Foodservice Trends in Brazil

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MARKET ACCESS SECRETARIAT
Global Analysis Report
Foodservice Trends
In Brazil
April 2014
EXECUTIVE SUMMARY1
In 2012, the consumer foodservice market continued its upward
trajectory in Brazil. One reason for this continued rise is the opening
of new fast food chain outlets and new international chains, such as
Quizino’s and Carl’s Jr, entering the Brazilian market. Another
reason is price increase due to a higher level of inflation
experienced throughout the year. The above factors have
stimulated the market growth of the Brazilian foodservice industry
allowing it to reach a world ranking of fourth with value sales of
US$146 billion in 2012 (Euromonitor International, 2013).
Independent operators have a strong foothold on the foodservice
industry in Brazil and made up 93% of overall sales in 2012. Chain
operators have shown steady sales growth over the last 5 years,
having increased their overall sales percentage from 5% in 2008 to
7.1% in 2012. This trend looks to continue over the forecasted
period with chain operators gaining over 9.5% of overall foodservice
sales by 2017.
Many of the top 10 players in the Brazilian foodservice industry are
also familiar and significant global competitors. The fact that their
combined market share was less than 5% indicates a varied
number of choices for the consumer.
Factors such as varied ethnicity, a growing middle-class, a cultural
preference to engage in frequent “dining experiences”, make Brazil,
and most specifically São Paulo, a strategically attractive
opportunity for suppliers to the country’s foodservice providers.
The 2014 FIFA World Cup being hosted in São Paulo and Rio de
Janeiro, and the 2016 Summer Olympic Games happening in Rio
de Janerio will see a large influx of international tourists to these
regions thus having a major effect on the Brazilian foodservice
industry in the near future.
1. Information in the executive summary sourced from Euromonitor International, 2013.
CONTENTS
Executive Summary ........................1
Sector Overview ..............................2
Subsectors ......................................4
Locations .........................................5
Top Companies ...............................7
Influencing Factors ..........................7
Opportunities ...................................8
Conclusion .......................................8
Resources .......................................9
SECTOR OVERVIEW
Ranked fourth largest in the world, Brazil’s foodservice sector was valued at US$146 billion in 2012.
Between 2008 and 2012, the Brazilian foodservice market saw a compound annual growth rate (CAGR)
of 10.9% and is expected to continue to expand with a CAGR of 10.6% through 2017, achieving total
sales of US$228 billion.
Foodservice subsectors consist of cafés/bars, full-service restaurants, fast food, self-service cafeterias,
street stalls/kiosks and 100% home delivery/takeaway. Cafés/bars and full-service restaurants are the
dominate subsectors making up 70% of the market, followed by fast food. Fast food showed the highest
CAGR of 15% over the 2008-2012 period. Over the forecasted period of 2013 to 2017, street stalls/kiosks
will show the highest CAGR at 14.1%, thus dropping fast food into second spot with a forecasted CAGR
of 12.6%.
Market Value and Growth of Brazil Foodservice by Subsector, Historic,
Current Prices, Fixed 2012 Exchange Rates
Categories
Total Consumer Foodservice
Cafés/Bars
Full-Service Restaurants
Fast Food
Self-Service Cafeterias
Street Stalls/Kiosks
100% Home Delivery/Takeaway
Pizza Consumer Foodservice**
2008
96,490.7
46,764.8
24,406.2
16,077.3
4,496.4
4,265.1
480.9
3,312.7
Market Value (US$ millions)
2009
2010
2011
105,106.7 115,505.9 128,671.2
49,808.2
53,510.2
58,112.1
27,145.4
30,283.8
33,882.3
17,685.0
19,856.1
23,100.1
5,119.6
5,748.8
6,532.7
4,817.4
5,493.3
6,362.3
531.1
613.7
681.8
3,726.8
4,229.8
4,704.3
2012
146,164.4
61,795.6
40,450.5
28,117.5
7,809.3
7,181.1
810.4
5,567.6
CAGR* %
2008-12
10.9
7.2
13.5
15.0
14.8
13.9
13.9
13.9
Source: Euromonitor, 2013.
*CAGR: compound annual growth rate.
