Pollo Campero takes wing in United States

LOS ANGELES — As American restaurant brands strive to plant their banners around the world, Pollo Campero, a 170-unit chicken-based chain headquartered in Guatemala, has established a strong U.S. beachhead here.

Propelled by sales that reached $1 million in the first seven weeks at its initial Los Angeles unit, Pollo Campero has opened two more counter-ser-vice branches in the area since April through an area franchisee.

Adir Restaurants Corp., the local operator, plans to add a fourth local outlet by year-end.

Immigrants from the eight Central American countries where Pollo Campero units enjoy strong customer loyalty have been credited with the unusually high initial sales in Los Angeles following the concept’s debut there. The first L.A. location, near downtown, was going through 17.5 tons of chicken a week and cutting block-long lines of customers at 6 p.m. in order to close by midnight, a spokesman for Adir indicated.

The chain, which specializes in fried and rotisserie-cooked marinated chicken, anticipates opening a store in Houston in November and is on the verge of signing a franchise deal for Washington, D.C., Maryland, and Virginia. Plans also call for the opening of franchised outlets in Atlanta, Chicago, Miami, and New York.

In a phone interview from the chain’s headquarters in Guatemala City, Pollo Campero Vice President Roberto Denegri said:

«Within the next five years, we hope to have close to 200 units in the U.S. We have had all kinds of proposals from people who want to franchise. But we want to go carefully—we want to manage the growth.»

Denegri said Pollo Campero’s primary target is the Central American community living in the U.S., followed by the broader Hispanic population and then all consumers.

«The Latino population in the U.S. is growing fast,» Denegri said. «There’s been an explosion of Latino culture there—movies, music, writers.»

In fact, Hispanic consumers in the United States will spend about $580 billion in 2002, according to a study by the University of Georgia’s Selig Center for Economic Growth. The report forecasts that the figure will rise to $926 billion by 2007.

Hispanics today account for 9.4% of total U.S. buying power, an increase from 5.2% in 1990. Furthermore, the Hispanic population appears to be growing at a faster rate than the general population. 

The number of Hispanics living in the United States increased by 58 percent between 1970 and 2000, compared with an overall 13 percent growth rate, according to the annual National Health Interview Survey.

The early success of the inaugural Pollo Campero outlet in La Curacao department store in the Pico-Union district of Los Angeles surprised even company officials. Members of the city’s Latino immigrant community began lining up outside the restaurant as early as 6 a.m. Since the initial $1 million-in-seven-weeks pace was set, sales have leveled off, and each of the three existing L.A. stores is generating about $500,000 per month.

Denegri said he anticipates that monthly sales will eventually settle at about $450,000 per store.

«Sales were well above expectations,» he explained. «They were huge numbers.»

He said the long lines in the initial weeks were a result of pent-up customer demand for the product, which, over the years, has achieved something of a cult status in cities with large Latino populations.

U.S. residents from Central America often carry Pollo Campero chicken back to the United States when they return from visits to their homelands.

«You would get on a plane from Guatemala City to Los Angeles, and the whole plane would smell like Campero,» Denegri said.

To help meet that demand, the company opened branches at Aurora International Airport in Guatemala City and San Salvador International Airport in El Salvador. Those two locations alone sell more than 3 million to-go orders annually, generating sales of $4 million at each outlet, according to Denegri.

Jerry Azarkman, who co-owns Adir Restaurants and four La Curacao department stores with his brother Ron, said he couldn’t believe the response to Pollo Campero.

«People waited in line for nine and a half hours,» he said.

Los Angeles Central American residents «had pride that [a restaurant chain] from their country broke the barriers and came to the United States,» Azarkman added.

«They saw McDonald’s and KFC open in Central America. Now they’re seeing someone from their country coming here.»

Adir Restaurants, under the only master franchise pact expected to be awarded, plans to open 50 Pollo Campero outlets over the next five years on the West Coast, including some subfranchised units.

Azarkman is currently looking for freestanding sites in the Los Angeles area. He also mentioned that he is in the process of building a management infrastructure to run the restaurants.

«We’re looking for a president right now,» he said.

Pollo Campero is not the first Latin American chicken concept to try to crack the U.S. marketplace. El Pollo Loco, the grilled chicken chain founded in Mexico, had its international rights (outside its home country) purchased by Denny’s Inc. in 1983. Since then, it has established a sizable presence in the Southwest and on the West Coast.

El Pollo Loco, whose U.S. debut also took place in Los Angeles, was embraced by both Latino and Anglo consumers. Today, it operates and franchises more than 300 units in the United States, generating annual sales of about $340 million. The company is owned by American Securities Capital Partners.

Randall Hiatt, president of Fossel International, a restaurant consulting firm based in Costa Mesa, Calif., acknowledged that there is room for growth in the chicken market in Southern California. «However, it won’t be easy to hit 200 units just by targeting the Central American population,» he added. «The narrower you try to be, the harder the time you have.»

Moving an imported concept into the commercial mainstream could be difficult as well. «I’ve seen [Pollo Campero units] in Latin America,» Hiatt said. «The product was good, but operations were not as sharp as they are here. They need to take a step up.»

Pollo Campero was founded in 1971 in Guatemala City. Soon afterward, its founders exported the concept to El Salvador, where it also flourished. Company executives opened branches in those two countries exclusively until 1991, when the concept debuted in Honduras. In 1994, a decision was made to franchise the chain, and three years later, the first licensed unit opened in Panama. Over time, franchises opened in Ecuador, Costa Rica, Nicaragua, and Mexico.

Today, the chain generates sales of about $300 million annually with its three basic types of chicken: original fried recipe, extra crispy, and rotisserie-cooked, all flavored with a spice-herb blend. Other lunch and dinner selections include chicken nuggets and strips, chicken burgers and sandwiches, and sides of french fries, mashed potatoes, fresh and prepared salads, and desserts.

Unlike the U.S. stores, Pollo Camperos in Latin America are open for breakfast, lunch, and dinner and feature a full-service format.