solution

In 2008, when the subprime crisis hit the world economy, Dennis de Wet was working in the Isle of Man
for a property syndication company that enabled investors to pool their money together for a slice of real
estate. It was a catalyst for his decision to leave the corporate world. “You spend eight to 10 hours a day
working, so it would be a bonus if you actually like what you are doing,” he says.
Born in Namibia, he had studied financial analysis at Stellenbosch University in South Africa before starting
his career as a financial controller for the property company that later seconded him to the Isle of Man. “I
realised if I stayed in corporate 10 or 20 more years, even as the CEO of the company, I would still be quite miserable. I am a dreamer, a visionary. I like new things and following ideas. I met people who woke up in
the morning and loved what they were doing, and I was envious of that.”
He listed the things he was passionate about: surfing, Grand Prix, wine, food and coffee and looked at each
industry to see if he could spot a viable business opportunity.Returning to his home country – in particular,
the town of Swakopmund – was always on the cards for De Wet and his young family. While still in the Isle
of Man, he started researching specialty coffee roasting as a possible future venture. At the time, the industry
was just taking off in neighbouring South Africa but had not yet found a foothold in Namibia.
Trying to find roasters in South Africa who could share insights was tough. “It was such a closed industry.
Even if I explained I was planning to do this in Namibia, they still thought I would be competition,” he
remembers. He eventually found one roaster in Cape Town who was happy to talk to him and 12 years down
the line, they have become good friends.
In 2010, the family moved to Namibia. De Wet trained himself on an espresso machine to hone his barista
skills and would take coffee imported from his South African contact into restaurants to gauge interest. In
the following April, he decided to take the plunge and ordered his roasting machine from the US. To cover
the costs, he took a loan from his father. He also started the process of registering the company and the
brand, Slowtown Coffee Roasters. In the six months it took for the equipment to arrive, De Wet hit the streets
to find the perfect location, but landlords weren’t keen on providing him with prime rental space. “They
could not grasp the concept of a coffee roastery,” he says.
Fortunately, a friend called to say their engineering company had some space available. “The co-tenant had
moved out and his boss was happy for me to take the gap as long as he could drink some of the coffee and
play his guitar in the shop,” De Wet laughs. In October 2011, Slowtown opened its first shop in a central and
popular spot in Swakopmund. Today, the company has a chain of six retail outlets: the original venue and at
the roastery in Swakopmund, one in Walvis Bay and three in the capital, Windhoek. It roasts four tonnes of
beans and sells 30,000 cups of coffee a month.

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Building a brand and expanding slowly
The growth was “slow and steady”, according to De Wet. “I paid back the loan from my father a year later,
on his terms. Since then, it has always been a bootstrapping business. We have been approached by venture
capitalists and possible equity partners, but I am happy we did it this way. It keeps us nimble and resilient.
Whatever money we’ve made has gone back into the business.”
In the first year, Slowtown had only one table in the shop, bought at an auction. Initially, the company sold
around 15 cups of coffee a day. “It was a scrappy start. What was great, though, is the same customers came
back daily. We focused on the quality of the coffee and built a base of loyal customers.” De Wet has always
sourced the coffee beans through the same coffee broker – based in Johannesburg, South Africa – with a
proven track record of working directly with the specialty coffee farmers or co-ops. It simplifies logistics; “I
order my coffee once a month and it arrives within three days,” he says.
A little over a year after opening the first shop, the small team took their coffee to the annual Tourism Expo
in Windhoek. It was the only company in the country roasting specialty coffee. Slowtown made more money
in those three days than it made in a normal month, recalls De Wet. “For us, this was a big branding drive
and created awareness of our product in Windhoek, where the spending power was.”
The developer of The Grove shopping mall in Windhoek approached De Wet in 2013 to rent space. He was
reluctant but finally agreed to take the smallest unit of 26m2. “I thought nothing ventured, nothing gained,
and we opened. The response was unexpected,” he says. It proved so popular, the company soon opened a
second outlet in the mall. At about the same time, Slowtown opened at another location in the CBD of
Windhoek. This was followed by a shop in the harbour town of Walvis Bay, a small factory outlet at its
roastery in Swakopmund and, finally, one in Maerua Mall, also in Windhoek.
Tapping into wholesale
Wholesale orders have been a crucial income stream for the business, with the company receiving many of
these orders from people who had visited the retail shops. One of the most successful retailers in the country,
SuperSpar in Maerua Mall, requested to stock Slowtown coffee in the first year after opening. “For a long

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time, that one retailer made up almost 90% of our wholesale sales. Today, our income is probably split
equally between our own stores and wholesale.”
Slowtown offers a consultancy service to its wholesale clients to set up coffee stations in their offices, lodges
or hotels. The company assists in sourcing the equipment, with the set-up and workflow of the coffee station,
and provides the roasted beans and barista training. De Wet explains that the Slowtown branded coffee
shops have always been the brand-building vehicle for the business. “Wholesale is easier money. There are
so many things that could go wrong with those 30,000 cups of coffee we serve each month; however, those
coffees are what builds our brand every day.”
Merchandise, cross-border online sales and growth
De Wet’s approach to the business was always clear: the quality of the product and the strength of the brand
should drive sales. “I’ve never been the type of person who would call people up to try and convince them
to purchase our coffee,” he reveals. His strategy seems to have worked. The company is now adding
Slowtown merchandise such as caps and T-shirts thanks to demand from its loyal supporters. It is also geared
for growth; two years ago, a new roasting unit was added that pushed its roasting capacity to 25 tonnes a
month. “It is one thing to roast 25 tonnes but it is a whole different story to sell that in a small country like
Namibia. We have to start looking cross-border for growth,” explains De Wet.
He believes South Africa could be the next frontier and that it would be a soft landing as he has experience
after living and working in the Western Cape. However, opening another retail coffee shop is not necessarily
on the cards. “Online interests me, it could open the doors to South Africa. If we have a good platform and
offer our product online, it means we could test cross-border sales without bankrupting ourselves if it doesn’t
work.”South Africa is not the end of the horizon. De Wet has a handful of connections in Germany and, when
the time is right, he sees no reason why Slowtown should not expand into the European market. “I have
confidence in the product and the brand,” he says.

Q. Strategic management for small and medium enterprise can be categorised into three modes.
Discuss into which category the case study can be placed into.