Innscor’s restaurant division, Simbisa Brands, has been given a $10m war chest to expand the Chicken Inn and Pizza Inn fast food brands in Zimbabwe. It’s a big bet given the currency crisis, but Simbisa can leverage parent company Innscor’s domestic supply chain.
Simbisa Brands has revealed that it plans to open 21 new outlets in Zimbabwe, of which four will be opened in Bulawayo, another four in Kwekwe and another four in Kadoma. Its outlets have a target budget of $500,000-$600,000: Simbisa Brands keeps costs low often by combining Pizza Inn and Chicken Inn outlets (and sometimes adding a Creamy Inn outlet too).
This week the company has opened a new Chicken Inn and Pizza Inn combined outlet (i.e. what is counted as two outlets) in Gwanda, south of Bulawayo. Simbisa Brands opened Chicken Inn and Creamy Inn outlets in the town in 2015. According to Trendtype data, there are over 150 Chicken/Pizza/Creamy Inn outlets in Zimbabwe alone. In addition there are a further 34 Baker’s Inn branches.
The planned investment comes in a week when Zimbabwe’s currency crisis continues to bite and millers in the country warned that they would be unable to pay for imported wheat. The difficulty of getting hold of hard currency to pay for imports has severely affected the ability of fast food franchises to import product – a times, for example, branches of Chicken Inn competitor KFC have been forced to close temporarily.
Innscor owns the country’s largest integrated chicken company, Irvine’s. It owns meat processor Colcom and the Baker’s Inn industrial bakery (and retail chain). It also has interests in the dairy sector (Probrands) and soft drinks (Probottlers). Simbisa Brands’ access to a strong domestic supply chain gives it a significant advantage over competitors.
The Simbisa Brands portfolio is particularly strong at targeting aspiring consumers with some disposable income, and the fast food brands are typically pioneer outlets, operating ahead of other chains. For example, KFC has six branches in Zimbabwe, but four are in Harare, with one each in Victoria Falls and Bulawayo. Local competitor Slice Group – which has chicken, pizza and ice cream fast food outlets – has a more diverse geographic profile but is a fraction of the size of Simbisa’s network.
In reality, Simbisa Brands is likely to face new competition from an non-traditional source: supermarket in-store fast food outlets such Choppies Fried Chicken. These outlets can account for 10% of a store’s revenues and also play a major role driving traffic. Choppies has followed Shoprite’s Hungry Lion model and aggressively rolled out its fried chicken in-store brand in Botswana, South Africa and Kenya but not yet in Zimbabwe. With its ownership battle sorted, investment in the Choppies brand in Zimbabwe is clearer. Part of that investment horizon will be targeting same customers Simbisa currently enjoys, especially around Bulawayo (where Choppies is especially strong).