Inclusive Business Model
October 2012
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© This presentation and its contents are the copyright property of Food Concepts and Entertainment Plc.
Overview
Food Concepts Plc, est. 2001 is a market leader in the West African food
sector
Operates the largest chicken quick service restaurant (QSR) in West Africa – 65
Chicken Republic outlets
Operates the largest bakery in Nigeria – Butterfield bread – 9 plant bakeries
Recently commenced operation of integrated poultry farm
CAGR of 45%
Highlights
World class, modern African Quick Service Restaurant (QSR) brand launched in 2004
One of the fastest growing QSR brands in West Africa
65 stores across Nigeria and Ghana, with mid term plans to roll out to 300 stores across
West Africa by 2016
Today, 20% of stores are under franchise, with plans to increase to 50%
80% owned by women; over 1,200 women employed
Developed the poultry supply chain with own farms and out-grower program with BOP
farmers
OUR STATE OF THE ART POULTRY FARM
Currently employs over 300 staff mostly women
Inclusive Business Model
Reaching BOP Suppliers – Small Farm Out Growers
In the poultry business – our out-growers are very important to our
value chain
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We have signed on ca 75 out-growers in our region
We negotiate and ensure supply of feed, day-old-chick and vaccines
We then ensure an off take of the final product
We also work with distributors mostly women to market our products
CR Divider Page
Butterfield Highlights
Launched in Nigeria in 2003
Converted from a retail to a wholesale bakery model – difficulties with
distribution – not many supermarts
Operates 9 plant Bakeries in 8 Nigerian States that sell millions of loaves
each year in order to meet mass-market demand
Distribution channel incorporates small distributors who serve BOP
retailers and customers
Inclusive Business Model Developing Distributors that Reach the BOP Mass Market
The inclusive business model is important in our Market.
– The Nigerian market has no organized distribution network
– We have to engage with distributors to market or products
– We have signed on over 2,000 distributors across the country
(mostly women) who also work with sub distributors who distribute
to BOP hawkers and table toppers (informal vendors who sell on
the streets or in markets)
– To further ensure we get fresh bread to deep corners of the
market, we recently developed a container bakery concept
– This low entry bakery allows our distributors and inclusive
business partners (hawkers and table-toppers) to own production
and distribution.
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© This presentation and its contents are the copyright property of Food Concepts and Entertainment Plc.
Distributor
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© This presentation and its contents are the copyright property of Food Concepts and Entertainment Plc.
OUR NEW BUTTERFIELD CONTAINER BAKERY FRANCHISING CONCEPTCapacity 3000 loaves per day
Inclusive Model – to sign our current distributors on to become franchisees and own their bakeries;
franchisees can sell directly through sub distributors
Offers alternative route to market, designed to ensure products reach BOP customers (closer
proximity than large plant bakeries)
BOP are an important market segment, as the informal bread market accounts for 80% of loaves
Model provides franchise funding, marketing support, training and premix (flour, packaging support)
to ensure quality and higher yields
Inclusive Model – Challenges
Challenges:
Funding – Most distributors cant get access to funds. Interest rates are currently 25%, with very
short tenors.
Lack of Skills - many of our partners lack business and operational skills and usually run out of
working capital
Product quality – especially in the poultry business where issues include high mortality rates
Infrastructure - lack of good roads – adds to the cost of transportation, lack of constant
electricity and portable water increases cost of operations especially for the out growers
Overcoming these challenges:
Working with financing institutions such as the IFC to provide cost-effective, long-term capital to
enable us to assist inclusive business value chain partners. We have held initial forums in Lagos
with distributors
Developing training programs to assist partners to develop skills and build capacity
Investments are required in infrastructure to help reduce the impact on operating cost and to
ensure competitiveness.
Investments are also required in new technology to increase efficiency e.g. feeding systems and
heating systems in broiler farms
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Inclusive Model – Opportunities
Market size – Nigeria with over 160million
Low per capital consumption of poultry – only 1.5kg – we intend to sign up a as
many as 500 out growers by 2014 and produce 12million birds per year by 2014
Low market penetration - our goal is to produce 1 million loaves a day and to
achieve this we need to effective market penetration models that are easy to use
and sustainable
Our low entry container bakery model will help our inclusive partners penetrate
markets outside key cities with fresh bread and snacks
They will also further develop local distributors and table toppers.
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Thank You
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