The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Domestic chains are thriving in South Africa but few have grown quite as fast, or become quite as popular, as Chesa Nyama. Specialising in braai, a South African-style barbecue, Chesa Nyama has expanded to 320 outlets since opening in 2012 and has become the country’s fastest growing chain. Braai, however, is more than a barbecue, and the weight of its culture significance is apparent in South Africa. Independent braai shops have been a go-to for local consumers for decades.
The company has found success in standardising and replicating a model that taps into this sentiment and adds both the value and convenience that independent outlets are largely unable to provide. Chesa Nyama prepares braai for consumers at a much faster rate, provides the consistent quality assurance of a well-known chain, and offers value deals and large portion sizes consumers want. Along with relatively low franchising fees and South Africa’s near constant urban sprawl, Chesa Nyama has been able to penetrate deep into low- to middle-income urban areas, boosting the company’s ambitious expansion efforts.
South Africa, however, is an increasingly attractive market for global chains looking to break into the continent, and the market has become highly competitive. Despite this, local chains and local fare still dominate, and the success of Chesa Nyama is emblematic of this preference.
While originally an Afrikaner tradition, braai has been culturally adopted by all South Africans and has come to symbolise greater socioeconomic inclusion. A good braai involves local African spices and sauces, such as the popular peri-peri sauce used to baste chicken, and emphasises the grilling of meats such as boerewors, a popular local sausage, steak, marinated chicken, fish, and occasionally, vegetables. Braai is commonly served with pap, a type of porridge that serves as a functionally versatile and highly popular side dish.
For decades, independent braai outlets in townships and shantytowns across South Africa have drawn locals. Braai is inexpensive, quite filling, and with its slow cooking technique, braai shops have served as a place for locals to relax and socialise. Braai is so important in cultural significance that South Africa’s Heritage Day in September is also commonly known as National Braai Day. This is the sentiment that Chesa Nyama taps into as a chain.
Moreover, South Africans have a tendency to eat what they know. Offerings such as braai and pap, therefore, will continue to attract a steady flow of consumers. Chesa Nyama excels at this. By offering popular local cuisine and recreating the sentimentality of braai, all the while providing benefits such as efficiency, quality assurance, and good value-for-money that typify a large fast food chain, the brand has been wholly embraced by local consumers. Chesa Nyama is the first chain to do this in South Africa, thus filling a distinct gap in the market.
Given the deep ties between food and culture, foodservice in South Africa continues to thrive despite poor economic conditions. While consumers in other markets may tend to cook at home during leaner times, South Africans continue to offer a preference for eating out. Urban sprawl and decent value-for-money options have helped make this possible. Coincidentally, the total value of consumer foodservice grew 9% in 2015.
Despite this, global foodservice chains have had a generally limited impact in terms of market share. Eight of the top ten largest fast food chains in South Africa by number of outlets are domestically-owned brands. This is partly a historical trend in which global chains were altogether prevented from entering the market prior to the end of apartheid in 1994, which gave local foodservice chains and independents room to grow into the market, as well as drive interest for local cuisine.
Global players have also been hesitant to enter the high-risk markets of Africa due to the continent’s political instability, market volatility, and per capita disposable incomes that are generally considered too low to afford the relatively high prices of international brands. Until recently, cities across South Africa have been load shedding, or scheduling controlled power outages to prevent city-wide power failures; certainly not ideal conditions for global chains. Tellingly, there are more McDonald’s outlets in New York City than on the entire African continent, according to South Africa’s Mail & Guardian.
The battered South African economy has also increased consumer interest in value-for-money offerings and generous portion sizes, characteristics that typically favour fast food chains. KFC, one of the two global chains to break the fast food top ten in the South African market, offers a “Ka-Ching” value menu of cheap bites each under ZAR20 (US$1.34) in an effort to meet the demand for value-for-money offerings. More urban lifestyles have also driven an increase in demand for convenience and efficiency when dining out or grabbing a meal on the go. Coincidentally, the total value of chained fast food grew 8% in 2015 with a category CAGR of over 3% to 2020.
Building on this momentum, Chesa Nyama has expanded to 320 outlets in South Africa alone, and has gone on to open in the neighbouring markets of Namibia, Zimbabwe, Botswana, Zambia, and Mozambique, all markets that have little international brand presence. Expanding now while the getting is good is important for domestic players like Chesa Nyama. 2014 saw the entry of both Burger King and Domino’s Pizza, as international chains increasingly look to South Africa as a gateway to the continent. In the near term, however, consumers will continue to favour chains that reflect local culture and local food, and braai isn’t going anywhere.