A Whopper costs far less than a meal at a Brazilian steakhouse in Brazil. Go figure. That, coupled with South America's struggling economy, explains why BK Brasil SA is faring well.
— Danni Santana
Brazil, known for its unique steak houses and premium beef exports, is seeing a growing appetite for a different type of meal, Burger King’s 680-calorie whopper.
Burger King is opening a new site in Brazil every three to four days, said Iuri Miranda, chief executive officer of BK Brasil SA, the world’s fastest-growing restaurant operator by revenue. With 736 sites since 2011, BK Brasil is challenging McDonald’s Corp. for Brazil’s fast-food crown. McDonald’s, which opened its first restaurant in Rio de Janeiro in 1979, has 939 in place.
A churrascaria, where slabs of barbecued beef are cut at your table’s edge, can cost 167 reals (or $45) per person for dinner, no drinks included. A Whopper costs just 21 reais at a time when South America’s largest economy is struggling to recover from a once-in-a-century recession.
“Fast-food chains were the only ones that didn’t suffer” during the economic crisis, benefiting from an expanded lower-middle class keen for eating in restaurants, said Leticia Menegon, a business professor at ESPM-SP, the Superior School of Advertising and Marketing in Brazil. Now, “people are changing their eating habits,” she added, with hamburgers having becoming increasingly popular among Brazilians from all classes.
With chains running only 10 percent of Brazil’s restaurants, compared with 60 percent in the U.S., there’s room for BK Brasil to expand, according to Miranda. The company has diversified its growth into small, prosperous cities in the country’s countryside, such as Campo Mourao, a town in Parana state with a population of 94,000 people that produces soybeans and corn. “We see no reasons for a slowdown in the medium term,” he said in an interview at Bloomberg offices in Sao Paulo. “We continue to see market growth.”
BK is a franchisee with Restaurant Brands International Inc., which was created in 2014 when Burger King Worldwide Inc. bought Tim Hortons Inc. and relocated its headquarters to the coffee chain’s home country of Canada. It’s controlled by Brazilian private equity firm 3G Capital, whose founders include billionaire Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira. Restaurant Brands owns an indirect stake in BK Brasil.
Founded in 1954, Burger King is the second-largest fast food hamburger chain in the world.
Last year, BK Brasil reached an agreement with Popeyes Louisiana Kitchen Inc. for the exclusive right to develop and operate the fried chicken brand in Brazil. BK Brasil plans to open 300 Popeyes restaurants over the next decade. BK Brasil’s shares, which raised about 2 billion reais in an initial public offering in Sao Paulo a year ago, have since gained 16.7 percent.
–With assistance from Leslie Patton.
©2019 Bloomberg L.P.