Verdict Food Service

Daily Newsletter

08 August 2023

Daily Newsletter

Authentic Restaurant Brands to acquire Fiesta Restaurant Group

ARB will buy Pollo Tropical restaurant brand owner in a deal could be valued at $225m.

US-based Authentic Restaurant Brands (ARB) is reportedly planning to buy Fiesta Restaurant Group, owner of the Pollo Tropical brand.

Citing people familiar with the matter, The Wall Street Journal reported that the deal could be valued at $225m.

Pollo Tropical is a US-based Latin American-inspired chicken chain established in 1988. The restaurant offers customers drive-through and catering services.

As of 2 April 2023, Dallas-based Fiesta Restaurant Group owned 137 Pollo Tropical restaurants across the state.

According to The Dallas Morning News, it also has 30 franchised restaurants in the US, Puerto Rico, Panama, Guyana and the Bahamas.

As per The WSJ report, the deal is expected to close on 7 August 2023.

The addition of Fiesta Restaurant Group is expected to further expand ARB’s restaurant brand portfolio.

On 17 August 2021, the company divested Taco Cabana to YTC Enterprises for a consideration of $85m.

In May this year, Fiesta Restaurant Group posted a net loss of $1.90m for the first quarter of 2023, compared to a net loss of $1.35m a year ago.

For the first quarter, which ended on 2 April 2023, the company’s total revenues were $103.4m, up 8.1% from $95.6m in the first quarter of 2022.

Fiesta’s comparable restaurant sales at Pollo Tropical in the latest quarter were up 9.7% compared to the same period last year.

Generative AI remains an untapped potential across the consumer industry

GlobalData estimates the total AI market will be worth $909 billion in 2030, growing at a CAGR of 35.2% between 2022 and 2030. The consumer goods, foodservice, and packaging sectors are undergoing digital transformation, accelerated by the COVID-19 pandemic and changing consumer preferences. AI can help companies operating in these sectors by significantly reducing costs and production times. In Nestlé's 2022 full-year results, the company announced a renewed focus on digitalization to drive growth. Financial and reputational pressures associated with supply chain disruptions and sustainability concerns are also driving interest in the digitalization of supply chains. Data science and ML are strong investments across all areas. However, the sectors cannot stop at AI-powered data analytics applications. They must also explore computer vision (CV), smart robots, AI sensors that automate manufacturing and distribution logistics, and generative AI tools that increase efficiency across corporate departments and customer service operations and enable innovation in product design. For the most part, the consumer goods, foodservice, and packaging sectors will not play a significant role in creating and developing AI hardware or platforms. Instead, these sectors will help scale up the adoption of AI technologies, such as CV, conversational platforms, and smart robots. This adoption will be driven by the financial benefits and potential cost savings AI automation delivers across global supply chains.