Plotting Java House path to the grilled chicken, fries space

Mr Derrick Van Houten, Group Chief Executive Officer at Java House Africa. PHOTO | POOL

What you need to know:

  • The plan is to open 30 Kukito outlets in the next five years. We are opening more Kukito outlets to add to the two that we currently have in Nairobi.

Derrick Van Houten, a former KFC executive, joined coffee house chain Java House Africa as CEO on March 1.

Houten has previously served as the chief executive of United Africa Company of Nigeria, a publicly-listed company based in Lagos.

The Business Daily spoke with him on what new opportunities the business is exploring as well as his plans to overcome some of the challenges the group is facing at the moment. Excerpts.

You are barely four months into your tenure as the Java boss having left a similar role at KFC a few months ago. What have you achieved together with your team in the last 100 days?

My strategy was to go back to basics when I joined Java House Africa in March. We simplified all complicated processes and stopped staff who just wanted to get easy with projects. As a result, we have got all our basic qualities back.
The other area we addressed is customer service. This is now fixed and we have never seen that sort of customer feedback we have today.
We were also very low-key in delivery but we are now number two regionally in deliveries in three months and that’s phenomenal for me.

To what extent has the coronavirus pandemic impacted the operations of Java especially in Kenya?

When Covid hit, our sales went down by a substantial margin. We therefore had to close down a few more branches to manage our costs. We also decided to cut our workforce through a voluntary exit programme, an exercise that saw about 700 workers sent home. We also slashed our staff salaries by 40 percent and I think that was the biggest scar in this business.

What impact have the cost cutting measures you initiated in March achieved to date?

It’s unfortunate that we had to scale down our operations when Covid hit. As you know, the hospitality sector was one of the hardest hit by low customer numbers as social distancing and stay-at-home measures were strictly enforced to curb the spread of the deadly respiratory disease.

We had to do all this to allow the business to survive through Covid. However, our recovery from March has been very good and this is based on the new pillars that we introduced when I took over.

Will Java consider going into franchise deals amidst these unprecedented times in business?

Franchising is an opportunity with Kukito. If we could get partners who could build in Kukito as a franchise unit, that we will definitely do.

What measures are you putting in place to stay ahead of KFC as well as other foreign-owned local chains such as Artcaffe—which has also been on an expansion trail fuelled by private equity investors?

It’s a fact that we are the biggest restaurant brands in East Africa. We have customers who believe in Java and you can’t buy that. That brand love is huge. We have now become more efficient with the business — we have changed a lot of processes. We have cut costs by reducing office space and we have gone into cheaper spaces. Our overheads are also down and we are more visible on our social media platforms.

Customers are increasingly becoming concerned about their health. Is Java looking at offering more options that cater to their health needs?

At Java, we strive to ensure that we meet all our guests’ needs in terms of health concerns. We are always evaluating our menu, and reviewing it to ensure that Java meals are as healthy as they can be.

Is Java looking to set up more branches in Kenya in its expansion quest to grow revenues?

We had actually secured some good sites in Nairobi but we had to put them on hold because of the Covid situation. We are now ready and we are going to expand into those sites. A lot of them are in Nairobi and we may also open a few more branches outside Nairobi.

How many more outlets is Java looking at opening under the Kukito brand and why are you opening more outlets under this brand?

The plan is to open 30 Kukito outlets in the next five years. We are opening more Kukito outlets to add to the two that we currently have in Nairobi. Kukito has been positioned in such a specific space in the market. Its grilled chicken and chips sell at between Sh300-Sh400.
The beauty of this brand is that you can put it up anywhere. You don’t have to be in malls or fuel stations. What we are doing is that we are providing a young brand in a market space that’s not being penetrated at the moment.
That space at the moment has a whole lot of different chicken openings from roadside outlets and CBD brands but there are no good safety-related chicken brand. One Kukito outlet has about six workers and this means that we will create about 200 jobs once all the outlets are up and running.

What was the impact of covid-19 on Java compared to big hotels?

Java unlike the big chains was able to adapt by being able to deliver the meals they already had in store that people already loved and this helped cushion our bottom line. Also our overheads are not as high as the big hotel chains. We are a restaurant.

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