Kevin Hedderwick’s second act
The former Famous Brands CEO is taking on new challenges in ‘semi-retirement’ – including as venture capitalist
When Kevin Hedderwick left Famous Brands early in 2016, having grown the listed casual dining company into a market leader, it was clear he wasn’t going to embrace a retirement of cruises and golf days. Instead, in "semi-retirement" he’s got involved in businesses that excite him.
Hedderwick’s first post-retirement work stint was a brief one. He joined dealmaker Brian Joffe’s Long4Life, an investment company focused on leisure businesses, but left after only a few months. Not that it’s soured his relationship with Joffe in any way — the two remain friends and talk often. "There’s never been any bad blood between us," he says, "to the extent that I have recently started consulting to Long4Life on strategic projects."
After Long4Life, he went on the hunt for companies to invest in. Hedderwick has always been close to the details of the businesses where he’s worked, gaining operational, strategic and marketing experience at companies such as Distell and SA Breweries, and through running his own Keg franchise. After leaving Famous Brands, however, he was looking for something slightly different.
"I didn’t want to get involved in having to fix things or run the business myself. Rather, I set about wanting to invest in businesses which clearly had strong growth potential, were highly cash generative and where the existing founder or owner was energetic, passionate and ambitious," he says. "At the same time, though, I cannot be a passive investor, but rather want to participate on the strategic side of things and help to grow the business [to realise] the founder’s dream."
With Thrive — Better Than Well, he’s found the opportunity to do so.
The community wellness and health company has its origins in the National Road Pharmacy in Kloof, KwaZulu-Natal — a small business dating back more than 60 years. When Lynda Bryant bought it in 2005, she was looking to create a space that could meet all the health-care needs of her community, and take a more holistic approach to health and wellness. Today, the business is an "integrated health-care provider" — a pioneer in the sector.
Hedderwick discovered Thrive due to a chance meeting. At the time, he’d engaged with about 20 other businesses in the consumer-facing space. "They were either not businesses that I could relate to, had limited growth potential, and/or were in need of a major overhaul," he says.
But Thrive impressed him: it was well thought through, had good branding and offered an excellent consumer proposition.
"[Bryant’s] done a phenomenal job, the way she took an old-fashioned roadside pharmacy brand and repositioned it into a health and wellness community centre with a dispensary," says Hedderwick. "Prescriptions have been the basis for years of pharmacy sales, but with [the introduction of] single exit pricing, prices on medicines are capped and margins are narrow. [Thrive has] supplemented and grown turnover and margins by extending the offering to include a range of mostly locally sourced health and wellness products."
The company’s tie-up with The Juice Kitchen, which provides organic fresh-pressed fruit and vegetable juices, also works well, he says.
Hedderwick invested in the business in September, and it opened its second store, in Ballito, at the beginning of March.
"Unfortunately, the timing couldn’t have been worse," he says, referring to the Covid-19 pandemic. "But we are quietly optimistic that post the national lockdown the store will gain momentum."
The longer-term idea is to open a few more stores in KwaZulu-Natal before looking to expand nationally. But Thrive isn’t planning to compete directly with Clicks or Dis-Chem. "We are not going to expand via major shopping malls but rather into destination-based community-type shopping precincts," says Hedderwick. "Thrive — Better Than Well is not about price, but rather service excellence, quality, range, knowledgeable staff and the community."
What Thrive offers, he says, is not something that you can get just anywhere. It’s like restaurant chain Tashas, in which Famous Brands bought a controlling stake in 2008: "Very upmarket, premium, but accessible to the ordinary folk."
Its appeal, for Hedderwick, lies beyond his personal interest in health and wellness; he’s drawn to the sector’s growth around the world — and SA, he says, is no exception.
"I enjoy the venture capital space, but this time it’s my own capital. I enjoy finding young entrepreneurs with a great concept that is consumer facing. My search in this regard continues."