Local ice tea makes a global splash
Success comes on the back of solid market research and experience in the beverage and hospitality spaces, write Chris Human and Geoff Bick
When Vovo Telo founder Dave Evans noticed that a local ice tea brand BOS was outselling Coca-Cola at his artisanal bakeries, his interest was piqued.
It was the start of a love affair that saw him join BOS Brands 2011 as investor and CEO. At the time the rapidly growing ice tea category was forecast to contribute 20% of total global soft drink market growth over the following five years, growing to 52-billion litres by 2018 (a projection the category looks set to exceed).
Recognising the massive potential of ice tea, Evans set to work. His small team included serial entrepreneur Grant Rushmere, rooibos farmer Richard Bowsher (BOS’s original founders) and marketing director Marié van Niekerk.
Today BOS is SA’s fastest growing soft drink with almost 14% of the local ice tea market. The brand has also successfully expanded abroad — over the past three years BOS has seen consistent offshore growth of more than 100% a year with more than 30% of its sales now in Europe and further afield.
This small company struck it big because of high-touch marketing, strong partnerships and strategic investment — making it the prefect case study for other South African businesses wanting to follow a similarly ambitious path.
Rushmere had valuable insight gained from his exposure to the inner workings of Red Bull’s marketing mechanics — he sold his previous company Afro Café to Red Bull in 2007. His keen appreciation of the value of a well-managed brand and mastery of the techniques required to achieve the requisite levels of clarity and simplicity, contributed to the building of an iconic and engaging brand.
Along with health benefits, BOS’s stand-out identity and tongue-in-cheek humour (unusual in the category) are the sources of its unique appeal.
Unlike most ice teas, all of BOS’s products are made from organic rooibos extract, which is high in natural anti-oxidants, all-natural fruit flavours and is free of preservatives and colourants. BOS is also lower in sugar than the vast majority of its soft
But for Evans and the BOS team these natural credentials have been the back story. The team intentionally chose to "hide them on the back of the can".
The brand’s early, and memorable, marketing efforts were quirky and contained BOS’s signature playfulness.
In 2012, the team built a vending machine named Bev, which dispensed free ice tea in exchange for tweets, launching the simple social media marketing concept at the Design Indaba in Cape Town.
Giraffes on bicycles put free cans of BOS in the hands of perplexed bystanders on the streets of Amsterdam, Antwerp and beyond. Swimmers donning shark fins pop up with the beverage from the waters of Cape Town beaches.
In addition to a presence at music festivals, cycle races and other events, BOS gets plenty of exposure from stunts such as these, which Van Niekerk refers to as "marketing moments of joy".
BOS Brand’s tagline, "Not just an ice tea", reflects the team’s emphasis on broadening the brand’s appeal into allied categories including sports drinks and cocktails (with recipes listed on BOS’s website).
Despite the market breadth that these product extensions provide, BOS continues to find itself butting up against the limitations of the local market.
SA’s current ice tea consumption of 1 litre per person annually is a sixth of Europe’s average and does not provide the scale required to meet BOS’s ambitious revenue targets.
Fortunately, the experience, ambition and global exposure of BOS’s founders and their team resulted in the network and knowledge to develop opportunities abroad.
The appeal of their Rooibos-based product and fun, healthy brand is well aligned with global trends and tested positively with consumers in key markets.
The BOS business model and brand were built for global appeal from the beginning. The key questions for Evans and his team have more often been "where" rather than "when". The team initially considered the pros and cons of expanding into the rest of Africa, the US, Europe, Japan and China based on possible volume and margin opportunities in these regions.
After gaining a solid foothold in SA and neighbouring countries, BOS ventured into Europe in 2013. The team had an existing network of partners including suppliers, investors and other business contacts. They began with hotels, restaurants, and cafes in Belgium, then the Netherlands and more recently France, Spain and further afield.
Evans says that launching the brand in smaller countries first allowed the team to contain the risk of failure. The cultural and language similarities between the Netherlands and Belgium provided fertile ground to begin their foreign expansion.
They went into key cities in Sweden and Switzerland next, and after about 18 months, distribution in the Netherlands and Belgium was extended to include retail outlets. Albert Heijn — one of the Netherlands’s largest supermarket chains with 878 stores — recently invited them to list their products.
BOS’s presence in six European countries has little to do with luck.
The company is part of a growing club of "born global" businesses that are createdwith the intention of internationalising soon (generally within three years) of commencing operations.
Crucially, its investors all bought into this approach from the start. The team’s vision for a global iced tea brand came off the back of solid market research, strong experience in the beverage and hospitality spaces and a keen understanding of what consumers really want. The founding team was able to leverage their initial investments and eventually lock in investment from venture capital firm Invenfin and additional individual investors. Evans and investor Jaime Gubbins were the initial angel investors, followed by Invenfin and former Manchester United manager Alex Ferguson.
BOS has the makings of an iconic South African export.
• Human is a GSB alumnus and Bick is professor of marketing at the UCT Graduate School of Business