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Brazil’s Food and Beverage Market. May 2012 osec.ch


Brazil’s Food and Beverage Market.

2

Title.

Brazil’s Food and Beverage Market

Language.

English

Number of pages.

77 pages

Author.

Camila Jerger

| Brazilian Food and Beverage Market Report 2012


Table of Contents. 1.

Foreword. ..................................................4

2.

Brazil: Profile and Economy. .....................5

6.3 6.4 6.5

Retailers. .............................................................. 39 Specialty / Gourmet Stores. .................................. 42 Pricing................................................................... 43

3.

Consumer Trends. ....................................7

7.

Opportunities and Challenges. .............. 44

4.

Regulatory Environment. ........................ 11

7.1 7.2

Opportunities. ....................................................... 44 Challenges. ........................................................... 45

4.1

8.

Export Check List. .................................. 47

4.3 4.4

Authorities Involved in Food Industry Regulations. .......................................................... 11 Regulations Concerning the Food and Beverage Industry. ................................................................ 12 Import Procedures. ............................................... 17 Tariffs. ................................................................... 18

5.

Food Industry. .........................................19

5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8

Food and Beverage Industry. ................................ 19 Organic and Natural Food. .................................... 20 Functional Food. ................................................... 22 Processed Food. ................................................... 24 Beverages. ............................................................ 28 Private Labels. ...................................................... 30 Foodservice / HoReCa. ......................................... 33 Industry Trends. .................................................... 35

8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8

Readiness to export. ............................................. 47 Market Research. ................................................ 48 Trade fairs............................................................. 49 Regulatory – Your Product in Brazil. ..................... 50 Finding a Distributor / Importer. ............................. 51 Regulatory: Adapting to the Local Legislation. ...... 53 Logistics and Imports. ........................................... 54 Product Launch. .................................................... 54

9.

Appendix. ............................................... 57

9.1 9.2 9.3 9.4 9.5

Trade Shows. ........................................................ 57 Trade Associations ................................................ 59 Publications .......................................................... 61 List of Abbreviations .............................................. 62 Import Duties ........................................................ 63

6.

Food Distribution.....................................38

6.1 6.2

Route to Market. ................................................... 38 Importers and Distributors. .................................... 38

10.

Trade statistics 2011. ............................. 71

4.2


5. Food Industry. 5.1 Food and Beverage Industry.

Figure 9: Brazilian imports growth by HS Chapter HS Chapter/ Description

The food and beverage industry is one of the key segments of the Brazilian economy, being the leader in gross value, exceeding all other industry segments and accounting for more than 18% of national production, according to the Brazilian Institute of Geography and Statistics (IBGE). The food and beverage industry is also the biggest employer of Brazil, accounting for approximately 20% of the total jobs. While 75% of all foods produced in Brazil are for domestic consumption, Brazil is also a relevant exporter. Its food trade volume reached US$ 10 billion in 2011, with a heavy surplus: US$ 8.8 billion in exports (main products are sugar, meats, juices and vegetable oils) and US$ 1.2 billion in imports (wheat and milk are the main imported items). When analyzing the period from 2007 till 2011, Brazilian imports on foods and beverages have grown 102% in value and 8% in volume.

Figure 8: Brazilian food and beverage imports

14'000'000 12'000'000 10'000'000 8'000'000

Value US$ million

6'000'000

Volume (kg)

4'000'000 2'000'000 0 2007 2008 2009 2010 2011

Growth (value) 2007-11

Growth (volume) 2007-11

02. Meat

147%

28%

03. Fish and Crustaceans

119%

61%

04. Dairy produce, eggs, honey

261%

159%

07. Edible vegetables and roots

143%

50%

08. Edible fruits and nuts

130%

75%

09. Coffee, tea, mate and spices

146%

-5%

10. Cereals

30%

-16%

11. Products of the milling industry, malt, starches, inulin, gluten

79%

11%

12. Oil seeds, grains

64%

-27%

13. Lac, gums, resins

56%

7%

15. Animal or vegetable fats and oils

128%

66%

16. Preparations of meat

229%

124%

17. Sugar and sugar confectionary

96%

70%

18. Cocoa and cocoa preparations

22%

-45%

19. Preparations of cereals, flour, starch or milk, pastrycooks’ products

181%

91%

20. Preparations of vegetables, fruits, nuts

107%

91%

21. Miscellaneous edible preparations

106%

56%

22. Beverages, spirits and vinegar

374%

860%

Source: Adapted from Aliceweb, aliceweb.mdic.gov.br

Taking into account Brazil’s continental dimensions, it is not uncommon that large food producers set up distribution centers and plants in different states, taking advantage of tax benefits, proximity to customers, possibility of producing regional products, etc.

Source: Adapted from Aliceweb, aliceweb.mdic.gov.br

The largest growth in imports in the period 2007-2011 was seen in the beverage sector (Chapter 22 of the Harmonized System), accounting with 374% in value terms and 860% in volume terms. Processed foods, mainly from HS Chapters 16 to 21 have also shown steady growth in the 5-year period, as seen on Figure 9.

Climate also affects the food and beverage industry to a large extent. The North and Northeast are close to the Equator and have high temperatures all year round, forcing producers to use refrigerated transportation and adapt their products to the local climate conditions.

Brazilian Food and Beverage Market Report 2012 |

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8. Export Check List. The success of your business in Brazil depends on a series of actions and it is vital that your company does not skip essential steps. Taking a step-by-step approach, as enshrined in Osec’s methodology, will save time, resources and will avoid problems with Brazili-

an authorities and will allow your company to select the right products and strategy for Brazil. Based on our experience in assisting Swiss companies exporting to Brazil, here are some key aspects your company should consider when starting business with this country.

8.1 Readiness to export. Is your company already exporting to other countries?

Brazil is not an easy market, so if your company does not have experience in exporting, it is highly recommended to focus first on nearby countries with similar regulations.

Is your company willing to invest in product launch, traveling, trade fairs, adaptation of labels and marketing materials, registration process, market research and to find the ideal partner?

There are ways to save costs on your internationalization process, but your company will still need to invest in this new market. Using specialists from Brazil (who can assist you from there, avoiding trips) and sharing costs with your Brazilian partner are some of the ways to spend less on the initial costs.

Will your company focus on a small number of countries?

Exporting to a new country is always a challenge, so it is recommended that your company focus on one or only a few countries at a time.

Is your company willing and able to make product adaptations if the local market and / or legislation requires so?

When learning more about the local market and regulatory aspects you might find out that some product or package adaptations might be necessary.

Do you have a strategy for export to Brazil?

During the course of the project, your strategy may change, according to the market research findings, for example. It is key, though, that you have in mind a few initial aspects: - which products you want to focus on - what is your investment budget on this new market - what kind of information you still need before you can take decisions - what is the ideal partner profile

Are you using Osec’s network in order to take the most of it in your new markets?

Osec and the Swiss Business Hubs with their network of experts can assist you in exporting to Brazil and other countries with a wide range of services that will fit exactly your needs.

Brazilian Food and Beverage Market Report 2012 |

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Market Report Brazil Food and Beverage