NOMPU SIZIBA: It’s our SME special feature. Today we speak to a young entrepreneur based in Soweto, the famous Vilakazi Street to be precise. Before the Covid-19-related lockdown, he ran a bustling gin bar, but then that all changed with the restrictions and he had to think out of the box as to what next. But he’s been one of the lucky ones in that he’s benefited from the assistance of alcohol-beverages player Diageo’s support for SMEs in terms of ticking them over with stock, cash and marketing support.
Well, to tell us about his entrepreneurial journey so far, I’m joined on the line by Nkululeko Maseko. He’s the founder of 88 Beach and 88 Society. Thanks very much, Nkululeko, for joining us. Before the Covid lockdown hit you were running a gin bar on Vilakazi Street. What was the setup of your business, and did you have a lot of custom at that time?
NKULULEKO MASEKO: The gin bar was a really new business that we had started in a restaurant with a separate business. And then as partners we started venturing out into other businesses among ourselves. My pick was Soweto. So I went into Soweto and found a little kind of shopfront. And my deal with the landlord was to build out in front of that shop front, and do kind of a gin deck, Gin Studio type of setup. It really worked well, because it was a kind of a first for Soweto in the sense that we were [offering] 95% gin-based drinks, or 95% – that’s the only thing you’ll find behind the bar. You can take like one line of beer, one line of tonic, and so forth. But essentially, at the time were carrying about 120 different gins, and I think people really took to that and they came out to see it.
We now have only, unfortunately, it’s just a …… [1:55 picture?] of people outside, and obviously it wasn’t as established as we wanted it to be. We had not put out the composite deck aesthetically to the point that we really wanted to, but that’s what we were building towards. I think in any entrepreneurial journey, the aim is really to start, and we started. The Covid situation caught us three months in, and we had to rethink everything that we were planning at that time.
NOMPU SIZIBA: Yes. So when the restrictions did kick in towards the end of March 2020, including of course the alcohol ban, what ran through your mind – and did you have much in the way of cashflow to see you through the next while in the face of no revenue? And how did you manage things like your staff situation?
NKULULEKO MASEKO: It caught me in one of the worst spaces because I was in corporate before. I resigned in January 2020, wanting to go fuller and kind of focus on the business because I was running another business while in corporate; the other venue we had was in rooms called Lush Lounge.
Coming into 2020, I wanted to go full on, and go into the business in Soweto. So on the 27th, when they said everything is closed down, I was not ready for that by any means and I took what I got from corporate and kind of sorted out things like school fees for my kids and so forth. The business was really meant to sustain itself and not sustain me.
It was really difficult for us to kind of sort out the staff. We lost quite a bit of staff. Some of them were from far away – on the outskirts of Joburg and even further. Some of them had to return home within that period. There was nothing that we could guarantee, even for them.
NOMPU SIZIBA: So what did you do to try and bounce back and do something to get revenue coming in again once the restriction started to be eased? And tell us about the new format of the business that you’re currently running.
NKULULEKO MASEKO: We ran other businesses during Covid, which were Covid-related, and that kind of gave us a little bit of cash. We started a hygiene business, where we did decontaminations; in fact, we still have it now, and we’re pushing it with some contracts. That really helped us build a little bit of capital.
But then our biggest issue was that we looked at the landscape and understood that people had been indoors for all this time and they were looking for new experiences. Yes, they wanted to go out, but in order to catch the market now we had to up the game of what we are offering.
We came up with 88 Beach Soweto. Even the name was like a bit of a shock to people hearing it for the first time – that there was a beach in Soweto. We made a joke about the only beach being open in the country at the time. [Chuckling] So we did 88 Beach Soweto. It was really the only open kind of venue, or outdoor venue on the street in Soweto. I think it’ll continue to be for quite a long time. We took the property that we were on, dropped about 80% of that building and converted the space into literally a beach space. So we got authentic beach sand, we put up some cabanas and really did like a not-seen-before kind of venue within Soweto.
I think that changed how people related to this GT ……[?5:31], changed how people related to entertainment offerings. And then we went all the way in terms of entertainment. But I think that support that we got – at the time it was really based on reaching out to brands like Diageo and their assisting us in kind of bringing back a good flow of entertainment, and just working capital. So their support allowed us to kind of put money back into the bottom line and help. Cashflow is something that you build over time, it’s a really difficult thing.
NOMPU SIZIBA: Nkululeko, when and how did you connect with Diageo, the alcohol beverages firm, and what sort of assistance did they provide to you to stay afloat?
NKULULEKO MASEKO: We connected with Diageo for the first time in our previous venue, and then obviously with the Gin Studio, because they’ve got a contemporary gin portfolio that they push, which was really good for the Gin Studio. But coming into Soweto, it was important to offer a wider scope of drinks. So we kind of let go of the Gin Studio idea and came into a more contemporary offering of drink occasions, and a wider range of drinks, depending on what we knew consumers wanted. Given my knowledge of the industry, I understood that cognac was a big thing, gin was a big thing, champagne was a big thing. And then I started to tailor the business. Usually you’d keep six or seven different brands in each category, but we can’t do that any more just because you don’t want money sitting on your back bar.
