Posted by: Martin | February 25, 2012

Chicken Republic

Can’t tire of African entrepreneurship stories

I just read an unusually interesting and inspiring story in CP-Africa and CNBC Magazine about  Nigerian entrepreneur Deji Akinjanju, who built a multi-million dollar fast-food empire from scratch in 10 years:

Setting up a food-retailing business and moving into what he [Akinjanju] calls “the chicken space” has happened in a roundabout fashion. “It was manufacturing and retailing businesses that initially interested me. But then the idea of fast food came up and it seemed like the obvious thing to do.” His degree in the US and masters in the UK, followed by consultancy experience at Accenture (formerly Andersen Consulting) in London taught him to “analyse and reason” and “learn from mistakes” – and he got practical experience from his first business based out of Johannesburg, supplying UN survival kits in Burundi and Rwanda.

[…]

As he leaves the restaurant to watch his beloved Arsenal football team play Chelsea on TV, he reflects on how far he’s come. “I left Nigeria at 18 and came back at 34. Since then I do believe I’ve created a brand that stands for something strong. It’s not just about number of outlets. I’m chasing happy customers, happy investors and real service quality.”

After 16 years in the United Kingdom, Deji Akinyanju returned home to found one of Nigeria’s most successful food retailers.“I felt driven to go back and make an impact,” he said on his decision to return home.”It was at the time of transition from military rule to democracy and I wanted to help build an entrepreneurial private sector.”

Today, 42 year old Akinyanju heads one of Nigeria’s fastest growing retail chains valued at about $120 million. With about $2 million (N320 million) in seed funding raised from family and friends, he initially had a franchise deal with Chicken Licken, South Africa but quickly established his own brand Chicken Republic.

But he admits he has learnt most on the job, drawing on his own doggedness to carry him through the tough times. “When I started, I didn’t have much experience. If you have passion, the rest is easy to learn, but you can’t teach somebody to be passionate.”

When reading this, my first reaction is Hey, I can do this in the Ivory Coast!   Akinjaju was at about the same age as me when he started, and just like Nigeria a decade ago the Ivory Coast has recently seen a big improvement in governance.  Though, I’ll admit the $2 million seed fund from friends and family is tough to match, and there are many smart people who have tried to set up fast-food retailers in Africa and failed:

From an article about KFC in http://www.howwemadeitinafrica.com:

“We have seen a number [of our] competitors go into markets in Africa and loose a bunch of money and withdraw. Some of the bigger South African brands have gone in, paid some very significant schools fees, and then had to either withdraw or scale down their operations … The potential in Africa is enormous, but you got to be very thoughtful, and go about it the right way.”

It seems to be working out for KFC though:

Around 2007, KFC earnestly started to consider opportunities in the rest of the continent. Keith Warren  [Managing Director of KFC Africa] says that Nigeria, with its population of over 150 million people, was a natural choice. And in December 2009, KFC opened its first branch in Lagos.

According to Warren, KFC was very well received in Nigeria. “Our original development plans for Nigeria were quite conservative, and within six weeks, I was [in discussion] with the franchisees, and they were saying, ‘Forget that, we are now going to build as many stores as we possibly can’. We are finding that the only limiting factor we’ve got in Nigeria right now is actually chicken supply, and finding suppliers who are able to meet our global quality standards in sufficient quantity.”

Chicken Farming

The chicken supply issue is very interesting indeed. Akinjanju and his Chicken Republic is having the same problem, and is now setting up a large chicken farm in Nigeria:

Akinyanju turned supply challenges into opportunity and, in a business epiphany, the company has just invested in its first production capacity, opening a chicken farm 200km south of Lagos.

The plant will supply his restaurants as well as supermarkets and such is the demand for chicken in Nigeria, Akinyanju is focused on becoming the country’s largest poultry distributor, supplying cheap chicken to the masses. Demand – which is growing as national eating habits shift and more poor people climb the economic ladder – way outstrips supply because of strict import restrictions designed to help nurture a domestic industry. “There is an unbelievable shortage of chicken in the country,” he says. “The Nigerian market is three times as big as South Africa’s yet South Africa’s largest chicken factories produce 3 million birds a week. In Nigeria it is just 100,000.”

The Ivory Coast is lowering import duties on chickens, but it’s the same story there with small scale producers, and an increasing demand from a growing economy and a growing population.  The fast food space isn’t as developed in the Ivory Coast as in Nigeria, but it seems set to inevitably follow suit.

Akinjanju says he  sees demand to open maybe 300-500 outlets in Nigeria and expand in other African countries. He says he sees a cultural change happening daily with a large and growing younger population eating out more and more.

Hear him speak in this video:


Responses

  1. As i see it here in Abidjan, Cote d’Ivoire, we Europeans cannot always see the wood for the trees … an old English saying. Subjects that are close to my heart include “ready to eat food … Fast Food Outlets” and “recycling”.

    And if you look very carefully in Cote d’Ivoire, there are hundreds, if not thousands, of fast food outlets, feeding hundreds of thousands of customers every week (from school children to government civil servants). Look around you at the little blue kiosks (often run by men from Guinea, not from Cote d’Ivoire), selling spaghetti bolognese,cooked in front of you on a high heat (no food poisoning risk here) for as little as 350 FCFA (that’s 50p in English money) per serving, which is usually quite copious.

    And the women from Cote d’Ivoire sitting by their small stalls, cooking and selling roasted banana, roasted sweetcorn, roasted peanuts, the sweet profiterole like gateaux (I can’t remember the name).

    None of this comes with an internationally, nor nationally recognised logo or ensign, but in Cote d’Ivoire often the kioks are painted in two shades of blue.

    When it comes to recycling in Cote d’Ivoire, you even buy peanuts in recycled Johnn Walker or Bacardi bottles in the major supermakets, on the shelves. Freshly squeezed drinks, such as Gingembre, Pineapple Juice, Lemon juice, etc, are sold in recycled plastic mineral water bottles on the streets of Cote d’Ivoire.

    As I have said before, Cote d’Ivoire is full of paradox and enigmas … and long may it remain that way.

    Vive Cote d’Ivoire.

  2. Yeah, I was going to mention that – of course there are tons of fast food places to eat out in Abidjan, they are just not branded or part of international chains.

    I remember when Nando’s opened in Dakar, it became the hip place to eat for well-off young people. Same thing with McDonald’s in Minsk (Belarus) come to think about it. Whether one likes it or not, people do like the standardised, ISO-certified, branded experience of modern fast food chains.

    You should see Ivorians who have only ever experienced maquis, quickly taking on the habit of eating at KFC when they emigrate to Europe.


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