Economics

Kenya’s Roadside Food Vendors Successfully Take Out Million Dollar Startup Kune Foods

In 2021, a white man armed with $1m set out to discover cheap foods in Kenyans. Due to cultural blindness, he couldn’t find any, so he decided to invent the cheap food for Kenyans. The result? Roadside food vendors armed with nothing but cooking pans launched a counter attack. 10 months later, the white man is still alive – though not standing – but without the $1m.

How did this happen?

Kenya’s roadside food vendors, populary known as Kibanda (plural Vibanda) stand out as one of the most resilient business models that exist today. They are simple, they have no overheads because they pay no rent and the staff primarily made up of the owner, they do not share profits with delivery people, and they are located where their customers are. They have stood the test of times over years, surviving droughts, famines, evictions, cholera outbreaks, demolitions, and even Covid-19.

This is the competition that Kune Foods was facing. Everyone knew that it was a lost battle.

Although the Vibanda had faced other challenges, no one knew how they would fare against an attacker armed with over 100m Shillings. Luckily, it was a walk over.

Kenya’s vibanda are notoriously known for efficiency, quality and low prices. So efficient are they that office workers in Nairobi already gave them a Six Sigma certification.  Martin, who has worked in an office in Westlands in Nairobi has been a regular customer for over 15 years. “Not a single day have I ever missed food. I have never found ‘mathe’ unwell, absent, or facing cashflow challenges. The food costs about 50 shillings, so I spend just over 2 dollars in a week. What other innovation is needed in this sector? None.”

Cooked Business Model

Business pathologists had already noted that the only attractive thing about Kune Foods was the $100 m raise they did at the start. Everything else was doomed to fail. Some even wondered whether the startup was genuine or just a lazy attempt at money laundering.

“A family of four in Nairobi’s Kasarani estate spends $3 per meal at home. They cook their food from home, eat dinner, then carry the remainder to the office for lunch the next day. This is the target group that Kune was targeting, but asking for the same $3 dollars on just one plate of food. In the event that they eat all the food and there is nothing to carry for lunch, they will eat at the Kibanda for only $0.7 How did Kune Foods expect to win this battle?”

All is not lost though. Except for the money that could have been laundered, the rest was invested in the country. A few Kenyans got jobs and earned their salary, which is good enough. Those were smart people because they did not dare to tell Kune Foods founder Robin Reecht the truth.

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