American Companies Taking Their Shot in Latin America

When I first started living in Mexico City about 4 years, I remember getting home with a Subway sandwich and some chips for dinner.

Unfortunately, I prefer Jimmy Johns but I’ve never seen a Jimmy Johns in Latin America.

So we have to work with what we got!

Anyhow, I remember getting a text from my mom asking how I am doing and what I’m up to.

I told her I’m eating and she obviously was curious.

Asked “what type of Mexican food are you having tonight?”

To which I replied “Subway!”

Not very Mexican.

And she found it confusing as to how “Subway exists” in Mexico.

After all, that’s an American company!

Which is understandable her confusion – those who haven’t left the country before often, in my experience, do sometimes get confused when you mention how you went to some restaurant or store common in the US.

Be it Home Depot, Walmart, Best Buy, Dominos, Burger King, Subway, etc.

All of which exist in Mexico City!

Well, except Best Buy, the last store in Mexico City for that chain closed when the Covid shit hit.

It was located in Buenavista Mall and I went there annually whenever my laptop was having a heart attack.

Funny enough, the heart attacks happened more often after I spilled vodka all over it.

Oddly, vodka and laptops don’t mix together, but the manual didn’t mention that!

Must be a Mexican thing, you know?

Their laptops simply are powerful enough like the American ones to handle vodka.

In all seriousness though, there are American companies that do well down here.

Funny enough, you might see an occasional American company that is basically dead in the US but just hasn’t kicked the bucket yet down here.

But, on the other side of the spectrum, you obviously have American companies that fall face first onto the cement after exiting the airport.

Where, upon arrival to Latin America, they just find that few customers are interested in what they’re selling!

Let’s get into some brief examples that you can learn more about on the internet that I find interesting about more broadly American companies competing with the locals in Latin America.

Let’s jump right in!

Taco Bell: The Best Tacos in All of the Americas

Funny enough, I sometimes make an occasional joke here and there to any random Tinder chick in Mexico about Taco Bell.

If there’s some chemistry, it’s always a joke that gets them laughing.

Joke about how Taco Bell just happens to have better tacos than anywhere in Mexico!

Of course, I get quite a few laughing but none who are seriously persuaded to the idea.

Though, as a side point, I did meet one Mexican chick who told me about her time in the US and how she loved Taco Bell.

So we got converted to the winning team!

Still, outside of her, Taco Bell doesn’t win too many hearts and minds in Mexico.

But it tried!

As you can read here, Taco Bell did have time in Mexico.

However, that spot closed and, since I last heard, I haven’t noticed any Taco Bells anywhere in the country.

Maybe there’s one in the rural countryside of Chiapas.

Outside of that possibility, Taco Bell is just the most obvious example of an American company taking its shot down here and fucking it up.

Of course, you could argue, to a degree, that there would be more Mexicans who would like Taco Bell but simply reject it for nationalistic reasons.

Primarily because Taco Bell just has a more notorious and well-known observation in Mexico as being a “gringo version” of tacos and so, therefore, we Mexicans shouldn’t approve of it.

Where a Mexican, who hasn’t even tried it, will reject it by that basis alone so as to feel more prideful of their own country’s tacos over the alternative of some foreign company making possibly quite tasty tacos also.

Of course, to be fair, you do have plenty who just didn’t like the product for the price and that was it when Taco Bell was open here.

Still, this all brings up a possibility – what if Chipotle opened up in Mexico?

A company that has decent tasting good and doesn’t have as much of a negative perception to the point that you can treat it as a punching bag for jokes and laughter with Tinder chicks.

A company that might not provoke as much of a nationalistic “we like our own tacos, gringo!” reaction.

Or, at the very least, maybe sell the same type of “gringo taco” food but with any name that isn’t literally “Taco Bell.”

Preferably with a Latino token representative of the company that can make it seem like it’s not entirely a “yankee competition.”

After all, as we’ll see in the next example, a foreign company can do well competing with pre-established national competitors if done right.

Especially if it appeals to the crowd who has more money to spend and visits a place for, in part, status reasons in large cities.

Just an idea.

Competing with Juan Valdez in Colombia

So if a country already has enough local competition for a particular product, is it basically impossible to crack the market as a foreign company?

Like trying to sell tacos to Mexicans as a foreigner?

Not necessarily!

In Colombia’s case, as some already know, they produce plenty of great coffee!

Particularly with the “Juan Valdez” company that has there stores everywhere.

A company you can see more of in this video here.

Anyhow, it came to be that Starbucks decided to take a stab at the Colombian market.

A country that, as I said, already produces plenty of great coffee!

Did they succeed?

Yes!

Now, to be fair, Juan Valdez is still very popular in the country.

