Our Transformation journey
We support a more equal and inclusive South Africa through the ongoing transformation of our business and value chain. We moved from non-compliant in 2018 to achieving a Level 2 B-BBEE rating in 2023.
Famous Brands strives to establish an employee demographic representing the South African population. We observe the principles of equality and fair treatment in all operations and interactions with employees. Our business transformation strategy is guided by the Department of Trade and Industry’s B-BBEE Codes of Good Practice objectives.
In 2021, Famous Brands moved from CATHSSETA (Tourism and Hospitality) to FOODBEVSETA (Food and Beverages), which better matches our business activities. In the subsequent years, we have benefited from this move, including unlocking substantially more funding for our skills development initiatives.
Our Group Transformation Manager, supported by our executive leadership team, is responsible for executing and monitoring our B-BBEE transformation strategy across our South African operations. Transformation is overseen by the Social and Ethics Working Committee and the Board’s Social and Ethics Committee. We follow best practices and align our activities with the 10 Principles of the United Nations Global Compact. We operate according to high standards of responsibility, ethics and accountability.
Our B-BBEE scorecard
We monitor our scores across the five elements of the B-BBEE scorecard, as set out below.We have strategies to improve our scores across all of these elements except for ownership.
As agreed with the B-BBEE Commission, we have moved our B-BBEE verification timeline forward from September to August and issued our B-BBEE certificate at the end of August 2022.
This report describes our progress, targets and outlook regarding our transformation journey. Over the years, we have made significant progress in fostering diversity at the Board level, throughout our workforce and within our value chain. In 2023, we achieved a Level 2 B-BBEE rating for the first time. The challenge ahead of Famous Brands is maintaining this rating, despite potential changes to B-BBEE legislation.
The ownership element measures the effective ownership of enterprises by Black people, including how they are entitled to the voting rights and economic interest associated with the equity holding. Voting rights afford the rights to determine strategic and operational policies of an enterprise, while economic interests result in the accumulation of wealth by Black people.
In 2023, Black ownership decreased to 12.27% (2022: 14.4%) based on an analysis of mandated investments. Famous Brands’ shares are publicly traded on the JSE, and many of our shareholders are ordinary South Africans who own shares through their pension funds and other investments.
Management control is exercised through the Company’s governing bodies, including the Board and executive management. In July 2022, at the time of verification, the Board comprised 40% Black non-executive directors, with Black women making up 20%.
|Read more about our Board and Exco composition|
The employment equity element tracks the Group’s plans to increase the representation of Black people in the workplace and management positions.
Our employment equity score declined from 9.74 to 9.87. We are committed to our targets with the Department of Labour. The table below is for South African employees.
The skills development element measures the investment that Famous Brands makes in the training and development of its Black workforce to improve their skills and competencies. In 2023, our score for skills development was 20.00 (2022: 20.00).
Key projects included our partnership with the YES programme to provide a workplace experience to 160 young Black South Africans. We allocated approximately 6% of our total skills development budget on developing Black employees across all levels. Of this, 0.5% was spent at senior and executive management levels.
The HR teams play an important role in developing employees and supporting the Group in achieving its objectives. Training initiatives include the programmes detailed on page 95 and learnerships and internships.
Supporting people with disabilities
Famous Brands has offered people with disabilities learnerships since 2019. These learnerships sponsored qualifications in professional cookery and call centre operations. We experienced several challenges with these learnerships, including escalating costs to run the programme, high drop-off rates for learnership and minimal absorption of learners into our business. These challenges made it difficult for Famous Brands to meet our B-BBEE targets for training people with disabilities.
In 2023, we restructured the learnership programme and brought it in-house to run parallel with our normal recruitment processes. The intention is to recruit people with disabilities, wherever possible, to replace employees who leave the Group. Finding the right interns increases our overall base of employees with disabilities and lowers the number of learnerships required each year. Our employees with disabilities participate in ongoing training, which is offered to all employees.
