Johannesburg Stock Exchange-listed Taste Holdings this week announced it is bringing Domino’s Pizza to Southern Africa.
Domino’s is one of the world’s largest pizza delivery companies, with over 10,800 outlets in more than 70 countries.
The deal is part of a larger trend of American fast food brands entering the African market. Burger King has opened more than 10 outlets in South Africa since its launch in May last year; KFC has also expanded across the continent.
Taste currently owns the Scooters and St Elmo’s pizza restaurant brands, with operations in South Africa and a number of its neighbouring countries. According to Taste CEO Carlo Gonzaga, current Scooters and St Elmo’s franchisees will be given assistance to covert to Domino’s.
Gonzaga told How we made it in Africa that he first approached Domino’s about 10 years ago, and that he has a relationship with the company’s management. “On finding out that they were finally interested in coming to South Africa, we then explored the option of how we could be part of it.”
Power of a global brand
But with already established brands such as St Elmo’s and Scooters, why the interest in Domino’s?
“We looked at markets around the world, and there are very few markets… where the number one or two positions isn’t occupied by Domino’s or Pizza Hut… We would certainly rather be trading under a global brand, than a local brand.”
He says that being in partnership with Domino’s gives Taste’s franchisees access to a myriad of global resources, including best operating practices and new product pipelines.
Franchisees will also have access to Domino’s global online ordering platform, something the company spent a significant amount of money on developing. Gonzaga says no South African restaurant brand has the resources to develop such a platform.
In Southern Africa, the Domino’s menu will also be adapted to local tastes. Gonzaga says the best-selling Scooters and St Elmo’s products will be kept on the menu.
When Domino’s opened in Nigeria, it also adjusted its offering to suit the local palette. “It has enabled us to convince part of the Nigerian consumers to try us because at least the flavour will be somewhat similar to what they know,” the Nigerian franchise holder told How we made it in Africa in an earlier interview.
While South Africa is the “big prize”, Gonzaga sees good potential for Domino’s in the other Southern African countries. “There are some interesting markets. Zambia is particularly potentially quite a strong market as is Mozambique over time… It will take a bit of time, but we do believe that ultimately there is a lot of potential in [the rest of] Africa.”