And, even more importantly, one could argue that Starbucks is not really competing with Juan Valdez in the most direct sense?

Let me explain…

First, as know, Starbucks does well selling other things like frapuccinos, flavored milk shakes and more.

On top of that, as I implied near the end of the Taco Bell section, sometimes it’s the brand that counts.

In which, in this case, you do have people who visit Starbucks even if it doesn’t have the highest quality coffee at the most affordable prices.

Hell, I only go to Starbucks when I want a place to sit down and enjoy black tea when in Mexico City!

I could go to the local Mexican option Cielito but I prefer Starbucks out of a similar patriotic desire to support companies from the homeland.

America!

And I would do just the same in Colombia.

Still, when I’m in American, I don’t feel any support to the specific brand per say.

I can always get a shit ton more black tea at similar quality or better anywhere else be it a gas station or McDonalds.

So, for me, I’m not really into the brand.

But some people are!

Those types who, in Colombia or anywhere else, feel the need to share photos of themselves at Starbucks on Instagram.

In which girls down here can also show off how they can afford to spend more money at the higher priced Starbucks store.

In a way, I suppose it might be an example of how charging more isn’t necessarily a bad thing if people can associate your brand to be worth it for the status and social media likes?

Among other reasons for why people in Colombia would prefer going to a Starbucks.

Still, similar to the Taco Bell example, those American companies can’t always compete well the locals down here.

Sometimes, if you can’t beat them, you join them.

Or buy them out?

Coca Cola Buying Inka Kola in Peru

In Peru, it is apparently the case that a company called Inka Kola has been the supreme leader in soda?

I have no personal experience with this one because I have limited time in Peru and never tried “Inka Kola.”

Still, upon doing some research, this is apparently the case or, at the very least, Inka Kola has always had plenty of popularity in the country as you can read here.

Nonetheless, from what I read, Coca Cola tried to outcompete with Inka Kola in Peru but it simply couldn’t.

So what did they do?

They bought Inka Kola and now sell the product in Peru themselves as you can read more about here.

With this nice quote here:

"In 1999, Coca-Cola purchased 50% of the shares of Inca Kola for $200 million, subsequently taking control of overseas marketing and production for the brand. The Lindley Corporation was permitted to retain ownership of the soft drink within Peru."

And, to nobody’s surprise, the Inka Kola product is apparently still the most popular brand in the country for this type of drink.

But while Coca Cola could buy out their opponent in Peru…

Could they adjust their regular product to meet consumer demands in nearby countries?

Coca Cola Mate Product in Argentina

As you can read here, Coca Cola tried making a carbonated and sweetened version of yebra mate in Argentina in 2003 with this quote from the article here:

"After 10 months of development, Coca-Cola Co. last week launched a mate-flavored soft drink called Nativa just for the Argentine market. The sweet, earthy beverage contains extract from the leaves of the yerba mate plant."

For those who don’t know, mate is a type of drink that is popular in Argentina as you can see here.

I tried it when I was there and thought it was nasty.

The only type of mate I ever enjoyed was some seemingly very different version in Bolivia years ago but that’s another story.

Anyhow, as you can see in the story cited above, Coca Cola tried to understand the Argentine market and learned that there is this drink called “mate” that seems quite popular.

So, sticking true to the Coca Cola brand, they supposedly carbonated the living shit out of it and took its stab at the Argentine market with it.

Did Argentines approve?

Well, from what I read, it didn’t sell very well at all.

Though, in other countries like Brazil, there is a mate-based soda called Mate Couro that can be seen in some states like Minas Gerais.

Though it’s not made by Coca Cola personally from my understanding.

To which you can see what that looks like here.

Still, it just goes to show that not every market is going to have the same tastes among its local consumers.

And speaking of American companies fucking up in Argentina….

Can You Make Pizza Better Than the Argentines?

When I lived in Argentina, there were things I liked and disliked about the country.

One of the things I like a lot though was the food.

To this day, it’s my opinion that Argentina has some of the best food you can find in Latin America.

Among other countries like Mexico for example.

Still, with the Argentines, they tend to make any meat taste really fucking good.

And also pizza.

Though, to me, the meat stuck out more as being a lot more memorable than the pizza.

But I will give credit to the Argentines for knowing how to make a good pizza.

As you can read here anyhow, Dominos and Pizza Hut tried taking their stab at the Argentine market but hasn’t had the most success.

And speaking of other fast food places from the US taking their shot down here…

McDonalds in Bolivia

Here is a good video explaining the reasons for why McDonalds was basically pushed out of the Bolivian market.

I’ll summarize the video and give some of my own opinion on some of the things said either in the video or in the comment section of the video.

So, as the video says, Bolivia had some major inflation and economic issues in the 1980s and basically implemented neoliberal policies to open the door to foreign investors.

