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® JANUARY 2015 / NO. 201 WWW.QSRMAGAZINE.COM

International INVASION Why international brands like Giraf as, led by CEO João Barbosa, think now is the time for U.S. expansion PAGE 42 PLUS AT A CROSSROADS PAGE 50 NAFEM SHOW PREVIEW PAGE 56 INTERNATIONAL BRANDS International

Adventurous menus, operational know-how, and cultured brand positioning INVASIONhave these 10 international brands poised for success in the U.S. market. BY TAMARA OMAZIC

Le Pain Quotidien

42 JANUARY 2015 | QSR | www.qsrmagazine.com INTERNATIONAL BRANDS

Nando’s

NANDO’S

hen it comes to global expansion, international operators are quick to point to the U.S. as the gateway to success. Foodservice here is booming, with expected restaurant industry sales in 2014 surpassing $680 Wbillion, according to the National Restaurant Association—and the limited-service sector accounts for about $230 billion of it. The rise of Millennials as tastemakers and an increasingly diverse population has led to global and ethnic flavors becoming more in demand than ever before, opening the door for international brands to grow explosively across the states. These 10 brands are likely to lead the charge.

Giraffas GIRAFFAS

Brioche Dorée Pret A Manger LE PAIN QUOTIDIEN BRIOCHE DORÉE PRET A MANGER

www.qsrmagazine.com | QSR | JANUARY 2015 43 INTERNATIONAL BRANDS

to self-serve, drip-brew coffee. The change, along with a menu that Pret A Manger borrows flavor profiles from various cultures, has resonated well with ENGLAND Pret’s target urban-consumer base. The team behind this -based eatery hopped “They do really well with the across the pond in 2000, landing in Manhattan to open urban lunch crowd because every- their first U.S. unit just down the street from the iconic thing is prepackaged,” says Lauren New York Stock Exchange. Described on its website as a Hallow, associate editor of news cross between a good restaurant, an Italian coffee bar, and concept analysis for research firm Technomic. “But they really and a bullet train, the limited-service concept focuses MANGER A on fresh, pre-packaged fare to draw in on-the-go PRET let people know they use natural, consumers. Hot and cold , salads, soups, and pastries are made preservative-free ingredients, so the fresh factor is still there. They do have throughout the day, and unsold items are donated to local food pantries, says a higher price point, and I think that’s why they’re sticking to these urban Joseph Iazzetta, vice president of store development at Pret. “We carry our areas with affluent consumers.” culture of doing good all the way through our shop in terms of how we design Iazzetta echoes that sentiment, adding that for Pret to thrive in a market, it, how we operate it, how we believe in sourcing food, and our charity work.” there must be heavy pedestrian traffic. In the coming years, the eatery will Entering the U.S. market was a litmus test for success and the permis- focus on growing in its current markets of New York, Boston, Chicago, and sion it needed to go global, Iazzetta says. But the move was not without Washington, D.C., before expanding across the country, Iazzetta says. “We’re the expected challenges. The brand had to make some adjustments to in the process of developing a deep national marketing planning strategy to appeal more to the American consumer, the most notable being the shift provide us with a road map.”

Caffebene Brioche Dorée SOUTH KOREA As the largest coffee-shop brand in South Korea, Caffebene looked to the U.S. first when Though its roots may be French, Brioche Dorée’s menu draws from many beginning its international expansion. European food cultures, including Italian, Persian, and Greek. Since open- “The U.S. is the world’s biggest market, ing in the U.S. five years ago, the gourmet café brand has focused greatly on which is why we first wanted to enter the nontraditional venues like U.S. when we wanted to go global,” says Amy Inhee Park, airports, travel plazas, and marketing associate for the brand. “We lacked familiarity, even universities, thanks in but that was also a good thing for us because we had a part to a partnership with blank slate.” HMSHost. Of its 38 units in That blank slate allowed the U.S. team to develop a North America, 27 are non- robust food offering that would differentiate the coffee traditional locations, says Jeff chain from U.S. competitors. The menu includes lunch items

DORÉE Drake, president of Brioche like a Ham and Egg and a Teriyaki Chicken Sand- Dorée North America, in an