This revised programme kicked off in November 2022 and we worked with recruitment agencies that specialise in these areas to select interns. We have begun building relationships with higher education institutions as a potential referral channel for interns. Since then, we have hired 61 interns.
We invested R11 million and developed training for employees on how to interact with people with disabilities and provide support for both the interns and hosting departments.
|R4.4 million spent on disabled training and development||R983 000 spent on bursaries||R12.5 million spent on the YES Programme||249 learnerships and internships for Black people||130 learnerships for people with disabilities|
Case study: Celebrating the success of the YES programme
Our collaboration with YES allows young South Africans to gain work experience while also developing a talent pipeline of trained baristas for our restaurants.
In February 2022, Famous Brands launched the Famous Brands Academy Barista Learnership in partnership with the YES Programme.
The learnership programme offered 159 unemployed youths a 12-month work experience. Of this, 120 youths underwent a training course on coffee and what it takes to be a top barista and 39 youths were placed as interns within the Group. The aspiring baristas were trained in all aspects of working in a restaurant through the Training Institute. They also completed the YES work readiness training programme with 25 modules on life skills, such as money management and digital literacy.
After completing their training, they were placed in franchise partner restaurants to gain valuable work experience for 12 months. At year-end, 104 youths graduated from the Famous Brands Academy Barista Learnership. We had an overall absorption rate of 91%, where 133 graduates of the YES programme have been employed at restaurants or within the Group.
YES is a South African non-profit initiative that brings together business, government and labour to address South Africa’s youth unemployment crisis. The YES initiative allows for up to two B-BBEE levels of enhanced B-BBEE status recognition. This depends on the level of job creation against the prescribed targets and the subsequent absorption of the youths.
Our impact in numbers
84% female youths placed. This is above the YES average of 58%.
77% of youths come from grant recipient households.
79% of youths have dependents.
+R9 million into the community through youth wallets. An incredible contribution from a single entity.
Enterprise and supplier development
The enterprise and supplier development element comprises:
- Preferential procurement: the extent to which Famous Brands procures goods and services from suppliers with strong B-BBEE credentials
- Enterprise and supplier development: the financial and non-financial support to develop new or existing small and micro Black-owned enterprises
This element aims to improve market access for Black-owned businesses by incentivising corporates to support and purchase from these businesses.
In 2023, our score for preferential procurement improved to 20.76 (2022: 19.61). This reflects our increased focus on buying from Black, Black women-owned and qualifying small and micro-enterprises. We aim to improve the diversity and transformation of our supplier database. We focus on understanding the contributor level of each suppliers.
Suppliers between non-compliant and a level 5 contributor status are assisted with a transformation plan or replaced with a qualifying supplier. Each month we track B-BBEE certificates and monitor our supply chain B-BBEE initiatives.
|1 890 suppliers supported||R6.17 billion spent with qualifying B-BBEE suppliers||R893 million spent with small and medium enterprises|
|911 small and medium enterprises supported||R2.2 billion spent with >51% Black-owned suppliers||R1.7 billion spent with Black women-owned suppliers|
We invest in projects that further diversify our supplier base and improve the lives of our Black suppliers and their communities. Some key initiatives are detailed below.
The Group’s Owner-Driver Programme was established in 2010 to assist Black drivers in starting their businesses. The project contributes points to our B-BBEE scorecard while providing efficiencies and improved consumer service levels in our distribution network.
We have 27 owner-drivers in the programme, which has created over 75 direct jobs. Famous Brands injected R23.5 million of enterprise and supplier development support to these drivers. In 2023, owner-driver operated businesses delivered 6.4 million cases to our restaurant network.
Famous Brands has supported the Berlin Beef project in the Eastern Cape since 2018. The project aims to improve sustainable cattle production in previously disadvantaged communities while providing the Group with access to high-quality and locally produced beef. As the beef is from a B-BBEE-compliant supplier, Famous Brands receives enterprise and supplier development points from this initiative.
