
Distribution Centre, the 2U Foods Buying Group and MMI
revenue during the Lockdown Period due to Covid-19.
Property, where:
What this has glaringly made evident is not only the
neglect of safety standards to protect shoppers but the
- The MMI Property business owns the Movable Panel Store
blatant disregard for elderly people an those living with
and all the equipmnent inside. This is on a no obligation
disabilities.
turnover related basis which removes the upfront capital
barriers.
The opportunity lies in eliminating the poverty penalty or the
unnecessary add-on expenses for this customer that arise - The 2U Foods Movable Panel Store owner operates the
from low purchasing power. By placing 2U Foods Movable store selling retail consumer goods, including Quick Service
Panel Stores in strategic locations, unnecessary costs such Restaurant (QSR) meals, to low-income customers.
as transport-related expenses associated with travelling to
shopping malls can be alleviated. - The 2UFOODS Direct Distribution Centre supplies Movable
Panel Stores with the retail products, bringing the benefits
The target market of the 2U Foods Movable Panel Store is of cheaper prices through of wholesale supply.
the low- to lower-middle income retail market. These are
- The 2U Foods Buying Group manages the independent
consumers with an average monthly household income of
operators and markets the 2U Foods brand to customers in
less than R9 000.
the communities of Movable Panel Store operations.

Considering the SEM classification, 51% of South African’s fall

into this income bracket. Geographically, the 2U Foods’ target
008 <<<< Business Plan 2020

The 2U Foods Movable Panel Store operator’s MMI Property’s role in the success of the
main responsibility is to operate the Outlet in 2U Foods Movable Panel Store is to provide
such a way that it is profitable. This requires the Outlet with the necessary property and
his/her ability not only to manage the stock equipment so that it can be successful. MMI
and finances of the store (which the 2U Property will lease a refurbished Movable
Foods Buying Group will provide training for) Panel Store which will have the necessary
but, more importantly, it requires the other equipment already installed before it is
businesses to perform their responsibilities handed over. The capital requirements of
in a manner that is cost- effective and the Movable Panel Store are notable in that
efficient. any expansion of the number of Movable
Panel Stores needs a considerable amount of
The 2UFOODS Direct Distribution Centre has financing.
to perform its responsibilities in bringing the
benefits of wholesale buying to the Movable Overall, it is important to stress that the
Panel Store. Specifically, this requires the success of the 2U Foods Group is dependent
Distribution Centre to manage an effective on the 2U Foods Movable Panel Store. The
supply chain that sources products at the success of the Outlet is in turn directly
lowest possible price and distributes them dependent on each business, especially
timely. the 2UFOODSDirect Distribution Centre,
performing its task effectively. The biggest
The 2U Foods Buying Group serves as the risk to the integrated business model is the
management and marketing arms of the 2U supply chain. Specifically, the ability of the
Foods Group. This role is important to the 2UFOODSDirect Distribution Centre to source
group in that, if the 2U Foods Movable Panel and distribute the required products for a
Stores are not fully prepared then they will reasonable price and at the required times.
not generate enough revenue to support the
group and, if the 2U Foods value proposition
is not adequately marketed, then the Outlets
will not have enough customers to generate
enough revenue to support the group. Thus,
the effective management of the group and a
successful marketing strategy are necessary
to generate demand and ensure the success
of the group as a whole.
Business Plan 2020 >>>> 009

Group Business
Concept

A successful business has a clear

understanding of the space it will disrupt.
The success of 2U Foods depends on catering cater for a price-sensitive market. The 2U
for an unserved need that the township and Foods Movable Panel Store will be able to
rural consumers have. The low purchasing sell at competitive prices because the goods
power of these consumers manifests itself purchased by each outlet will be bought at
in two characteristics, namely high price wholesale prices from the 2UFOODSDirect
sensitivity and higher prices per good. Distribution Centre.
By alleviating the burden of these two
characteristics, 2U Foods can better serve The second characteristic of a consumer
the community and bring value to its target with low purchasing power is what has
market. come to be known as the “poverty penalty”
(Prahalad 2010). It explains the phenomenon
A consumer with low purchasing power that consumers with low purchasing
is more price sensitive than a consumer power may end up paying more per good
with high purchasing power. As mentioned that comparable consumers with higher
above, the poorest South Africans spend purchasing power. This is because factors
about 33.5% of their income on food alone such as high logistics costs forwarded to
and above 44.4% of their income on food, consumers due a lack of infrastructure, low-
beverages and tobacco (Standard Bank 2016). income finance constraints restricting buying
Because poorer South Africans spend a higher bulk, or even stores limiting price-reductions
proportion of their income on necessities, (i.e. promotions) which are ineffective given
a price increase or decrease in the price of a consumer’s low-purchasing power, result in
these necessities has a higher impact on the effective costs of individual goods being
their disposable income. Thus, in terms of higher than the same goods in other markets.
disposable income, these consumers are very
price sensitivity as an increase in the cost of The “poverty penalty” creates the need for
their daily or weekly basket of goods means businesses to limit the factors that contribute
relatively less disposable income. to higher effective prices per good. The 2U
Foods business concept aims to satisfy this
These price sensitivity means these need through developing a supply chain that
consumers need the lowest prices possible. brings the stores as close to the consumer
By bringing the benefits of wholesale buying as possible.
power to the community, a 2U Foods Movable
Panel Store will help satisfy this need and
 0010 <<<< Business Plan 2020