wich, as well as Belgian waffles with various toppings and LEPPER/BRIOCHE

DEREK email. Italian gelato. “We are looking to grow our nontraditional presence by 20 percent, and “We knew pastries and bread items were everyday go-to also to add four to six corporate storefront locations annually, and then [grow] items for American consumers, so we added more types of by 10–15 percent,” he says. Drake adds that corporate in-line restaurants will pastries so we could offer a wider variety of choices,” Inhee open in cities like Dallas, Washington, D.C., and Chicago. Park says. “I think they could do well if they moved to an in-line or standalone loca- Its South Korean roots can be seen in items like the Red tion,” Hallow says, adding that the brand’s gourmet salads, which extend Bean Bingsu, a type of Korean shaved ice, and the Misuguru beyond traditional tossed salads, and French-inspired crepes would resonate latte, made with a traditional Chinese grain powder called well with the American fast-casual consumer. misu. “A lot of cafés in New York are more for the to-go guests, “The brand was founded in France nearly 40 years ago, [and] in that time, but for our locations, we want the customers to stay,” Inhee we’ve leveraged the history of who we are as a French concept. We’ve set it up Park says of a key point of differentiation for Caffebene. The as an urban bakery café—it appeals to people who live and work in the city,” bulk of the coffee chain’s growth will occur in the Big Apple, Drake says. A global brand, Brioche Dorée operates more than 500 restaurants with more than 40 openings planned across the city. in total across Europe, Asia, the Middle East, and South America.

44 JANUARY 2015 | QSR | www.qsrmagazine.com INTERNATIONAL BRANDS

Beard Jollibee

Papa’s

JAPAN Dubbed by many of its fans as the While many U.S. concepts built McDonald’s of the around one dessert item, like fro- Philippines, Jollibee

zen yogurt or cupcakes, have seen MONTADITOS

100 didn’t stray from its market saturation and fast-food decline, this Jap- model when anese chain of 100 Montaditos it made its U.S. debut in Daly cream puff stores City, California, in 1989. Since continues to see then, the brand has grown to span robust growth. The montadito may be the fast-food answer to increas- Nevada, Texas, Washington, New “These guys are ingly popular Spanish tapas. These sharable, bite-sized York, New Jersey, Virginia, and definitely jumping on the indul- sandwiches are a culinary staple in Spain, the brand’s home Hawaii, with a total of 29 loca- gent trend, but they do well with the market in which they operate 285 units. With a blank canvas tions. But “the challenge with snacking trend because they have of baguette-like bread, 100 Montaditos tops its sandwiches them is that most of their stores some more savory options,” says with combinations like meatballs and bacon; shrimp, let- are located in areas with a high Technomic’s Hallow. “And they’re tuce, piquillo peppers, and ali oil; and Basque-style chorizo Filipino population,” says Hal- affordable.” known as chistorra and piparra pepper. Guests can choose low, adding that Jollibee’s comfort For about $2–$3, a guest can from 100 such combinations to build a platter of five. food could potentially resonate enjoy savory items like the sweet “It’s a very flexible style of eating, similar to the small with Americans in regions like the potato cream puff or sweet treats like plates trend,” Hallow says. “It’s meant for consumers to pick South and Southeast. the green tea and honey cream puff a few montaditos and create their own meal or go there The chain does indeed offer that alludes to the brand’s roots. And for something like an after-work happy hour or a situation some familiar comfort food they can get a glimpse at the whole where you can share.” An alcohol program featuring wines like burgers, buckets of fried baking process, too, thanks to what imported from Spain and various sangrias round out the chicken, and corned beef sand- Beard Papa’s calls its “eater-tain- authentic options. wiches, but it also offers items ment” operational model. Having Like most other international transplants, 100 Mon- specifically catered to Filipino celebrated 10 years in the U.S. in taditos—which boasts 20 U.S. units—grew first in urban consumers, including burger 2013, the brand recently made its markets like Miami and New York. But “they went to Iowa steaks, spaghetti topped with foray into Hollywood, growing its recently,” Hallow says. “They have shown that they have the sliced hot dogs, and frozen bev- total U.S. unit count to 26. potential to succeed outside of the major cities.” erages similar to bubble tea.

concept very well to the fast-casual space, says Technomic’s Hallow. “You can get a steak and three sides for under $14, Giraffas which is something most quick serves can’t offer, and it would be hard to find it for that price point at a full serve.” One of the keys to keeping costs low at Giraffas is the cut of beef used in its burgers, Barbosa says. While ground When the executives of this steak and burger chuck is the go-to choice for American burger brands, Bra- brand saw their home market of Brazil begin zilian consumers prefer a cut known as picanha. As there’s to reach saturation, they looked north to the little demand for this cut of beef, which in North America U.S. for a new challenge. But before making would be divided into the rump, the round, and the loin, its debut, Giraffas underwent a fast-casual it’s relatively inexpensive to source in the states. makeover. Giraffas’ picanha burgers and steaks are familiar to

“We saw the fast-food market here was GIRAFFAS the brand’s first U.S. market, Florida. With a robust popu- saturated already, too, and a lot of fast-food chains were losing space to new lation of Brazilians and Hispanics to attract, the brand has grown to 11 loca- fast-casual concepts,” says João Barbosa, Giraffas U.S. CEO. “So our first big tions in the Sunshine State. Next year, Barbosa and the U.S. team will target challenge was to adjust the concept to a fast casual.” urban markets like New York and Boston, and then grow westward. The brand’s upscale menu, which includes Filet Mignon Tips Stroganoff, “We’re aiming to have something like 110–120 restaurants by 2020 here in Brazilian Shrimp Moqueca, and cheesy-bread bites called Pao de Queijo, lends the the U.S.,” Barbosa says, adding that the brand will eventually franchise.

