KENYA: Cafe Javas Opens In Nairobi As CJ's

Uganda coffee chain Café Javas has entered the local market with a new branch in Nairobi, raising competition for Kenya’s restaurant operator Java House.

Café Javas’ new outlet, operating under the name CJ’s, is located at the junction of Biashara and Koinange streets.

The firm’s expansion into Kenya raises its rivalry with Java House with which it was embroiled in a trademark war in its Ugandan home market.

Java moved to the Uganda High Court in 2016 after Mandela Group of Companies, which owns Café Javas, successfully objected to the registrar of trademarks’ acceptance of the Nairobi Java House name.

The court gave the coffee house a go-ahead to register name as a trademark and to operate its restaurants.

Justice Christopher Izama last year ruled that no evidence had been produced to prove that customers could easily confuse the two restaurant brands.

Café Javas has seven branches within Uganda’s capital Kampala and an additional outlet at Victoria Mall in Entebbe.

Java operates 65 branches across East Africa in addition to outlets under Planet Yoghurt and 360 Degrees Pizza brands.

Kenya based Java House has set aside Sh5 billion in a renewed expansion drive over the next five years. About 80 per cent of the firm’s expansion drive will focus on opening more outlets in Kenya.

Java Group is the biggest restaurant chain in the region, followed by fast-food brand Kentucky Fried Chicken (KFC), Art Caffe restaurant and Subway.

Artcaffe, which has 12 branches, has been the main competitor for Java House until recently when smaller coffee houses including Kaldis and Connect set up shop locally.

In February this year, the upmarket coffee chain unveiled Artcaffe Fairtrade Coffee Blend from coffee sourced in Nyeri and Machakos to grow its revenue streams.

The product is available at all its outlets for Sh290 served in a French press while a 250 grammes ground box goes for Sh690.

America fast food chain Subway has 12 branches in the region — eight in Kenya, three in Tanzania and one in Uganda.

Java Group will inject up to KSh1 billion in expansion drive this year cementing its place as the number one restaurant chain in the region.

Chief executive Ken Kuguru said the firm would open new outlets in emerging towns and within major cities in the country to grow its branch count and create new revenue streams.

The firm will also simultaneously explore new markets in the East African region but most of the new investments are expected to be in Kenya.

Java Group is the biggest restaurant chain in the region with 64 branches, followed by fast-food brand Kentucky Fried Chicken (KFC), Art Caffe restaurant and Subway.

The KFC has 31 branches in the region, 17 of them in Kenya, nine in Uganda and five in Tanzania. Art Caffe has 12 branches in Kenya.

America fast food chain Subway has 12 branches in the region — eight in Kenya, three in Tanzania and one in Uganda.

Mr Kuguru said that 80 per cent of the firm’s expansion drive over the next five years will focus on opening more outlets within the Kenyan borders.

The five-year strategy is estimated to cost the firm up to Sh5 billion.

Java Group runs coffee outlets under Java House, owns 360 Degrees Pizza and Planet Yoghurt brand.

The 64 branches under the label include 56 coffee outlets. The firm is looking to open at least two outlets of its brands every month.

Java House will invest between Sh500 million to Sh1 billion in new branches as well as advancements in a state-of-the-art central kitchen and commissary facilities,said Mr Kuguru.

Java Group is keen on Meru and Machakos counties, where it will open its first branches of the year.

The expansion drive indicates a shift to the counties after the devolved governments were established in 2013.


Tourism Observer

South African And Nigerian Cities To Be Outgrown By Kenyan

Kenyan cities are tipped to register the highest growth rates in consumer spending over the next 15 years, outpacing the Nigeria, South Africa and Cameroon metropolises.

Research firm Euromonitor International in a new report covering 24 cities projects that consumer expenditure in Kisumu will rise by 277 per cent from $0.6 billion (Sh60.6 billion) in 2015 to $2.2 billion (Sh228 billion) in 2030 at the equivalent of last year’s prices.

The Kenyan lakeside city is followed by Mombasa whose consumer spending is forecast to rise 221 per cent from $1.6 billion (Sh161.6 billion) to $5.1 billion (Sh518.7 billion) over the same period as per the Euromonitor projections.

Nairobi is third with a predicted 208 per cent expansion rate in consumer expenditure from $5.6 billion (Sh565.6 billion) to $17.2 billion (Sh1.7 trillion).

The anticipated growth rates mean Kenya’s cities are expected to be more attractive to businesses dealing in consumer goods and services compared to other leading African cities.

The local cities are followed by Cameroon’s Yaoundé, Nigeria’s Abuja and Cameroon’s Douala whose consumption is forecast to rise by 172 per cent, 170 per cent and 134 per cent from the current levels of $4.6 billion, $9.6 billion and $4.2 billion respectively.

While Kenyan cities are poised to register the fastest growth in consumption over the review period, the report notes that they are relatively poorer than those in Nigeria and South Africa that have larger absolute consumer spending.

“In contrast, Kenyan cities are relatively poorer. Yet on the positive side, the country’s relatively high Internet usage paves the way for innovative, tech-savvy solutions,” says the Euromonitor report.

“E-commerce companies and tech entrepreneurs will find Kenyan cities particularly appealing.”

The majority of the households, about 92 per cent in Nairobi, Mombasa and Kisumu have an annual income of between zero and $10,000 (Sh1 million).

About six per cent earn between $10,000 (Sh1 million) and $25,000 (Sh2.5 million), with two per cent having an income of more than $25,000 (Sh2.5 million).

The report notes that consumers in the Kenyan cities spend most of their money on basic goods and services including food, transport, housing and leisure.

Food is the largest expenditure item, accounting for 44.3 per cent of Kisumu’s consumer spending, 39.5 per cent of Mombasa’s and 35.1 per cent of Nairobi’s.

Several international food brands have entered Nairobi over the past few years, targeting demand from the growing middle class whose tastes have partly been shaped by global travel. These include Kentucky Fried Chicken, Pizza Hut, and Subway.

HONG KONG; McDonald’s And Cafe de Coral Among Nine Chains Targeted By Public Health Fears

International fast-food chain McDonald’s and listed company Cafe de Coral are among nine restaurant groups targeted by the city’s consumer watchdog in its latest campaign to tackle a major public health risk caused by the use of meat from animals fed by growth-promoting antibiotics.

In a statement published on the Consumer Council’s website, the watchdog said it had written to nine restaurant chains to inquire about their policies on the use of such meat.

It further urged the companies to set a timetable to stop sourcing meat and poultry from animals that were routinely fattened by the supplements. The request came in an effort to halt the spread of deadly, antibiotic-resistant bacteria posing serious health hazards.

The full list of chains targeted are: McDonald’s, KFC, Subway, Yoshinoya, Cafe de Coral, Fairwood, Maxim’s, Tai Hing and Tsui Wah.
Together the chains oversee more than 800 outlets across the city, according to the council.

The watchdog suggested the firms publicise details of their antibiotic-free production policy and that implementation be audited by an independent third party.

In a reply to the Post, Tsui Wah Group, which runs 35 outlets in the city, said the company was looking into the matter.

Local fast-food giant Cafe de Coral confirmed its receipt of the council’s letter and would exchange views with the watchdog on the issue.

Meanwhile, diverse opinions were found on the internet regarding the impact of using antibiotics in livestock production.

Internet user “Ali G” questioned whether antibiotics were really used to promote animal growth, while “Beaker” said: “What short-sighted stupidity, for sake of profit to create resistant superbugs.”

Council chief executive Gilly Wong Fung-han said the watchdog would give the restaurants some time to implement changes.