Value Experience Trumps PriceTue, 05/29/2018 - 11:33
Q: CMR incorporates several brands and concepts. What strategies has the company implemented to remain successful?
A: CMR started as a family business that developed a clear vision to introduce to Mexico the best of the world in terms of restaurants. This vision had two steps. The first was the creation of our own brands. Our first brand was Wings and we gradually developed more. Since we own these brands, we have the option of exporting these and their related concepts to other countries. The second step was to introduce brands or concepts that are relevant to the Mexican market, such as Chili’s, Olive Garden and Red Lobster, through the creation of alliances.
We have important partners like Brinker, the owner of the Chili’s brand. In fact, we are the largest franchiser of Chili’s in the world and Brinker’s largest partner thanks to our 69 restaurants. Another strategic partner is Darden, the owner of Olive Garden, Longhorn and Capital Grille. Golden Gate Capital, the owner of Red Lobster, is an important partner for us and Nestlé is also a strategic partner through its brand Nescafé. We have many partners, each with different purposes. Some only provide their brand and content and together with others, such as Nestlé, we are developing new concepts.
Q: CMR has become an expert both in the development of franchises and new concepts. Which will offer the greater opportunity in the coming years?
A: Both models have their virtues. Although it seems easy, franchises have a significant degree of complexity, especially since not everything can be applied to the Mexican market. You need to have some negotiating flexibility to adapt the concept to Mexico.
On the other hand, when you create, you have complete freedom to do anything you want but this implies a new level of internal infrastructure, including people with different skill sets, such as marketing and design. Fortunately, the Mexican market has been really receptive to our brands but we have found the market also wants Mexican concepts created by Mexicans.
Q: How will the new Nescafé business impact CMR and the market?
A: Consumption patterns are changing. There are daytime consumption opportunities that we had not targeted with our restaurants, such as the growing trend toward midmorning and midafternoon snacking. Nestlé recognized that coffee consumption in Mexico is growing outside the home and it wanted to have presence in this segment. This situation led us to work together. Our concept has been in operation for more than a year and a half. We are considering opening 150 stores in the next five to eight years. However, this number could vary depending on the reception in the market.
Q: How has CMR adapted its business strategies to fit new consumption patterns and channels?
A: There are two important trends to consider. The first is that consumption outside the house is growing, which has led to more people consuming in restaurants and to a proliferation of new restaurants. This helps to professionalize the sector and to create new solutions.
The other trend we are seeing is consumption through digital channels. More than 80 percent of the population has access to smartphones, which allows consumers to have access to more information about restaurants and to the new platforms operating in the segment, such as Uber Eats and Rappi. These new platforms also provide more accessibility to our consumers. We have offered delivery services since 2016 and in 2017 we started working with SinDelantal. When Uber Eats arrived to the market, we were among the first big companies to work with them. These platforms complement what we do. Working with them allows us to combine the best of both worlds. It is also a way to reach new consumers and generations that would otherwise not go to a restaurant.
Corporación Mexicana de Restaurantes (CMR) is a Mexican restaurant conglomerate with over over 50 years in the market.