US ice cream chain to open Nairobi branch next month

Ice cream manufacturer Razco Limited has been
Ice cream manufacturer Razco Limited has been cleared to buy out its rival Alpha Dairy Limited, adding to the growing list of acquisitions in the dairy industry. File 

Cold Stone Creamery, an American ice cream chain, has joined a raft of Western retailers setting up base in Kenya with its first store set to open in Nairobi by the end of next month. Cold Stone Creamery said its debut Nairobi branch is among seven it plans to open over the next five years.

The ice cream vendor is entering the local market through a 10-year franchise deal with Om Nom Nom Mauritius Ltd, a firm that also operates in the East Africa region and has interests in retail, hotel, catering and real-estate industries.

“Om Nom Nom already conducts business in the Nairobi market and their in-market knowledge is priceless. Cold Stone Creamery will be the first of its kind in the Kenya market. We are extremely excited about expanding into East Africa,” said Eddy Jimenez, senior vice president of international operations and development at Kahala Brands, Cold Stone’s parent company.

The company said it has found a ready market in the growing middle class that is “more exposed and has an appetite for variety”.

“It’s about making great memories for our customers and we are delighted to become part of the Cold Stone Creamery family and feel the brand and its fun; unique customer experience is a perfect fit for the East African market,” said Roseanne Owiti, district manager for the Cold Stone Creamery brand in Kenya. Subway and KFC are other fast food chains that have expanded to the Kenyan market, equally attracted by the growing middle class.

“The emerging and growing middle class in Nairobi offers a perfect market for the food retail business. They are demanding high quality meals and great customer service at an affordable price point,” said Christopher J. Bak, chief executive of Liberty Eagle Holdings, the franchise holders for Subway when the chain was opening its store in June 2013.

The ice cream chain should also find customers in Nairobi’s growing expatriate community, which is growing as more international firms choose to relocate to Nairobi. IBM, Google, Visa, MasterCard, Pepsi, Travelport and Dow Chemicals are some of the multinationals that have chosen the capital city as either their regional or Africa headquarters.

Investors have also been drawn by eateries and related companies that have successfully captured the market.

“Nairobi Java House enjoys an attractive positioning as both aspirational and yet obtainable by East Africa’s rapidly expanding consumer middle class and, as such, it sits perfectly with ECP’s investment thesis,” said private equity firm ECP when it bought a majority stake in Java back in May 2012.

In March this year, Pearl Capital Partners, a private equity firm, bought a minority stake in Eldoville for Sh200 million. Eldoville processes cheese, butter and yoghurt for the high-end market.