Java House signs expansion deal with China’s Green Chain
Kenyan coffee shop franchise, Java House Africa has signed a deal with a Chinese online retail company, Green Chain, which would see it export coffee and tea to China as part of its expansion plans. Green Chain is a subsidiary company owned by C.J. Smart Cargo International.
According to Paul Smith, the Chief Executive of the company, this deal is poised to see the company export between 10-15 tonnes of its 375-gram bag of Kenya AA Arabic coffee and Gold Label Tea to China within a month.
Already an exporter of its macadamia nuts to China, the coffee chain is planning to utilize its high-quality agricultural products to penetrate other parts of Asia as it aims to expand outside of China and into the Asian market.
Mr. Smith also explained that Chinese customers accounted for quite a number of their biggest sales of bagged coffee at their restaurants in Kenya so it’s a wise move to take it to them directly.
The cafe culture in China is becoming more common around key cities even though it’s a traditionally tea-drinking country. In recent times, companies like Costa Coffee and Starbucks have established outlets in China.
In February, Java House was at the center of a bidding war involving two American private equity funds who bid as much as $100 million (Sh10 billion) to acquire the company. The company was eventually sold to Abraaj Group, a Dubai-based global investment firm with interests across Africa and other emerging markets.
The company, in May, disclosed plans to double the number of outlets in Kenya over the next two years before expanding its operations in East Africa and beyond. With this deal, they have already begun the process.
Various coffee franchises have been springing up around Africa in recent years. And when compared to the past decade, the demand for coffee has improved significantly. But considering that Africa has some of the biggest coffee exporters in the world, it seems only fitting that demand within the continent is growing. Competition within the landscape should encourage other franchises to develop more innovative and creative solutions to building a customer base, which is good for both Africans and the business climate throughout the continent and beyond.
Java House which was launched in Nairobi as a single coffee shop in 1999, currently has close to 60 stores in three East African countries with the majority of those stores being in Kenya.
Java House Group has also been spreading its tentacles to other business frontiers. 2017 saw the launch of a pizzeria outlet called 360 Degrees and the first self-service frozen yogurt chain called Planet Yogurt. The company currently has over 2,000 people on its payroll and serves in excess of 320,000 diners monthly.