A goal is a
dream
with a
deadline.

By increasing the convenience for consumers, 2U Foods will The competitive edge over 2U Foods in terms of price may not
limit the amount they have to pay for overhead costs such be substantial as existing players have established supply
as travel to and from the store or limiting the logistics costs chains that have brought existing prices down. However,
forwarded on to consumers. 2U Foods can gain a substantial advantage in bringing
convenience to customers through placing 2U Foods Movable
As seen above, the opportunity for the 2U Foods business, Panel Store in strategic locations, minimizing the overhead
specifically the 2U Foods Movable Panel Store, is catering costs of consumers and, thus, the effective price per good.
to the needy of customers through affordable products
in convenient locations. Thus, 2U Foods’ competitive edge
revolves around an integrated supply chain that brings
wholesale supply and, therefore, an affordable product and
placing 2U Foods Movable Panel Stores in strategic locations
that maximises the convenience for customers.
Business Plan 2020 >>>> 0011

Identifying
The Need and Opportunity

2UFOODS COMPETITIVE BASIS

- Formal: competitive pricing due to capitalising on
supermarket supply chain; increasing presence in
townships
- Informal: strategically located but with limited range of
goods; some can capitalise on economies of scale
through bulk buying

USAVE
Compact Supermarket 2U Foods competitive basis:
- Convenient locations
- Panic Button
2UFOODS
-Drop Safe
Unique Competing
Customer Needs - Delivery Scooter
- Minimum 7 direct jobs
- Reduced effort and time to purchase goods
- Point of Sale
- Convenience in location & on route
- Business and Systems Training
between home and work
- Standardised operating model
- Savings on cost of transportation
making it simpler
- Affordability
to comply with hygiene
standard
- Offering of both daily
necessities and QSR meals
- Bakery
- Low stockholding due to
optimized daily delivery
- Access to goods at
wholesale prices
0012 <<<< Business Plan 2020

”
For every
sale you miss
because you’re
too enthusiastic,
you will miss
a hundred
because you’re
not enthusiastic
enough.
 Business Plan 2020 >>>> 0013

HOW does 2UFoods make a difference?

Through an integrated supply chain that:
- Brings the benefits of wholesale buying to the township
- Effectively distributes products to strategically located 2U Foods Outlets
- Intermit relationships with customers
- Catering for their exact needs and recommendations
- Dynamic product offerings i.e. food & non-food items and QSR meals

WHERE is the opportunity for 2UFoods WHY has 2UFoods embarked

2UFoods to make a difference? on this?
Value
- Underserved townships and households low - Help the heavily burdened customer
purchasing power
Proposition - Alleviate some of the financial stress experience
- Convenient locations that create easy by low- to lower-middle income customers
purchases - Save them time through convenience
- Primary (Start/Finish) transport hubs - Contribute to the economy
- Create jobs and stimulate growth
- Empower black entrepreneurs

WHAT is
2UFoods'
strategic intent?
2UFoods value offering is a township and rural market convenience store that is superior to its local
competition in price and proximity. An integrated supply chain combined with opportunities for young
black entrepreneurs will alleviate the financial stress of those who live in underserved communities.
0014 <<<< Business Plan 2020

Group Structure &

Contractual
Relationships

The Buying Group

The 2U Foods business concept revolves around four businesses that

make up the integrated supply chain. These are MMI Property, the
Iriducias nobis autendenihil iducias adit
2UFOODSDirect Distribution Centre, the 2U Foods Movable Panel Stores, quostrum accus Iriducias nobis autendenihil
iducias adit quostrum.
and the 2U Foods Buying Group. This section will present the various
relationships in the group.

