One of the most important factors behind the ongoing success of the KFC brand in Africa is the strong focus on being local. The fast food giant has local elements in its menu, uses local suppliers and tries to set the price to local levels. This is all with the goal of solidifying its position among the biggest and best on the continent.
It has been widely recognised for some time now that KFC is South Africa’s fast food industry leader. With close to 800 stores across the country, and hundreds more on the continent, this American brand has learnt over the years that international expansion is all about catering for local tastes while maintaining high-quality service and sticking to sound business processes and principles.
KFC entered the South African market place in 1971 and quickly began expanding. Although its spread was slowed somewhat by US Congress laws forbidding American companies from owning South African assets, when the sanctions were lifted in 1994, KFC quickly continued bolstering its presence.
Unlike other sectors, and not just those in the food industry, fast food is a booming market. The annual turnover of SA’s fast food industry in 2014 was estimated at a staggering R302 billion and reports suggest that the industry accounts for just under 40% of total consumer foodservice sales across the country. The rising middle class and the increasing spending power of the lower LSM groups have resulted in more and more customers flooding through the doors at KFC and other local and multi-national franchise-style outlets.
So with a booming market, a brand that is known the world-over, food that is enjoyed by millions and a dominating share of the market, how can KFC continue to grow?
According to Roger Eaton, CEO of KFC and Senior Officer for Yum! Brands (KFC’s holding company), expansion on the continent, in emerging markets, will provide real opportunities for development.
AFRICAN CHICKEN
“We have close to 800 stores in South Africa, we’re exploding there and we will continue to grow at about 50 stores per year so we have a great model. That has helped us build a great platform which is enabling us to expand into Africa,” Eaton told CNN’s Marketplace Africa.
“We are slowly moving north. We’ve been strong in the surrounding countries but we are now moving further north and pushing into Ghana, Nigeria and Uganda and that has been our growth story – we’re very confident,” he added.
Obviously, the most important factor when assessing development in a new region is the local supply chain. KFC likes to source its ingredients locally, avoiding importation costs and helping to provide support to the native economy. This is not always an easy task; take Angola for example, KFC is still searching for a quality lettuce supplier and currently sells all of its products without the leafy vegetable. In other parts of Africa, KFC imports potatoes for its fries from Holland because of the lack of reliable, high-class supply.
Fortunately, for the majority of its products, in the majority of regions, KFC has managed to successfully build robust relationships with quality suppliers and Eaton admits that this is one of the most important concerns when considering a new marketplace.
“The first and most important thing is, can we access the products we need to meet the standards we have – that’s absolutely critical. The second thing is, how can we make the food affordable to consumers in those countries.
“In Africa, in virtually every single country that we operate, the chicken is locally sourced and we need to make sure we have a high-quality supply. That can actually take 18 months, not only to get the supply, but to bring the supply to the standard of which we want to operate,” he told CNN.
“You have to make sure that the supply chain is built around standards that you’ve set and that you hold rigorously against those suppliers. We have a very detailed audit system on all of our supply chain globally,” he added.
Tailoring the menu to meet local tastes is also important when it comes to marketing and driving sales. In a unique-to-each-region project, KFC has used its side dish offering in Africa to mould its menu to local customers.
“One of the things that is great about the brand is that it can always do the local side, local context. In Nigeria its Jollof Rice, in South Africa it’s a maize porridge called Pap and in Kenya we’ve gone for a twist and deep fried balls of Pap in original recipe breading.
“It’s a local specialty and ours is the KFC version,” KFC Africa MD, Doug Smart told CNN’s Marketplace Africa.
UNDERSTANDING KFC
In recent times, there has been more of a focus from the end-consumer on exactly what goes into a product, how it is made and where the product comes from. KFC has already answered two questions by organising local supply chains and making their production methods transparent.
When it comes to what goes into the product, the whole industry has faced a plethora of rumours, slurs and sometimes crazy accusations of what the food is actually made up of.
McDonalds and Burger King have faced similar problems and the former has even undertaken a complex advertising campaign to defend its products by educating consumers and reassuring them that nothing ‘nasty’ goes into its food.
Eaton told CNN that he thinks people’s consciousness is an advantage for KFC as it means people gain more of an understanding about exactly how much hard work goes into ensuring quality standards.
“I see this as a great thing for our brand,” he told Marketplace Africa. “One of the things that’s not understood about KFC is how much work we put into getting fresh chicken into our stores and hand-breading it. I’m very comfortable, I think we have great supply chains and a great formula for how we make the product; it’s getting more and more appreciated.”
As more and more people in more and more countries start become loyal KFC customers, it looks like there will be no slowing this fast food giant. As Africa’s want and subsequent need for fast food outlets grows, KFC will be at the forefront of the market (set to be worth a reported $1 trillion by 2020), pioneering local supply chains and quality service, and this global icon will likely become the single most well-known fast food brand on the continent.
“It all comes back to the fantastic taste of the food; we have an incredible recipe, the food tastes fantastic and that’s why it works everywhere we go and Africa is no different. We’ve done a great job of finding great partners, building fantastic looking stores and having great team members and all of those things come together to make a great business,” Eaton told CNN.