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Foreign Influences - Buenos Aires is increasingly attractive to expatriates looking for a place where their money goes further
Arpil 2009
by Bianca McKell / QSR Magazine April 2009
Amidst the global financial crises a phenomenon of growth and innovation has been occurring in the food and beverage industry of Buenos Aires, Argentina. Rapid growth began in 2004 and has continued through 2008 with analysts predicting a minor slowdown ahead in 2009, but by no means a stoppage.
Many porteños (residents of Argentina) believe that because the country has already suffered and begun to recover from a disastrous financial collapse of its own in 2000 (2002) that Argentina is better equipped to handle the current situation than other countries.
A significant and perhaps more credible factor is the dollar to peso rate. Until 2001, the Argentine government arbitrarily fixed the rate of exchange at 1:1. Today the peso is allowed to float against other currencies, maintaining the rate for several years at around three pesos to one dollar. Even with inflation, this favorable exchange rate has made Buenos Aires a popular bargain travel destination for tourists with tighter budgets and financial concerns in addition to vacation plans. As well as a travel destination, Buenos Aires is increasingly attractive to expatriates looking for a place where their money goes further.
“I think there are other factors that are having more effects, both positive and negative—on the positive side, the influx of tourists and expats here has created a demand for ingredients that weren’t available just a couple of years ago,” says Dan Perlman, chef and owner of Casa Saltshaker. “You used to be able to walk into a Chinatown market and find nothing but, more or less, soy sauce, sesame oil, and a few jars of various Lee Kum Kee sauces. Now they’re packed with options from all over Asia and the markets stock exotic fruits and vegetables. Even outside of communities like Chinatown, Koreatown, and the Bolivian/Peruvian markets, more and more is available. Local supermarkets stock things like hot peppers and imported goods, something they didn’t do two years ago.”
Reports support Perlman’s theory, showing that the retail market and the economy in general have been recovering strongest in the middle and upper classes but also in the low-income bracket due to the increased income made available. This growth has heralded the return of many items Argentines once enjoyed before the crises in 2000, as well as a fresh crop of fusion restaurants, gourmet and value-added products, delivery services, supermarkets, specialty and ethnic foods and organic products. The new market is very flexible and accessible to almost the entire stratum of Argentines and foreigners.
Before the financial upturn, consumers focused exclusively on low prices and good value over ambiance, brand name, or attractive packaging. Salary increases and higher purchasing power have stimulated a renewed value for convenience, brand names, quality, variety and proximity. There is a pizza parlor or empanada restaurant on almost every corner. These venues have always represented quick and easy meals but have now branched out into delivery service and more “gourmet” styles of fast-food consumption.
"The influx of tourists and expats here has created a demand for ingredients that weren’t available just a couple of years ago.”
As this trend strengthens, it is expected that the marketing niche for consumer ready foodstuffs, snacks, beverages and luxury items will grow in tandem. Import goods will also increase in demand. Although almost all food and beverages are domestically produced, major supermarket chains have taken note. Disco, Coto, Jumbo, and Carrefour are the major upscale supermarkets and each has at least a full isle or more dedicated to imported and luxury goods.
The Argentine palate traditionally consists of a diet high in beef and pasta, usually served with salad and a potato side dish, and is typically considered unadventurous.
“That is changing, bit by bit, as chefs, primarily those who’ve spent time traveling and working overseas, come back and see ways to take traditional dishes and make them healthier, more modern, more interesting, and/or revive dishes that have been lost over time and bring them into a modern style. The best exemplars of this sort of place are Urondo, Pura Tierra, Sucre, Bar Uriarte, and Thymus,” Perlman says.
Spices, salt, and ethnic dishes were generally eschewed by the local populace for simpler fare that is hearty, filling and aesthetically pleasing. Market growth and the evolution of the consumer base to include tourists and expats have expanded the tastes of the region. Buenos Aires’ most popular restaurant list now includes cuisine from Italy, Spain, Japan, France, Scandinavia, Mexico, China, Turkey, Morocco, India, and Armenia.
“A few years ago, outside of Italian (mostly poor quality) and a few French bistros, Chinese takeout places, and Peruvian home style places (only, at that time, frequented by Peruvians and Bolivians), there was nothing here,” Perlman says. “Now there are restaurants from all sorts of Asian cuisine, various other Latin American, North American, Caribbean, and European, and today, I just heard about a West African place that has opened up. That’s all very, very new, and really adds to the food scene here.”
Fusion restaurants like Osaka rank high amongst Buenos Aires travel guides and the local populace. The chefs here fuse Peruvian and Japanese cuisine to comprise an innovative and extensive menu. While still not going as far as to serve the traditional Wasabi ball and pickled ginger, unless requested, it is a step in the direction of increasing the demand for even more ethnic products and restaurants.
Argentina is also home of the largest Jewish community in Latin America, making kosher products ever increasing in demand. The Abasto shopping mall in Buenos Aires is the location of the only kosher McDonald’s outside of Israel. Kosher goods are attractive to a broad range of consumers, like vegetarians, who view them to be of a higher quality.
There are also a number of restaurants that serve aphrodisiac, vegetarian, and macrobiotic food. The variety of restaurants in each category covers a range from sophisticated to fast-food chains satisfying every taste and every pocket. The remarkable thing here is that “budget” doesn’t translate to “poor quality” or “unhealthy” as it does in many other markets. Although “good for you” products are relatively new to Latin America, consumers consistently make health conscious choices.
There are local fast-dishes called minutas. These are dishes that take a short time to prepare but are not as unhealthy as typical fast food. The most popular are: milanesa (breaded meat) with fried potatoes, and empanadas (dough filled small portions of ground meat, olives, boiled egg and spices).
“My favorites probably take more time than cooking just based on location, and those are the open air parrillas [grills] along the north and south boardwalks [Costanera Sur and Norte] where you can get a steak or grilled pork or sausage sandwich for a few pesos and eat them with a soda or beer while looking out over the river or the ecological reserve,” says Perlman.
"Budget” doesn’t translate to “poor quality” or “unhealthy” as it does in many other markets.
Argentina is the world’s second largest producer of organic food. It is reported that there are approximately 7.4 million acres of organic crops and livestock is naturally grazed in pastures. Organic farmland in the U.S. is approximately 3.7 million acres. Argentine beef is world renowned for its quality and flavor because it is grass-fed as opposed to grain or corn fed.
However, the use of feedlots for finishing cattle is on the rise because of increased availability of grain and silage to Argentine cattle farmers. Animals that are finished in confinement begin life and live in large pastures with high quality grasses until a period before slaughter when they are moved to smaller pens and their diet supplanted with grains and corn. According to an article at Cattlenetworks.com, 4.5 million to 5 million animals passed through pens in 2008. In 2001, the figure was 1.5 million.
“There is no turning back—more than 50 percent, and likely 70 percent or 80 percent, of Argentina’s cattle are going to be finished in feed lots within the next five years,” Juan Carlos Eiras, president of the Argentine Feedlot Chamber, told local daily La Voz del Interior.
This trend begs the question: Will the negative impact of increased growth and the financial crises be an overall decrease in quality?” Argentina banned the use of both antibiotics as growth promotants and growth hormones in 2004. But as they enter the global feedlot market, which has requirements in opposition to the ban, pressure to emulate exactly North American feedlot standards will increase.