Owner of Outback invests R$75 million in Brazil, the chain’s largest international operation

Bloomin’ Brands, owner of Outback and Abraccio restaurants, will open new stores in Brazil. Photo: Taba Benedicto/Estadão

The American restaurant chain Bloomin’ Brands is investing R$ 75 million in the opening of 17 units in Brazil this year. Of this total, 16 will be branded Outback Steakhouse and 1 of Abraccio (Italian food).

Brazil is the group’s main market after their country of origin, accounting for 90% of the turnover of international operations. More than that: the speed of sales growth of Brazilian restaurants surpassed most of the American units in the first months of the year, justifying new investments here. In the United States, the company also operates the brands Carrabba’s Italian, Bonefish and Fleming’s Prime.

Bloomin’ Brands had global revenue of US$ 1.1 billion in the first quarter of 2022, an increase of 14.7% compared to the same period in 2021. Of this total, US$ 104 million came from international operations, which increased by 26% – therefore, above the average in the country of origin. It is worth remembering, however, that there was the impact of the pandemic in the first months of 2021 – with more intense restrictions on trade here in this period.

Brazil has 146 network units

Here, the next openings will be in the cities of Belo Horizonte, Recife, Limeira (SP) and Contagem (MG). The last ones were in Brasília, São Paulo and Campinas (SP), among others. Most openings will be in malls, but there are also street units. Until this month, the group had already reached the mark of 134 Outback units already open and another 12 in Abraccio.

Bloomin’ Brands does not work in the franchise model. She is, in fact, the owner of each of the restaurants. And the expansion will be fully supported by the cash generation of the business, without taking on debt to grow.

There is, however, a particularity in the model, which is the figure of the minority partner and store operator. The company is looking for experienced employees from its stores interested in investing in a new unit and taking over the day-to-day driving. They could be waiters, cooks or dishwashers, anyone. As long as you have at least five years at home and have an entrepreneurial streak.

delivery

In addition to the 17 physical restaurants, Bloomin’ Brands will launch by the end of the year eight new operations by the chain’s younger cousin, the Aussie Grill, based on chicken protein. The brand works exclusively via delivery, with food prepared in the kitchens of Outback restaurants. The first operation of Aussie Grill arrived in the country in September 2020.

As a legacy of the pandemic, the chain now has a much greater share of home deliveries in sales in Brazil. Before the global spread of the coronavirus, which closed restaurants and made consumers stay at home, delivery represented about 3% of sales. today, with 100,000 deliveries per weekthe Brazilian operation already has 20% to 25% of sales being delivered to customers’ homes.

For this, adaptations were necessary. The famous Bloomin’ Onion, fried giant onions, for example, is not yet part of the delivery menu. That’s because the company still hasn’t found a viable way to get it crispy to customers. The chain opted for a simplified version of the dish, with breaded onion petals, to deliver a better experience at home.

The deliveries also showed a new opportunity for the company. With fewer stores spread across the country, the brand Abraccio would find it difficult to serve customers at home. The solution found was to take advantage of the kitchens of Outback’s establishments to prepare meals from the sister Italian brand. Today, 38 Abraccio delivery operations operate from “dark kitchens” in an Australian brand store.

Own app plans

Bloomin Brands’ delivery in Brazil is carried out by ifood, through a contract on which the company does not give details about possible exclusivity clauses or agreed fees. The company’s plans, however, involve the creation of its own application, which can be accessed by those who go to restaurants and by those who want to order food at home. Thus, the company must have access to more information about customers, which is often used, among other purposes, to organize a more efficient and targeted offer system. In addition, it allows the network to access the client more cheaply. Instead of buying ads on social networks, it is now possible to send a notification to the customer through the app. All this, of course, depends on the user’s consent, according to the General Data Protection Law.

Inflation presses margin

But it’s not just flowers. The president of the Brazilian operation, Pierre Berenstein, said that the company took a series of measures to seek to absorb the impacts of inflation of the last two years in the business. According to the Executive, the readjustments in the menus were made below the variation of the Broad Consumer Price Index (IPCA), which accumulates high of 11.89% in the last 12 months. To reduce the impact, the network invested throughout the year in energy efficiency and water reuse. In addition, it sought better contracts with part of the suppliers that are not responsible for essential products for the company, such as onions.

Still, Berenstein admits: “everyone’s margin has fallen”. Without giving details of the most recent variations, he comments that it was a phenomenon felt in the retail business as a whole. According to the company’s most recent data, for the first quarter of 2022, the Ebitda margin (operating) in the international area was 8.5%, compared to 4.3% registered a year earlier. Despite the clear annual improvement, the indicator is below the pre-pandemic record of 12.1%.