46 JANUARY 2015 | QSR | www.qsrmagazine.com INTERNATIONAL BRANDS

The South African brand broke into the U.S. market by way of Nando’s Washington, D.C., which was seen SOUTH AFRICA as an international city, Heiss says. With 20 units across the The creation of peri-peri chicken, and Nando’s founding, is District and bordering Virginia, closely tied to the Portuguese colonization of South Africa in Nando’s U.S. operation resembles the late 15th century. As the story goes, Portuguese settlers U.K. restaurants in service style. discovered the African bird’s eye chili plant and concocted a That’s informed by the breakdown hot sauce unrivaled by any other; the name peri-peri came of traffic, Heiss says. In South from the Swahili word for pepper. And in 1987, Portuguese- Africa, 70 percent of all orders

born audio engineer Fernando Duarte and entrepreneur NANDO’S are takeaway, while in the U.K., a Robert Brozin were so smitten by peri-peri chicken served in a Johannesburg whopping 90 percent are dine in. In the U.S., 80 percent of orders are dine fast-food joint, they bought out the place and slowly grew it into a chain in, which is why the brand looks more like a fast casual, with counter ser- across South Africa. Today, Nando’s spans 23 countries across five continents, vice, real plates and silverware, and fine-dining décor touches. Most impor- numbering 1,100 restaurants. tantly, each restaurant operates like a part of the community, Heiss says. “The U.S. was always on the radar of the founders, but there was a “The shareholders and founders never envisioned being able to operate healthy respect for what it takes to make it in the U.S. because it’s often things from a boardroom 3,000 miles away,” he says. “The plan was always to referred to as the largest consumer market in the world and a lot of brands set up local leadership and give them authority and autonomy to grow. We have attempted expansion here,” says Burton Heiss, U.S. CEO for Nando’s. are an international brand, but very much a local business.”

Maoz Vegetarian

A Middle Eastern street food, falafel is an increasingly common item in the U.S. fast-casual scene. The chickpea fritter

(2) is the core of Amsterdam-based Maoz

QUOTIDIEN Vegetarian, created in 1991 by an Israeli PAIN LE couple looking for a taste of home in the Netherlands. And though it’s grown to Le Pain Quotidien four other countries and the U.S. since its founding, Maoz hasn’t strayed from its meat-free roots. “The difference with this falafel brand is that it is a fully veg- etarian concept,” says Technomic’s Hallow. “Most of the other Stepping into one of Le Pain Quotidien’s restaurants in the U.S. is much like being trans- Mediterranean concepts have offered a protein somehow.” ported to a Belgian café: Rustic wooden accents create a warm atmosphere, branded The menu includes salads and sandwiches made in pita jams and jellies line shelves, fresh bread and pastries fill display cases, and in the center bread with either falafel; vegan shawarma; or hummus, egg, of it all sits a large communal table. The fast casual’s menu boasts a robust breakfast and eggplant. Guest can customize all items with toppings menu, Belgian open-faced sandwiches known as tartines, quiches, gourmet salads, and like babaganoush, a traditional dish with eggplant, onion, and sharable platters of meats, cheeses, and breads. tomato; Feta cheese; and hard-boiled egg. Some Maoz loca- “We believe that in big, urban cities, the biggest challenge consumers face is loneli- tions also feature a fresh-squeezed juice bar with fruits and ness. One of our icons is the communal table,” says CEO Vincent Herbert. “We want to veggies like beets, kale, apple, spinach, carrot, ginger, and make sure guests at Le Pain Quotidien can reconnect with themselves and enjoy not other fresh fare. only service, but also hospitality.” To thrive in the U.S., the brand did make some changes, With that mission in mind, Le Pain Quotidien entered the U.S. in markets like New including reformulating its falafel fritters to be gluten free, York, Philadelphia, Los Angeles, and Washington, D.C. Herbert says the challenge of says Aviv Schweitzer, operations manager for Maoz USA. breaking into the “biggest, most strategic, and probably the most competitive market” “We also introduced sweet potato fries, which quickly turned enticed his team because they believed the brand’s core values would be appreciated in out to be a hit.” the U.S. They faced initially higher rent than the company was used to in European mar- With 12 units in the U.S., the brand is focusing on New kets, meaning the team had to be certain each location would yield high profits quickly, York expansion, with a unit set to open in Long Island in Jan- Herbert says. The crux of its success has been the brand’s ability to not look like a chain. uary, Schweitzer adds. q “It’s not about a chain of 220 restaurants; it’s about being one store in one neigh- borhood 220 times,” Herbert says. “For us, growth is not a strategy.” Tamara Omazic is QSR’s former associate editor.

48 JANUARY 2015 | QSR | www.qsrmagazine.com