From a pizzeria in Mexico to flooding Europe with fast food: Alsea is growing at a rate of 100 openings a year

The Mexican multi-brand restaurant operator is growing exponentially in the old continent with high-profile brands such as Domino’s Pizza, Starbucks, Burger King and Chili’s Bar & Grill

Una empleada consulta los pedidos en el Starbucks del centro comercial Loranca en Fuenlabrada
An employee checks orders at the Starbucks in the Loranca shopping center in Fuenlabrada, Spain.
María Fernández

A Domino’s Pizza branch in Galapagar and a Starbucks in Fuenlabrada, both in Spain’s Madrid region, are the two latest openings by Alsea, the Mexican multinational that operates these and other high-profile restaurant brands such as Foster’s Hollywood, Chili’s Bar & Grill, Popeyes, Burger King and California Pizza Kitchen. By the time this article is published, there will surely be more, as the group is growing at a rate of two openings a week in at least one of the six European countries where it operates: France, the Netherlands, Belgium, Luxembourg, Portugal and Spain. José Luis Portela, its European CEO, explains that they managed 100 new restaurants in 2023 (60% owned and 40% franchised), and that in 2024 they will continue “on the same path,” having exceeded a total of 1,500 establishments on the old continent. Its plan, announced in 2023, is to open 400 more establishments by 2025.

The group’s origins lie in a Dominos’s franchise opened by brothers Cosme and Alberto Torrado in Mexico City in 1990 with the help of their mother. It took them only nine years to be listed on the Mexican Stock Exchange. With the family as the main shareholder, they then expanded throughout Latin America and branched out into Europe in 2014, buying the Zena group. In the past 10 years, they have devoured the market share of fast-food operators on that side of the Atlantic.

At the end of 2018, Alsea acquired the Vips group and, in 2019, the exclusive rights to operate Starbucks in France, Belgium, the Netherlands and Luxembourg. Although in 2019 rumors circulated of a possible public offering (IPO) in Europe, the company states that there are no such plans for now. The last announcement dates back to March, when they acquired the remaining minority stakes in the capital of its European subsidiary, including those of the Arango family, founders of Vips, which held 5.13%, for €238 million ($259 million).

Behind this meteoric growth is a steady increase in sales with a record turnover of nearly €1.27 billion ($1.38 billion) in Europe last year with 6% growth in the first quarter of €300 million ($326 million), despite the fact that in many European countries where they operate consumption has become more restrained, as acknowledged by Portela. His quarterly balance sheet reflects the fact that many consumers are turning their backs on U.S. franchises in France and the Netherlands due to Israel’s offensive in Gaza. “There has been an impact since October, especially with the Starbucks brand in Central Europe and France, but we think it is temporary and we are looking ahead with optimism,” he says. “Now, with the Olympic Games coming, we are getting ready and hiring people to meet an increase in demand.”

The company’s accounts are experiencing another positive cyclical effect: both the fall in energy costs — which have not, however, been matched by an equivalent fall in prices — and the normalization of the Consumer Price Index (CPI) in many food products have boosted its operating profits by almost 11% in the first quarter of the year. Globally, Alsea’s European business accounts for 30% of sales and 20% of profit. “Latin America and Europe are different markets,” says Portela. Lower labor and leasing costs in Mexico mean that margins are higher back home.

Four factories

Alsea’s operating strategy is, however, similar across the board. Alsea has four factories in Spain that make everything from the dough for its Domino’s pizzas to Starbucks sandwiches and Foster’s Hollywood ribs. Its main loyalty club in Spain has almost 1.8 million followers and offers discounts and incentives to customers to eat at one of its restaurants. “We have very varied client profiles,” says Portela. “At Starbucks, we get everything from 15-year-olds to older people who tend to use and consume different products. Those of my generation drink lattes or black coffee, while younger people like cold drinks or cappuccino. Vips is a brand that has been around forever, and some people come to snack on its famous pancakes. Domino’s Pizza has everything and attracts a slightly younger clientele.”

Consumers are looking for novelty and variety in how they can order. “At Burger King, we have digital kiosks for ordering,” says Portela. “At Starbucks, you can order through the app and pick up your order directly at the delivery area without going through the cashier. At Foster’s, Vips and Fridays, you will be served by a waiter, but if you are in a hurry and don’t want to wait for the bill, you can pay on the app and leave.”

Alsea has 22,626 employees on the continent with most on minimum wage. Employees in Spain, at least, have benefited from the 2024 minimum wage hike. “Here, and in the world in general, there has been strong growth. Better wages offer more consumption capacity,” adds Portela.

In terms of distribution, 30% of Alsea’s sales are digital. They operate through their own platforms and through aggregators such as Glovo. “Customers ask us to make interaction with other brands easy,” explains Portela. “If I want a delivery, I can do it through the app, the phone, whatever channel offers you the best experience. It’s not just about the burger, the salad or the pasta dish, but the service, the ordering facilities and the cleanliness.” Alsea is confident that they will continue to grow despite widespread concern regarding obesity and sedentary lifestyles — in Mexico, almost four out of every 10 people over 15 years of age suffer from obesity. The country has the second-highest obesity rate of all the countries that make up the Organization for Economic Cooperation and Development (OECD), just six points below the United States (42.8%). “Fortunately, there is plenty of room to grow,” Portela says.

The franchise system

Alsea’s business uses a range of formulas with to operate third-party brands, something they can do exclusively in one country or as franchisees of another company, as is the case with Burger King in Spain, where the main operator is Restaurant Brands Iberia. They also have their own brands such as Vips, some of which are franchised. The brand present in most European markets (six) is Starbucks and the brand with the most stores is Domino’s (384).

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