Context – Nkosana starts off really well by providing the judges context. He says, “What we do is . . .” which is a great way to start a pitch. He continues with, “We buy fresh milk from the dairy farmers and process that milk in to products.” This is a very succinct and understandable introduction for the judges. The only slight critique is that as soon as he mentions “100% fruit juices” the judges may be thinking, well, that’s not dairy. However, from a distribution point of view, fruit juices do make sense.
Purpose – Nkosana also does incredibly well by introducing the purpose of the business early in the pitch. He says the purpose is to revitalise the dairy industry by being an offtake conduit for emerging small dairy farmers. A business that has a strong purpose is very compelling to an investor.
Jobs – Nkosana goes on to say that his business will create thousands of new jobs – a very topical subject considering South Africa’s high unemployment rate. How he will create these jobs is not so clear, and a seasoned investor would interrogate his assertion later in the investment process. Investors understand that using a purpose such as this is highly emotive and could be used to manipulate the judges (investors) which is why the veracity of this statement would need to be interrogated. How exactly will thousands of jobs be created?
Use of funds – Nkosana also does incredibly well in outlining the use of the funds he is pitching for, even breaking this down over a two-year period. He speaks about acquiring a 5 000-litre tank and ISO 9000 accreditation in the first year, both of which would be very smart uses of the capital. The tank will allow South Western Dairy to hold more capacity, and the ISO accreditation would be one of the requirements to unlock potential retail clients. Nkosana goes on to say that in year 2 he will acquire a sachet-filling line . . . and then he speaks about 100% organic fruit juice. Is there possibly a focus issue?
Top ‘n tail – Nkosana ends his pitch with, “I am the milkman” – the same line he used to open his pitch. This ensures that he has labelled himself well in the judges’ minds. In fact, when Raizcorp judge Allon Raiz thanks Nkosana for his pitch, he addresses him as Nkosana, the milkman. It’s about memorability.
Market trends (alternatives to milk products) – Nedbank judge, Monique Chinnah, interrogates Nkosana about his assertion that he is going to revitalise the dairy industry when there is a global trend moving away from dairy. Investors are generally macro-thinkers and are loath to invest in industries that are dying or contracting. With the rise of the health and green movements, the dairy industry across the world has been under pressure with numerous dairy-free alternatives to milk appearing in the market every year – soy milk, almond milk, rice milk, etc. Nkosana should have anticipated this macro-question and pre-formulated a response that includes international and local statistics to give investors confidence that the market is not shrinking, if that is in fact the case. Instead, Nkosana goes off on a tangent that doesn’t relate to the question and, only right at the end, does he attempt to answer it. Monique does not seem convinced.
Capacity – Engen Petroleum judge, Zishaan Abbass, focuses on Nkosana’s capacity. Effectively, the subtext of what Zishaan is asking is if South Western Dairy is not even achieving full capacity now (insufficient demand) then why does Nkosana need additional production capacity (equipment)?
Demand – Raizcorp judge, Allon Raiz, pushes Zishaan’s concern further by pointing out that South Western Dairy’s issue isn’t capacity, it is marketing (demand). He goes on to probe and try to understand Nkosana’s argument implying an insufficient supply of milk. What emerges from this interaction is that the true issue is that potential retailers want security (assurances) that South Western Dairy will be able to provide sufficient and consistent supply on an ongoing basis. Nkosana goes on to say that farmers are willing to supply him only if they, too, are confident that he has a steady market. So, the issue is demand.
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