The inside of a Big Square outlet.
Kenya’s restaurant industry has been booming over the last few years. Local brands are opening outlets in major cities to meet growing demand from the middle class, while international players have also entered the market. Investors too, seem to be taking note. Last year, private equity firm Emerging Capital Partners (ECP), bought a majority stake in a homegrown coffee chain. This interest among investors and entrepreneurs is expected to continue.
“The middle class is growing and we need to invest in companies that service that middle class. I think the excitement in our industry will only grow,” said Morne Deetlefs, the owner of casual dining restaurant Big Square.
We are seated at a construction site where the South African entrepreneur is overseeing the building of his second restaurant in Gigiri, in the heart of Nairobi’s diplomatic zone.
The first Big Square outlet located in Karen, an upmarket area in Nairobi, has already carved a niche for itself barely a year since it opened. By the end of 2013, Deetlefs plans on opening a third Big Square outlet in another prime area, called Lavington. Next year, he hopes to expand to the middle income suburbs in Nairobi.
“I definitely don’t want to be a brand that is exclusive. When creating a brand, you need to choose your best locations first. Once you are known, you can now start venturing into other areas,” he said.
Deetlefs, who was previously managing director at a firm that runs fast food, bakery and convenience retail outlets in Kenya, said he started Big Square to fill a gap in the market.
“I saw an opportunity… The timing is right. I think in the next five to eight years, the whole of East Africa will be a different place… look at the development going on and the growing middle class,” said Deetlefs.
Deetlefs reckoned that there “is scope for national growth”, citing the emergence of business hubs in major urban centres across Kenya.
“Next year we want to be in ten locations,” said Deetlefs. “It is achievable. I am optimistic about the market. Look at what is happening at other players in the industry. They are all growing.”
According to Deetlefs, investors have realised that the restaurant business could be profitable and are willing to finance innovative businesses that meet market demand.
“If you create the right opportunity, people will invest. I am not focusing on the money. I am focusing on the brand. I am focusing on the business. Once I can prove that this is fruitful and I can get other people excited about it, the money will come,” he said.
Despite the increasing number of restaurants and coffee houses in major urban centres in Kenya, Deetlefs believes the market is big enough and there is space for brands that differentiate themselves from the rest.
“I think differentiation for me is big. It makes your story so much easier to sell. If you want to create a brand, you have to [be] different and create your own niche,” said Deetlefs “Anybody can create a one-off restaurant, but if you really want to be successful, you have to open more outlets and to do that you have to offer a branded experience.”
The big goal for Deetlefs is to take Big Square across the region and even beyond the continent. “Why can’t an African brand go to America? Why can’t an African brand go to England? We would like to do this. Why not?”
As he expands Big Square, one of the biggest difficulties Deetlefs expects to encounter is recruitment and the training of staff. Finding talent, he said, is a challenge many businesses face in the region.
“You don’t have the money to employ the people you really want to employ. I can find locations, I can most probably find finance to build the shops. One shop is easy, but after you start growing into multiple units, your team becomes the biggest challenge,” he said.
Despite the hurdles that come with entrepreneurship, Deetlefs finds it fulfilling.
“If you are an entrepreneur, it’s in your blood. I have tried quite a few things in my life. Some worked and some failed. I have worked for a few companies, but what I really love is what I am doing now. It makes me happy.”
According to Deetlefs, after years of trying his hands at many things he has become better at strategic planning and learnt to work with people who compliment his strengths and weaknesses. He added that although he has learnt a lot in his lifetime, his experience has not made “the risk less frightening”.
“A lot of people don’t talk about fear and the risk factor in being an entrepreneur. There is a lot of emotional roller coasters in being an entrepreneur. I live in a foreign country; I am here with my whole family. The risk for me, I think, is even bigger. If it doesn’t work I have to pack up and go back to my own country,” he said.
Deetlefs advised other entrepreneurs to confront their fears. “I think when it comes to fear, you have to face it and just pull through.”
For those aspiring to venture into business, having an understanding of the industry they invest in is critical.
Deetlefs noted that although Africa has immense opportunities worth investing in, it will take years before things really take off. “I think the challenge is that it’s difficult to do business in Africa. It’s damn difficult,” he said.
“Africa is not going to change overnight. It will take a while. As the economies grow, the pressure to make it easier for businesses to thrive will increase. It will gain momentum quicker than it has in the past.”
These challenges notwithstanding, Deetlefs believes now is the time to invest in Africa’s emerging economies.
“If you wait another five years, I think you will miss the bus. The time is now.”
Source: How We Made It in Africa
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