**Pizza consumer foodservice data is compiled from three different subsectors (fast food, full-service restaurants, and 100% home
delivery/takeaway) for the purposes of comparison, but remains reflected within the figures for these subsectors, and thus the
consumer foodservice total. As such, pizza consumer foodservice is not counted as its own sector within the consumer foodservice
total.
Market Value and Growth of Brazil Foodservice by Subsector, Forecast,
Current Prices, Fixed 2012 Exchange Rates
Categories
Total Consumer Foodservice
Cafés/Bars
Full-Service Restaurants
Fast Food
Self-Service Cafeterias
Street Stalls/Kiosks
100% Home Delivery/Takeaway
Pizza Consumer Foodservice**
2013
152,761.3
58,825.3
44,527.4
31,772.6
8,674.1
8,080.0
882.1
6,068.5
Market Value (US$ millions)
2014
2015
2016
170,111.2 187,855.9 208,178.0
64,258.5
69,901.3
76,091.0
49,524.1
54,461.4
60,161.6
35,987.6
40,771.7
45,911.4
9,936.2
10,937.5
12,357.0
9,437.7
10,731.4
12,507.9
966.9
1,052.6
1,149.1
6,724.0
7,295.7
7,988.9
2017
228,227.6
82,015.8
66,411.7
51,162.9
13,721.5
13,673.4
1,242.3
8,652.5
CAGR* %
2013-17
10.6
8.7
10.5
12.6
12.1
14.1
8.9
9.3
Source: Euromonitor, 2013.
*CAGR: compound annual growth rate.
**Pizza consumer foodservice data is compiled from three different subsectors (fast food, full-service restaurants, and 100% home
delivery/takeaway) for the purposes of comparison, but remains reflected within the figures for these subsectors, and thus the
consumer foodservice total. As such, pizza consumer foodservice is not counted as its own sector within the consumer foodservice
total.
Page | 2
Independent operators provide the majority of foodservice in Brazil, accounting for US$135.8 billion or
93% of the total foodservice market in 2012. However, chained operators achieved the most dynamic
performance of the year with sales showing a 30% increase, compared to their independent counterparts
which only showed a 12.5% increase over 2011. Chained operators will continue to see a very healthy
CAGR of 16.1% from 2013 to 2017, while independent operators will only see a 10% CAGR over the
same period.
Market Value and Growth of Brazil Foodservice by Type, Historic,
Current Prices, Fixed 2012 Exchange Rates
Subsector
Market Value (US$ millions)
2009
2010
2011
105,106.7 115,505.9 128,671.2
99,604.2 108,901.6 120,707.0
5,502.4
6,604.2
7,964.2
2008
96,490.7
91,632.8
4,857.9
Total Consumer Foodservice
Independent Consumer Foodservice
Chained Consumer Foodservice
Source: Euromonitor International, 2013.
2012
146,164.4
135,819.4
10,345.1
CAGR* %
2008-12
10.9
10.3
20.8
*CAGR: compound annual growth rate.
Market Value and Growth of Brazil Foodservice by Type, Forecast,
Current Prices, Fixed 2012 Exchange Rates
Subsector
Total Consumer Foodservice
Independent Consumer Foodservice
Chained Consumer Foodservice
2013
152,761.3
140,764.4
11,996.9
Source: Euromonitor International, 2013.
Market Value (US$ millions)
2014
2015
2016
170,111.2 187,855.9 208,178.0
155,908.5 171,356.0 189,079.2
14,202.7
16,499.9
19,098.8
2017
228,227.6
206,399.5
21,828.2
CAGR* %
2013-17
10.6
10.0
16.1
*CAGR: compound annual growth rate.
The Brazilian foodservice sector had just under 1 million outlets that recorded close to 24 billion
transactions in 2012, with an average transaction cost of $6.11. The cafés/bars subsector had the most
outlets with over 400,000 and also showed the most transactions at 12.5 billion. Full-service restaurants
had the highest average sales per outlet and highest average sales per transaction with US$622,890 and
US$24.59, respectively. In 2012, 100% home delivery/takeaway was the lowest performing subsector in
terms of outlets and transactions.
