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Red Cap came up with an innovative distribution model for their Red Cap Biofuel gel that aims to create jobs and business opportunities for members of poorer communities, while providing a contingent solution to energy saving. (More information on our Energy Saving Kit)
Red Cap is aiming to build Red Cap into a countrywide brand through a franchise model that will see the gel and related products such as cooking stoves and glow-in-the-dark lamps sold through individual agents around the country. The company plans to recruit 300 street agents equipped with branded product carts to promote and distribute Red Cap gel in the townships by the end of this year. (Interested in becoming an agent?)
"Many South Africans prefer cooking with paraffin, even if they have access to electricity. We are simply offering a safer and more environmentally-friendly alternative, "said William Haywood, Director of Red Cap, adding that several municipalities are promoting gel-based cooking and heating to reduce the risk of fires in their communities.
The Red Cap Energy Saving Kit is a welcome alternative for the three million South Africans still reliant on paraffin to fuel their cooking and heating needs, and for the 20 million other users in a 770 million litre industry. In this context, the entrance to the market of a major new ethanol-based cooking and heating gel is good news for home safety and the environment.
As the gel is not derived from fossil fuel, carbon emissions are sharply reduced as fumes are non-toxic. Even more significantly, in light of the horrifying number of township blazes caused by paraffin fires, Red Cap gel does not run like a liquid, therefore the likelihood of home fires is dramatically reduces.
While gel has been sold as an alternative to paraffin for more than a decade, Red Cap's business model involves marketing , sales, consulting and training towards building a highly recognisable brand that generates sustainable income for franchises around the country. A basic start up kit, would be entrepreneurs can obtain a Red Cap "mini-business" which includes a branded cart, umbrella, uniform and start-up stock. Each franchisee will be trained and supported to grow their cart-based enterprise into a larger franchise.
Haywood believes Red Cap will be welcomed by the consumer when they compare pricing with other products in the market and lasts about three times as long. Red Cap vendors will be trained in business practice and Haywood would like to see each vendor walking home with a profit after earning back the initial capital outlay.
This project is geared at empowering franchisees as well as making the gel readily and visibly available to township residents.
Chemcity, a division of Sasol is providing business advice as well as marketing and technical assistance. While the project is still in the development stage, once the strategy is perfected, Red Cap should become a valuable asset to less affluent individuals and communities in South Africa.
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