How fast-food chain KFC addresses local cultures and tastes in Africa

"A Zambian is as different to a Nigerian, as an Italian is different to a Russian, and people need to start to understand that."

Fast-food chain KFC has been operating in South Africa and some of its neighbouring countries from as early as the 1970s. However, it was only at the end of 2009 that it expanded its footprint further north into sub-Saharan Africa with the opening of the first KFC outlet in Nigeria. By the end of 2012 KFC had stores operating in Angola, Nigeria, Namibia, Botswana, Mozambique, Lesotho, Malawi, Swaziland, Ghana, Kenya and Zambia. KFC has plans to extend its reach to Zimbabwe, Tanzania and Uganda in 2013, with much longer-term growth plans to establish itself in the Democratic Republic of Congo, Ethiopia and Senegal. KFC's general manager of new African markets, Bruce Layzell, however, believes one cannot take a blanket approach to doing business on the continent. He says companies need to understand the complexities of each country in Africa. It is for this reason that KFC restaurants in each African market differ in order to make the brand relevant in a local context. In an interview with How we made it in Africa, Layzell discussed this and KFC’s business on the continent in general. Below are some edited excerpts. In a recent press release you’ve noted that taking a blanket approach to doing business in Africa does not work. Can you elaborate on this, and give us some examples of how your KFC stores differ from one African country to another?

A Zambian is as different to a Nigerian, as an Italian is different to a Russian, and people need to start to understand that. There is the archaic way of looking at Africa as just one continent of homogeneous people. So people are different, and that means tastes are different, cultures are different, religions are different. As a result, how we take our products to these different people, need to obviously be different. We need to meet them at their needs.

We want to reflect the local culture on the walls and in our advertising. Maybe to somebody from Europe, a Zambian looks similar to somebody from Botswana, but they are not – and we need to put the right faces up on the wall. So we have murals that are depicting customers, but we want Zambians to be on the wall in Zambia, and we want Nigerians to be on the wall in Nigeria.

And do you adjust the menu for specific countries?

Absolutely. Our core products – you know KFC original recipe chicken – are standard in all of our restaurants. What we do find is a lot of countries have an affinity for spicy foods. So in those markets we will put on our brand standard hot and crispy chicken. In West Africa they eat a type of rice called jollof rice, so in Nigeria, we have jollof rice on the menu. In Kenya they have a product called ugali (a type of porridge made from maize flour), so we will put that on the menu, and we will try to put a KFC spin on it so that it becomes unique to our brand. When there is a need for some localisation of the menu, we absolutely will do that.

Which of the sub-Saharan African countries that KFC entered over the last few years are your most lucrative markets?

Nigeria is key just because of the volume of potential customers that are there. Ghana is another great market in the same area, not as big a market [as Nigeria] obviously, but just a wonderful place to do business. It is a great democracy, and there is some great economic and political stability there. And then we have an East Africa hub – Kenya, Uganda, Tanzania. If you put those three countries together it is more than a 100 million people. So I would say those are the key markets for us.

At the end of 2011, a Yum! Brands (the US-based owner of KFC, Pizza Hut and Taco Bell) executive said that Africa won't significantly increase the Group's overall profits for the next decade. Do you agree with this?

Absolutely. What we want to do is we want to build steady, sustainable growth. We can go ahead and build a significant number of stores that were badly planned, badly built, badly executed – it would fall over. We don’t want to build a house of cards. We want to build something that is strong, that will be sustainable for a long, long time. And that means a slow growth at the end of the day. We want to do things right.

At the moment our sub-Saharan Africa stores is about 10% of our South African stores. So we’ve got a long way to go to catch up and that will take some time. But if you have a look at the potential upside of sub-Saharan Africa – it is massive. We really believe in it. And we want to see Africa’s contribution to our global results increase year on year on year.

Some South African retailers have noted that a lack of suitable retail space is holding back their growth in the rest of the continent. Is this also a problem for KFC?

It is a massive problem for us. The classic example always given is Lagos – a city of 15 million people, and it essentially has two world-class malls, which clearly aren’t enough. There aren’t real retail nodes as you would expect to find in South Africa, or in Europe or America. So you can’t just walk into a place and there is already a beautiful store that is just waiting for you to shopfit it. What we have to do is go and find usually private individuals who own properties, and say, "can we use your land to develop a KFC?"

So even the sophistication of the retail property development market isn’t there. But what we are seeing is there are many South African property developers moving up in Africa. There are many international property developers starting to look at the opportunities in Africa, and seeing the importance and the opportunity for laying down these formal retail nodes. Down the line we will have more access to that, but certainly at the moment, there is a massive dearth of quality retail space.

How would you describe the competition in sub-Saharan Africa's fast-food industry, excluding South Africa?

Fast-food is well established in these markets. There are many quick service restaurants in all these African countries, and they have been in there a lot longer than us, and they are the incumbents. So when you go into a market, it will be arrogant to say, "here comes KFC and we are going to change the world". Competition is valuable for everybody, it keeps us on the front foot, it keeps us strong. We have been very impressed with some of the brands that have grown up in some of these countries.