The return of African kitchen business

by | January 17, 2013 12:37 am



African kitchens are springing up very fast in many places in Lagos. Gone are those days when they were located just by the roadside. Nowadays, it is common to see them in both the commercial and residential areas. The modern African kitchens are by far different from the traditional ones in terms of the environment, social amenities, quality of dishes served as well as the management style. Our findings show that more people are going into this line of business.

The rising rate of unemployment is one of the factors motivating people to set up this form of business. As the saying goes, an idle hand is the devil’s workshop. Therefore, instead of being idle, unemployed Nigerians, especially those who have earlier worked with hotels or fast-food outfits and who probably lost their jobs, would gather every resource within their reach to set up an African kitchen. When asked what motivated him into the business, a manager of such outfit who craved anonymity said, “I once worked with a hotel at Ikoyi and after I lost my job, I decided to set up this kitchen.”

The rise of the middle class with very busy daily schedule, whose movements are restricted by many official responsibilities, is another factor. They leave home early and return late. For that reason, they do not have the time to prepare meals for themselves. As a result, this set of people has tacitly outsourced the preparation of their meals to other members of the public, and this is where African kitchen service providers come in.

Related to the above is the fact that only few companies operate staff canteen these days, and so workers are left to fend for themselves. Worse still, they hardly have the time to go out for lunch. Some shrewd operators of African kitchen have spotted this opportunity and their solution to this problem is delivery service. Through delivery service, a group of workers who want similar local dishes at a time can order for lunch to be brought to their office. The higher the number of the people that want this service at a time, the better because larger requests help the African kitchen operator to easily break even. And above all, the price per plate of local dish through this service is higher than what they charge customers who eat in their outfits.

Aiding the above is the daily traffic congestion which causes the demand for the African kitchen services to be gathering more momentum. Our findings show that private sector workers have now cultivated the habit of leaving office late as they stay behind to allow the heavy traffic which occurs most times between 6.30pm and 9pm comdaily to clear. This is the time for dinner, which strengthens the factors making patronage at this time of the day high.

Where is the best place to locate an African kitchen?

There is a general consensus among different categories of operators in this business that commercial areas have an edge over residential areas. According to them, places such as Lagos Island, Ikoyi, Victoria Island and Ikeja are categorised as commercial areas while other places, especially Lagos mainland, are regarded as residential areas.

“In commercial areas you have both the corporate and residential customers, whereas there are only residential customers in the residential areas,” said a manager of one of the leading fast-food firms who did not want his name in print. His firm is the pioneer of this service. One thing differentiates the two customers, and that is the ability to pay. According to him, “Corporate customers don’t mind the price as their major concern is quality, whereas residential customers are after quantity.” African kitchen segment of most big fast-food firms are more profitable in commercial areas.

However, getting a good location in commercial areas comes at a higher price. To establish an African kitchen in commercial areas might cost about N5 million, whereas you will only need about N1.5 million or less in residential areas for a space Unitthat is equivalent to a 2-bedroom flat. Irrespective of the area of operation, the payback period is about 3 years or less depending on the quality of management and extent of patronage.

Dishes (meals) served at African kitchen

Local dishes such as eba, fufu, pounded yam, rice and amala are served with a blend of traditional and modern methods. “We have a menu which we give to customers immediately they come in,” explained one of our respondents. The inclusion of menu adds to factors that separate the modern African kitchens from the traditional ones. In addition, some outfits sell real pounded yam instead of the type prepared from yam flour popularly called “poundo yam”.

“I usually buy their pounded yam because it is wrapped with local leaves, which gives it a natural flavour,” said Rotimi Abiodun, a customer we met at one of the outfits. This particular way of packaging pounded yam explains the traditional factor in modern African kitchen services.

Prices vary from N300 per plate in a small African kitchen to as high as N1,400 in big ones depending on the choice of local dish as well as how a customer combines items that make up a meal. For instance, a plate of pounded yam can be combined with vegetable soup and with either a fish, goat meat or cow tail. In effect, three customers who eat pounded yam in a particular kitchen may end up not paying the same amount depending on their choices.

Demand pattern for services

Customer patronage is always at the peak starting from the afternoon to the evening for outfits in commercial areas. Meanwhile, most of the kitchen outfits in residential areas record significant patronage during evening time and at the weekend. This is because commercial areas are mostly deserted during the weekend whereas the residential areas are full of activities.

Most of the customers prefer either eba or fufu to other dishes. Additionally, not all the outfits can afford to provide pounded yam meal due to shortage of manpower. Our findings show that out of every ten customers that patronise some of the outfits visited, about three orders each were made for eba and fufu while the remaining four customers opt for any of rice, pounded yam or amala.

The National Bureau of Statistics (NBS) corroborates our findings. NBS reports through its publication “Consumption Pattern in Nigeria 2009/2010”, that out of N1.44 trillion that was spent on food items in Lagos State during the period under review, N354 billion or 25 percent was spent on tubers and plantains. Items such as gari (white and yellow), cassava root, plantain and cassava flour, yam flour, potatoes, just to mention a few are classified as tubers and plantains.

Competition has heightened among the providers of kitchen services and that reflects in the start-up cost mentioned above. Apart from a well-furnished place, you will now have to provide free DSTV services to your customers especially for the broadcast of matches played in Europe. An average kitchen has two big flat screen TV sets, several freezers or coolants (provided mostly by Nigerian Breweries, Coca Cola, 7-UP and Guinness), a medium size generator, ceiling or standing fans and so on.

One of the operators confided in us that business activities are always at the peak from Tuesday to Thursday weekly. Further enquiries show that the stated days are when Champion League and Europa matches are played. In other words, operators are using the strong fan base that some European clubs enjoy among Nigerian football fans to pull customers to their kitchens. This is common among small and medium size outfits which use a space equivalent to a miniflat and which employ between 5 to 10 workers.

You will be very wrong if you think the big fast-food outfits which concurrently provide African kitchen services will leave things to chances. In addition to providing all the incentives itemised above, they strictly monitor the quality of services being rendered to their customers. They employ graduates with expertise in quality control who ensure that from raw materials to when the food is placed before a customer, the quality is not compromised. This, the small and medium size cannot provide because the highest qualification of their workers is secondary school certificate. Turnover is volume driven and with a good management, a small to medium size kitchen in residential areas could realize about N35, 000 to N50, 000 daily as gross earnings.

Major challenges include pilfering, high labour turnover, high cost of running generators and inability to access finance from banks especially at infancy. To reduce pilfering, the owner has to be around always. High labour turnover is partly due to remuneration, the caliber of people they employ and working hours. An average worker earns between N10, 000 and N15,000 per month while they work from 7am till 9pm daily. Most school certificate holders use such place as a stop-gap. Those who use franchise mode of operations are seen by banks as risky due to frequent changing of franchisee.

By: TELIAT SULE

Research & Intelligence Unit