Espinaca Innovations: A Case Study in Entrepreneurship

The Espinaca Journey

At the age of 24, Lufefe Nomjana from Khayelitsha, Cape Town, in South Africa, came up with a plan to add spinach to foods consumed daily, like bread. He realised that a lot of people in his neighbourhood were obese, yet malnourished! They consumed a lot of food that although it filled their stomachs, did not provide nourishment to their bodies. It was typically cheap food that had high volumes. This created all kinds of lifestyle maladies, such as diabetes and even cancer.

The idea Lufefe had when he started this innovation was to bring about change in the lifestyles of the people in the township of Khayelitsha, within the metropolitan area of Cape Town. Unemployment in South Africa is at a high figure of 26%. However, in so-called black townships such as Khayelitsha, it could be as high as 60%! In addition to this, most of these unemployed would be between the age of 18 and 35. This seriously affected the job prospects of this group of the population.

Lufefe realised this, and also realised, for various reasons, he had to change his own lifestyle. He also realised that by doing that, he could make a contribution towards changing the lifestyle and habits of the people in his community. However, all he had was a bunch of spinach, R40 in his pocket, a neighbour’s oven, and an idea.

Lufefe subsequently decided to develop a recipe for spinach bread. He got the neighbours to lend him their oven, and baked his bread. Every morning he would wake up early, make the dough in a bucket and bake the bread in a neighbour’s oven. People won’t always buy spinach, but bread is consumed daily. Lufefe mixed spinach into his baked goods so that people would receive the health benefits of the spinach in their normal daily lives. He is against normal bread, but the spinach-enhanced bread was much healthier!

Lufefe also decided to not use normal plastic bags, as they contribute to pollution and are eco-unfriendly. He subsequently obtained PLA bags from Green Home. These PLA bags are eco-friendly and are biodegradable. The bags look like clear plastic bags, but are made from renewable plant materials instead of oil. They do not contain any toxins and the production of PLA plastic bags creates much lower greenhouse emissions than those made from conventional plastic, as they are made of corn starch.

Green Home, the provider of the PLA bags, were so impressed with Lufefe’s mission to provide nutritious and affordable daily bread in an eco-friendly way, that they decided to provide the bags to him at cost.

When Lufefe speaks more about this concept, one realises that to him it is more than just a bread. It is a healing tool and a cleansing material, yet a tasty product developed right there in Khayelitsha.

Lufefe realised that he needed a constant supply of spinach and that he did not have the means, time nor inclination to grow the spinach himself. He therefore convinced people growing spinach in a community garden to grow his supply for him. In this way he made a good contribution to supporting people in his community.

Initially Lufefe had to walk up to nearly 25km a day delivering his bread. As the bread became popular, he ran a Thundafund campaign to generate funds to purchase delivery bicycles and bread baking machinery. The Espinaca Innovations delivery team now delivers bread locally on bicycles. Lufefe is now selling healthy products, promoting a healthy lifestyle and minimising the carbon footprint of the bakery. This helps Lufefe to deliver his tasty goods to regular customers faster and efficiently.

“We were ‘bread on bikes’ – we delivered bread on the doorsteps, and also educated people on how to live healthy in Khayelitsha.  The bicycle was symbolic of a healthy lifestyle. The spinach bread was symbolic of healthy eating. The current setup is a dream come true. It might seem small to others, but for us it is a dream come true. In the short term, we are looking at expanding through a franchise model.”

A container transformed into a modern-day bakery is where all the baking magic happens.

Lufefe also keeps his prices comparable to government bread. People in Khayelitsha can therefore experience the health benefits of eating additive free spinach bread at no extra cost. An additional benefit of the bread is that it lasts longer than normal bread – it stays fresh for a considerable longer time.

He created his delicious spinach bread to provide a convenient and economic way for families to consume healthier food on a daily basis. Being health-inspired, Lufefe wanted to transform the eating habits of the people from Khayelitsha and South Africa at large. Being a vegetarian, he has put in the hours in creating delicious and healthy meals, such as his now famous spinach bread and gourmet muffins.

