Brazilian chain Giraffas eyes U.S. growth

Aug. 14, 2012 | by Valerie Killifer

When Carlos Guerra opened the first Giraffas restaurant in Brazil in 1981, the concept's main menu focus was sandwiches and burgers. Thirty years later, the menu has evolved to Brazilian comfort food such as barbecue, beans, steak and chicken, served in a traditional quick-service format.

With nearly 400 locations now across Brazil, the chain has emerged as the country's third-largest quick-service concept, despite direct competition from the likes of McDonald's and other U.S-based chains.

Now solidly planted in its home soil, company executives have set their sights on an international development plan targeted to bring an upscale model to U.S. diners. The first Giraffas opened in Miami nearly a year ago with three more locations there quickly following suit. By the end of the year, five locations will be open in Miami.

"Florida right now is the destination of many Brazilian tourists and we have a lot of Brazilians living in the area," Guerra said.

That solid customer base is what made Miami the natural first choice for site selection in the U.S., even though company executives are eyeing locations across the country. The plan is to have 40 to 50 locations open in the States over the next five years, offering American diners the same taste of Brazil made popular by casual-dining Brazilian steakhouses.

"Our positioning is in one sentence: 'A Brazilian twist on what you love,"' said U.S. marketing director Carlos Vanegas. "We have a fairly large Brazilian community in the U.S. but two types of concepts: No. 1 is the Brazilian steakhouse and the other is the type of restaurant that caters specifically to the Brazilian community. We are coming in with a concept that has no direct competitors."

Operations and the guest

When considering which international market to enter, Guerra said company leaders felt they had the most to learn from the U.S.

"The United States is a very large market and have a lot to learn here," he said. "Wherever we open a restaurant, we like to learn something new. It's easier to conduct business here than in Brazil and we have better logistics here. The competition is really high so we have to have the best product and the best service."

The U.S. operation is run separately from the restaurant in Brazil, in order to focus on the different brand positions of each. And to entice new guests into the restaurant, the U.S. marketing team has placed its focus on food quality and service.

"No one would expect to have a 10-ounce steak and three sides for under $12," Vanegas said. "We try to pull people into the restaurant first by talking about the quality of our food and the service. Once they're in the restaurant, we show them it's not just meat."

At its first location, 70 percent of sales come from the dinner daypart and 30 percent during lunch. At the second location, the split is 60/40.

"At one point we thought about doing breakfast," Vanegas said. However, that idea was tabled in an effort to focus more directly on lunch and dinner.

"Introducing a new concept with an ethnic offering that doesn't have a history in the U.S. is a huge challenge," Vanegas said. "We never came here thinking it was going to be a piece of cake."

Read more about operations management.

Topics: Burger/Steak/BBQ , Franchising & Growth , Operations Management

Valerie Killifer / As the founder of P-O-P Content & Communications, Valerie Killifer brings her passion for creative thinking and relationship development to the forefront of her business. She spent 15 years as a professional journalist and continues to write about the brands, people and trends impacting the restaurant industry.
www View Valerie Killifer's profile on LinkedIn

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