The 2U Foods Movable Panel Store will have contractual relationship

with each of the businesses in 2U Foods Group:

- With regard to the 2UFOODSDirect Distribution Centre, the contract will

relate to the provision and payment of stock for the 2U Foods Movable
Panel Stores to sell.

- With regard to the 2U Foods Buying Group, the contract will relate to the
provision and payment of the fee that gives the Movable Panel Store the
right to operate under the 2U Foods brand and it will also relate to the
provision and payment of the marketing of the brand to be conducted by
the 2U Foods Buying Group.

- With regard to MMI Property, the contract will relate to the provision
and payment of the Movable Panel Store used by the 2U Foods store
operator. This contract will stipulate who is responsible for the
maintenance of the Movable Panel Store.
Business Plan 2020 >>>> 0015

I got lucky because I never gave up the search.

Are you quitting too soon? Or are you willing to
pursue luck with a vengeance?
0016 <<<< Business Plan 2020

Operational Relationships.

The 2U Foods Movable Panel Store will interact with each Managing the Movable Panel Stores extends to ensuring
of the businesses in the 2U Foods Group: the operators are adequately prepared in terms of supplies
(excluding stock) and training so that they can run a smooth
- With regard to the 2UFOODSDirect Distribution Centre, operation. Additionally, the 2U Foods Buying Group is
the relationship will extend to the timely delivery of stock, responsible for maintaining the relationships among the
which the 2U Foods Movable Panel Store will sell. This 2U Foods Movable Panel Store, Distribution Centre and MMI
relationship is imperative as the timing of the delivery Property.
will be important to ensuring the Movable Panel Store is
neither overstocked nor understocked. To help with this - MMI Property will rent the Movable Panel Store to the
relationship, the 2U Foods Movable Panel Store Outlet 2UFoods Movable Panel Store Outlet. Its relationship with
will have an ERP system, which will communicate to the the 2U Foods Movable Panel Store Outlet will also extend
Distribution Centre on products needed to be topped up. to the regular repair and maintenance of the Movable Panel
Stores so that the 2U Foods operator can conduct smooth
- With regard to the 2U Foods Buying Group, the
operations.
relationship involves the Buying Group marketing the
brand and managing the 2U Foods Movable Panel Stores.

 Business Plan 2020 >>>> 0017

Operational
Relationships

Stock
Supply
 0018 <<<< Business Plan 2020

Financial
Relationships

There are three main financial outflows from the 2UFoods Outlet.
In order to simply the organizational burden of the 2U Foods
- The Buying Group fee in exchange for
Outlet, the above three payments will all be paid weekly to
marketing, managing, and the right to use
the 2U Foods Buying Group. 2UFoods Buying Group will then
the 2U Foods brand,
pass on the required amounts to 2UFOODSDirect Distribution
- The payment for stock in exchange for the Centre and MMI Property for the respective services provided
delivery of stock to sell, by them to the 2UFoods Movable Panel Store Outlet. This extra
step simplifies the duties of the 2U Foods Movable Panel Store
- The rental payment in exchange for the Outlet and reducing the financial and non- payment risks to
right to use the Movable Panel Store. the entire business concept.
Business Plan 2020 >>>> 0019

I got lucky because I never gave up the search.

Are you quitting too soon? Or are you willing to
pursue luck with a vengeance?

Conclusion
The needs of low-income retail consumers revolve around low purchasing power. Specifically, these consumers are price-
sensitivity and may pay a higher effective price per product due to excess overheads. Thus, 2U Foods’ value proposition is
centred on providing goods and meals at affordable prices at consumers convenience.

The contractual, organizational and contractual relationships are key to ensuring the 2U Foods Group runs efficiently and
deliver value for its customers. The contractual and organisational relationships differ to the financial relationships of the
group. Whereas the 2U Foods Movable Panel Store will deal with each business in the group independently with regard to their
contractual and organizational relationship, the 2U Foods Movable Panel Store Outlet will only have a financial relationship
with the 2U Foods Buying Group. It will pay a lump sum to the 2U Foods Buying Group, which will then pay other businesses
in the Group for the services provided to the 2UFoods Movable Panel Store Outlet. This approach serves to reduce the risks
associated with non- payment and accounting burden on business owners.
Profile
2022

Contact

Company Address
4431 Etete
Shakaskraal | iLembe District
Kwa-Zulu Natal

Company Telephone
072 512 0649