Global fast food chain KFC finds sweet success with Kenya’s middle class30th Jun, 2017
Driven by huge demand for their famed chicken, KFC has far-exceeded its growth targets
When KFC entered the Kenyan market six years ago, the uptake was phenomenal, with long queues outside its outlets of consumers eager to get a taste of the famed fried chicken.
Since then, the demand has not let up – there are now 14 outlets in the country, deliveries have grown 32% over the past twelve months alone, and the restaurant has ventured upcountry much earlier than it had projected at the beginning.
“When we started we were perceived as a premium brand, catering to the upper-income segment of the market,” says Derrick Van Houten, Group CEO of Kuku Foods, local franchise of KFC.
“But sales are now booming in the middle income segment, particularly family meals which have grown tremendously,” Van Houten told Venture Magazine.
Kuku Foods is the local Kenyan franchisee of Yum! Brands, which owns KFC, and is also the company behind Pizza Hut and Taco Bell.
There are 20,000 KFC restaurants globally, each of which has to adhere to a strict, standardised production process.
It means that although there can be small tweaks in the menu to cater to local tastes, “everything is exactly the same as everywhere in the world.”
The country’s best-performing KFC outlet in terms of sales volume is, surprisingly, a drive-through branch on Mombasa Road, and not any of the numerous outlets at the malls in the city.
“Mombasa Road is our biggest outlet in Kenya by far,” Van Houten says, which supports the view that KFC is no longer a “posh” brand limited to the swanky malls.
It also suggests changing consumer tastes in Kenya, where the popular understanding has been that Kenyans would prefer a sit down meal in a restaurant any time they get the chance and eating on the go is more frowned upon.
“Today, deliveries make up 17% of KFC’s sales in Kenya, and take-aways another 40%. It wasn’t always this way. Deliveries have grown 32% over the past twelve months alone. Chicken and chips make up the overwhelming majority of KFC sales in the country; Kenyans are less enthusiastic about the “healthier” options like chicken wraps and ugali.
“We tried experimenting with local tastes when we incorporated ugali, but that wasn’t a hit. We realised there was no point competing with eating in – homecooking will always win! People come to KFC for good food. So we decided to stick to what we know, which is chips, chicken and soda,” he says.
KFC sources all its chicken locally, Van Houten tells Venture Magazine.
The chips are imported frozen from the Netherlands each month.
But the CEO says that Kuku Foods is working on developing a supply chain with local potato farmers, though Yum! Brands would have to set up an audit process to ensure quality. There are also challenges with the supply of fresh produce like tomatoes, lettuce and cheese.
“It’s difficult to consistently find the right kind of vegetables in the market,” he says. “So we manage the whole cold storage chain ourselves – the warehousing, logistics and delivery.”
Going forward, Van Houten says KFC will focus more on the drive-through model, going by the Mombasa Road outlet’s runaway success.
The executive also sees also huge potential growth in the upcountry market.
“It wasn’t our plan to go outside Nairobi so soon; we thought that consumers would be less impressed with our fare,” he says. “But we were wrong. The uptake and growth and sales was just phenomenal. In fact, the Nakuru restaurant is among our top five outlets in the country.”
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