Limited-Service Restaurants in Brazil

PROSPECTS

Reduced use of plastic driven by increasing interest in environmental issues and stricter legislation

Many Brazilians are increasingly responding to environmental issues with a growing interest in sustainability, which is having a strong influence on trends within a number of markets including consumer foodservice. Limited- service players are therefore exploring different ways to address consumers’ concerns by introducing biodegradable packaging or by reducing their use of plastic, including a ban on providing plastic straws to customers as witnessed in cities such as Rio do Janeiro, in an attempt to position themselves as environmentally friendly.

Players expand their menus to include meat-free options to address consumers’ changing lifestyles and health trends

Limited-service restaurants recorded stronger current value growth in 2019 compared to 2018, a trend that is predicted to continue into the forecast period. Channels such as burger limited-service restaurants, which recorded impressive double-digit current value growth in 2019, are responding to Brazilians’ changing consumption habits and are expanding their standard offer with an increasing range of meat-free options.

Online order continues to gain share of limited-service restaurants, driven by strong pricing strategies

While retaining overall low value share in 2019, online ordering from limited-service restaurants continued to record double-digit current value growth and is expected to significantly gain in importance over the forecast period. This trend is being primarily driven by strong pricing strategies being launched by third party delivery apps such as iFood, Rappi and Uber Eats.

COMPETITIVE LANDSCAPE

Chained players gradually gain share in highly fragmented competitive landscape

Limited-service restaurants remained a highly fragmented competitive landscape in 2019, dominated by independent operators, although globally-renowned chained banners such as McDonald’s and Burger King continued to gain value share. On the other hand, the number of brands that have been established through franchising including Subway continued to lose ground.

Strong marketing and expansion continue to pay dividends for KFC

Changing local representation a number of times since being present in Brazil, chicken limited-service brand KFC continued to gain strong value share in 2019, in addition to recording another year of double-digit current value growth. Its performance has not only been boosted by ongoing expansion in the country but also by an aggressive promotional strategy whereby the brand advertised its menu on television during commerce breaks for football matches.

Bacio di Latte has further plans for expansion in the country

Ice cream limited-service restaurant brand Bacio di Latte from Johnston Bueno Empreendimentos e participacoes Ltd also recorded a strong performance in 2019 after continuing to invest in its outlet expansion, with plans to open another 40 stores in the early part of the forecast period. This is an attempt by the brand to expand its network in Northeastern states where its penetration is low.

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