Over 90% of slaughtered stock comes from the commercial sector, although smallholder farmers farm 40% of cattle. The main limitations of smallholder livestock production are poor genetic make-up of the cattle and natural resources management. These limitations affect the quality and consistency of production and reduce the marketability of livestock.
This project aims to improve the quality of the existing cattle by introducing suitable and adaptable genetic material that the formal market will accept. The project also trains farmers on natural resource management to enhance their livestock production.
The project works with 188 Black smallholder farmers and 1 000 communal farmers based in 200 villages in the Eastern Cape. In 2023, the project allocated 200 breeding bulls and 10 000 breeding heifers to these emerging farmers. As each village has an average of 40 households, this investment will benefit approximately 8 000 families in the participating villages.
Berlin Beef project in numbers
|R5 million per year Famous Brands will contribute a total of R20 million, made up of R5 million per year over four years||188 Black beef farmers in the Eastern Cape are supported by the initiative||18 500 calves on farms are taken care of by Black and land reform farmers under the mentorship and supervision of the fund||800 jobs were created by this initiative||3 750 people are direct and indirect beneficiaries in the Eastern Cape|
Ground and Green – turning coffee grounds into eco-friendly products
Every day more than two billion cups of coffee are consumed across the globe. Most of the coffee grounds used to make those cups are thrown away, with six million tonnes sent to landfill every year . As great coffee is a key component of many of our restaurants’ offerings, Famous Brands looked for an opportunity to develop a product based on used coffee grounds. Coffee beans contain natural oils and a fraction of these oils are released into a cup of coffee, this makes coffee grounds a viable alternative to wood-based fire products. Recycling coffee grounds into fire products prevents emissions from decomposing grounds and also harnesses their untapped energy to give them a second life as a useful product.
Famous Brands decided to launch the business opportunity as an enterprise and supplier development project and invited qualifying employees to participate. Vincent Madiboho was selected and entered into a partnership with Famous Brands. He now owns 51% of the new company, called Ground and Green. While the company was registered in February 2023, the journey to develop the product and branding took a full year. The project involved over nine months of research and development to transform coffee grounds from raw materials into effective products. Then, the products were further refined to reduce costs in the manufacturing process and ensure that they are easy to handle and package.
Today, Ground and Green collects coffee grounds from 47 Gauteng restaurants to be dried and prepared to be transformed into useful products. The first two products being a fire lighter and fire brick which are competitively priced.
Socio-economic development refers to financial and non-financial contributions to individuals or communities where at least 75% of the beneficiaries are classified as Black. Our socio-economic development initiatives alleviate poverty and hunger and support local investment in our communities. In 2022, Famous Brands spent more than R16.4 million on its CSI activities in South Africa.
|Read more in our corporate social investment report|
R1 million was donated to Gift of the Givers to support their hunger alleviation initiatives including feeding schemes, agricultural programmes and food parcels.
R500 000 was donated to FoodForward SA to support their programmes that benefit more than 950,000 South Africans each day.
R7.9 million was invested in grassroots rugby development reaching 1 058 beneficiaries.
R2.5 million was donated to support children who have cancer.
R671 770 was spent to provide meals for the Tembisa Feeding Scheme.
R371 850 was donated to Smile Foundation to help children with facial abnormalities and severe burns by providing them with surgery, psychological care and support for their families.
R1.1 million to the ROUNDA initiative to support feeding schemes.
R1.5 million donated to Reach for a Dream to assist children facing life threatening illnesses.
R1 million worth of flatbreads created from excess pizza dough was donated to charities and organisations that feed children, the elderly, families, and other vulnerable groups.
We are committed to identifying additional strategies for all B-BBEE elements to transform our business further and contribute to a better South Africa. We are monitoring changes to B-BBEE legislation, including the Employment Equity Amendment Bill that will come into effect on 1 September 2023.
Our focus areas for 2024 are as follows:
- Maintain Level 2 B-BBEE status.
- Improve employment equity scores.
- Encourage non-compliant suppliers to comply with B-BBEE regulations.
- Strive to improve our enterprise and supplier development scores.