Outlets and Transactions of Brazil Foodservice by Subsector, 2012
Subsector
Total Consumer Foodservice
Cafés/Bars
Street Stalls/Kiosks
Fast Food
Full-Service Restaurants
Self-Service Cafeterias
Pizza Consumer Foodservice**
100% Home Delivery/Takeaway
Outlets
995,853
409,696
334,710
156,787
64,940
21,671
15,445
8,049
Transactions
(Thousands)
23,919,602.5
12,467,540.5
2,940,980.2
5,907,232.0
1,644,971.5
868,002.4
253,936.2
90,876.0
Average Sales Average Sales
per Outlet
per Transaction
($US)
($US)
$146,773
$6.11
$150,833
$4.96
$21,455
$2.44
$179,336
$4.76
$622,890
$24.59
$360,357
$9.00
$360,479
$21.93
$10,068
$0.89
Source: Euromonitor International, 2013.
**Pizza consumer foodservice data is compiled from three different subsectors (fast food, full-service restaurants,
and 100% home delivery/takeaway) for the purposes of comparison, but remains reflected within the figures for
these subsectors, and thus the consumer foodservice total. As such, pizza consumer foodservice is not counted
as its own sector within the consumer foodservice total.
Page | 3
Of the total foodservice outlets in Brazil, independent operators accounted for 98.3% or 979,000 outlets
and had close to 24 billion transactions in 2012. Although chain operators only accounted for 1.7% of total
outlets and 5.2% of total transactions, on a per-outlet basis, they have shown higher sales and a higher
average transaction value then their independent counterparts.
Outlets and Transactions of Brazil Foodservice by Type, 2012
Subsector
Total consumer foodservice
Independent consumer foodservice
Chained consumer foodservice
Outlets
995,853
978,959
16,894
Average Sales Average Sales
per Outlet
per Transaction
($US)
($US)
23,919,602.5
$146,773
$6.11
22,726,811.1
$138,739
$5.98
1,192,791.3
$612,353
$8.67
Transactions
(Thousands)
Source: Euromonitor International, 2013.
SUBSECTORS
The following subsector analysis is based on information from Euromonitor International, November 2013.
See resource section for complete listing of resources.
Cafés/Bars
Cafés/bars is the largest subsector within the Brazilian foodservice industry and made up 42.3% or
US$61.8 billion of the total values sales in 2012. Most cafés/bars in Brazil offer drinks and snacks
throughout the day, with coffee being served in the mornings and alcoholic beverages from lunchtime on.
Within cafés/bars there is the subsector of coffee shops, which is highly competitive, particularly in São
Paulo and Rio de Janeiro where the majority of coffee shops are located. This competitive landscape has
encouraged coffee chain operators to look at a store-within-a-store concept, such as joining with a
bookstore or business establishments.
Although cafés/bars had the highest number of outlets with 410,000 and the most transactions with
12.5 billion in 2012, they are forecasted to experience the lowest CAGR with only 8.7% from 2013 to
2017 mostly due to the hardening Dry Law relating to alcoholic drinks potentially resulting in a decline in
beverage sales.
Street Stalls/Kiosks
The most popular street stalls/kiosks with consumers is the ice cream kiosks. The top two companies
which account for 75% of the market share within the chained street stall/kiosk subsector, are McDonald’s
Corp and Brazil Fast Food Corp, with their brands of McDonald’s and Bob’s . The independent street
stall/kiosk operators still make up the majority of the subsector and account for 99% of the total outlets or
332,000. In the past, regulations restricted food stalls to essentially hotdogs, but a new law in São Paulo
will now formally licence the operation of food trucks and this segment is expected to greatly increase in
the coming months.
Street stalls/kiosks saw value sales of US$7.2 billion in 2012 and a CAGR of 13.9% from 2008 to 2012.
The CAGR for the forecasted period of 2013 to 2017 is expected to be 14.1% while sales are predicted to
reach US$13.7 billion.
Page | 4
Fast Food
The fast food subcategory had total value sales of US$28.1 billion in 2012 and raised the number of
outlets to 157,000 with 5.9 billion transactions in 2012. Of all the fast food restaurants in Brazil, the top 5
companies are McDonald’s Corp, Al Saraiva (Habib’s), Doctor’s Association Inc. (Subway), Brazil Fast
Food Corp (Bob’s), and Burger King Holdings Inc., which hold 66% of the overall market share.
