Give us an overview of Vida’s expansion journey into other African countries.
Our international journey began in 2013 when we entered Ghana. Here we were also a first mover. We have a partner that is currently operating 15 stores in Accra.
Then in 2015, we entered into another master franchise agreement for Mauritius with a new partner, which is currently operating five very high revenue stores.
The most recent partnership was concluded in 2019 for Zambia. We opened the first store in June of that year in Lusaka in a shopping mall and we are about to open the second Vida in August of this year with that same partner.
Your first market outside South Africa was Ghana. How did you decide on this country?
Our partner in Ghana approached us, having seen the success of Vida e Caffè while on holiday in South Africa. He has extensive experience in the premium restaurant sector in Ghana and thought it would have great potential.
The Ghanaian market shows a slightly different consumer behaviour to South Africa when it comes to the desire for convenience. People in Ghana tend to prefer to sit down longer and socialise with larger groups of friends and family, which we have catered for with our bigger stores with more seating facilities.
Our pricing strategy is similar to South Africa where we are premium priced, justified by a high-quality beverage and food offering and a high innovation rate.
The menu in Ghana also remains very close to South Africa, apart from some cultural influence like rice balls in some of the bigger stores. As it enjoys a warm climate, the fresh fruit-based smoothies and Frios (blended ice) drinks are doing exceptionally well in addition to our coffee.
You also have a presence in Zambia. How does the Zambian market differ from South Africa and Ghana?
Our partner in Zambia has been in South Africa many times and he was also impressed with Vida and approached us. We struck a deal in 2019 and opened in a premium well-located mall.
Zambia is quite similar to South Africa when it comes to convenience, but the customers love pastries. Our pastry assortment is thus much larger and it forms a bigger part of the total revenue. Pricing in Zambia is premium. We always do a competitive benchmark versus the other players in any market and then position ourselves at a premium price level from the start.
When we see diverse customer needs in different markets, we give our partners the flexibility to cater for those desires.
In South Africa, Vida has expanded its footprint through both on-site corporate and fuel-station (forecourts) outlets. Do you follow this model in the rest of Africa?
Having learnt our lesson in the various African countries, we have defined a clear and focused footprint roll-out with two phases.
Phase 1 is the foundation phase (Mauritius, Zambia) where we are building consumer brand awareness in stand-alone flagship stores, typically in high streets, malls and airports.
In phase 2, the growth phase (Ghana), we enter the forecourts and corporates and this adds to the consumer experience.
How do you select which countries to expand into?
The four criteria we look at are macro-economic indicators, the competitor coffee shop landscape – finding a balance between a market that is too saturated vs one where the coffee culture still needs to be created – the presence of other quick-service restaurants brands, and ease of doing business. If a country meets our criteria, we search for a suitable partner.
Read Part Two of this interview with Frank van Asperen @ howwemadeitinafrica.com, where he talks about Vida e Caffè’s expansion to Côte d’Ivoire and shares his thoughts on the Nigerian market.