To which the country improved economically.

Team Neoliberalism.

And McDonalds was doing well enough initially.

By 1999, McDonalds was expanding and even adjusting its menu to the local market.

But its popularity went down and closed up shop in 2002.

Now why did it fail in Bolivia?

The video expands on how it faced cultural rejection from the people and its government in the 2000s.

In which they mention Evo Morales and his rejection of globalism for example.

Then they go on about how Bolivia is one of the poorest countries in South America and so, by that logic, not as many people would be able to afford McDonalds.

In comparison, the video mentions how you can get a much cheaper meal (among maybe street vendors).

My thoughts?

I think the video was made by someone who has done poor research into Bolivia and also has no real world boots on the ground experience down here.

As always, you have these types in the US who bring in some “local expert” at best to talk about whatever country down here but the person creating the video or writing the book has limited time living in Latin America.

First, they mention McDonalds doing well in 1999 but then going on the decline afterwards until closing up show in 2002.

But Evo Morales, who they mentioned rejected globalism and some foreign companies (which is true), wasn’t in office until 2006.

So how the fuck does he have any relevance to the decline of McDonalds if he wasn’t in power until 4 years later?

Having said that, you could argue that the local sentiment against foreign companies existed before Evo rise to power.

Which makes sense for him to rise to power riding on the wave of that to begin with like we saw in the Water Wars of Cochabamba as you can see here.

Still, the water wars and the sentiment behind similar protests like that, which helped propel Evo politically, was focused on foreign companies doing more advantageous things.

Like trying to privatize water versus selling a hamburger.

Second, you have the argument of Bolivia being one of the poorest countries in Latin America with few being able to afford a hamburger.

Obviously, that would limit the relative success of McDonalds in Cochabamba of Bolivia versus a wealthier city in Latin America like Mexico City.

Still, if this was one of the reasons to keep McDonalds out of Bolivia, then why was Bolivia having so much more success in 1999 where, in the words used in the video, they had people “lining up” outside to go inside the restaurant.

With Bolivia having suffered an economic decline in those years around the early 2000s, I’d still ask then how other companies managed to survive despite McDonalds failing to do so.

Economic conditions on the ground do matter but the video does make me feel it’s missing some other condition.

Third, they mention street food.

By their logic, how could most people go to McDonalds when you got STREET FOOD available at much cheaper prices!

A few things to dissect here….

For one, not every local in Latin America likes street food.

From the opinions I’ve heard over the years living down here, many consider the food to not be as sanitary.

Others, from what I’ve seen occasionally, might see the food as “beneath them” and “for poor people.”

In the same way that some locals might go to Starbucks for the brand as we mentioned before.

Also, if street food was always the unbeatable competition, then how come McDonalds had, as they said in the video, people literally lining up outside to try their food from the beginning?

To which they had economic success going on for years after enough people have tried their food to know if it’s worth it or not to go back.

And go back they did for several odd years.

Furthermore, plenty of people in Latin America don’t always go for the cheapest option and there’s always plenty of people eating out, in fast food places, etc.

In Mexico City, which is one of the best spots for street food in all of Latin America, you still have plenty of people eating at fast food joints and more expensive restaurants.

As I wrote here, I went to a Burger King not too long ago and only saw Mexicans in there!

No foreigners!

When I lived in Bolivia years ago, I also saw plenty of foreign restaurants that had plenty of clients.

From top of my head, I remember seeing at least a Subway.

Among others as this person in the comment section mentioned here in the video:

“In Bolivia we have Burger King, Subway, Papa Johns, Starbucks, KFC, Cinnabon and a Hard Rock Cafe. So we're far away from being anti american franchises.”

So if these reasons aren’t satisfactory enough to me to explain McDonald’s decline in Bolivia…

What was the bigger reason?

I have no idea.

I couldn’t find out looking up anything online.

However, the video did explain that McDonalds specifically was not just closing up shop in Bolivia at the time but hundreds of stores around the world.

So, if I had to guess, I would wonder how much it had to do with internal issues the company has supposedly facing at the time.

Still, someone in the comment section did mention this:

“THIS. These guys completely ignored the fact that McDonald's left the country as it was going through the biggest economic recession in recent times and McDonald's was running low on operational capital, which caused them to leave about a dozen different countries in the same year.

Anyway, this was one of the more interesting cases to dissect briefly.

Much more could be said but let’s move on beyond fast food joints.

The Failure of Walmart in Brazil

This is another example that I have more limited experience with since I only spent a brief period in Brazil.

Would be appreciated to hear from anyone who knows Brazil better than I do.

Anyhow, as you can see here, Walmart didn’t have much success in Brazil when they expanded to the country supposedly.

At least not as much compared to other countries.

