March 26, 2010 Big Beef

Volume 6 | Issue 1

Braslo Produtos de Carnes Ltda has been the exclusive supplier of Mcdonald’s hamburgers and other meat products in Brazil since 1982 and fol

“We have a distinct advantage in the market because we didn’t start from zero,” explains Braslo’s director, Roberto Ruban. The Brazilian based company was created by the American holding company OSI 27 years ago, following a request by the McDonald’s group.

The first supplier of the fast food chain’s meat products, OSI has supplied McDonald’s since 1955 in the U.S. “This extensive experience proved invaluable to operations in Brazil, and Braslo not only supplied McDonald’s but also began providing services to other restaurants,” he continues.

REVOLUTIONARY INFRASTRUCTURE

Establishing Braslo in accordance with guidelines and quality standards already defined in the U.S. and Europe not only required expertise but significant investment. The logistics of supplying perishable goods in a country as vast as Brazil, with limited transport opportunities, provided the company with many challenges. To overcome these difficulties, Braslo invested $40 million in its 8,000-square-meter facility in Osasco São Paulo, which is a part of fast food industrial center, Food Town. The first Food Town was constructed in Russia and operates on the principal that all the suppliers for a specific restaurant are centered in one location, therefore reducing transport times and costs and increasing quality and freshness.

McDonald’s Food Town in Brazil opened in 1999 and serves as an integrated production and distribution center. “The concept of Food Town is simple and effective: both the bread and meat factories are on site and all resources are shared,” Ruban explains. The distribution advantages are clear when considering the volume to value ratio of bread, which due to bulky packaging and low weight, increased logistics costs. Bread must also be delivered as soon as possible, a factor that also benefits the transportation of meat products. The component factories made a joint investment and share resources but operate independently, linked by their mutual client: McDonald’s.

The production technology at the plant is the best in the market, and although it is openly available for purchase by all food processing companies, Braslo’s experience and highly qualified team of 400 staff are the important differential in its operation.

The infrastructure of the company constitutes one of its most important investments. Another was the decision to invest in fully cooked goods for export in 2002. The move marked an important step in Braslo’s expansion into overseas markets and supplying other clients in addition to McDonald’s.

Braslo currently exports to many Middle East countries – for which it is the exclusive supplier of McDonald’s beef and chicken products – including Saudi Arabia, the United Arab Emirates, Oman, Bahrain, Lebanon, and Pakistan; it also supplies Germany and the United Kingdom for other customers. The exports have positioned the company as the leading producer of meat products for fast food chains in Brazil. In addition to McDonald’s, Braslo also supplies Subway, Appleby’s and Outback Steakhouses and is in negotiations with KFC.

PROCESSED PROTEIN PRODUCTS

Braslo produces over 38,000 tons of beef, chicken and fish products every year. “On average the consumption of our products weighs out equally between chicken and beef,” says Ruban. These statistics however, consider international sales. In Brazil, customers still prefer the hamburger sandwiches and beef products, such as meatballs for Subway restaurants, tipping the balance to around 60 percent of sales made by the beef division. Braslo also provides McDonald’s with the McFish filet. The company works together with its clients to discover new variations within these lines: either creating new products and offering these to existing customers, or developing new ones based on a briefing or existing range or planned campaign.

The company buys its meat from suppliers and processes it at the facility in São Paulo. Beef is purchased in its filleted state from registered suppliers, a factor that Braslo is very specific about. “Aside from the issues of health and safety, we supply the Arab countries with halal products that require very specific sources,” says Ruban. The meat, which is received in both fresh and frozen forms, is mixed and prepared for each product type at the factory. Hamburgers, Arabian kibes, meatballs and other products are molded and frozen before being packaged and sent to the distribution center. “Meat raw material must arrive at Braslo and be processed within seven days of the slaughtering, which means we have to work according to strict guidelines and time deadlines,” Ruban continues. When considering that some of the meat arrives from suppliers over 500 miles away, and must be prepared and delivered in seven days, processing must be extremely efficient.

The process for producing chicken products is more involved. On arrival at the facility the refrigerated chicken is subjected to microbiological tests before treatment. “The main difference between beef and chicken products is that chicken is often coated (breaded chicken and crispy chicken varieties), and seasoned on site,” Ruban says. The flour and coatings are imported from Europe, USA and South Africa and take an average of 40 days to arrive at the factory. Braslo carries out all of the preparation stages from the filleted chicken to partial frying of the finished, coated products. Again time is of the essence, managing international delivery times with health and safety lifecycles. In the case of semi-prepared chicken, the products are reheated, or cooking finished at the restaurants.

Braslo imports 100 percent of the fish it processes in frozen block form from Chile and Argentina. Like the chicken it must be seasoned and coated at the facility. The fish is cut and coated with the flour, which is imported from the US, and is never allowed to defrost to maintain freshness and quality.

ACQUIRING EXCELLENCE

In 2008 OSI sold Braslo and two of its other Brazilian companies, Penasul Alimentos and Agrofrango (vertically integrated poultry processors), as well as a U.K. poultry producer (Moy Park) to the Brazilian group Marfrig. With a large variety of food companies and supplying over 120 different countries worldwide, the acquisition increased Braslo’s power in the market and joined it with some of the world’s leading brands, making it the market leader for the supply of meat and protein products to fast food restaurants in Brazil. The $680 million deal was estimated to have joint annual revenues of over $2 billion.

Braslo’s success comes in spite of economic crisis. Brazil is the world’s largest beef and poultry exporter. Its meatpacking sector has been consolidating and with the strengthening of the real against the dollar in the past year, Brazilian companies with strong cash flows have been buying assets abroad. “We are more than satisfied with our growth and performance,” says Ruban. Export fluctuations are balanced by the variety of continents to which Braslo sells, and the outlook for the future is bright.

Braslo has come a long way since its early days of supplying beef products to McDonald’s 27 years ago. Today, it is one of the best equipped companies worldwide to provide all types of protein products, from beef, lamb and pork to chicken and fish, fully prepared for fast food restaurants. “Every one of our contracts is different. Every client has its specific requirements and restrictions, and we have acquired the know-how and experience to deal with them all,” concludes Ruban. Understanding the needs of the market on a global scale and manufacturing products approved by leading restaurant chains mean continued promising performance for Braslo.

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