The fast food subcategory saw an increase in chained bakery products due to new international chains,
such as Quiznos, joining the market. Another factor helping to increase the rise in the fast food
subcategory is the upsurge of new shopping centers being opened in Brazil which are providing good
retailing space and a steady flow of consumers.
Full-Service Restaurants
Second in total value sales with US$40.5 billion are Brazil’s full-service restaurants. Between 2008 and
2012 full-service restaurants saw a CAGR of 13.2%, but are expected to experience a slight decline in
CAGR (10.5%) during the forecasted period of 2013 to 2018.
Within the full-service restaurant subcategory there are a number of different types of restaurant styles,
such as Asian, European, Latin American, Middle Eastern, North American and pizza. The chained Latin
American style restaurants showed the most growth with 43%, and saw the second highest number of
outlets open, with 18 in 2012. Chained Asian full-service restaurants opened the most outlets within 36 in
2012 and showed a 39% growth in sales.
Self-Service Cafeterias
The most popular style of self-serve cafeterias in Brazil is the kilo restaurant, which serves food by
weight. Chained kilo restaurants directly compete with full-service and fast food restaurants when it
comes to price and product offering. Although chained kilo restaurants experience high rental charges
due to being located in shopping malls, this cost is balanced out by only having minimal infrastructure
costs, such as tables and chairs. The leading operators of chained self-serve cafeteria are Divino Fogão
and Viena Express and account for 91% of the market share in Brazil.
Self-service cafeterias are one of the smallest within the foodservice subsector in terms of outlets and
transactions with 21,671 and 868 million, respectively. However, they are second when it comes to
average sales per outlet and average sales per transaction with US$360,000 and US$9.00, respectively.
In 2012, self-service cafeterias registered value sales of US$7.8 billion and boasted a 14.8% CAGR from
2008 to 2012. Value sales are projected to reach US$13.7 billion by 2017.
100% Home Delivery/Takeaway
The top three brands in the 100% home delivery/takeaway subcategory are China in Box, Lig-Lig and
Domino’s Pizza. These three brands make up 75% of the market share. Although pizza is the main
delivery food, Brazilian consumers favour Chinese food for 100% home delivery/takeaway which explains
why China in Box and Lig-Lig are two of the top three brands.
100% home delivery/takeaway saw value sales of US$810 million in 2012 and a CAGR of 13.9% from
2008 to 2012 and is expected to reach values sales of US$1.2 billion by 2017. During the forecasted
period of 2013 to 2017, the 2014 FIFA World Cup and the 2016 Olympic Games will take place in Brazil;
these two events should help increase sales within the category due to a projected increase in the
delivery of pizza, Chinese and Japanese foods.
Page | 5
LOCATIONS
The majority of Brazil’s 995,860 foodservice outlets are standalone, which account for 83% or 842,986
and saw value sales of US$109.5 billion in 2012. However, standalone foodservice was one of the lowest
performers in regards to average sales growth rate and outlets numbers from 2008 to 2012. Due to the
increase in new shopping centres being developed in Brazil, the top performer over the period of 2008 to
2012 was retail which averaged a sales growth rate of 15.8% and an average outlet growth rate of 3.9%
(Euromonitor International, November 2013).
Market Value and Growth of Brazil Foodservice by Location, Historic,
Current Prices, Fixed 2012 Exchange Rates
Location
2008
96,490.7
73,436.2
9,885.8
6,559.4
5,084.8
1,524.5
Total Consumer Foodservice
Standalone
Travel
Retail
Lodging
Leisure
Market Value (US$ millions)
2009
2010
2011
105,106.7 115,505.9 128,671.2
79,785.1
87,411.5
96,890.3
10,790.6
11,893.5
13,481.0
7,370.0
8,374.5
9,698.3
5,469.4
5,904.0
6,558.2
1,691.6
1,922.4
2,043.5
Source: Euromonitor international, 2013.
2012
146,164.4
109,491.1
15,298.0
11,803.6
7,090.3
2,481.4
CAGR* %
2008-12
10.9
10.5
11.5
15.8
8.7
13.0
*CAGR: compound annual growth rate.