The spinach bread is in the Top 10 of overall bread sales in Vangate Mall, and Top 5 in Khayelitsha Super Spar. It is also available at the Spar in the trendy Cape Quarter in Green Point, Cape Town. In addition, Lufefe has also started supplying the spinach bread to hotels like the Table Bay Hotel and the Lord Charles.

Today Lufefe is moving forward with his company, Espinaca Innovations. He recently (February 2016) signed a contract to supply five Pick ‘n Pay Family Stores with Espinaca bread. Other businesses he provides products to, include 7 Spar shops and the Wellness Warehouse in Cape Town. He also caters for events, both public and private.

His goal is to also supply spinach pizza bases, spinach rusks, spinach rolls and dominate the bakery industry with healthy products. “The aim is to be the best, not the biggest,” he said. Other products currently include the following: organic spinach bread, gluten-free spinach & Rosemary bread, gluten-free spinach and Basil bread, spinach & feta muffins, spinach juices, spinach smoothies, low-carb spinach & Kale cookies, and 0% carb pasta (organic).

Communities in which Espinaca operates include Khayelitsha, Gugulethu and Cape Town.

Protecting his Idea

Coming up with a unique business idea is challenging. Protecting that idea from being stolen is even tougher.  Lufefe added spinach to bread, calling it “spinach bread”, formally known as Espinaca, which is also the name of his company. He added honey, rosemary and basil for extra flavour.

When Lufefe pitched his idea at a pitching session hosted by the UCT Graduate School of Business in Cape Town, he won an award for best business idea. He realised that he had a unique idea and bigger companies were starting to approach him with different offers.

He feared that someone else might steal his idea before he had even had the chance to turn it into a profitable business. “A lot of companies wanted to partner with me, some wanted to get a piece of this idea, so I had to protect it,” he says.

Lufefe subsequently went to the Companies and Intellectual Property Commission (CIPC), a body under The Department of Trade and Industry, who gave him a temporary patent, which would allow him to apply for the 20-year patent, something he is currently working on. For Lufefe this means that spinach bread cannot be commercially made without his consent. This protection from the government will last for 20 years.

Lufefe Nomjana the Entrepreneur

Lufefe Nomjana is one of South Africa’s most celebrated young entrepreneurs. After creating spinach bread, he quickly found international fame as the “Spinach King.” But the journey of the entrepreneur wasn’t always easy. After being exposed to the “wrong side” of life, he found his way back to his “purpose” and eventually started the company, all to leave a legacy for his family.

He was born in the Eastern Cape, and grew up in the town of Butterworth. His mother was a single parent. “I looked after myself and my younger brother as far as clothes were concerned as my mother did not earn enough. At the age of 14, I worked for a supermarket. At 17, I moved to Cape Town. I had my own shack and lived in Belair. I worked at a scrap yard. With my friends we abused alcohol and smoked marijuana. I eventually got fired for stealing from the scrapyard. Thereafter I moved to Khayelitsha, where I stopped using alcohol and smoking marijuana – I was now committed to living a clean lifestyle.”

“My mother then also came to Cape Town, which allowed me the opportunity to finish school. I started a business buying clothing and selling it in Khayelitsha. It got me to understand how entrepreneurship worked. I also sold insurance – this really helped me to understand the art of selling.”

Lufefe started to volunteer to work in the community garden, where he worked with spinach. It was here that he got the idea of Popeye, the comic character, and spinach. He developed the business idea to address the problems of the community as far as hunger, unemployment and health was concerned.

Initially he had no idea how to bake bread, but he learnt how to do it. He also learnt about all the dangers inherent in it as well.

At first his business struggled as the people in the community did not understand the product. In Khayelitsha, people were not concerned with health. Price was the issue where food was concerned. Therefore, he first needed to educate the people before he could sell to them. His dream became one of changing and impacting the community, to drive society to better lifestyles, and to improve people’s lives through healthy food. Lufefe therefore does not just sell bread. He talks to his clients about food and healthy lifestyles. Education is a big part of what he does.

