Outback Steakhouse, an American chain known for its Australian barbecue twist, has found significant success in Brazil, contributing to 83% of Bloomin' Brands' international sales in the first half of 2023. The Brazilian branch saw a 61% increase in sales, a 42% increase in traffic, and a 19.2% rise in average check compared to the same period in 2022. This success can be attributed to Brazil's rising middle class and a food culture centered around beef.
Outback Brazil opened its doors in 1997, less than a decade after its debut in the US. The brand has gained a large following both online and offline, becoming a new and valued experience for consumers. The country's strategic location, with Outback stores predominantly situated in shopping malls, downtowns, and city centers, has contributed to its success.
Bloomin' Brands, the parent company, continues to see its share prices recover from the pandemic lows, with the Brazil segment's performance contributing significantly to this recovery. However, the company faces the challenge of whether its international operations are sufficiently diversified, given the high dependence on Brazil for its revenue.
1. Outback Steakhouse, known for its American twist on Australian barbecue, has found an unlikely home in Brazil.
2. The country generates a staggering 83% of Bloomin' Brands, nearly $500 million of its international sales in the first half of 2023.
3. Outback Brazil saw sales grow 61%, traffic increased by 42%, and the average check by 19.2% compared to the same time in 2022.
4. For the US operations, those numbers were 3.9%, -5% and 8.9% respectively.
5. Nearly half of its total international restaurants are located in Brazil.
6. It's a little over 10% of their revenue that we're forecasting in 2023 will come from Brazil.
7. Thanks to Brazil's rising middle class and a food culture centered around beef, the brand has amassed a huge following both on social media as well as in person.
8. Outback Brazil opened its doors in 1997, less than ten years after its debut in the US.
9. Australian Barbecue is a new experience for consumers because it's a typical experience of another culture.
10. At the time of opening, there were only 11 international Outback's in Canada, Korea, Mexico, Philippines, and Aruba.
11. By 2005, bloomin brands under its former name, Outback Steakhouse Inc, had about 140 international stores, of which 12 were in Brazil.
12. Quickly, the Latin American country proved to be crucial for the company's success.
13. A year later, Outback Steakhouse, then called Aussie Restaurant Partners, was acquired by private equity firm Bain Capital and Catterton Partners for $3.5 billion, or over $40 a share.
14. Forming Bloomin brands, The company went public in 2012, selling 16 million shares at $11 each.
15. At that time, Brazil accounted for about one fifth of Outback's international footprint.
16. By 2017, that number had grown to 35% and sales to $377 million across 87 locations, a massive jump from 2013.
17. However, in the years leading up to the pandemic Bloomin' Brands, overall sales remained stagnant, seeing little growth in some years even declining.
18. At the start of 2020, reports started spreading that Blumin was divesting from the Brazil market, partly to streamline its operations and bolster margins.
19. Outback's operations in the country were estimated to be worth $472 million.
20. However, those plans fell through.
21. For Bloomin' Brands, as with most restaurant chains, the pandemic hit hard with dropping revenues and tumbling stock prices.
22. However, within a year, the Brazil segment had bounced back and that return reflected in the company's stock.
23. Just to frame it in the US, most casual diners