KENYA – An American fast food chain, Domino’s Pizza, and ice cream seller Cold Stone Creamery, have announced plans to open 16 Kenyan outlets in the next two years at an estimated cost of Sh445 million.

Local franchise holder of the two brands, Om Nom Nom, says the outlets will be located in areas mainly frequented by middle class shoppers.

This past weekend the firm opened two Cold Stone outlets, one on Mama Ngina Street and another at Fortis Tower in Westlands where it also has the first Domino’s Pizza store. Cold Stone Creamery is based in Arizona while Domino’s Pizza is headquartered in Michigan.

Eric Andre, a director and co-founder of Om Nom Nom, says they have set aside about half a billion shillings for expansion with two stores set to open in Gigiri and Nyali, Mombasa by mid next month.

“We are planning to open at least eight Domino’s Pizza and 10 Cold Stone outlets in the next 24 months in Nairobi where our focus will remain over that period,” Mr Andre told the Business Daily in a telephone interview.

“Kenya’s middle class is growing and consists of people eager to sample new things like what we are providing them. Therefore, setting up in Kenya was very logical for us.”

Om Nom Nom, which a regional firm that has interests in retail, hotel, catering and real-estate industries, is a private company co-owned by three investors— a Kenyan, Briton and Mr Andre who is Italian.

Coffee shops, restaurants and fast-food outlets have been on an expansion and capital raising plans in the race to tap Kenya’s emerging eating out culture mainly driven by an expanding middle class with higher disposable incomes.

Cold Stone and Domino’s Pizza are following in the footsteps of other US brands that have made their debut in Kenya in the past five years alone.

Subway and KFC fast food chains have entered Kenya in the past five years, and are currently growing their branch network.

About two years ago American private equity firm Emerging Capital Partners (ECP) bought a majority stake in Java, a chain of coffee shops, with the capital injection planned to drive expansion.

These international brands stand to gain from Nairobi’s expatriate community that is growing as multinational firms like IBM, Google, Visa and MoneyGram choose the city as either their regional or Africa headquarters. The next Cold Stone and Domino’s Pizza stores are to be located near the US Embassy.

“We will definitely benefit from the expatriate community in the area but this is not the primary reason we opened there,” said Mr Andre of the store that is set to open on December 1.

Frontier Strategy Group, US data vendor that tracks emerging markets, mid this year ranked Kenya as the second most preferred destination in Africa for multinational corporations seeking to set up shop.

Kenya was ranked second with a score of 23.17 per cent after Nigeria which was top on the continent and globally with a score of 29.57 per cent. Globally, Kenya was fifth behind Saudi Arabia (24.69 per cent), Vietnam (24.72 per cent) and Argentina which was second (24.72 per cent).

The index was based on input from 200 multinational corporations like Coca Cola and General Electric.

“Terrorist attacks will cause sporadic disruptions but the vibrant private sector, rising consumer spending and Kenya’s important role as a hub for East Africa are strong economic drivers which are unlikely to be derailed by insecurity,” said Frontier Strategy Group.

November 11, 2014;