Super CEO's

Newsweek, 2005


10 Big Thinkers for Big Business

By Keith Naughton on 6/19/05

Newsweek 

JUAN JOSE GUTIERREZ

Juan Jose Gutierrez has never set foot in China or Indonesia. But that didn’t stop the president of the fast-food chain Pollo Campero (“Country-Style Chicken”) from announcing plans earlier this month to move into those Asian markets. The first of as many as 500 China stores is due to open in Shanghai by the end of this year. China has become a “mecca” for businesses all over the world, says Gutierrez, 47. “As Latin American businessmen we asked ourselves, ‘Why not us?’”

Not many businessmen from small Latin nations have ever asked that question. Pollo Campero hails from tiny Guatemala, yet is the most ambitious international restaurant chain from any Latin nation, large or small. While some Mexican chains and Venezuela’s Churromania have entered the U.S. market, Gutierrez reckons he is the first to target Asia. Highly successful in Guatemala and neighboring Latin markets, Pollo Campero followed its Central American customers along immigration routes to U.S. cities like Houston, Dallas and New York. It now has 196 stores in nine countries, employing nearly 7,000 people and generating annual revenue of $300 million. But Asia is Gutierrez’s first move outside Central America and its diaspora, and represents a quantum leap in ambition and risk. Bob Sandelman, the head of a southern California consumer-research firm, says Pollo Campero “does seem a bit like a fish out of water with no Latin American population in China.”

A balding, diminutive father of four, Gutierrez and his executives cite several reasons to expect a smooth swim in Asia. One is the worldwide fascination with Latino culture, food and celebrities, for which U.S. franchise operations chief Rodolfo Jimenez sees an unmet demand in Asia. Another reason: that killer chicken recipe. Pollo Campero didn’t even have to sell itself in Indonesia: a major Indonesia restaurant company badgered it for franchise rights for two years. In China, Kentucky Fried Chicken has set up 1,200 stores since arriving in 1987, proving there’s a huge market for fried chicken. And Pollo Campero has gone head to head with the American giant before: KFC tried to crack the Guatemalan market shortly after Pollo Campero was founded by Gutierrez’s father in 1971, and couldn’t.

Gutierrez, who was 16 when his father Dionisio died in a plane crash in 1974, took over Pollo Campero eight years later. His first move into the United States failed after a year, when the company-owned restaurant in Miami was quickly dragged down by a weak understanding of the local market and high employee turnover. The failure taught Gutierrez the advantages of franchising over direct ownership, and led to the opening of an international franchising arm in the mid-1990s.

The company’s first franchises were in Central America and built on a fiercely loyal customer base. At airport stores in Guatemala City and San Salvador, U.S.-bound passengers stuffed duffel bags with Pollo Campero chicken as a treat for stateside relatives. Some even stocked up in order to resell the spicy chicken for a profit in American cities. When planes on these routes began to smell of chicken, executives of one carrier asked Pollo Campero to use scent-proof packaging. Pollo Campero declined, but the episode inspired the company to start thinking about expansion into the United States.

The frenzy that greeted its 2002 U.S. debut was worthy of a Hollywood premiere. People began lining up outside the first L.A. store nearly six hours before its scheduled opening, forcing the franchise owners to stay open until 3 in the morning the next day. Sales hit the $1 million mark on the 47th day of operations. To date, Pollo Campero has allowed word of mouth to spread the company’s name in the Latino community and to the larger American market. They cite a new Virginia store where Latinos represent only 6 percent of clientele as a sign of its appeal.

Crossing over to China will be much tougher, analysts warn. Weak protection for intellectual property means Pollo Campero is bound to spawn imitators. Gutierrez says he’s well aware that restaurants have the “highest mortality rate” in the business world, and of what survival entails. If Pollo Campero falters in China, it wouldn’t be his first brush with failure. If it succeeds, he may embolden other Latinos to think as big as Asia.


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