Nairobi’s Growing Middle Class Attracts World’s Food Chains

Written by Kevin Mwanza

Nov 17, 2014

Three international fast food chains have in the past week launched operations in Nairobi, sending the clearest signal yet that the past 10 years of steady economic growth and the accompanying expansion of Kenya’s middle class is beginning to get noticed.

American fast food chain Domino’s Pizza, ice cream seller Cold Stone Creamery and South Africa-based Ocean Basket – a sea food diner – opened outlets in the Kenyan capital in what is seen as the very first fruits of the larger GDP figures released in September that moved Kenya to the club of middle-income nations.

The three have followed in the footsteps of two well-known American chains, KFC and Subway, who set up shop in Nairobi 2011 and 2013 respectively.

The attractiveness of any location around the globe to fast food chains is often seen as an acknowledgement of the rise in the number of people with disposable incomes, a shift that investors in the outlets say has occurred in Kenya.

“This economy has a growing middle class with a higher spending power, and who just like their Nigerian counterparts, are highly adventurous and want to try out new things,” said Eric Andre, a director and co-founder of Om Nom Nom, the franchise holder of Cold Stone Creamery and Domino’s Pizza.

“Besides, the infrastructure in Kenya, although not perfect, stands out in the region and the same can be said about education standards.”

Most of the food chains have picked popular addresses in Central Nairobi or malls located in leafy suburbs such as Westlands and Upper Hill. The food chains invest heavily in market research before choosing to enter a new market, down to the details of identifying specific locations for the stores.

The presence of a growing middle class that guarantees sales is one of the key factors that inform such decisions, making countries like Kenya attractive as new frontiers that can guarantee maximum profitability with the least investment. The global brands are also known to consider infrastructure, cultural influences and trade regulations, among other factors.