In good shape: Kauai hopes to capitalise on a global trend towards healthy food

The famous Kauai wraps. (Photo: Kauai Global (@KauaiGlobal) / X)

By Georgina Crouth

20 Dec 2023

The quick-service restaurant group has plans to aggressively roll out over the coming year, in Virgin Actives in Italy, Britain and Australia, as well as some stand-alone stores.

You can thank Kauai for livening up breakfast, lunch and pretty much most snacking needs: The group was not only the first to introduce smoothies to South Africa in 1994, but also popularised wraps, as well as free-range eggs and chicken in the quick-service restaurant (QSR) sector.

Through its partnership with Virgin Active gyms and stand-alone outlets across the country, Kauai now serves a whopping seven million smoothies and more than 20 million healthy meals – including its pioneering wraps, raw juices and bowls – each year.

kauai The famous Kauai wraps. (Photo: Kauai Global (@KauaiGlobal) / X)

This month, Kauai – South Africa’s largest QSR group – opened its 200th store at the V&A Waterfront in Cape Town.

It has also expanded to Britain, the Netherlands, Thailand, Namibia, Botswana, Italy and, soon, Australia, where local food preferences are reflected in the menu.

Dean Kowarski, the founder of the Real Foods Group which also owns NÜ Health Café, Schoon and Highveld Honey, says store numbers are not the driving focus.

“In the past 18 months, we opened 43 stores, but we’re not obsessed with store growth. We are obsessed with bringing healthy food to customers, which is a passion of ours: how do we make healthy food accessible and convenient? How do we use it to change people’s lives?”

The numbers don’t lie: the number of meals served and stores open reflect a rising interest in healthy eating in South Africa and a broader geographic spread of stores in the country, as a bigger section of the population embraces healthy eating.

“That’s new, that’s changed… it’s no longer just limited to the big cities – it’s spread to Bloemfontein, Kimberley, Benoni and Boksburg, in areas that traditionally we couldn’t open in because there was no demand for (healthy QSR) food. Today, there is.”

Kauai’s international expansion, linked to Virgin Active gyms and high streets, brings healthy and accessible QSR options to more customers.

Kowarski was appointed as the CEO of Virgin Active a year ago after Virgin Active South Africa merged with Real Foods for £28.6-million in exchange for shares in the mother body, Virgin Active International.

The deal saw Virgin Active International injecting £30-million into Virgin Active UK, Italy and Asia Pacific.

The existing shareholders of Virgin Active, Brait and Virgin Group, agreed to a further £20.2-million investment in the business; members of the investor consortium in Real Foods planned an additional £18.2-million investment; and Titan Premier Investments, an investment vehicle of former Brait chairman Christo Wiese, would inject £50-million to become new shareholders in Virgin Active.

Kowarski says Kauai plans to mirror the Virgin Active footprint.

“Virgin has a very big footprint in Italy, the UK and Australia, in addition to Singapore, Thailand and South Africa. We focused on the UK and Italy to start because what we do in terms of building up the Kauai brand is to open inside the Virgin Actives to derisk it commercially.”

This means they do not have to start on the high street and pay exorbitant rentals in major cities in London, Milan or Rome to draw attention. The Virgin Active locations offer existing infrastructure, rental contracts and facilities where they can build the brand and attract both gym members and non-member customers.

In the UK, they have already rolled out to seven clubs, with an aggressive rollout planned for 2024.

Kauai has also opened a first store in Florence, with plans to open a store a month in Italy. This week, Sydney gets its first Kauai, with more clubs in Australia to open stores over the next year.

As in South Africa, food deliveries via third-party delivery platforms will be a big focus, helping to drive brand recognition across those territories.

On their app, they will be providing customers with an enhanced brand experience, which will allow them to order ahead, and receive rewards and benefits.

There are some differences in naming conventions and localised tweaks to the menu, to cater for country-specific demand.

“The reality is if we had to roll out the menu, as we have it in South Africa, it wouldn’t work. You have to take into account the local base which includes certain naming conventions. So the majority of the menu stays as is, but there is about 30% localisation of the menu – in Italy, it’s probably around 40%.

“We list local favourites with a healthy twist – like pastas for example, or panini-type product, that is much like a wrap but much thinner and flatter – with the same free-range ingredients, quality and freshness.”

NÜ Health Cafés, currently limited to 12 premium Virgin Actives in South Africa, act like an incubator, where they push boundaries, explore what is new in global healthy eating, and combine trends in creative and different ways.

“NÜ has a broader menu, is less accessible than Kauai and is more premium, but often what happens is that where we see success in NÜ, a year or two later we put that on the Kauai menu. It’s a great brand, does incredibly well and just has a slower rollout, more premium and higher end, for someone who is really engaged in that health space.”

The group still sees sizeable growth opportunities in South Africa, outside the Virgin Active gyms, new cities and residential eatery areas. Next year will see a big focus on internationalising the brand, building awareness and opening a few standalone stores outside of the gym model.

Kowarski says they have been in the healthy food business for more than 25 years: it’s what they do.

“QSR brands like Domino’s Pizza, McDonald’s, Burger King, KFC and Nando’s have a strong presence internationally but there are no dominant brands in the healthy food space.

“Kauai offers something quite unique – we’re tried and tested and ready to scale globally.” DM

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