Brazilian market beckons U.S. fast-food firms.

In the continuing search for new markets and growth opportunities, U.S. fast-food companies are entering the fast lane to expansion in Latin America's largest consumer market.

At the beginning of 1993, two major U.S. fast-food chains had franchise operating in Brazil. But the end of

Most of these companies already have plans for expansion, so that in years ahead more Brazilians will be able to enjoy some of the same fast-food hamburgers, pizzas, fried chicken and roast beef sandwiches so familiar to U.S. consumers.

Brazil's taste for fast foods is being stimulated by a young and increasingly urban population, a growing middle class, a more mobile society and a greater interest in the outside world, including the culture and consumer products of the United States.

For the immediate future, the competition will be concentrated mainly in Brazil's two largest cities, Sao Paulo and Rio de Janeiro. But these test markets may be the launching pad for broader penetration as fast foods gain wider acceptance.

Fast Growth in Fast-Food Sector

With more than 150 million people, Brazil is the second most populous country in the hemisphere, after the United States. Although the Brazilian economy has been weakened by four years of recession and continued hyper-inflation, the fast-food segment of the restaurant market is growing at an average annual rate of 20 percent.

Fast-food sales are projected to reach around $900 million this year. Brazilian firms dominate, but locally operated franchises of U.S. fast-food chains may already have nearly a 20-percent share of this market.

McDonald's has been in the Brazilian market since 1979 and plans to add 24 units this year to the 131 restaurants operating at the beginning of 1993. By the end of the decade, McDonald's reportedly expects to have more than 400 restaurants throughout Brazil.

One of its new competitors will be Burger King. In July 1993, Burger King Corporation bought out a Brazilian chain of 52 hamburger fast-food restaurants.

And other U.S. companies are betting that Brazil's fast-food appetite is not limited to the hamburger-centered menu.

More Than Burgers

In July 1993, KFC Corporation added to the world's largest chicken fast-food chain by opening its first Kentucky Fried Chicken restaurant in Brazil. KFC was previously in Brazil during the 1970s, but the prospects for success are considered much brighter today.

A new generation has become accustomed to fast foods, and Brazilians already consume around 3 million metric tons of children a year -- a figure that is growing at a 10-percent annual rate. KFC reportedly plans to open three restaurants this year in Sao Paulo and one next year in Rio de Janeiro, with the goal of expanding to 15 units in Rio de Janeiro within four years.

Brazilian consumers will also have a choice among U.S.-based pizza and roast beef fast-food restaurants. Pizza Hut already has 24 outlets in Brazil, while Dominio's plans to open its first outlet in Sao Paulo this year. Arby's established its first Brazilian fast-food restaurant in Sao Paulo in June and reportedly plans to have 30 units within six years.

Altough franchises of U.S. restaurant chains mainly purchase local foods, their increased presence in Brazil is likely to contribute to the growth in interest in U.S. foods and many help create opportunities for other U.S. businesses and food products.

U.S. firms with an interest in this market might consider participating in Brazil's largest food show, ABRAS, held each September in Rio de Janeiro. The USA Pavilion at ABRAS provides U.S. firms with an opportunity to develop contacts and test the market for their products.