Everyone loves the smell of freshly baked bread, something that Sameh El-Sadat, co-founder of Egyptian bakery chain TBS, understands very well indeed.
“When a client visits the store, he not only sees croissants and sandwiches on display, but he can get his senses stimulated by smelling and watching the baked goods as they come out of the oven.”
This thinking has even inspired a slogan: “It’s so fresh, it’s baked in front of you!”
“This slogan has been the foundation of our project,” says El-Sadat.
In summer 2008, Sadat and two friends opened the first TBS store on Egypt’s north coast, a popular holiday spot for the country’s well-heeled. They subsequently opened branches in Cairo.
Sadat says that they chose the bakery business because they used to eat lots of baked goods when they travelled abroad. “We noticed that Egypt did not have bakery products that could meet international standards. Also at the time, the range of bakery products in Egypt was very limited and did not include many of the products that we are selling today.”
TBS stands for “The Bakery Shop”, the company’s official name, as well as the trio’s first initials: Tarek El-Nazer, Bassel Mashhour and Sameh El-Sadat.
The founders are alumni of the American University in Cairo, where they studied political science and accounting. Prior to launching their own business, they worked at private equities, multinational companies and banks.
Despite conducting extensive market research and attending bakery exhibitions in Europe, Sadat and his friends were still concerned that their lack of experience in the field made their venture tremendously risky.
Fortunately, a fourth partner with a culinary background came on board to allay these fears.
“We were lucky that Chef Yasser Abdel Salam joined us as a fourth partner,” said Sadat. Salam was previously head bakery chef at the Four Seasons Hotel.
Today, TBS runs 25 outlets in Cairo and Alexandria selling bread, croissants and pastries, as well as bespoke sandwiches and coffee.
The company has also signed an agreement with multinational energy provider Total, launching a chain of booths at Total gas stations branded “TBS On the Go”. TBS has a presence at 12 gas stations with more branches expected to open imminently.
The company’s portfolio of brands doesn’t stop there. The Delicious Bakery brand has since 2012 supplied the bakery departments of some of Egypt’s most famous grocery stores with premium-quality breads, croissants, doughnuts, muffins and more.
With its full-scale factory, The Bakery Shop (TBS) Company has a growing number of business-to-business accounts, including global coffee chain Starbucks.
In 2015, the company indulged its sweet tooth by acquiring Egyptian dessert company The Four Fat Ladies.
“It makes American desserts including cakes, muffins, brownies and cheesecakes,” said Sadat. “We acquired it because we needed a new brand that could broaden the range of our products.”
At the outset, the founders self-financed the project but felt after several years that they could convince banks to invest in their venture. In 2014, they secured a loan from Egypt's biggest private-sector bank, Commercial International Bank, of 10 million Egyptian Pounds (U.S.$570,000).
"Our company has already moved up from the bracket of small-size enterprises to that of medium ones,” said Sadat. “Our [annual] sales are estimated at 200 million Egyptian Pounds (U.S.$11.4 million).”
“We have nearly 50 stores and almost 800 employees,” he added.
With their successes in Cairo and Alexandria, the founders are contemplating a national as well as regional expansion.
“The most important piece of advice I can give to an entrepreneur is to be brave, never to fear challenges, to work on the ground and to develop a network of acquaintances that would include investors, bank executives as well as other entrepreneurs,” said Sadat. “All that will help him make the right decisions and scale up his business.”