- FoodCo Nigeria Limited, a prominent retailer and operator of the largest supermarket chain brand in southwest Nigeria, has been listed among Africa’s fastest-growing companies for the second consecutive year.
- The ranking, compiled by Financial Times and Statista, recognized FoodCo as the sole modern retailer in the list of top-performing African companies.
- From its humble beginnings as a small corner stall in Ibadan, FoodCo has grown into a renowned supermarket chain, catering to customers’ demands for quality products at affordable prices.
For the second year running, FoodCo Nigeria Limited, a top retailer and operator of the largest supermarket chain brand in southwest Nigeria outside Lagos, has been listed among Africa’s fastest-growing companies.
In a ranking compiled by the global business reporting platform, Financial Times, in collaboration with statistics and consumer insights platform, Statista, FoodCo emerged as the only modern retailer in the list of 100 top-performing African companies.
The rising profile of the company belies its humble beginning as a small corner stall in the rustic city of Ibadan. From its inception in 1982, FoodCo was clear in its mission: to bring quality products at affordable prices to Nigerians. From that first stall in Bodija which sold fresh fruits and vegetables to working-class homemakers, the business quickly gained a reputation as a choice option for families who preferred the serene, hygienic environment to the hustle and bustle of the city’s open markets.
For context, Ibadan is the largest city in West Africa by geographic area. It also boasts some of the region’s most popular open markets such as Dugbe, Bodija, Agbeni, and Oja-Oba. By the early 80s, it was already a metropolitan hub in South-West Nigeria and FoodCo emerged as one of a handful of pioneer businesses that tapped into the prospects of modern retail in the city.
Soon, it morphed into a proper supermarket and became a hit among the city’s elites, foreign returnees and expatriates largely due to its quality assurance which was often suspect in the open markets. A Quick Service Restaurant section was thereafter added and the business expanded to include five stores. For nearly two decades, it was smooth sailing as the company entrenched itself as Ibadan’s foremost retailer.
As the new millennium unfolded in 2000, for FoodCo, it heralded a severe headwind that forced the business to close three of its shops within two years. The years 2000-2005 were dire. During the period, Madam Sola Sun-Basorun, the founder and current chairperson, took time to re-assess the company’s operations and set down structures for sustainable growth. A former librarian at the University of Ibadan, she had made the pivot to entrepreneurship, plowing all her capital, most of which was raised from her wedding gifts and a bank loan of N5,000, into setting up FoodCo. The crisis would test her mettle as a businesswoman and thankfully, she passed.
However, it was a slow climb back; first, to stability, and then, profitability. By 2006 things started to look good for the business and by the end of 2010, FoodCo was on a strong path to recovery with two new outlets launched in Ibadan. This would signal the second wave of the company’s growth. Instructively, it is the only operator from that pioneering era still in business.
In 2017, the company expanded into a diversified consumer goods venture with the addition of manufacturing and entertainment arms. The manufacturing unit currently produces its own ice cream and premium water under the SunFresh label. This is in addition to the award-winning SunFresh bread introduced in 2013.
“At the heart of our business is a strong commitment to delighting the customer,” says Ade Sun-Basorun, a former associate partner with McKinsey and Company who is currently CEO of FoodCo. Since assuming office, Ade has led the third wave of the retail chain’s growth hinged on customer service excellence, innovation, and ecosystem partnerships.
“We are focused on delivering quality, affordable products to our customers and our strong commitment to excellent customer service stands us out. As a brand, FoodCo is passionate about bringing the sophistication and convenience of modern retail to Nigerians. This unwavering focus which we have sustained for these past 41 years is what has helped us stand the test of time,” he added.
Just like other sectors, the organized retail industry was adversely hit by the COVID-19 pandemic. Restrictions in movement, supply chain disruptions and the pandemic-induced inflation made selling challenging. So how did FoodCo fare? “One of the things that kept us grounded was our decision to take a human-first approach by providing support for the vulnerable among us. Our kitchen prepared freshly made meals for health workers on the frontlines, we donated critical care equipment to some hospitals and supported government’s public education efforts by putting up billboards at public places such as markets and city centres,” Ade explained.
“The pandemic also forced us to accelerate some of the upgrades we were considering for the business, particularly on the technological front. It was during this period that we launched the online supermarket, WhatsApp Order service and also started the home delivery service. The move paid off as the business grew by 100%. We came out of COVID-19 with a store count of 12 at the end of 2021, from the six we had before the pandemic.”
According to Ade, the rapid expansion is also driven by customers’ demand for modern retail services. “Our expansion is also a response to our customers’ requests for quality retail offerings that are closer to their communities,” he says. “We try to ensure that they don’t have to undertake long commutes to shop for their favourite groceries or household items. This was what prompted us to open a shop in Abeokuta. Our entry into the town was greeted with warmth and excitement and we presently have three outlets there with plans to open more.”
The company has since added seven more outlets across the region, bringing the current total to 19 with footprints spread across Oyo, Lagos and Ogun. FoodCo currently employs over 1000 staff and is heavily invested in the small and medium enterprise community where it has become a major access-to-market channel for local entrepreneurs and farmers. This is alongside other capacity-building efforts geared towards improving stock quality, mitigating the influence of middlemen in creating false price inflations as well as enhancing efficiency across the value chain.
Recounting the team’s reaction when the company was first listed in inaugural Africa’s Fastest Growing Company ranking in 2022, Ade said: “You know, the announcement came barely a year after the COVID-19 lockdowns so the news filled us with a heightened sense of gratitude, first to God and then to our customers for sticking with us through that period.”
A second listing in the coveted report has cemented the company’s position as one of Nigeria’s foremost retailers. However, Ade believes that there are still a lot of untapped opportunities to realize the potential of modern retail in Nigeria.
“With current penetration at less than five per cent, the sector is still sub-scale. We must also acknowledge that given the present economic situation, the sector is going through a challenging cycle. However, we remain bullish about its prospects. Having operated in this space for more than 40 years, we understand a thing or two about cycles because we have been there several times,” he opines.
Among other factors, Ade is banking on the emergence of a consumer class that not only appreciates the importance of modern retail but also has the disposal income and sophistication to engage the sector. He states: “Nigeria’s middle class is about 50 million people and nestled within that category is a strong consumer class that can sustain the demand for modern retail. We believe that they could be the key to unlocking possibilities within the sector. The challenge now lies with operators to innovate and adapt to the changing customer dynamics to harvest the opportunities, and for government to continue to create an enabling environment for the sector to thrive.”
