Bootlegger founders Antonie Basson, Pieter Bloem, De Waal Basson. Image: Supplied.
South African coffee chain Bootlegger Coffee Company has seen sustained growth since its beginnings as a single store in Cape Town’s Sea Point in 2013.
The business started as a small venture between friends Pieter Bloem, De Waal Basson, and Antonie Basson – and was never supposed to be a restaurant chain, but rather a strong retail coffee bean brand. And although Bloem jokes that if he had his way, they would still only run their single Sea Point store, today, Bootlegger has grown into one of the country’s biggest coffee shop and restaurant franchises.
In eight years, the three friends have taken Bootlegger Coffee Company from that single Sea Point store to 26 branches located in Cape Town and Johannesburg – with six new branches currently under construction, and at least three more planned for 2022.
The operation has scaled dramatically, too. To date, the Bootlegger founders say they have created employment for more than 600 people and poured around 9 million flat whites. They currently bake at least 500 croissants each day and sell 10,000 slices of banana bread per month based on a recipe born out of Bloem’s mother’s kitchen.
Reaching this scale took time, however – and this much baking and coffee pouring was never actually the early objective.
After leaving the advertising industry, co-founder Bloem says he knew he wanted to open a restaurant, and he went as far as to put in an offer for an existing independent establishment. But when he realised he knew nothing about running a standalone restaurant he instead decided to buy a Col’Cacchio franchise.
“My school fees were five years in the basement of a regional mall in Cavendish,” Bloem told Business Insider South Africa. “I didn’t see the light of day for five years!”
Although it was a good business that taught him a lot about what it takes to run a restaurant, Bloem eventually sold it and took some time off. But he soon banded together with two close friends – brothers De Waal and Antonie Basson – and bought into a coffee shop called Go Gos, owned by Bloem’s wife.
With limited experience in the coffee industry, Bloem says they made the early decision to buy the best coffee equipment they could find to mask any early errors they might make. And then, over a few whiskeys, they decided to change the business’s name to Bootlegger for its masculine, slightly mischievous, community-centric, but also rule-breaking connotations.
Bloem initially took the name to heart, selling beans from the boot of his car, often on the journey from the roaster in Riviersonderend and Cape Town. At this stage the idea was for Bootlegger to be a retail coffee business, but after moving the roaster to the Sea Point location, mainly for convenience sake, they realised they might as well sell a few cups of coffee to the public from there too.
This is where it all started to snowball, says Bloem.
“We thought, if we sell coffee, then we might as well sell a bit of breakfast. If we can sell breakfast, we might as well do lunch. And if we are going to do lunch, then it’s going to flow over to tapas. We also didn’t have a bar in the neighbourhood that we enjoyed going to, and so if we’re running a bar, we might as well do dinner,” he says. “So from not wanting to run another restaurant, we had one open from 6:30 in the morning until 11 at night. And that’s how Bootlegger started.”
At that stage, the three friends still didn’t plan to expand the Bootlegger brand into more than the single location, but Bloem says all the ingredients were there in their various skillsets.
“I’m the dreamer, De Waal is the accountant, and Antonie’s the baker,” Bloem says. And with the addition of Chief Operating Officer Ricky Ruthenberg, who Bloem describes as “the driver”, the team was able to grow the business to what it is today.
“There’s a risk when best friends come together that you start getting irritated with each other or disagree, but we were all going in different directions and working towards the same goal, so it worked,” Bloem says.
The further expansion came when property developers with offices above the Sea Point branch loved the concept and opened the Bootlegger team’s eyes to opportunities at other locations. Bloem says most of these were too good to say no to – and they paused the idea of a retail-only coffee brand and instead focused on their brick and mortar operations.
“The idea was always growth, but not necessarily to have 32 restaurants by the end of 2021,” says Bloem.
In spite of their expansion, central to the Bootlegger growth model is a hyper-local approach. There are six Bootlegger branches on the Atlantic Seaboard in almost as many kilometres, for example.
“We wanted to have control over the growth. If you open one store in Cape Town, one in Paris, one in Canada, you are set up for disaster. It doesn’t work for us. We like to go into an area, get a good understanding of that area, and then have multiple stores – like we’re doing in Johannesburg now,” says Bloem.
Bloem believes that local knowledge is critical when identifying new locations: “Just to be one block up or one block down or which side of the road you are on can make all the difference to that store’s success.”
For this insight, they turn to their in-house decision-makers – and are also looking towards franchisees with good knowledge of their surroundings.
The existing stores also tend to sell themselves to future franchisees, says Chief Operating Officer Ricky Ruthenberg – most prospective franchisees begin their journey after visiting a branch, finding it appealing, and then submitting a franchising enquiry form.
“There’s a lot of interest in Bootlegger franchises, but it takes a special person to run a coffee shop. It’s not just someone with a cheque, and it’s not just a business. You own a 24-hour business and become responsible for a lot of people,” says Ruthenberg.
Ruthenberg says over the last eight years of refining the franchising process, they’ve streamlined it to build out new stores within four to six weeks. Depending on prior experience, a new franchisee can be running the branch independently within three months. After that, their goal is for franchisees to see a return on their investment within two years.
“It’s turnkey to a point – we’ve got a strong operations team, we build the store, staff it and stock it and show you how to do everything from day one. How to make coffee, how to pay your bills and your staff, and then you slot in,” says Ruthenberg.
A new Bootlegger branch costs between R2.5 and R3.5 million, including joining fees and working capital, depending on the size of the store, which is on a par with similar restaurant franchises like Mugg and Bean. A cheaper kiosk concept that sells coffees and pastries is also on the cards, which will cost between R800,000 and R1 million. Once agreements are signed, and everything is up and running, franchisees pay a monthly fee of 5%, plus a contracted marketing fee of 2% – although to date this has remained at 1%.
They’re currently open to applications around the country, with a particular focus on Cape Town and Johannesburg. And although the team mean business and carefully vet every new franchisee and business partner, they still appear to have the spark for fun and friendship that ignited the venture.
“We take a similar approach to our friendship as we do finding business partners,” says Ruthenberg. “If we’re able to go for a run up Table Mountain together, and at the end of it can still do business and drink a beer together, then we’re on the right track.”
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