You want money to come in and then go to the consumer, as it comes. We had to cut down on what we stocked as well. So when we showed them the plan of the beach, they really bought into it, and they were willing to help. And I think they really pushed us in the direction of just being confident enough to put ourselves out there, knowing that the people would come. We’d built a really good space and people would want to flock to it. But when they got there, you had to provide an experience that was none like they would find in the rest of the area. It was tricky.
NOMPU SIZIBA: I was going to say, how did you manage? In total there were three alcohol bans. How did you manage with that unpredictability?
NKULULEKO MASEKO: Very difficult, because with the ban we still had like things like weather issues; when it rains, because it’s a beach-area vibe, you can’t really cover that. So that was also an issue. And then the bans really took away the momentum in terms of what we were doing. On the one side you’d find yourself with no cash; on the other side you’d have lots of stock and a little bit of cash. And even in the third one, you’d have lots of stock sitting in your reserves, but very little cash; and you can’t convert it because if you convert it you have to go into illicit trade – and that’s an issue because you can lose your licence. So there’ve been a lot of barriers as well.
It just puts kind of the flow of things really off. It kills the cashflow. That meant we couldn’t really pay out everything that we needed to pay out. I remember sitting with every single one of my staff and having to negotiate and say, okay, what do we do? What else can we take, and how can we do it? It wasn’t ideal, but it was like we understood their position. For us it was how do we get through this particular phase of our business, and hopefully on the other side of this it will be okay.
NOMPU SIZIBA: Even though regulations have been eased quite substantially, and there are no longer any alcohol bans – for now, at least – how difficult is it for you to police things like social distancing at your venue, because people do relax, especially when they’ve been drinking and so on?
NKULULEKO MASEKO: In a space like ours it’s very, very hard. In a normal restaurant space, you have dining tables across the room, and then you just section off and say, don’t sit here, sit there, don’t sit here; or you have takeaway tables and leave really big gaps. For us it’s predominantly lounges and kind of …… [9:50 day bed?] situations. So quite different to kind of separate people. And another thing is that inherently people just want to be together, people want to be closer to each other. They want to be experiencing that mood or that vibe or that venue in groups. So we managed the whole point of getting temperatures at the gate, making sure people came with masks, documenting everyone who was in the venue and trying as much as possible to remove some of the furniture. But if you do that, you’ve got an overflow of people and you can’t seat them there, and they want to sit there. They see that there is space, but you’re not seating them there, and you’re fighting with them. And then you’re trying to explain Covid again, as if it didn’t happen.
NOMPU SIZIBA: Very difficult.
NKULULEKO MASEKO: It was very, very difficult for us, I must say.
NOMPU SIZIBA: So where are you now in terms of the business? Are you beginning to see steady cash flows, steady custom? Are you optimistic about the future, barring that we face a third wave and so on?
NKULULEKO MASEKO: We’ve looked at everything that could possibly happen. We did this in January for one of the businesses – we’re now talking about Soweto – and we thought to ourselves these is a chance of a third wave, winter is coming, and we’re not too happy or satisfied with our current venue. We literally decided to drop the whole thing and start it over.
So we’re actually in a construction phase at the moment, where we are converting. We’ve obtained more properties, getting more properties around, and we are now building three other venues. So there’s a final ……
we’ll have on top of the Beach that we are doing with a very popular young black chef we can’t name at the moment. We are increasing the Beach …… into Michelin something. And then we are increasing the space within the Beach area from what the capacity was, in order to kind of make provision for things like social distancing, if that continues into the future, because that was an issue.
And then we have another space called Society 88, which is our everyday workflow coffee, and we have a unique food concept that we put in there as well.
And then our intention on top of that fine-dining restaurants is to also have a 32-room boutique hotel. The street is changing. We’ve got such new and vibrant outlets coming up on the street. There’s a new venue like ……[13:48] 1947, a really good, beautiful venue. That’s really changing how we offer this service to consumers.
And we are also on that bandwagon to say, “from what the street has been before, to what it should be now and into the future”. And if we want it to continue being a tourist destination when things get back, if you want to bring in more investment and invest in the economic growth of the ……[Kazi? 13:01] economy especially, we have to kind of up the game in terms of the offerings. So we are spending quite a bit of money now and we’ve been helped by a couple of companies to make that investment. And we believe that on the other side of this we are very confident that the only thing that will be left is where we are with Covid.
But otherwise we would have built a space being cognisant of the fact that there has to be social distancing, how food is prepared and where it is prepared, and then kind of doing all the things that, prior to really going into the details, weren’t things that we thought about within that space initially …..13:41].
NOMPU SIZIBA: That was Nkululeko Maseko, the founder of 88 Beach and 88 Society.