The business also works with local early childhood development centres. Lufefe provides them with spinach seedlings, they grow the plants, and he buys them back from them. He sells bread to the centres at a reduced rate. Slowly but surely, people are warming up to the idea of healthy eating.

According to Lufefe, his focus at the business is to ensure the production is done properly. Supply chain management is important, and distribution is critical. He has to ensure that the quality and taste of the bread is consistent.

“I teach my employees as much as possible about everything. This is so that they can go on without me being there. The process of baking spinach bread is unique and requires specialist skills.”

In May 2016, Lufefe was contracted as a guest lecturer at the University of Cape Town Graduate School of Business executive education. He also lectured to a group of French International MBA’s and they invited him to teach in France in 2017 for 2 weeks. Locally in South Africa, he has been approached to lecture at Mangosuthu University in Kwa-Zulu Natal.

The driving force behind his activities has always been about creating a legacy, wealth creation and increasing the net worth of the business. He strives towards remaining focused and disciplined. He sees his current progress as a process of converting his skills, experience, findings, challenges and his story to wealth creation and growing his legacy. He is adamant that his descendants would not need to beg to make a living.

Accolades for Lufefe Nomjana and Espinaca Innovations

In 2012, Lufefe graduated from the Raymond Ackerman Academy. In 2013 he was selected among 50 entrepreneurs as one of the Top 10 most promising South African Entrepreneurs. In February 2014 Espinaca was featured in the Forbes Magazine as one of the innovative business concepts in Africa to look for. Lufefe himself was featured as a young and innovative entrepreneur. In September 2014, Espinaca Innovations was a finalist in the Cape Talk Small Business Awards.

In 2015, Lufefe Nomjana was invited to the Discovery Vitality Summit in Johannesburg to discuss the business of health. This resulted in an offer from Virgin Active South Africa to install a Spinach King health food restaurant with an outdoor gym. This was to be launched on 20 January 2016 in partnership with Kuai Restaurant, the health food giants in South Africa. Moreover, Espinaca recently agreed to be the official catering partner for a range of its products, i.e. Spinach & Kale Juices, Spinach Banting cookies and sandwiches for Mindful Revolution, a company that conducts mindfulness workshops for corporates.

In October 2015 Lufefe was one of the 7 African young food innovators that was selected to represent Africa in Italy through the Slow Food Network (a UN initiative). He was delegated to discuss the future of the food system at a world annual conference. In November 2015, Espinaca won a Premier’s Entrepreneurship Recognition Award (PERA) (in the Western Cape), as well as the best Agro-Process Business of the year 2015.

Espinaca has also recently collaborated with the Department of Health in bringing health awareness to the limited resourced communities. The idea is to promote healthy eating and healthy lifestyles and also bring practical solutions through experts to reduce the number of chronic and cardiovascular diseases. This recognition humbles him, and inspires him to do even better in all that he does. Being innovative to him has become second nature and this is a tool that Khayelitsha and South Africa needs. The journey to success can never be meaningful when we do not leave a legacy.

Lufefe does indeed touch many lives in many ways. The results are clear and many people have a testimony about Lufefe and how he does what he does. He talks to approximately 20 MBA groups from abroad every year about his entrepreneurial journey. Elements of his character that stand out include his humility, his passion, and his willingness to learn!

Goals for The Future

In 2016, Espinaca Innovations opened up a Spinach King healthy fast food store at the Khayelitsha Mall. A partnership between Espinaca, Virgin Active and KCT (Khayelitsha Community Trust), Espinaca wants to offer healthy foods made from organic spinach served in biodegradable packaging to the community of Khayelitsha. He would like to expand this concept into other areas as well.

By 2018, Espinaca wants to open a second bakery and expand its distribution into other regions of Cape Town. He will continue to do so until everyone in South Africa is eating Espinaca’s products.

Lessons from Lufefe’s Journey

His business model is simple yet efficient. His target customer is the health conscious consumer, initially in Khayelitsha, but now much broader. In addition, retail chains have also become his customers. His value proposition is the idea of a healthy lifestyle, together with daily nourishment. His distribution channels include a direct delivery force, as well as supermarket chains such as Spar, Pick ‘n Pay, and now even health fast food stores. He “locks in” his customer by living the lifestyle he preaches and by educating them. His revenue model is mostly product sales driven (bread, muffins, etc.), although he is also looking towards a franchising model.

