Brazil Food Stocks
Companhia Brasileira de Distribuicao (CBD) is commonly known as Grupo Pao de Acucar, which is the trading name of the supermarket chain. This Brazilian company is engaged in the business of retailing food, electronic goods, home merchandise and other forms of goods that are sold in supermarkets and home appliance stores.
Currently, the company has 551 stores in Brazil, 496 of which are retail food stores. In total, 311 of these stores are located in the Sao Paulo State, which is where 58 percent of the sales revenue comes from for the company. The company operations distribution centers throughout Brazil, including Sao Paulo, Rio de Janeiro, Brasilia, Fortaleza, Curtiba and Recife. The company has 63,185 employees, and is headquartered out of Sao Paulo.
The company operates its stores under six different names: Pao de Acucar (164 stores), CompreBem (186 stores), Sendas (62 stores), Extra (83 stores), Extra Electro (50 stores) and Extra Perto (four stores).
The stock has a forward P/E of 31 and a yield of 0.30%.
Companhia de Bebidas Das Americas (ABV), also known as AMBEV, specializes in producing and distributing beer, draft beer, malt, soft drinks, sport drinks, ice tea and bottle water. The products are distributed throughout Brazil, as well as 14 other countries across North and South America. The company has three division, beer, carbonated soft drinks and non-carbonated.
The company sells and distributes Pepsi products throughout Latin America, as well as providing Lipton Ice Tea and Gatorade to the continent. The company also distributes Budweiser products in Canada. It distributes the drink Brahma in the United States, Europe, Asia and Africa. The company has 13 mixed plants, 12 breweries, four soft drink plants, three raw material plants, one malt plant and a farm in the state of Amazonas.
In Latin America, the company has a 91% percent stake in Quinsa, which operates in Argentina, Bolivia, Chile, Paraguay and Uruguay, as well as Equator, Guatemala, El Salvador, Nicaragua, Peru, the Dominican Republic and Venezuela. The company recently opened up a plant with a capacity to produce one million hectorliters of beer, which also created 1,350 new jobs.
Outside of the United States, AMBEV is the largest Pepsi bottler; in addition, the company accounts for 69 percent of the Brazilian beer market, while employing 34,000 employees. Currently, the company has one million points of sale in the country, hundreds of third-party distributors, 13,000 salesmen, 16,000 trucks, as well as countless boats and ferries that cross the Amazon River.
The stock has a P/E of 28 and a yield of 1%.
Perdigao S.A. (PDA) distributes food in different segments from meats, flour, dairy products, juices, animal feed, cheeses, deserts, and more. This food company specializes in poultry, pork and beef foods, with some dairy processed products. The products from the company include whole and cut chickens, frozen pork cuts and beef, processed foods, specialty meats processed meats and pastas.
Perdigao is made up of a structure of 20 industrial units spread across Brazil. Currently, the company employs 39,000 individuals and has a portfolio of 2,500 items, which are sold under the brands Perdiago, perdix, Batavo, Chester, Apreciatta, Borella, Halal, Turma da Monica, Sulina, Alnoor, Toque de Sabor, Light & Elegant, Escolha Saudavel, Confidence, Fazenda, Confianca, Unef, BFF and Nabrasa.
The activities of the company are sent out through a network of 24 distribution centers, 15 dairy-processing distributors and 35 cross-docking transit points in Brazil. In addition, the company has a distribution network in Europe and more than 100 countries around the world. The activities of the company are split into poultry, pork and beef, milk, processed food products and other items like animal feed.
The stock has a P/E of 22.
Sadia S.A. (SDA), located in Concordia, Santa Catarina, is a food producer that ranks as one of the leading producers of frozen food in the world and the main Brazilian exporter of meat-based products. The company’s name literally translates as ‘healthy’ in Portuguese, adding to the message the company has about healthy food for its customers.
In 2006, the company had 12 industrial plants producing 1.3 million tons of meat products. In total, the company has 70,000 points of sale in Brazil and 200 foreign clients around the world. The company has proven to be so influential, that the former chairman of the company, Luis Fernando Furlan, was appointed Minister of Industry and Foreign Trade by President Luiz Inacio Lula da Silva in 2003.
Currently, there are 2,500 products to choose from in the Sadia line, including poultry, pork, meats, sausages, pasta, hamburgers, soups and desserts. The operation sectors for the company include breeding farms for poultry and hog stock, hatcheries, pork breeding centers, slaughterhouses, processing units, animal feed plants and distribution centers.
The stock has a P/E of 3.
Brazil Fast Food Corp. (BOBS.OB), also known as Bob’s, is a company that operates in Brazil as a fast food hamburger restaurant chain. So far, the company has 517 points of sale, which includes 181 kiosks. In total, the company owns 61 of the restaurants, while 456 are owned by franchisees under the trade name. The company is sometimes referred to as the McDonald's of Brazil.
Over half of the Bob’s restaurants are located in the states of Rio de Janeiro and Sao Paulo, with the rest spread across Brazil. Also, there are two franchised restaurants in Portugal and Angola. The largest amount of franchise restaurants for Bob’s outside of Rio de Janeiro and Sao Paulo are in the states of Santa Catarina and Parana. The company is headquartered out of Rio de Janeiro and has nearly 4,000 employees.
The company operates on the franchise system, with franchisees paying R$60,000 for a restaurant, although that cost is lower for kiosks. The company receives five percent of all gross sales from the franchise. Franchisees also pay a four percent of monthly gross sales fee to pay to advertising to the company. Terms for the franchisees are at five years, with the agreement being renewed without interruption in the franchisee’s restaurant. There are no financial obligations for the franchisees.
Beyond the restaurants, the company also operates several gasoline retailers including Shell and Petrobas.
The stock has a P/E of 7.
Author does not own any of the above.
By Fred Fuld at Stockerblog.com