Miami, FL - Burger King Corp's operations are sizzling in meat-crazy Latin America, with sales up and more restaurants due to open, the company's regional head says.
But its much-discussed launch into Brazil, the giant of the hemisphere, may not happen next year, Julio Ramirez, president of Burger King's Latin America, Caribbean and Mexico Division said.
“It's a matter of when, not if,” Ramirez said in an interview. “But we don't have a target date. We're not saying 1999.”
The opening in Brazil, home to 160 million potential burger-eaters, will be the biggest adventure of the Miami-based Burger King's expansion program in Latin America.
At present, the Brazilian market is dominated by Burger King's perennial rival McDonalds Corp, which has more than 400 restaurants and has been operating there for 18 years.
While some media reports have said Burger King would open in Brazil next year, Ramirez said the company wanted to open with at least 30 restaurants and was still looking for franchisees in the major cities.
“We're talking to a variety of players. We have identified potential franchise owners in Brasilia and Recife. We don't want to open until we have Sao Paulo and Rio (de Janeiro) nailed down. We don't feel pressure to open,” he said.
Jitters over Brazil's economy, vulnerable to the effects of the Asia crisis, had played a part in prolonging a launch, Ramirez said.
“Some people bailed out ... it's not us who are less enthusiastic.”
Despite McDonalds' position of strength, many Brazilians were already familiar with Burger King as hundreds of thousands of them visited Florida and other parts of the United States each year, he said, adding “We know we can do well.”
Overall though, Latin America was a success for Burger King, with sales and customers up and new openings planned, he said.
Opening in the region in 1963, in Puerto Rico, it now has 391 restaurants in Latin America and the Caribbean, including 124 in Puerto Rico and 71 in Mexico.
Growth had been between 5 and 10 percent over the past few years and was expected to continue at that rate, Ramirez said.
Latin Americans has taken to fast food with gusto, he said, and Burger King's flame-broiled cooking style complimented their traditional tastes.
“Latin America has been a shining star for us. Our real push now is to grow in Mexico. We hope to accelerate that.”
Mexico is only Latin American country where the company owns restaurants as well as working with several franchisees. At present it has 14 and plans to open a new one every month starting next month.
Growth in Mexico was about 30 per cent per year for four years, with the company doing well in tourist areas such as Merida and Cancun and in border towns like Ciudad Juarez and Tijuana, he said.
In the Andean countries, Burger King was besting McDonalds in Peru and Ecuador, Ramirez said. It will open its first Bolivian outlet in March, in Santa Cruz, followed by another in La Paz within six months.
Political uncertainty in Venezuela, where the prospect that Hugo Chavez might win the presidency next month, has caused concern in business circles, and Ramirez said the situation there for Burger King looked “very difficult”. But Chile and Argentina were very successful, he said.
Ramirez also pointed to the Dominican Republic as a growth area. The company has opened 15 outlets in four years and was looking at opening nine more, possibly in tie-ups with Shell Oil, which owns several plots of land there.
In Central America, Burger King was “neck and neck” with McDonalds. It is expected to open in Nicaragua by the end of this year, putting it in every Central American country, bar Belize.
But the devastation wrought by Hurricane Mitch in Honduras, where Burger King has 12 restaurants, could affect its operations there as the country's infrastructure was ruined, Ramirez said.
Asked about a possibile economic downturn in Latin America, Ramirez said the company was concerned by the prospect but said the fast-food business appeared to be resilient in recessions.
“A family might not be taking holidays to the U.S. but they still have to eat,” he said.
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