Bought for R1: What Khayelitsha Cookie Company Teaches About Business Turnaround
Mid-year is often when South African business owners start looking harder at their books.
Half the year is done. Tax season is approaching. And whatever the second half needs — more capital, tighter admin, or a hard look at what is not working — the difficult questions tend to surface around now.
For Adri Williams, co-owner of the Khayelitsha Cookie Company, those hard questions are not new. Thirteen years ago, she and her business partner at the time, Eunice Nyobole, bought a struggling cookie bakery for R1. With it came R2.5 million in debt.
Eunice has since retired, but the business the two women built together now employs 97 people, most of them women, and supplies Clicks and Checkers. It also needs to produce about 97,000 cookies a day to break even, and has recently landed a contract to put its cookies on British Airways flights.
How Adri and Eunice found each other
Adri and Eunice met around 2007, when Adri was working for a national coffee manufacturer and Eunice managed a fast-food outlet in Cape Town. Adri trained staff on the coffee machines, and the two women fell into the habit of talking over coffee whenever she visited.
Not long after Adri learnt that her grandmother in Johannesburg had died, Eunice noticed something was wrong and drew her into conversation. Adri admitted how much she missed her family so far from home. Eunice told her, simply, that she could be a mother to her in Cape Town.
It set the tone for a friendship the two women still describe as family.
Later that year, Adri left the coffee company. Volunteer work at a hospital, where she had watched a baby die of malnutrition, had convinced her she wanted work that made more of a difference than a comfortable salary could. She applied to KCC, was warned in the interview that the company could not guarantee a monthly salary, and took the job anyway.
A few years later, Adri visited Eunice at the restaurant and found her deeply unhappy. She invited her to join KCC instead. Within a few years, the two friends who had met over a coffee machine were taking over the business.
A business bought for R1
In 2013, the company was struggling badly. Its two directors, Tim Leher and Tom Fehrse, offered to sell it to Adri and Eunice for a single rand, on one condition: the new owners would also take on the R2.5 million debt on the books.
It was not blind faith. Adri and Eunice had spent years working alongside Tim and Tom and understood the business from the inside. But it was still a serious risk.
What made it possible was the kind of support many business owners never get. As part of the handover, Tim and Tom agreed that if the company folded, Adri and Eunice would be released from the debt. When cash was tight, including during Covid, they allowed them to pay when they could, interest-free.
Thirteen years later, Adri still calls them for advice.
The first fix was output
The first big fix was not complicated. The bakery needed to produce more.
At the time, competitors were relying on automated production methods, while KCC continued to hand-bake every cookie.
Their solution was practical: if the team hit the day’s cookie target, they could go home early and still be paid for the full day.
The idea worked because it made sense to the women on the factory floor. Many were mothers who wanted to get home to their children. The faster the work was done, the sooner they could leave. Over time, the daily target increased in step with wage increases. On most days now, baking is finished by early afternoon.
It took three years for the business to break even. But that was only the first milestone. The losses accumulated before the takeover were so significant that it took another 10 years to claw back the deficit. Thirteen years after buying the business, about R800,000 of the original R2.5 million debt still remains. This year, Adri says, the business reached another milestone: on paper, its accumulated profit finally matched the outstanding debt, marking the first time the two balanced each other out.
Learning the numbers the hard way
Adri is candid that she is not a numbers person by nature.
“I’m the furthest thing from a chartered accountant you can get,” she says. “But I had to learn.”
She taught herself through after-hours study: income statements, tax, forward planning. When she hit a wall, she called mentors until she found someone who could explain it.
Contracts were a harder lesson.
“We got badly burnt by a contract you think is fine, and then two or three Latin words turn the whole thing in the other party’s favour,” she says.
Big suppliers, she learnt, know how to use those details.
Today, she runs a fixed rhythm. Monday, Wednesday and Friday are admin days for finances, HR and planning — the necessary parts of the job. Tuesdays and Thursdays are for clients and marketing, the work she loves.
It is not glamorous, but it is part of the discipline that keeps the business steady.
Getting into retail
Getting into retail was the first big milestone.
Khayelitsha Cookie Company is now the exclusive supplier of a private-label cookie range at Clicks, a listing Adri believes was earned through years of consistently delivering the same quality before the retailer eventually approached them for a meeting.
“They’re not going to give you a chance the first time they taste your product,” Adri says. “They call you the thirtieth time, once they’ve seen the standard hold.”
From there came Checkers’ Oh My Goodness range, and then the British Airways contract, secured through existing supply partners.
That deal alone created nine new jobs.
“That’s a drop in the ocean against the problem South Africa has,” Adri says. “But it’s nine families with one less person going to bed hungry.”
The contract is currently baked at a loss. Shipping delays linked to conflict in the Middle East forced the company to switch to air freight, at roughly four times the cost of sea freight, to avoid months-long transit times and protect its relationship with a new client.
In 2018, KCC also outgrew five scattered rented units in Maitland. A R1.9 million loan funded the move to one site in Parow, bringing production under one roof and clearing the way for international food-safety accreditation, a requirement for the retail and export deals that followed.
What Adri tells other business owners
Asked what advice she would give someone taking on a business under financial pressure, Adri does not hesitate.
Get mentors, she says. One who pushes you forward, and one who asks the hard questions.
“Every business is one bad decision away from closing. Don’t ever think you’ll always make the right call.”
She also believes purpose matters, especially when the numbers are difficult.
“Purpose equals passion. Passion equals endurance,” is a line she repeats often, including to the international MBA students who tour the factory each year.
For Adri, purpose is not separate from the business. It is part of what helped her keep going when the work was hard, the debt was real and progress was slow.
Her third lesson is about professionalism.
“It’s not about your story or your product at the end of the day. It’s about whether you deliver on time and stay consistent.”
That consistency, Adri believes, is part of why big customers kept trusting them. The company was recently recognised as the best supplier in the cookie industry across Africa, which she believes has much to do with consistency and low complaint rates.
Looking back, Adri does not pretend the turnaround happened quickly. It took three years to break even. Thirteen years later, there is still debt left to pay. But the business is still here: employing 97 people, supplying major retail channels and continuing to create work in a country that needs it.
For South African business owners carrying debt, funding an unglamorous fix or trying to grow without losing sight of the numbers, Khayelitsha Cookie Company’s story is a reminder that turnaround is usually slow work. In Adri’s case, it came through output, admin, consistency and trust, built one year at a time.
At Genfin, we work with established South African businesses navigating exactly that kind of long game, where the numbers and the story both need to hold up. If that is where you are, we would like to hear from you.
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