PwC MSME Survey 2020

Case study: Vestar Coffee (1/2) 5000 Olatunji Adenuga Vestar Coffee "These major challenges have restricted our ability to accelerate our growth with the unorthodox approach of government officials in demanding for official/unofficial levies as a business risk..." Overview of Business Historical background: Vestar Beverage Company Limited, the parent company of Vestar Coffee, was incorporated on 5th April 2016 and started operations on 14th May, 2017 with the Vestar Coffee flagship store in Victoria Island. Inspiration: Simply the Love for Coffee... Over the last decade, the coffee culture in Nigeria was rather primitive with more emphasis on instant coffee, which was extended to the established hotel brands. The coffee industry is a US$100 billion industry globally, with Nigeria having the potential to have a US$300 million chunk of the industry in the short term. The Specialty coffee industry, which we operate in, is a global phenomenon which has developed since the 1980s and culminated in a cultural shift to create a sense of community, shared work spaces and a premium coffee experience. Journey so far The belief that what we are doing will provide these experiences is what inspired me to start Vestar Coffee. Products & Services: Vestar Coffee offers a variety of Espresso based coffee drinks, Hot Chocolate beverages, Teas and Spices, Cold beverage combinations, Juices, Pastry, Salads and Parfaits. We also offer coffee merchandise to our guests who are coffee connoisseurs. Other Information: The specialty coffee industry in Nigeria is still a niche industry with the capacity to leapfrog established industries across Africa. The transformation of the industry in the UK during the 1990s from predominantly Tea culture is evidence of this potential with similar parameters to measure growth. Size of the business: In the course of the 2018 fiscal year, we grew revenue YoY (annualized 2017) by 72% and are also grew revenue in 2019 by high single to double-digit percentages. The slowdown in revenue growth in 2019 was due to the state of the economy and decimation of disposable incomes. We are still a loss making business with 2 years to break-even. We have 12 employees and total registered customer base of 2,900. Location: We are located in Victoria Island (Flagship Store), Lekki Phase 1 and Ikoyi (Contract location). Recorded Milestones We had set a target of opening 5 stores in our first 5 years as an operating company, 20 locations in 10 years and 100 locations in 20 years. In our first full year of operation, we successfully opened 2 additional locations (totalling 3 locations) and we believe that we are still on course to exceed our store targets, despite the halt in expansion in 2019 due to the economic slowdown. We were recognized at a Google Event as the best reviewed restaurant/café in Nigeria, and have gone on to be invited by a number of corporates and event managers to provide our products and services, due to our strong brand. PwC MSME Survey 2020 PwC June 2020 31

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