America loves its own cowboys, but is it
ready for Brazilian "gauchos" bearing gifts?
The folks at Fogo de Chao think so.
BRAZILIAN BLAZE
Fogo de Chao is showing Americans how to eat meat–Gaucho style. At the heart of this Brazilian steakhouse, now with three units in the U.S. and counting, are 15 cuts of beef, pork, chicken and lamb slowly roasted over an open fire.
That’s enough to romance any meat eater, but there’s a lot more sizzle at this South American steakhouse. It just so happens that these meats are served on long skewers by roaming Brazilian gauchos (cowboys).
Highly successful in Southern Brazil for more than 20 years, Fogo de Chao makes American steakhouses, with their steak, baked potato and side salad, seem, well, a little ordinary.
The concept is the work of two sets of Brazilian brothers, Jair and Arri Coser and Jorge and Aleixo Ongaratto. As teenagers, the four ventured outside their home, the mountainous countryside of Rio Grande do Sul, South Brazil, and traveled to Rio de Janeiro with the intention to someday open their own restaurant. For four years in the mid-1970s, the young men worked as bus boys and waiters in various "churrascarias"–restaurants where meat is the specialty.
Pooling their resources in 1979, the brothers teamed up to open the first Fogo de Chao in Porto Alegre, the state capitol of Rio Grande do Sul. It was a hit, and the partners opened a second location in 1985 in Brazil’s largest city, Sao Paulo. In 1987 they opened a third unit, also in Sao Paulo. And after hearing suggestions from American business travelers to bring their concept to the U.S., the brothers opened a unit in Dallas in 1997. Houston and, most recently, Atlanta, followed shortly thereafter.
While America hosts a multitude of steakhouses trying to capture the essence of the romanticized Wild West or the dark, smoky quality of an exclusive men’s club, Fogo de Chao tops the charts when it comes to authenticity and originality. "Fogo de Chao" literally means "fire of the ground"–a name chosen by the brothers in remembrance of a party held every year in their hometown, Relvado.
"Once a year we had a big party in my little town," says Jorge Ongaratto. "We would put meat on skewers; big skewers that cooked the meat along a fire. The best part of those parties was the meat. This–Fogo de Chao–is the result."
And the authenticity doesn’t stop there. Gauchos double as both cook and server and train for at least three to four years at churrascarias in Southern Brazil before being employed by a Fogo de Chao restaurant. Each unit employs about 10 intensively trained gauchos to cook and serve the meats. No one is head chef; rather, the gauchos work together as a team.
"I have never liked having a big chef star," says Jorge Ongaratto. "We are a big team star."
While the concept’s creators work hard to maintain Southern Brazilian and gaucho traditions, they also work to adapt each restaurant to its individual city. The partners spend weeks researching possible future sites for Fogo de Chao, always trying to adapt and create something original from the competition.
"I take a week to go to a city, research, listen to people, see what’s going on and then my partner does the same," says Jorge Ongaratto. "We then take our notes and discuss. We are always trying to adapt to the customer and we never try to do what the competition is doing. We are always trying to do things in a different way."
Different it is. Fogo de Chao operates under the concept of "espeto corrido," which means, "continuous service." There is no menu. Instead, diners pay a flat rate and, in turn, have access to a large, buffet-style salad bar with more than 30 items to choose from including hearts of palm and Prosciutto di Parma. At each place setting is a green and red-sided disk. When a customer flips the disk to the green side, gauchos dressed in baggy pantaloons, blue shirts and red scarves approach the table with meat. The gauchos also offer a variety of side dishes including fried yucca, garlic-mashed potatoes, fried bananas and cheese bread.
Lunch is $19.50, dinner, is $35.50, drinks, dessert, tax and gratuity not included, and check averages amount to about $60. Fogo de Chao definitely is not your father’s steakhouse. It’s quite upscale and customers, usually professionals and their families, often dine in large groups.
Jorge Ongaratto expects annual U.S. sales this year to be at least $25 million and is hoping for them to be as high as $35 million. In 2000, with just two units up and running, the concept hit $17 million in the U.S. alone. Fogo de Chao serves about 16,000 to 17,000 customers per month. Each U.S. restaurant seats about 300 people, and while the size of each U.S. unit is the same, Jorge Ongaratto expects the new Atlanta unit to do slightly better than Houston and Dallas this year.
The Houston unit cost $5 million to build, which included the purchase of the land on which the restaurant sits. In comparison, the Atlanta unit’s opening costs were only $2.5 million, simply because the partners do not own the property. Using what they learned in Atlanta, Jorge Ongaratto expects that future units can be up and running for less than $2 million in opening costs.
While the four partners have yet to franchise, they are currently conducting a test "inside franchise" at their Porto Alegre unit. The idea is for churrasqueiros to work for 10 years and then own a Fogo de Chao.
"After training three to four years and then working for 10, they begin to know our ideas and know what we think about the business," says Jorge Ongaratto. "And, they have the security of success."
With this team of franchisees, the brothers hope to expand and grow. On their radar screen are additional Texas markets, several California cities, and possibly Chicago and Washington, D.C. After five years, they hope to reach annual sales of $100 million, says Jorge Ongaratto.
"Believe me, in 10 years, this concept is going all over the world," he says. "We just need to take the right steps, like we are doing now. Once we have the team ready, we can grow a lot more."
But worldwide expansion does have its price, such as personal time with family.
"After 22 years I [finally] spent the last Mom’s Day with my Mom," says Jorge Ongaratto. "She was so happy. I didn’t go during Christmastime last year, so I went for Mom’s Day. That’s the only thing I miss so much–my family. We fight a lot, but we love each other a lot, too."
"Opening a restaurant is not easy like people think," says Jorge Ongaratto. "We’ve been working for more than 20 years to continually make it better."
Experience, authenticity and an intense training program will combine to make Fogo de Chao a broad success, the owners contend. "It’s big," says Jorge Ongaratto. "It’s one of the hottest concepts around."