Market Value and Growth of Brazil Foodservice by Location, Forecast,
Current Prices, Fixed 2012 Exchange Rates
Location
Total Consumer Foodservice
Standalone
Travel
Retail
Lodging
Leisure
2013
152,761.3
113,793.1
15,721.6
13,262.6
7,196.6
2,787.5
Market Value (US$ millions)
2014
2015
2016
170,111.2 187,854.3 208,177.1
126,624.1 139,578.1 154,256.8
17,434.3
19,302.7
21,609.0
14,943.6
16,690.5
18,683.9
7,976.0
8,774.1
9,674.5
3,133.1
3,508.9
3,952.9
Source: Euromonitor International, 2013.
2017
226,985.3
167,475.6
23,715.5
20,797.3
10,597.5
4,399.3
CAGR* %
2013-17
10.4
10.1
10.8
11.9
10.2
12.1
*CAGR: compound annual growth rate.
Outlet Numbers and Growth of Brazil Foodservice by Location, Historic and Forecast
Outlets
Location
Total Consumer Foodservice
Standalone
Travel
Retail
Lodging
Leisure
CAGR* %
2008
2012
2017F
916,622.0
761,797.5
78,290.2
33,159.3
30,074.1
13,300.9
995,859.7
824,985.6
89,545.4
38,637.8
28,555.5
14,135.5
1,132,827.0
935,767.9
105,178.7
44,694.6
30,308.7
16,877.1
Source: Euromonitor International, 2013.
2008-12
*CAGR: compound annual growth rate.
2.1
2.0
3.4
3.9
-1.3
1.5
2013-17F
2.7
2.6
3.5
2.8
2.1
4.2
F: Forecasted
Page | 6
A typical retail outlet earned US$305,494 in 2012, which is over double what foodservice locations in
general earned at US$146,772. Retail foodservice experienced the highest outlet CAGR at 3.9% from
2008 to 2012. Over the forecasted period of 2013 to 2017, leisure foodservice is expected to show the
highest CAGR in values sales and outlets with 12.1% and 4.2%, respectively, due to a projected
expansion of entertainment services in Brazil.
TOP COMPANIES
McDonald’s Corp. is ranked first in Brazilian foodservice with the most outlets (1,540), and brought in
US$3.0 billion in sales in 2012. Of note, British Petroleum Co., with their fast food convenience stores
brand ampm, has the second most outlets in Brazil with 1,377, but only holds 0.1% market share and is
ranked 11th amongst foodservice companies is Brazil.
Top 10 Companies in Brazil Consumer Foodservice
Company
McDonald's Corp
Al Saraiva Empreendimentos
Imobiliários e Participações Ltda
Brazil Fast Food Corp
Doctor's Associates Inc
Burger King Worldwide Inc
Restpar Alimentos Ltda
Grupo Úmbria
Yum! Brands Inc
OSI Restaurant Partners Inc
CPQ Brasil S/A
Other
Source: Euromonitor International, 2013.
Foodservice Value Sales (US$ millions)
CAGR* (%)
Market
2008
2012
2008-12
Share (%)
1,659.6
3,060.1
16.5
2.1
Total
Outlets
2012
1540
466.4
1,010.1
21.3
0.7
407
380.2
109.9
76.1
179.8
140.7
89.1
57.4
117.8
93,044.6
705.6
602.2
491.5
372.3
248.3
191.8
184.1
141.6
138,857.4
16.7
53.0
59.4
20.0
15.3
21.1
33.8
4.7
10.5
0.5
0.4
0.3
0.3
0.2
0.1
0.1
0.1
95
864
1041
203
388
310
41
95
356
987,096
*CAGR: compound annual growth rate.
INFLUENCING FACTORS
Geographic
Inside Brazil’s lucrative foodservice market, São Paulo has emerged as the key location for strategic
entry. For reasons such as its large size, diverse culture, and high incomes in combination with a thriving
nightlife and dining scene, São Paulo is an ideal entry point for new brands, and for existing players
looking to increase their presence.
