Investing in Africa
Pages 6 & 7 A STRONG brand, a willingness to invest and a viable supply chain are key for businesses hoping to make their mark on the continent.
THE traditional British fish ’n’ chips dish is a comfort food not normally associated with export potential to the rest of Africa.
This a not a myth — but times and tastes could be changing, according to Nicolas De Sousa, marketing director of Traditional Brands, parent company of the Old Fashioned Fish and Chips and Chingos Chicken franchises.
Says De Sousa: “Generally maize is the primary staple food in Africa, often accompanied by a meat product, which is logical when looking at the resources available. However, the market has discovered the value in the concept of the traditional fish and chips meal — primarily potato and fish — which are accessible foods to African markets.”
He says that predictability has been the main defining factor of the world’s biggest franchise brands, such as KFC or Nando’s. But this consistency in aspects such as product, presentation and service has yet to be experienced in the African market, says De Sousa, “which does indicate that there is great potential in the market”.
He cautions: “What many view as ‘potential’ is based on formulas and models which have worked oversees. Basing your projected successes on these models is a dangerous prospect as the African market is still largely undiscovered as yet — but initial signs show that the market as a whole is unique and has specific requirements. For that reason, relying on a model which has worked in China or the US, for example, is unlikely to create traction for a company.
“It is certain that investing in Africa holds enormous potential — it is a land of milk and honey when you look at the resources available and development opportunities presented. However, the market is nowhere close to being stable and a huge amount of caution is necessary when delving into it.
“Our current strategic plans involve partnering with our strongest existing franchisees … they are able to bring their ‘street smart’, in-depth experience with customer markets in our southern African regions to the table. African market trends are largely dictated by the locals in a region and the main influencers among them.”
De Sousa points out that while the African investors’ market has major potential, the risks are just as large.
“There is widespread unpredictability in the GDPs of African countries, and taking into account the effect of the global recession applicable to Africa. As well as the lack of existing knowledge and infrastructure, the market is also a difficult one to conquer.
“Explorers and discoverers are often the creators of precedents and lessons from which others learn from. It is necessary for risks to be taken by these pioneers for the world to begin properly understanding the African market potential — we’ve barely begun to scratch the surface thus far — but investors would be wise to consider the inherent risks before embarking into new territories with no set standards.”