• Friday, July 12, 2024
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Counting on in-store transactions, Burger King berths in Nigeria

Burger king whopper index shows naira overvalued

Burger King, an American quick-service restaurant (QSR) chain, has finally entered Nigeria with eye on the volume of in-store transactions that Africa’s most populous country offers.

The QSR chain will open its first stores in the country by the third quarter of 2021. One of the assumptions supporting Burger King’s aggressive entry into Nigeria is that at least 20 percent of Nigeria’s population is middle class. This is about 40 million people out of Nigeria’s 200 million-strong population. This compensates for the possible lack of repeat unique customers.

“We are proud to bring this iconic brand to Nigeria, and believe that our Nigerian guests will love Burger King flame-grilled sandwiches and other famous Burger King menu items, that guests can have their way,” says Antoine Zammarieh, managing director from Allied Food and Confectionery Services Limited, and who was managing director at Eko Hotels for 10 years, at the launch in Lagos, Tuesday.

In late 2000, QSR businesses started moving forward with the brands such as Mr Biggs. People familiar with the industry say that unfortunately Mr Biggs did not follow the rules and failed, but is in a revival mode.

KFC, an international restaurant brand followed, then Chicken Republic, Dominoes, Coldstone and some South African brands of QSR too. Some of the South African brands did not succeed and left.

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Nevertheless, the QSR business has become one of the hottest businesses in Nigeria. It employs many and contributes to the country’s gross domestic product. The growing QSR industry offers Nigerians more options.

Zammarieh has lived in Nigeria for 38 years, and says there has been an evolution in the lifestyle of Nigerians. In today’s Nigeria, the husband and wife are working; unlike in the past when being a stay-at-home wife was common.

In fact, as the children grow up they are also quick to join the labour force. This means there is little time available to cook at home. Quick service restaurants fill this gap. This was not the case in the past because many women were stay-at-home wives, which is no longer sustainable.

“The Nigerian market is the number one in Africa with 210 million people of which 60 percent is youth. You cannot say this is not a good market for this kind of business,” Zammarieh states in an exclusive interview. “How to adapt your business to the market is the most important thing.”

Adaptation here means that flavours and menus have to fit local pellets. For Nigeria, adaption also means meeting up the demands of a market where there is a huge infrastructure deficit. It is not a plug-and-play kind of market. Plug and play meaning there is electric power, water and sewage systems that work. This is a foresight many new entrants into the market miss. This can lead to massive failures.

Other areas that determine success are logistics in the distribution of food and training of staff. Without proper training, a company can fail in this business.

Fortunately, there is a pool of QSR talent forming already. Ten years ago there was no QSR talent tool in Nigeria. This is because now there are many QSR companies training people to make pizzas, among the products.

“If you cut corners on training and logistics you will fail. To succeed you have to go the whole nine yards as they say,” the managing director of Allied Food and Confectionery Services notes.

To the argument that Nigerians are learning to eat healthier and might not patronise Burger King, Zammarieh asks what a healthy meal means.

Eating pounded yam or eba (cassava-based food) late at night with the soup may not be healthier than a burger. It is heavy. Health-conscious Nigerians are not eating salads only. Healthy is salad, no bread or heavy carbohydrates. The trend of health is there but it is not sustainable. One needs a meal that can sustain them to do 10 to 12 hours of work a day, Zammarieh says.

King Burger may have seen a profitable market in Nigeria where some QSR brands have failed. Time will show how much their fundamental market analyses would help them stay sustainable.