Ideas & Debate

Sustainability lesson from KFC’s ‘potato-gate’ scandal

potato

A farmer harvesting potatoes in farmland. FILE PHOTO | NMG

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Summary

  • In KFC Kenya’s case, unfortunately, the company has been left with a lot of eggs and breadcrumbs on its face as a global supply chain crisis has exposed a local company policy of importing basic raw materials like potatoes, in an agriculturally driven economy.

I’m a tree and sheep farmer. Now, remember I’m an urbanite undertaking farming as a hobby so of course, I need to look a little bit chic if I’m going to the farm because, well, you’d have to be an urbanite female to understand what I’m talking about.

So back in 2013 I went to one of Kenya’s favourite shoe chain stores and bought what was trendy gumboots. Not the horrific, industrial-strength, Armageddon ready black kind, but a very lovely cheetah print pair.

I bought a zebra print as well. This expensive double shoe indulgence was borne of frustration that whenever I liked something and went to get another pair, there would always be stockouts. Or it wouldn’t be there in my size.

Fast forward to 2021. I went into that chain’s Yaya, Junction Mall and Cedar Mall Nanyuki branches on various occasions seeking one shoe or another. The type I wanted was either out of stock or wasn’t available in my size.

I’m clearly a sucker for pain, but the truth is that this chain has good prices and good quality shoes when you eventually find them. I always ask the various store managers why this happens all the time.

The constant response is that head office knows and there’s nothing the store manager can do about it. By the way, I have never seen the animal print gumboots ever again so my indulgence was totally vindicated.

I remembered this story during last week’s scandal aptly termed by someone as “potato-gate”. KFC, the fried chicken franchise, ran out of chips. Chips! You could not have missed the great hullaballoo surrounding how a multinational company ran out of chips because they had not received their regular imported supply from Egypt.

What does KFC and this shoe chain (also a multinational by the way), as well as many other companies have in common? A supply chain for their products. Whether you are producing restaurant food or shoes, the underlying product is manufactured with inputs that are either locally sourced, imported or a combination of both.

Your supply chain manager works very closely with the sales team as they know the fastest moving items which then require to be stocked up in plenty, with advance raw material purchases made when potential disruptions are anticipated.

Such potential disruptions may be caused by a shortage of shipping containers, local political upheaval that may cause logistical challenges or the one in a million chance that a massive tanker will get stuck in the middle of the Suez Canal and cause the greatest shipping industry chaos in recent history.

If the products are a hundred percent locally manufactured, then getting the distribution team to monitor which stock-keeping units (SKUs) need constant replacement is a basic, kindergarten level performance indicator for the distribution manager of a shoe retail chain.

The bigger issue here is what should the respective local boards (if they do exist) have been doing? Ensuring that these companies are running sustainable businesses.

To the board, sustainability should mean that not only do the company’s profits allow the business to exist in the longer term, but those profits should be generated responsibly.

This would include ensuring that the suppliers of raw materials do not produce exploitatively such as the use of child labour, and are paid fairly for their product or that the environment of the communities in which the business operates is not degraded through emissions.

It should also include ensuring that the firm’s own employees are working in a safe environment and are paid fairly.

In KFC Kenya’s case, unfortunately, the company has been left with a lot of eggs and breadcrumbs on its face as a global supply chain crisis has exposed a local company policy of importing basic raw materials like potatoes, in an agriculturally driven economy.

Never waste a crisis is what some pundit said. A sustainable way to get out of this potato salad of a snafu will be to begin the conversations on how this raw material can potentially be grown in a country that has produced European Union standard horticultural crops for decades.

If at all it has a local board, a constant nagging discussion in the board meeting should be: What are we doing to get into the hearts (other than in a cholesterol artery-clogging way) and minds of the community we operate in, other than just taking their money?

How are we leaving Kenya in a better place than when we found it when we entered this market?

For the shoe manufacturer’s board, if it exists, please get to walking around your retail stores and try buying your own products. Let me know your (frustrating) experience when you’re done.

[email protected] Twitter: @carolmusyoka