Kaldi’s Coffee has been described as Ethiopia’s version of American chain Starbucks. Established in 2005, Kaldi’s operates more than two dozen coffee shops in the capital Addis Ababa and other cities in Ethiopia.
Founder and CEO Tseday Asrat talks to How we made it in Africa about the growth of the chain, challenges she faces and the opportunities opening up outside the capital. Below are excerpts.
In 2005 you were operating one outlet, and today Kaldi’s Coffee has more than 20 stores. What factors have influenced the success of the coffee chain?
Kaldi’s was able to get popularity instantly by offering quality services and coffee. I hadn’t even thought about opening more than one at the beginning. After 18 months in the business, I was able to see the growing demand because we had a lot of customers. It made sense to follow where there is demand; this led to the opening of the second chain and the others followed.
Ethiopian consumers love coffee and make time during their day to have coffee with colleagues and friends. The process of drinking coffee is integrated in our culture. On top of that, it is something that is affordable for consumers.
Do you see evidence of a growing middle class in Ethiopia?
Sure. That’s our incentive for opening new outlets in all areas of Addis Ababa.
Describe the opportunities outside Addis Ababa.
We have already expanded to Debre Zeyit, located 45km away from the capital city. It has proved to be very promising for us to keep opening in other major cities such Adama and Bahir Dar. There is great potential and we will keep [expanding] further more to the regions and towns.
What challenges does the business face?
One of our biggest challenges is to ensure that we maintain the quality of our services and consistency in our products. In addition, we have challenges of supply shortages. Nevertheless, we saw this as an opportunity. For example we had a roasted coffee supply problem back in 2011 and as a remedy we started roasting coffee for our consumption and the market. We also started a dairy processing plant three years ago for the same reason. We are now in the process of starting a chicken farm.
Running a business always comes with challenges whether it is in Ethiopia or anywhere else in the world. Nevertheless, I believe what makes Ethiopia different is that the market is still at the early stages but it is growing fast.
Describe your future plans for the business.
In the coming years, we will be focusing more on the supply chain aspect in providing all the resources needed for Kaldi’s Coffee. We also want to focus on opening a training centre to develop service skills.
Tell us about the lessons you’ve learnt in your journey as an entrepreneur.
The key lesson I have learnt is that good leadership is very crucial. I have also learnt that it is very important that you think and plan one step ahead of the competition.