The man running Virgin Active

As the CEO of Virgin Active and the man who made Kauai the phenomenon it is today, Dean Kowarski is considered the most powerful man in South Africa’s health industry. 

With an incredible passion for nutritious food and healthy living, Kowarski disrupted South Africa’s fast food market by daring to do things differently. 

Kowarski, a qualified chartered accountant, has worked in various countries around the world, including Chile, Greece, the US, and the UK. 

Over a decade ago, while working long hours in an investment banking job in New York, he fell into the habit of eating quick and easy fast food, according to CEO Magazine.

As his health began to decline, Kowarski decided it was time for a change. He cut out processed foods and switched to fresh, responsibly sourced meals.

When he returned to South Africa in 2013, he noticed a lack of convenient, healthy eating options. This inspired him to open the NÜ Health Food Café. 

“It was just a place for me to get access to healthy food because I thought there was a gap in South Africa,” he told CEO Magazine.

With his background in finance, Kowarski quickly recognized a business opportunity. CEO Magazine explained that, in a market dominated by pizzas, burgers, and major fast-food brands, there wasn’t a health food brand that truly led the way.

Kowarski’s solution was to establish Real Foods Group in Cape Town, which now boasts eight brands under its umbrella. These brands offer a variety of products, including casual dining options, locally sourced honey and bread, and nutrition bars.

“First, I wanted to create a place for me to eat and then share it with other people, and that’s how it all started,” he explained.

In 2015, Real Foods Group took a significant step by acquiring Kauai, a well-known healthy fast-food chain famous for its smoothies.

Kauai

The business was launched in 1996 by three Californian friends who had lived on the Hawaiian Garden Isle of Kauai. 

While living in tents in a papaya field, they ran a bottled juice company and dreamed of opening a sandwich and smoothie shop. 

The former Kauai director, John Berry, told News 24 that the idea took root when he, along with brothers Carl and Brett Harwin, visited Cape Town in 1995 for Carl’s wedding and a surfing holiday.

“After being here for a few days, we noticed that we couldn’t find the types of food – healthy juices, smoothies and so on – that we were used to back home,” Berry said.

“When we were hungry, all we could find were pizzas, burgers and fried chicken. We were surprised that nobody was providing a healthy, convenient food and drink offering in South Africa… the market was here but not the offering.”

However, when Real Foods Group acquired the business, Kowarski envisioned a different trajectory. 

Whereas Berry had planned to further streamline the business by making it more convenient and accessible, even considering a drive-thru option, Kowarski saw potential in shifting the company towards the fast-casual segment. 

He believed that by competing with fast food, the business would spiral to the bottom.

Even though the shift towards healthy eating had not really made its way over to South Africa, he recognised that it was becoming a global phenomenon, he told CNBC Africa shortly after the acquisition in 2015. 

“It’s not only a South African phenomenon – it’s a worldwide phenomenon,” he said.

“It’s about a move to healthier eating, to real foods, unprocessed foods. It’s about lifestyle, it’s about choices people are making moving away from fast food too fast casual too healthy eating.” 

“Our vision was that health will come, it will become a significant business in South Africa and globally and we should make those changes sooner rather than later. So we repositioned Kauai into the premium space look and feel.”

An important part of the rebrand included transforming the design of the Kauai stores, which previously had a Hawaiian theme.

“Our opinion was that Kauai was definitely not working because it wasn’t being true to itself,” he told eNCA.

“This original Hawaiian-themed restaurant was exactly like a themed party. It didn’t speak to the food – it spoke to some faraway island. So we changed everything.”

Today, the business has a completely different look, and the Hawaiian design has been replaced by sleek, minimal storefronts. 

The first few months of this rebrand weren’t easy. Customers were fiercely loyal to the brand and were not happy about the price increases and menu changes. 

But after only six months, the business was a hit with customers. “I mean, our numbers just were staggering,” Kowarski said. 

Since then, the business has continued to show incredible growth. Last year, it opened its 200th store at V&A Waterfront. 

“Opening our 200th Kauai store in South Africa is testament to South Africans seeking healthier food choices” he said. 

The company is now the largest quick-service restaurant (QSR) health brand in South Africa, and its locations include grocery stores, Virgin Active gyms, and schools.

Virgin Active

In 2022, the UK health chain, part-owned by Richard Branson’s Virgin Group and private-equity firm Brait SE, aimed to create a comprehensive fitness and nutrition company.

As part of this strategy, Virgin Active acquired the nutrition assets of The Real Foods Group for approximately R565 million, and Kowarski became the expanded company’s CEO.

Kowarski described the merger as “an incredibly exciting moment for Virgin Active and The Real Foods Group”.

“Both brands have been pioneers in their respective wellness fields, building local and international reputations for excellence.”

Virgin Active had faced a difficult few years coming out of the pandemic, but the lockdown also increased people’s desire for healthier lifestyles.

Substantial investments were made in the group to support this new direction, including £20.2 million (R469 million today) from existing shareholders Virgin Active, Brait, and Virgin Group.

Additionally, Real Foods’ investor consortium contributed £18.2 million (R422 million today), and Titan Premier Investments, billionaire Christo Wiese’s investment vehicle, injected £50 million (R1.16 billion today), becoming new shareholders in Virgin Active.

“On the back of today’s transaction, we now have the opportunity to combine our skills to deliver a complete health offer around both fitness and nutrition so that our members can meet their health goals more successfully,” Kowarski explained.

“This, alongside the additional investment in the business, positions Virgin Active strongly to deliver growth over the long term.”