The Market For Broilers Through Fast-Food Outlets In Venezuela

PROAGRO is the leading firm in the broiler business in Venezuela. It is integrated through hatchery, grow-out, processing and distribution activities. As a consequence of strict price regulation policies enforced by the government in the poultry products, PROAGRO experienced serious injury to its profitability over the last few years. The most severe regulations were applied to PROAGRO's chief product (whole, ready-to-cook broiler with feet and giblets incorporated in the body cavity); therefore, PROAGRO's management has concentrated research efforts to find alternative ways to increase sales of products with larger margins through the most profitable distribution channels. At the present time the distribution channel with the biggest margin for broilers is through the restaurants specializing in broilers. PROAGRO sells 8 percent of its products to this kind of establishment, but recent efforts to increase distribution in these channels have had limited success due to intense competition from other poultry firms. An alternate way to increase broiler sales through "away-from-home" channels would be through an owned (or controlled) chain operation with high sales volume per unit. To accomplish this it would be necessary to offer faster service and lower prices of the products. These factors have been the basis of the fast-food concept developed successfully in the American market. This report will focus on the development of research methodology appropriate for (1) analyzing the Venezuelan market potential for fast-food poultry products and (2) evaluating PROAGRO's likelihood of increasing profits through entry into this business.