How Danny K became SA’s Willy Wonka

For those who only know Danny K as an award-winning musician, it may be a surprise to learn that Daniel Koppel (his real name) has bought well-known confectionery firm Sweets from Heaven.

Perhaps more surprising is that he’s been in the confectionery game for more than five years as founder and CEO of KD Foods, a name that stems from the first product in his business — Knocker Doodle Aussie Style Liquorice — rather than a play on his initials. Buying the Sweets from Heaven trademark and business out of liquidation in February was, it seems, a logical extension of this.

"The truth," Koppel tells the FM of his interest in business, "is that it probably started before anyone knew about me as a musician."

Before he went into music full-time, Koppel had completed an MBA at Wits Business School, and taken a job at Investec’s private banking division. At the same time, outside of work, he was recording demos in his bedroom.

Then, nearly a year into his stint at the bank — where he had aspirations of going into corporate finance — Koppel was offered a recording contract. It put him in something of a dilemma: leave the business world where he was starting to establish himself, or ditch his musical dream and possibly "live to regret it".

"That was my trajectory — looking at businesses, backing entrepreneurs. But I was fresh out of business school; I just wanted to learn about the banking environment," he says. "I was there just under a year — when I left, my boss thought I was completely loony."

Of course, if Koppel had stuck with Investec, he would never have had the chance to share a stage with Nelson Mandela, U2 and Beyoncé, he says. "These memories are very precious to me, and made me the man I am."

But where Koppel diverges from many other musicians is that he used his corporate training to build a thriving business around his music career. "I would take [the] money I made, invest and look for opportunities," he says.

Eight years ago, for example, he was approached with a simple request to endorse headphones. Instead, he took that a step further, investing in an electronics company called SMD Technologies, which has brands such as Volkano, Rocka and Amplify.

He soon added food to his portfolio. "Sweets was something that for some reason intrigued me, but I knew I needed a brand to make an impact," he says.

Enter Sweets from Heaven.

The confectionery company got its start back in 1988, when company founder Laurie Davidoff opened the first store in central Joburg’s Smal Street mall. A JSE listing followed, and the company grew to establish a footprint in Australia and the US before delisting in 2003.

It remains, says Koppel, "an absolutely legendary brand in the hearts and minds of South Africans".

In 2016, a year after launching, KD Foods bought a long-term licence to the Sweets from Heaven brand, allowing Koppel to make the candy and use the company’s logo. But it was after the business went into liquidation last year that he saw an opportunity to buy the brand outright.

Koppel’s father-in-law, well-known divorce lawyer Billy Gundelfinger, helped him clinch the deal. He was, says Koppel, "invaluable in this process and went above and beyond to assist in making this materialise".

But now that Koppel has Sweets from Heaven, what does he plan to do with it?

Like many retailers, Sweets from Heaven endured a brutal pandemic, with little support over the past two years, says Koppel. And while some of the franchise stores are still operating, they’re just ticking over, with low stock levels.

"We will be engaging with the franchise holders of the brand … we want to add value to them," he says. "If we’re going to demand they keep the name on the door, we can’t be passive partners — we have to add value."

Koppel plans to reinvent the stores, modernising the concept along the lines of global brand Dylan’s Candy, in the US. More importantly, he’s aiming to use the Sweets from Heaven trademark on various fast-moving consumer goods products, such as gums, jellies, marshmallows and chocolates.

"As the brand equity is so strong, I believe it could carry over to ‘grab and go’ products in all of retail and not only Sweets from Heaven stores," he says.

It is, indeed, a product people know. The Heaven mix, for example, is a combination of gummy dinosaurs, gummy unicorns, vampire teeth and blue sharks. In Koppel’s view, it’s the juggernaut of the brand.

But Koppel’s plans are bigger than just Sweets from Heaven. He’s looking to build a larger diversified food group, along the lines of Tiger Brands or Pioneer Foods.

The starting point, however, is confectionery. In 2019, KD Foods joined forces with local sweet manufacturer Oya Sweets to make confectionery for a host of private brands, and make sweets locally, rather than importing them. The strategic idea, according to KD Foods’ website, was to increase operational efficiency by owning the supply chain.

"To truly compete with the other leading confectionery brands, we needed vertical integration and the benefit of our own factory making our product. The factory is state-of-the-art, and I believe our recipes and formulations set us apart in taste, texture and quality," he says.

KD Foods is now on the hunt for more local manufacturers. It recently bought The Chocolate Tree, a 30-year-old health manufacturing facility that makes everything from rice cakes to seed bars and organic cocoa powder, sold under the Good Heart brand. And this month, KD signed up another new factory, Master Sima, and the organic peanut butter puff range called Peanuffs.

The business also owns nutri-pharmaceutical brands, and has branched into CBD products. And, you probably don’t know this, but Koppel’s company also holds the local rights to some immense global brands, including Disney-and Marvel-branded food and snacks.

The big trick with the sweet business is to get your distribution right. Besides supplying retailers such as Spar, Dis-Chem, Shoprite and Checkers, KD Foods is also looking at moving into the cinema space.

"The movie theatres had an exceptional December, and we had a product that sold three times what we expected. It’s a very strong place to trade," he says.

So does this mean the end of Koppel’s music career?

Not at all, he says. "I think I’ll always be a musician, I always have this voice in my head [telling] me to do another album, another song."

In the music business they say you’re only as good as your last hit; in food you’re only as good as your last order

—  Daniel Koppel

He’s done pretty well in that aspect of his life, too, scooping four SA Music Awards. But it’s just as well he had another option, given how atrocious the economic environment has been for local artists of late. As Koppel notes, if he’d had to rely on his music to make a living, he’d be in an awful place.

"Many of my colleagues have had a terrible two years ... the fact that I did diversify has been a tremendous help to me," he says.

But with business taking up his time, won’t he miss the fame — the gala events, performing on a stage, and hobnobbing with celebrities?

Not really, says Koppel. "It can be harsh out there and intoxicating on your ego at the same time — it’s potentially a dangerous space. I don’t really miss that. Also, I’m older, with a family. I feel like I’ve passed that stage of being single and going to clubs and after-parties."

And, he adds, the food industry does still allow him to be creative, and put his "performance" skills on show — like when he’s trying to sell a new product to a reluctant buyer. "I’m performing, trying to win over my audience and get the product listing and support. In some ways, I’m transported back to [being] that young kid trying desperately to get a big record exec to believe in him, to cut him a break," he says.

"In the music business they say you’re only as good as your last hit; in food you’re only as good as your last order. You have to wake up every day and work … it’s just about the grind."

Still, the music business and the food industries couldn’t be more different. Take, for example, the impact of overhead costs on your bottom line. "In business, you have to employ a lot of people to make a big difference ... I employ more than 30 people in KD Foods … I never had to do that in music. I had a manager, a music director and me, and that’s all I needed. I miss the leanness of the music space."

But there are benefits, too. While his kids used to get excited if they heard his songs on the radio, now it’s almost as if they have Willie Wonka as a father, with the keys to an endless sweet factory. "In a kid’s world," he says, "nothing beats that."