Thursday, October 1, 2009

The Pizza Shop Caper

Today, I was fortunate to join two old school friends for lunch. Lior and Marc. More correctly (respectfully) Lior, and Rabbi Sosnovik

I had chatted to Lior earlier in the day, and he told me he was meeting Marc (Rabbi S) for lunch. I decided to join them. I had not seen Lior for a couple of months. And I had not seen Marc/The Rabbi for a year or more.

We met at Next Door, In Norwood, Johannesburg. Lunch was great. The food was very yummy and the company was awesome. What more could I ask for.

And, to top it off, my brother Darin (who lives in Sydney, Australia) called to say ‘Hi”. I excused myself from the table to take the call, and chatted to my brother away from the main restaurant area. While I was chatting, I saw a Next Door employee, with boxes of little bottles. Little bottles filled with capers. (for those that don’t know, here is an explanation of capers, and how to use them )

Anyways…..What was this Next Door employee doing with the bottles of capers?

He was removing the standard labels with hot water and soap, and was replacing the labels with Next Door branded labels

It got me thinking:

Why would a Next Door employee be removing standard caper bottle labels, and replace them Next Door labels?

So, I had a chat to Anthony, the owner of Next Door. Anthony wants to start branding in-house products with Next Door branding (e.g. Next Door chilli sauce) as well as other products with Next Door Branding (e.g. company X’s capers). Anthony obviously wants to promote the Next Door brand. When you sit down to eat, he wants people to see Next Door branded sauces and condiments. If people buy products for their home, he wants them to have Next Door branded products. Great idea Anthony. After all, product recognition is pretty standard ideal that most companies strive for.

But wait a minute. Anthony’s strengths lie in running a restaurant, providing high-quality food along with superior service. Why would he want to brand capers, you may ask?

Brand recognition

I told you that already. Have you not been paying attention?

Back to the lesson. Anthony knows what his strengths are. He knows what he wants to achieve. To support that end, he wants Next Door branded products (even capers). But the branding of capers is not going to distract him from his core activities and goals.

Many businesses are faced with the caper-branding dilemma. Businesses ask: How can we brand capers? It would be great for our brand recognition, but it’s necessarily not core to me running, growing and improving my business?

And many businesses then embark on a thinking process that goes something like this:

1. Contact all ‘caper bottling’ companies so that we can enter into a branding agreement

2. Or think bigger and consider buying a ‘caper farm’ so that we can grow our own capers

3. No, a ‘caper farm’ is not our core business, so scrap that idea

4. Back to contacting the ‘caper bottling’ companies

5. Select the one that we can do business with

6. Negotiate a superb deal whereby the ‘caper bottler’ supplies us with bottles capers, displaying our brand

7. Get lawyers to draw up contracts between us and the ’caper bottler’

8. Negotiate a wholesale rate, whereby the ‘caper bottler’ supplies us with ‘capers’ at 10% lower than the standard retail rate

9. Arrange logistics details, including delivery, returns, payment, discounts, claims, returns etc

10. Stock, and sell, our branded ‘capers’ in our store, as a nice sideline, aimed at supporting our goal of brand recognition

(Again, keep notes. This non-exhaustive list above, will be referred to later. It’s called the ‘noise’ list)

Shew, so many steps in order to get branded capers. After so much effort, we got what we wanted: Our own branded capers

Well done.

Branding capers with your own brand is a great strategy. Brand recognition is important in today’s business environment. And it will only take 10 steps to get that. And it will only take 2 weeks of sourcing a caper supplier. And it will only take 2 months of negotiations and the finalization of a legal contract. And you too will then get 10% off the standard retail price. Wow. What a deal.

And then there is Anthony and Next Door. Anthony knows what he wants. He wants brand recognition. He wants branded capers. And his goal is to run a successful restaurant…and have a certain personal lifestyle. So, to that end:

1. He bought a whole lot of bottles of capers and probably got 5% off the standard retail price

2. He got an employee to spend 30 minutes taking off the labels and replace them with Next Door labels

What an amazing lesson. Anthony did not let the ‘branding of capers’ take him away from his primary focus: Running a successful restaurant.

To get branded capers, an employee spent 30 minutes taking off labels and replacing them:

• Anthony did not spend hours in meetings with caper suppliers

• He did not pay lots of money getting legal contracts drawn up

• He did not enter into lengthy negotiations over a perio of 2 months

• He did not attend time consuming meetings, with each session lasting 2 hours

He did, however, save 5%, buying wholesale. And he could have saved 10% following steps 1 to 10 above (the ‘noise’ list). So he lost out on 5% margin for the capers he bought off the wholesale shelf, and not from the factory direct

And he missed out on 5% margin on a product that is not core to his business activities

And he spent all the time he could have spent on 1 to 10 (the ‘noise’), on:

• Keeping an eye on his business

• Developing his staff

• Meeting with key customers and suppliers

• Lying on the couch, reading a book

Anthony got what he wanted: Branded capers.

It cost him more to buy them wholesale, rather than enter into an agreement with the caper bottler. But that is not his core business anyway. Anthony will make a lot more money than the potential 5% caper saving, by focusing on his business, employees, suppliers, customers and re-energising..... by lying on the couch, reading a book.

He could have been really, really busy. He could have met with caper bottlers. He could have met with lawyers. He could have had legal documents drawn up. He could have entered into agreements. He could have looked like a real-life, flesh and blood, busy businessman.

BUT….that ‘busy’, as with so many ‘busies’, was not key to the development of his business

The lesson for the capers: Focus on what you do best, on what you want to do and what you need to do (managing a restaurant when you need to and lying on a couch reading a book when you want to). Don’t create work for work’s sake, and make yourself feel better by thinking you are busy (negotiations and contracts in order to save 5% on your non-core branded capers)


Keep the goal in mind

And be clever in evaluating options that help you achieve your goals, without creating unnecessary noise


  1. Some blog posts will be endowed like white men. Some like black men