Burger King On The Offensive


As its political risk profile continues to improve, Colombia is rapidly evolving into one of Latin America's high - potential consumer markets. From retail to fast food, foreign companies are paying more attention to opportuni ties in Colombia. We have recently seen leading Chilean retailer Cencosud reach an agreement to acquire Carrefour 's assets in Colombia for about US$2.5bn , while Portugal's Jeronimo Martins is also making inroads in Colombia ' s retail sector . Most recently , and what we will focus on in this article, is Burger King ' s plan s to launch 80 restaurants over the next five years in partnership with the Colombian private equity company Promotora , which in turn has bought out Burger King's existing franchise partner Kinco with whom it currently runs about 20 restaurants. To emphasise Colombia ' s relative appeal, it ranks fourth in BMI 's Q113 Latin American Food & Drink Risk/Reward ratings, behind Mexico, Brazil and Chile , currently being the best opportunity after the three highest profile Latin American economies.

Bright Outlook
Colombia Private Final Consumption, real growth % change y-o-y

Growing multinational corporation interest underscores the progress Colombia has been making . When you consider its size, with a population of about 46mn, it is hardly surpris ing that Colombia is pulling more weight these days. In fact, in GDP terms, our Latin America team sees income per capita growing from about US$7,100 in 2007 to about US$11,200 by 2017, which is good going when you also factor in anticipated population growth. Burger King, which is owned by 3G Capital , will face competition from the likes of McDonald's of course , as well as a number of Colombian chains. With consumer spending rising quite briskly and more potential store points opening up as shopping malls spring up across the major cities, we are likely to see quite a bit more densif ication of Columbia's retail sector .

This article is tagged to:
Sector: Food & Drink
Geography: Colombia