How to Build a Multi-brand Restaurant Chain
By Hector Martinez, Managing Director, The Abraaj Group
The way the world eats is changing. In growth markets, the rapid expansion of the middle class, alongside increasing urbanisation, has seen demand for ‘formal’ dining shoot up. An increasing share of workers, especially women, are eating outside of the home socially, during work, and in lieu of home-cooked meals.
Between 2000 and 2015 the number of restaurant chains in growth markets in Asia, Latin America, Africa and the Middle East nearly doubled to over 450, according to World Bank figures. And the growth is forecast to continue. From 2015–2019, we expect there to be US$ 155 billion in additional foodservice spending in our markets — which marks growth levels of around 40%.
A decline in large international brands?
While large global food and beverage brands have in the past dominated the market, we are seeing the advent of smaller, specialized and local brands that are swiftly capturing market share from their global counterparts.
At Abraaj, we have long recognised the Food and Beverage sector as a key growth area and have deployed capital into high growth F&B businesses all the way from Lima to Bangkok. However, our experience has shown that accessing this opportunity requires a targeted and tailored approach, given the nuances in spending habits and patterns, flavour preferences, and competition from existing and new players.
The Acurio Journey
Acurio is a leading Peruvian restaurant chain founded by star chef Gaston Acurio. It is the only Peruvian restaurant operator serving national cuisine both domestically and internationally via multi-brand concepts. Acurio has eight unique brands and nearly 50 outlets, including the flagship Astrid & Gaston in Lima, ranked one of the top 20 restaurants in the world by San Pellegrino (2014–2015).
Whether it is Chinese Peruvian or Creole Peruvian, Acurio has brought a distinctive, novel take on Peruvian cuisine which has enabled the company to successfully expand in different cities all around the world. The Acurio franchise includes food festivals, cookbooks and restaurants spanning a range of themes and price points, making them accessible to a wider clientele.
Brands tailored to locale are at the heart of its successful international growth. When Acurio took its first steps outside the Spanish speaking world nearly 10 years ago, it was to San Francisco under the La Mar brand. In a city famously wary of culinary outsiders, the restaurant carefully reflected its surroundings with plenty of seafood and strong Latin influences. It has thrived and Acurio has gone on to open other US successful operations in Miami and Chicago.
Fast forward to 2016 and the company opened Manko-Paris, its first restaurant in France. It is a perfect example of the company’s approach to expanding into new markets with distinctive new brands. Manko — named after Manco Cápac, son of the Inca Sun God — slides effortlessly into the high-end Paris restaurant scene.
Fusing French and Peruvian dishes, Manko is just exotic enough, just familiar enough for the demanding Paris market. In addition to the blending of culinary traditions, the restaurant is set within a space and a design ethic that reflects both Peruvian and Parisian influences.
Abraaj invested in Acurio in 2012, recognising its potential as a brand well placed to expand rapidly into different markets. Acurio and Abraaj share a belief that to succeed in any given market, you must have partners who fully understand that market.
Acurio’s success stems from the fact that it partners with local restaurants before it launches in new markets or establishes new brands. Local partners understand what works and what doesn’t work. Acurio’s offering is then tailored accordingly. To become a multi-market player, Acurio has been willing to adapt its Peruvian food to each market. This makes it uniquely Peruvian and local at the same time.
When Abraaj invested in Acurio, it helped to formalise the decision making process within the company and develop a more detailed financial model. Processes were established for assessing each possible opening and a board of directors was put in place.
Like all our investments, Acurio was a partnership between our highly structured and rigorous financial approach, global standards and the expert local knowledge of the business. For both Acurio and Abraaj, growth comes from identifying regional champions in particular markets and working with them to maximise the potential for growth.
Acurio presented an excellent opportunity for international expansion and development in a fast-growing, rapidly-innovating segment. Abraaj represented the right partner to help Acurio realize its potential and our journey over the past 4 years has been one of growth and alignment.