In which, from what I read online, they apparently failed to take into account the buying habits of the locals that don’t necessarily prefer buying everything they need at one place.

In which, from my basic understanding, you have plenty of locals who prefer to buy specific products at various markets to best get the lowest price they can for everything instead of buying it all for more at a single place like Walmart or any other large supermarket.

Even if it means having to go out more or, from my perspective, sacrificing a little bit of convenience with having to go out more.

In the comment section of the video posted above, some folks gave their 2 cents like you can see in the quotes here:

" I live in Brazil. There's a Walmart 58km away, let me tell you, it is EXPENSIVE.... not many people shop there, it's empty most of the time. There's a Carrefour close by, they always have sales, they have brands that small markets don't have and it's inside a mall.... So people have a tendency to go there."

There were other comments that mentioned things like:

A lot more delivery is done by places like drug stores, reducing the need to go to Walmart.

Brazilian cities are not as spread out as American ones in which you can find a local market close by easily enough.

Brazilians don't necessarily need to cook at home for lunch since, during their one hour mandated by law lunch hour during work, they can find a very cheap restaurant nearby.

Then you have this quote here:

"Let's be honest here. Walmart didn't try to understand our habits, they just tried apply their american system of shopping and translated them to portuguese (but other supermarkets already offer what walmart try to show like something brand new).

Futhermore while in U.S.A. you can find something really cheaper compared to other retailers at walmart, in Brazil their prices are quite the same of carrefour, Gbarbosa, Casino, and others (like a box of juice costing $10 at Casino/Carrefour and $9.50 at Walmart, even the small family markets at our neighborhood got similar prices,  so anyone here wouldn't use the car to drive to a wallmart store only for save $0.50 if we can got a what we need just walking 3 min from home). 

Walmart failed in Brazil because it is expensive as any other store."

It’s interesting to read about.

Really goes to show that, as you can see elsewhere on my blog, obviously not all of Latin America is the same.

In other Latin countries, like Mexico for example, Walmart seemingly does quite well from what I’ve seen here.

It’s even in smaller cities with few tourists like Pachuca when I lived there and where you have nearby markets close by that you could shop from.

In fact, larger supermarkets from Soriana to Walmart do just fine in Mexico!

Despite there maybe being some nearby market you can go to and how the cities here are not as spread out either to the point that it'd be difficult to find a local market necessarily.

And when it comes to prices?

Depending on the product, it could be more expensive in a Walmart or Soriana.

But I find many of the products to be of reasonable price and so do many Mexicans since I mostly see only Mexicans in those super markets.

And, of course, you have supermarkets that do well in other Latin countries also.

Still, to be fair, Walmart didn’t just evaporate from Brazil completely.

From what I could read in the comments, I guess it still exists to a degree in Brazil?

But then you have other articles like this here one that claim that it's out of the country.

Unfortunately for Brazil though, as this article here highlights, Walmart supposedly has completely left the country in 2018 after 22 years in the country.

But, as I said, I don’t live in Brazil so if anyone who knows the country better than I do has anything to add in…

Like if there’s some last standing Walmart around somewhere or a better explanation for why it failed to achieve market success, then let me know in the comments.

Would be interesting to hear.

Finally, let’s end on a positive note.

The Love for KFC in Ecuador -

Back to fast food!

We had one other positive example in this article about Starbucks…

Let’s end on another positive one – KFC!

Is KFC popular in countries down here?

Well, I have seen KFC in various points around Mexico City and they seem to do well enough.

Makes me wonder where Popeyes is at…

Still, what about other areas of Latin America?

As this article points out here, supposedly KFC has done quite well in Ecuador!

With over 45 years operating in the country and with 144 stores in the country.

Despite the Covid issues, KFC has done well enough and been delivering food to people choosing to stay home.

Then you have this little quote here from the article cited above….

“Es un orgullo disfrutar del exquisito pollo frito de una franquicia tan reconocida a nivel mundial, y que se ha convertido en la cadena de comida más grande del país.”

Wow – the largest fast-food chain in the country?

So, to end on a positive note, at least we have KFC doing quite well in Ecuador.

Which, to me, I find surprising because I never liked KFC in Mexico.

The chicken is always seemingly much smaller than how I remember it growing up in Iowa.

Wait – wasn’t I supposed to end this on a positive note?

Oh yeah – good for KFC for doing well in Ecuador!

And probably other countries in Latin America.

Any Comments?

Anyhow, that’s the last interesting example I could quickly find on the internet.

I’m sure though that there are many more examples out there in Latin America of how American companies have taken their stab at the local markets in the region.

With either success or failure.

If you have any examples to add or any comments, drop them below.

Follow my Twitter here.

And thanks for reading.

Best regards,

Matt