When Ebele Enunwa stopped for a bite to eat at his local branch of Port Harcourt’s only fast food restaurant, the queue of people snaked all the way to the car park.
The young investment banker turned away in frustration and decided to start his own fast food eatery which would raise the bar of service in Nigeria’s oil and gas hub.
In 2004 he opened Kilimanjaro, a chain of fast food restaurants which today has 20 outlets across Nigeria, including the capital Abuja and commercial center Lagos.
The company is one of a growing number of fast food restaurants to sprout across Africa in recent years. Morocco and South Africa have seen average annual fast food outlet growth of between 3-4% from 2009 to 2014 according to Euromonitor, and markets in Sub-Saharan Africa have also become attractive to international chains.
“Kenya and Nigeria are most obvious candidates from a macro perspective because they offer the desirable ingredients of an expanding middle-class, and a strong private sector backbone,” says Elias Schulze, managing partner at the Africa Group, a boutique advisory and venture capital firm. “They have a challenging but growingly sophisticated supply chain, and adaptable consumer tastes,” he adds.
Rising incomes, changing lifestyles
KFC has had the biggest reach across the continent out of international brands, with 771 outlets in South Africa and franchises in Angola, Namibia, Botswana, Mozambique, Malawi, Ghana, Kenya and Zambia. In 2013, it extended into Zimbabwe, Tanzania and Uganda.
This growing palate for fast food is attributed in part to the continent’s growing middle class whose disposable income and changing lifestyle left them with with an appetite for quick food on the go.
“As incomes rise and all of the usual emerging market dynamics are in play, such as urbanisation, more hectic lifestyles, many people in Africa are also gaining access to chained/branded restaurants for the first time,” says Elizabeth Friend, strategy analyst at Euromonitor International.
The spread of internet and advent of social media has also exposed young Africans to tastes and preferences of other people of their age group across the world.
“They’re curious about the foods their peers are eating and the restaurants they are going to, and they’re eager for a chance to try them out for themselves,” Friend adds.
Blending with locals
Some international chains have tailored their products to local tastes by adding popular local ingredients. In Nigeria Domino’s sells pizza topped with Jollof rice, a West African staple, and suya, a spiced meat dish often served on kebabs by local street vendors. KFC also sells a jollof rice inspired dish in Nigeria and in Kenya it offers a product based on ugali, a popular maize-based porridge.
However, local brands like Kilimanjaro say that the fact that they know their customers far better than their international counterparts puts them at significant advantage.
“Nigerians love their local meals and that’s our strong point,” says Ebele Enunwa. “In fact we are a Nigerian menu quick service restaurant. People like the fact that they can walk in and find food they grew up on – food they prepare and eat at home and have grown accustomed to,” he adds. Enunwa acknowledges there is a level of curiosity about western food like pizza or burgers, but he insists that Kilimanjaro serves the kind of fare Nigerians would eat every day for sustenance.
“We serve a full range of Nigerian meals freshly prepared on location at each location using fresh produce received from the farm each day. That’s tough for a western brand to beat – I think.” He adds.
Apart from their profound knowledge of local tastes and eating habits, home-grown chains are also adept at navigating local bureaucracies and running a business in challenging circumstances, such as when electricity is in short supply.
“The main obstacles are somewhat obvious,” says Schulze. “Challenging and underdeveloped supply chains, weak logistics networks, expensive and inconsistent power, potentially sensitive local partnerships, awkward or unhelpful regulatory environment,” he adds.
The continent middle-class is still fairly nascent and delicate, Schulze says, and its growth would be key to the long-term term success of any international brand. In many cases, companies can expect a return on investment only if they managed to scale up to 10, 20 or more stores.
“Ultimately it’s a gamble on the future,” says Schulze.