His key resources are his brand, his supply of spinach, his bakery, his products, and his distribution network. Key activities include procuring spinach, baking, sales and marketing, distribution, and educating his consumer base. His key partners are his spinach suppliers and his distribution network, consisting of food retail companies. They are also his customers. His key costs are his ingredients, staff, and electricity.

From the case study, it is clear that it is not about where one starts in life. Lufefe rose above his situation of substance abuse and initial lack of education to develop a successful business. He had an idea that drove him. Guy Kawasaki speaks of “make meaning” in his well-known book, Art of the Start. This is about having an idea that will get you up in the morning and keep you going, even when circumstances are against you. This idea was not about making money, but about feeding his community with healthy food and providing jobs.

His business started off with R40, a bunch of spinach and a neighbour’s oven. Most people would not have started at all. However, Lufefe had the end in mind, and did not let himself be deterred by his initial lack of resources. This proves to many that we can all achieve what we want when we are ready, regardless of the lack of resources.

Being a philosopher at heart, helped him to understand the principle behind the use of bicycles, which to him represented a healthy lifestyle, as well as that eating spinach was symbolic of healthy eating. This was part of the meaning his spinach idea had for him. With bicycles, you cannot travel faster than what you pedal. This directly translates into the principle you are the driving force of your life. While you at times will get the wind from the front and your journey will slow down, there will also be times that you will get support with the wind from behind, and your speed will increase.

Lufefe is someone with a passion. His excitement about his product is contagious and every person whom he meets cannot but help to get excited about the product as well. He finished his school education and exposed himself to entrepreneurial activities, such as selling clothing and insurance. This contributed to his knowledge of running and developing his spinach product business. His training at the Raymond Ackerman Academy is further testament of his belief that education was important to the entrepreneur.

He understood that distribution was crucial to the growth of his business, and made sure that his regular clients got their bread early every morning. Great service was not a nice to have, but crucial for business success.

Lufefe understood that his idea was up against the circumstances of his community. They were poor and primarily unemployed. To get them to buy a product that they did not understand, he first had to educate his customer segments. He did this relentlessly and has himself become a vegetarian. Educating your customers has always been an important element in business. Lufefe clearly understood this principle. He has gone beyond just teaching his customers, and is now educating aspirant entrepreneurs, both locally and abroad. What an amazing journey!

Lufefe’s ability to see the bigger picture has moved him to get exposed to large corporates such as Spar, Pick n Pay, Virgin Active, etc. Getting this exposure has helped him in his quest to grow his own business knowledge and his business per se. He has taken to heart this exposure and is expanding his business to include franchises and fast health food stores. Although he started off with an extremely humble beginning, he dreamt big and is still dreaming big!

This article was also posted on AfricaBusiness.com as well as NTU-SBF Centre for African Studies.   

 

References

1. Cuba, A. 2016. Espinaca Innovations profile. https://www.behance.net/gallery/32682765/Espinaca-Innovations-profile. Accessed 09 May 2016.
2. Gana, B. 2015. What you can learn from this entrepreneur about protecting your idea. http://livemag.co.za/vip/what-you-can-learn-from-this-entrepreneur-about-protecting-your-idea/. Accessed: 04 May 2016.
3. 2014. GreenHome partnering with Espinaca Innovations. http://www.greenhome.co.za/greenhome-partnering-espinaca-innovations/. Accessed: 04 May 2016.
4. 2015. Season 6 Episode 44 Espinaca Spinach Bread. https://www.youtube.com/watch?v=kAAyA7fBUEY#t=962.1421666. Accessed: 04 May 2016.
5. 2014. Espinaca Innovations. https://www.youtube.com/watch?v=TGYA1ZAhoGk. Accessed: 04 May 2016.
6. Nomjana, L. 2016. Spinach King. Powerpoint Presentation.