Nairobi Java House is East Africa’s largest coffee chain operating 25 stores in Kenya and Uganda with 1,200 staff. The success of Java has inspired the launch of other casual dining restaurants and coffee brands in the region.
Java’s CEO Kevin Ashley shares with How we made it in Africa the reasons for the company’s success.
1. Growth doesn’t have to be geographical
According to Ashley, focusing on the market it knows best is one of the factors behind the success of the coffee chain. Despite starting operations 15 years ago, it is only four months ago that Java opened outside Kenya in neighbouring Uganda.
In Kenya, Java’s business is concentrated in the capital Nairobi. The vast majority of its outlets are located in the city and more are set to open in areas closer to where people live.
Instead of venturing outside Kenya earlier on, Ashley says Java chose to focus on the Nairobi market, thereby limiting management and logistical challenges.
“Growth does not need to happen only geographically. If we see a need in the Nairobi market, why not fill it? Our management team is here, our supply chain is here and we know the property market really well.”
2. Benefiting from private equity investment
In 2012, private equity firm Emerging Capital Partners (ECP) acquired a stake in Java. Since then the coffee chain’s expansion has intensified. The company launched in Uganda earlier this year, it is opening more stores in Nairobi and venturing into other towns in Kenya as well as planning an entry into Rwanda.
“One of the myths people have about private equity is that they are going to come in and want to shake things up. Actually what PE funds look for are people who already have proven success in the business, and they end up buying into your vision. As long as your vision is in alignment with theirs to grow the business, there is no drama at all. In fact they bring many resources to the table that you didn’t have access to, and not just in terms of capital.”
Ashley says Java has benefited greatly from the deal with ECP. As a result a former COO of a global restaurant brand was tapped to join Java’s board.
“He comes every three months and mentors about five people in our team. I wouldn’t have had access to that kind of resource before,” Ashley says. “A lot of times people who develop family businesses forget the importance of trying to modernise their systems and structures whereby the family aspect of the business is actually reduced. You need to create a structure that can be transferred to other owners easily. If your brother is the CFO and your sister the COO, most people are going to walk away and not take any further interest.”
3. Embracing Kenyans as customers
Although in the early days two-thirds of Java customers were expatriates and affluent Asians, today the outlets mostly attract a Kenyan crowd. Ashley says making Java “a Kenyan brand” was a key goal for its co-founders. He believes that failure to “truly embrace Kenyans as customers” is to blame for some of the failures of foreign firms that have tried to do business here.
“Foreign brands have come and gone in this country over the last 15 years. The bones of South African businesses are littered across East Africa. It is because people underestimate the Kenyan market. They don’t underestimate the robustness of the economy, but they underestimate the Kenyan consumer.
“The Kenyan market is very sophisticated and it’s very cosmopolitan. Also very price-sensitive. Kenya is not a ‘bling’ society like Nigeria. People look at value so when you come in with an international brand they will expect you to price it fairly. They also expect the quality to be at least equal to what you sell abroad, and importantly that your staff will look like they are cared for,” he explains.
4. Tap into local talent
He adds that tapping local talent also makes customers “feel at home” when they visit Java outlets.
“We developed the policy of only African and Kenyan management at every level. Today we are 1,200 staff and I am the only non East African. If you look at that number it should tell you why so many Kenyans have embraced our brand as truly Kenyan. That’s because we have embraced Kenyans as leaders, managers and as people capable of building and running branches.”
Motivating staff by giving them medical cover, pension, holidays and opportunities for career growth has made Java an attractive employer. He notes most of its staff are people “who may have started out as waiters or cashiers” but have risen to leadership positions.
When Java began the process to launch in Uganda, its team took charge and delivered effectively.
“I think I made four trips in the whole process between starting construction and opening for business. That is something we are really proud of because these are Kenyans who didn’t get MBAs or university degrees. They are people who have lifted themselves up by the bootstraps through great and hard work. Today they are able to go out and start an international standards business in a foreign country on their own. It is quite incredible.”
5. Avoid the ‘I have arrived syndrome’
And simply calling yourself an entrepreneur “before you have been a successful businessman” does not make you one. When a dose of success comes, he warns entrepreneurs, especially young ones, to steer clear of the “I have arrived syndrome”.
“The journey is forever. Do not ever let yourself feel like you have arrived, because if you do someone else will come and run right past you. You always have to keep going because you haven’t reached the mountain top yet.”
Ashley urges entrepreneurs not be in too much a hurry, something he wished he knew when he co-founded Java in 1999. “I moved really fast with ideas, and sometimes would move too fast for other people. If I could go back and speak to myself in 1999 I would say: ‘Learn how to be better at taking people along the journey with you’.”
6. Don’t neglect your personal life
He adds that entrepreneurs should also strive to balance family and their pursuit for success.
“You can’t just work 15 hours a day seven days a week and think that you are doing it for your family. You need to take time off and do homework with the kids, go to ball games, chat with them and take them out to dinner. I do that and I would advise entrepreneurs not to sacrifice family for their business because you might gain some financial reward and then lose everything.”