By Zeenat Moorad, Business Day Live
Picture: THE NEW YORK TIMES/OZIER MUHAMMAD on BDLive
Local firm signs franchise deal to bring popular American confectionery and ice cream purveyors to this country
GRAND Parade Investments (GPI), which brought Burger King to SA in 2013, on Thursday announced it has signed a franchise agreement with Nasdaq-listed Dunkin’ Brands to open as many as 250 Dunkin’ Donuts and 70 Baskin Robbins stores in SA.
Investment by global brands has increased in emerging markets, which are replete with aspirational and brand-aware consumers. Though there is little respite on the horizon from lower utility costs or easier credit, quick-service dining and the propensity to shop, particularly for clothing and footwear, has endured in SA.
Dunkin’ Donuts’ entrance follows that of Domino’s Pizza and global doughnut company and coffee retailer Krispy Kreme, which opened an outlet in Rosebank, Johannesburg last November. NYSE-listed Starbucks, the maker of caramel macchiatos and pumpkin-spice lattes, will open coffee shops in SA this year.
"At GPI, we work with world-class partners to develop brands that will resonate with South African consumers, which is why we’re thrilled to bring Dunkin’ Donuts and Baskin Robbins to the market," Hassen Adams, executive chairman at GPI, said on Thursday.
The agreement will see the introduction of Baskin Robbins ice cream products in supermarket chains and convenience stores in SA.
With more than 11,500 outlets in 40 countries, Dunkin’ Donuts sells more than 1.8-billion cups of coffee a year. The brand aims to offer regional menu items to cater to local tastes, it said.
SA’s coffee culture has grown as a deluge of artisanal roasteries and niche chains serve up java fixes to a growing market.
Baskin Robbins is the world’s largest chain of ice cream specialty shops known for its "31 flavours" and creative range of frozen desserts. According to a recent Datamonitor study, the industry was worth more than R3bn in SA.
Last year, UK-based R&R Ice Cream purchased Nestlé’s South African ice cream business for an undisclosed sum, to tap into the African market. Nestlé’s portfolio includes King Cone and Eskimo Pie.
R&R Ice Cream is Europe’s largest private-label ice cream manufacturer.
In the local market, Ola SA, a division of Unilever, holds 33% of the market measured by value. The company’s biggest brands include Ola and Magnum, both with a 6% share, according to Euromonitor.
Nestlé SA holds a 29% value share, with its Country Fresh bulk ice cream leading the brand rankings, with a share of 11% last year.
Out-of-home consumption is largely dominated by Famous Brands’ Steers and Milky Lane chains, while KFC and McDonald’s also offer a range of popular ice creams. At the premium end, Häagen-Dazs has about five stores across the country and its ice creams are sold at retailers and garage forecourts.
GPI’s agreement remains subject to receipt of approval from the financial surveillance department of the Reserve Bank.
Both corporate-owned stores and franchised outlets will be opened.