Cultural
São Paulo is an ethnically diverse population, a true melting pot of inhabitants from Italian, African,
Portuguese, Jewish and Muslim descent, and in particular, is home to the largest population of Japanese
people outside of Japan. Culturally, there is a pronounced worldliness among local consumers when it
comes to cuisine, as a result of their exposure to a variety of culinary traditions.
This unique cultural blend has also fostered an appreciation for restaurant dining, making it one of the
most popular leisure activities. On average, Brazilian consumers’ expenditure on food and beverages was
Page | 7
twice that spent by other global counterparts, suggesting the population places a very high priority on
their eating experiences.
Industry
In general, foodservice operators were looking for improved ways to compete and differentiate their brand
in 2013. Euromonitor learned these players would be focusing on providing a better dining experience
through improved food quality and ambiance. Operators are incorporating localized menu choices to
cater to consumers while still maintaining their global reputation.
The highest profile foodservice operator, McDonalds introduced new items for breakfast and healthy
sandwiches in 2012. The strength of Brazil Fast Food Corp., comes from a multi-brand strategy and
acquisition activity, and Drs. Associate group attributed its success to outlet expansion, marketing
campaigns and affordable prices. Chained consumer foodservice providers are expected to carry out a
continuous cycle of acquisitions in the coming years.
Economy
The growth of the economy over the past decade has led to an increase in the middle class that has more
disposable income and can now afford to eat out. World Bank stated that Brazil’s middle class grew 40%
over the past decade (World Bank, November 2013).
OPPORTUNITIES
Latin America has a vast and growing middle class, which value the eating out experience, and looks
forward to engaging in this past time with great enthusiasm. The large share of sales bars/pubs contribute
to obtain in Brazil’s foodservice market is a reflection of how important social occasions are, and the
strength of the existing eating and drinking culture. Furthermore, Brazilians place less of a need for fast
paced and takeaway consumption. Self-service cafeterias are a large foodservice industry in Brazil and
make it the largest market for this type of foodservice in the country, thus indicating it is a category that
should not be overlooked.
As disposable incomes grow, so too will these foodservice trends, presenting great opportunity. Even in
low-growth high-income regions, foodservice players could adapt and take advantage of an increasingly
fluid and competitive environment. Demand for good food in an affordable, informal, social environment is
growing, as consumers place format secondary. Overall, these trends translate into real opportunity for
those who can forge a distinct identity, through their food, sourcing, or design.
With new international players entering the market, the opening of new shopping centres and global
events such as the 2014 FIFA World Cup and 2016 Summer Olympic Games expected to favour
consumer foodservice sales and the fact that Brazil is one of the fastest-growing countries within Latin
America these factors will provide foodservice operators the ability for continued expansion into this
market over the forecasted period of 2013 to 2018 (Euromonitor International, November 2013).
CONCLUSION
Several factors will influence and support the performance of the consumer foodservice market over the
2013-2017 forecast period. Strong macroeconomic trends and investments from both domestic and
international operators in concert with new resources from alliances, and acquisitions or mergers will
sustain future development. Furthermore, large operators are likely to expand within the Brazilian
consumer foodservice market through multi-brands, a trend already seen in recent years, including
groups, such as McDonalds Corp., Al Saraiva Empreendimentos, and Brazil Fast Food.
Page | 8
RESOURCES
Euromonitor International, 2013
Euromonitor International (November 2013)
“Consumer Foodservice in Brazil.” Passport.
“Consumer Foodservice by Location in Brazil.” Passport.
“Cafes/Bars in Brazil” Passport . p. 4
“Fast Food in Brazil” Passport . p. 4
“Full-Service Restaurants in Brazil” Passport . p. 4
“Self-Service Cafeterias in Brazil” Passport . p. 5
“Street Stalls/Kiosks in Brazil” Passport . p. 5
“100% Home Delivery/Takeaway in Brazil” Passport . p. 5
Euromonitor International (August 2013)
“Mapping the New World: Global Consumer Foodservice in 2013 and Beyond.” Passport.
“Consumer Foodservice 2013: New Insights and System Refresher” Passport.
World Bank, November 2013 http://www.worldbank.org/en/news/press-release/2012/11/13/
new-world-bank-report-finds-fifty-percent-increase-middle-class-latin-america-over-last-decade
Page | 9
Foodservice Trends in Brazil
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