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Brazil has been growing like a weed and companies from all over the country and in all different industries have been benefiting. As the Brazilian economy continues to expand, consumers have found more and more discretionary income that needs to be spent. Two industries that have received a lot of this new wealth are the fast and casual dining sectors. Consumers have voted with their wallets - they are very hungry and are willing to pay for it.
Two companies that have benefited from this trend are International Meal Company (IMC) who went public in Brazil in March and Arcos Dorados Holdings who went public in New York on April 13th.
International Meal Company operates three different restaurant chains including Viena, Frango Assada and various airport concepts. Viena offers consumers home-style cooking sold by the pound at over 100 malls across Southern Brazil. Frango is a leading fast-food restaurant in Brazil and many locations offer gas stations and convenience stores. IMC also operates a range of brands at major airports. All of these divisions have been profiting from an increase in discretionary spending as consumers travel and spend more.
Arcos operates 1,755 McDonald’s locations in Latin America and the Caribbean. Since buying McDonald's Latin America business in 2007, net income has quadrupled and sales last year alone increased 33%. That easily beat McDonald's overall sales growth of only 5.3%. Arcos is trying to raise $2.97 billion which will be invested in continued growth. International investors are flocking to the potential growth and many say the Latin American market has yet to be saturated.
These two companies are great examples of the explosive growth available to investors who are willing to take the added risk of investing in an emerging market.
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