If you like good coffee and greasy spoon restaurants, this will probably make your day.
Now that it looks like the Cambiemos alliance is growing in strength and President Macri’s support seems to have increased nationally, international companies are starting to look at Argentina differently.
All eyes are now on the local economy and it seems everyone wants a piece of this tempting cake. From US-based brands such as Dean & Deluca, to Denny’s fast food, to the Colombian coffee chain Juan Valdez, and even Denmark’s Pandora Jewelry, there is now a chance for companies abroad to hedge into the local marketplace. In an interview with La Nación, the president of the Argentine Association of Brands and Franchises, Marcelo Salas, says that there is “a lot of interest in coming to Argentina,” especially when it comes to food and restaurant franchises and mentions Denny’s and the famed coffee shop Dean & Deluca, which rose to fame around the world thanks to a little TV show called Felicity.
During the Fernández de Kirchner administration, big luxury brands like Ralph Lauren, Louis Vuitton, and Cartier decided to say bid adieu to places like the fancy Avenida Alvear Avenue in the Recoleta neighborhood. Fed up with experiencing the collateral damage of protectionist policies, big international brands found it was worth it to leave the country than comply with the difficulties of staying in business. When President Macri took office in 2015, one of his immediate actions was to change all that by cutting the export tax, ending currency controls, and lowering subsidies. Such changes threw the economy and population into a fluctuating midst of “what is about to happen next?.” Now that it seems like there may be a light at the end of this tumbling economic tunnel, we could be seeing a Cheesecake Factory around the corner any time soon
However, international brands like Mexico’s fast food chain Mr. Fish are a bit hesitant, for these franchisers expect the same thing as any other investor looking at a new business venture. To settle down in Argentina they want to operate under a master franchise modality and expect legal security, stability, and continuity in economic policy. Most of these companies have already built business in countries like Paraguay and Chile, so the next step is not too far fetched. Additionally, Argentina offers a larger consumer marketplace than it’s neighboring countries.
Seems like a pretty manageable layout, right? Well, Argentina still has yet to prove that it can supply to such prerequisites, and some big brands have yet to make the first move. It’s all about a domino effect, and right now the pieces are just lining up, ready to be tipped.
What is even more exciting is the Argentine brands’ potential for international expansion. According to the consulting firm Estudio Canudas, since the Macri administration took office the country leads among its region as the top exporter, as 25 percent of local brands have a presence abroad even as far as Dubai. Just to visualize a bit more clearly, that translates into about 179 firms with nearly 1800 outlets in 62 countries. About 50 percent of these firms are exporting directly to neighboring countries like Paraguay and Uruguay.
Comi de Francorp reports that franchises such as Pani restaurants have been on the rise, signing deals with Peru, Paraguay, and hopefully hitting Miami in 2018. Other food brands like Havana have slowly established an international presence, with 85 locations outside of Argentina. General manager Alan Aurich acknowledges the difficulties and caution the company takes with each of its next moves. When considering “traveling north,” Aurich firmly states that, “there are no second chances,” explaining, “Argentine brands do not have even 2 percent of the power that US companies have anywhere, we have a hard time inserting ourselves and it requires understanding each market well.”
Huge changes are happening for Argentine stomachs. This fascinating political alignment could make way for a whole new marketplace, in and outside of the country. In just a few years, one might be able to walk through the street and stop by a Dean & Deluca for groceries, then get a quick slice at Spanish franchise Telepizza for lunch.