The world’s most popular chicken restaurant began life in 1987, in a decidedly unfashionable suburb of Johannesburg, South Africa. It was born from the dream of two young men, allowing people to enjoy the most delicious chicken in the world: fresh, flame-grilled, and prepared in a PERi-PERi marinade. It was Mozambican street food, inspired by the colonial influences of Portuguese cooking.
Nando’s PERi-PERi chicken was an immediate hit. It was a massive, global taste sensation that the world couldn’t – and still can’t – get enough of. Today, Nando’s continues to offer the world delicious chicken in 1,200 restaurants across 30 countries. Nando’s is especially popular in the UK, Canada, and Australia and it remains South Africa’s favourite way of eating chicken.
Linda Reddy, Supply Chain Director at Nando’s South Africa says the business’s success can be attributed to a number of things: first and foremost, it’s the incomparable chicken. It’s also the warm, welcoming, and hospitable culture of the business; the ambience of the restaurants, the great value that Nando’s offers, and the entrepreneurial culture instilled by its founders 29 years ago.
“It’s a business about making money and having fun,” she says. “Our values say it’s okay to make mistakes and try different things. The company has a long history of things that haven’t worked out and things that have worked out successfully. So it’s built on a strong foundation of those values and it’s really made the business what it is today.”
Starting a company
The poultry production industry in South Africa is enormous, but sourcing chicken was not always simple for Nando’s. The company approached one of the largest national suppliers when it began, but was turned away:
“They said ‘thank you very much, your products are really good and you’re going in the right direction, but we cannot supply you’. So it was the smaller chicken producers and abattoirs in this country which helped the founders over time. More family-run businesses came to the fore and said ‘we’ll supply you’, and would deliver right to the door. Ever since, we’ve only ever used fresh chicken.”
Using fresh products, however, creates complexities within the supply chain, particularly with regards to managing the balance of a short shelf life and consumer demand. As the company has grown, logistics have become a great deal more sophisticated; fresh chicken can last up to seven days thanks to cold chain management, and distribution is completely outsourced. Each country now has its own local supplier for Nando’s globally renowned sauces and bastings.
“Up until eight years ago, we made our own bastings in our central kitchen here in South Africa,” Reddy explains. “That’s where we use our African Bird’s Eye chilli. It’s one of the key components that goes into the spice pack of our sauces. We made that and we controlled every element of it, from equipment to staff. We sent out sauces from South Africa to the UK, Australia, Canada, and the US. It’s at the heart of our IP.
“We still manage the African Birds Eye chili and spice pack supply relationships, ensuring they’re properly managed to create the sauces that are eventually used in the restaurant, and also to marinade the chicken in the processing plant. Fresh chicken arrives pre-marinated which gives the chilies the chance to settle into the meat. This enhances tenderness and gives a delicious flavour.”
Building a team
Finding staff to implement this now-extensive supply chain has not always been simple.
“For me, coming into the business was really about how we could take the supply chain business we already had to the next level: how to be commercially astute, and create an integrated function for the broader business whilst still giving customers the best-tasting chicken in the world.”
Reddy’s immediate priority was to take the Nando’s supply chain to a world class standard by being more pro-active, and managing supplier relationships into committed partnerships. She latched onto her previous experience in business banking, innovation, food industry, and supply chain expertise to reinvent her business area. The company manages supply chain as a business within a business – and beyond a traditional support function.
“We have a road map of where we want to go. There were things we needed to put in place to get us into the journey. We’ve developed the road map over two years, and in the process, supply chain has evolved to become a focussed, customer-centric, specialised division of the business. The team has grown from four people to 17. Members of the team earned their place on it for their deep commodity skills and experience and having a great attitude which is consistent with the vibrant Nando’s culture.
“My vision was to bring together people with strong experience and skill in strategic sourcing and logistics, who wanted to be part of an exciting journey to build our supply chain. We deliberately seek people who reflect our values of passion, courage, integrity, pride and family. We invest a lot of time and effort making Nando’s a great place to work and believe that our people are the reason for our success. As Robbie Brozin, one of our founders, has been saying since 1987: ’it’s the people that make the chicken’.”
Up until three years ago, the supply chain team would plan just three months in advance; now, the timeframe is six to 18 months, in line with marketing, innovation, and new restaurants plans. The team also holds a long-term roadmap that assists the large suppliers: how they are expected to develop in terms of capability and capacity in order to meet quality and demand.
Running a company – however large – in South Africa can be challenging. Resources are constrained, as are manufacturers, and it puts businesses at risk. Reddy and her team has started to implement contingency plans within the Nando’s supply chain that counteract such issues, and methods to ensure sustainability of supply.
Electricity, water, infrastructure, and labour all pose challenges in our Southern African business climate. There was recently a drought that put a strain on production not only of chicken, but also of sauce, basting, and marinade ingredients. Moreover, the drought significantly increased the cost of maize, which is the main component of chicken feed. It also had a knock-on effect on key products such as potatoes and greens, which are needed for the Nando’s side dishes.
Despite these challenges, Reddy is enormously confident in the company’s plans for expansion. Nando’s has recalibrated its business model to include more restaurant relocations, the team having decided that some restaurants are not optimally placed. Nando’s has also introduced drive thru restaurants in South Africa, something that has proven a popular concept. Takeaway food is a huge business in South Africa, and Reddy expects the drive thru format to expand to the UK and Australia. As for the restaurants themselves, Nando’s plans to remodel many restaurants to be more reflective of the fast casual dining style model, which will require a huge overhaul and volume of Capex.
Reddy feels that the way Nando’s handles the complexities of conducting business in South Africa sets the company apart: “When you are in this environment and you have been in it for so many years, you learn to work with it and make it happen,” she concludes. “We deal with so many challenges, but still achieve transformation within the diverse consumer and business landscape. South Africa is on a big drive to create opportunities for diverse people of all cultures and Nando’s is fully aligned with that goal. All of that outweighs the risks.”