Brazil: dynamic growth of the domestic market and exports
by Redaktion (comments: 2)
The fact that the Brazilian organic market is developing well was very apparent at the second edition of the double trade fair Bio Brazil Fair/BioFach America Latina and at Natural Tech in São Paulo. The progress being made was also clearly to be seen when visiting various businesses. The pioneer firms in the organic sector have expanded their offer significantly, young firms are coming up with fresh ideas and cooperatives are bringing the great diversity of the country to the market. The availability of organic food and natural cosmetics has increased hugely and, because of interesting marketing models, more and more organic and natural products land in the shopping baskets of consumers. The prognosis: organic turnover in 2014 will rise by 35 % to the equivalent of US$900m (2 billion BRL). In our country special, we report in several articles on the Brazilian organic market.
Picture: Ambitious growth of the Brazilian market. For 10 days, Karin Heinze travelled round Brazil meeting producers, observing marketing models and visiting the trade fairFor a number of years, the organic market in Brazil has enjoyed high double-digit growth rates - from 15 % to over 20 %. According to data provided by the Brazilian Development Promotion Institute IPD and Organics Brazil, turnover in 2012 was around US$760m. After a very high uplift of 22 % last year, this year market experts are anticipating record growth of 35 %, which will increase sales to over US$900m (2bn BRL).
(Picture: MN Propolis is strongly export-oriented but is now beginning to expand its activities on the domestic market)
Up till now, 50 % - 60 % of its certified organic goods – predominantly basic products like sugar, coffee, soya, rice and fruit juices, mainly in bulk – have been exported. Now Brazilian manufacturers are putting on the market more finished products that are also in demand in other countries. In their effort to exploit export markets all over the world, they are supported by IPD/Organics Brazil and Apex-Brasil.
(Picture: Alberto Carlos Bicca from the Brazilian Trade and Investment Promotion Agency Apex-Brasil getting information from exhibitors)
Organics Brazil and the IPD initiative work closely with Apex Brasil the Brazilian Trade and Investment Promotion Agency, resulting in recent years in the emergence of a strong network in the organic sector. The success story of IPD/Organics Brazil and Apex-Brasil began in 2005 with 12 firms and turnover of US$9.5m. In 2012, 74 firms in the project achieved what at that time was their peak export sales of US$129.5m. In the meantime, they are exporting more and more processed goods alongside food products, natural cosmetics and natural textiles.
(Picture: Ikove manager Fabio Magnani is delighted to see Brazilian natural cosmetics being well received abroad)
With his team, the project manager and coordinator of Organics Brazil and IPD, Ming Liu, aims to raise the number of firms to 100 and to increase turnover to US$150m by 2016. “The organic companies are developing more and more interesting and high-value products that are in demand in the flourishing markets in the USA and Europe. We help to find the appropriate sales channels,” Liu explains. The success of IPD/Organics Brazil is down to more than ten years of experience, sound knowledge of the market, innumerable contacts and a committed team. Brazil imports organic goods from the USA and Europe to the value of around €25m. (Picture: The stand of Organics Brazil was a meeting point and a place where firms could seek advice)
Exporting is still the most important arm of the organic industry in Brazil, but demand in the country itself is growing dynamically. We see the evidence in the figures of the big chains. The conventional retail trade accounts for two-thirds of sales. Pão de Açúcar (Casino Group), with nearly 1,500 stores and turnover of ca. US$19bn (2012), is number one in the retail food trade in Brazil and, with its extensive organic range of about 850 products (own brand Taeq and branded goods), is the leader in organic marketing. The growth rate of organic turnover in recent years has been an annual 30 % - 40 %, and the value of current sales is in excess of US$75m, according to Sandra Caires (Picture on right), who is responsible for this aspect of the business. At the Bio Brazil Fair/BioFach America Latina, the company presented itself in the form of a store.
(Picture on left: Tastings and discussions on the stand of Brazil’s major organic retailer Pão de Açúcar)
The 90 organic exhibitors declared themselves satisfied with the fair. During the four days, more than 15,000 visitors came into the exhibition hall in Ibirapuera Park, and on the last day Bio Brazil Fair/BioFach America Latina and also Natural Tech with 130 exhibitors (dietetic, vegetarian food, food supplements and natural products) were open to end consumers. The trade fair was a home game: there were hardly any international exhibitors or visitors from abroad. However, the Brazilian market is big and demand is rising – so there’s enough to do on the domestic market. The exhibitors took the opportunity to present their innovations. For example, the traditional companies Native and Korin exhibited their extensive organic product ranges, that today go well beyond their main products, namely sugar (Native) and poultry and eggs (Korin). Native is the biggest company in Brazil’s organic sector.
(Pictures from left: Native, Korin and Blessing are some of the important organic manufacturers in Brazil)
La Finestra sul Cielo Brasil, a subsidiary of the Italian-Spanish wholesaler, presented pasta and rice and quinoa drinks. Emporium Vida now offers frozen products alongside its wide range of fresh bread and bakery goods. Fazenda Solarius has extended its selection of Mediterranean pestos, antipasti and conserves, and on the Organic Brazil stand Miolo Real introduced four kinds of palm hearts in jars. The firm Blessing offers a big range of exotic fruit spreads, tomato products and dried blueberries cultivated in Brazil. In general, the trend is similar to what we see on the European market: convenience products, ready meals, vegetarian and gluten-free and lactose-free products.
(Pictures from left: Yuri Bringel de Oliveira, Emporium Vida; Jordi Vila, La Finestra sul Cielo Brasil and Gustavo Domingues, the founder of Fazenda Solarius)
Natural and organic cosmetics were well represented at the fair: the two Brazilian firms Surya and Ikove were there with their big stands. There was a lot of activity on the stand of the Brazilian branch of the German natural cosmetics firm Alva: the very committed young ‘Diretora’ Ananda Boschilia e Santos was involved in a lot of discussions, and three tables were given over to applying make-up products. According to Ananda, this German brand is in great demand in Brazil. Similarly, Sebastian Schlossarek and his business partner have established the Herbia brand in Brazil. The natural cosmetics range and ethereal oils are sold in selected stores and via their own online shop. At the same time, the firm operates as the importer and distributor of the British brand Natracare and the German Wiona bio-diapers. With 12 shops the Brazilian firm Cativa Natureza is well-established. At the fair many interested visitors informed themselves at the stand.
(Pictures from left: The stand of Cativa Natureza, Sebastian Schlossarek, Herbia, and Ananda Boschilia, Alva Brazil)
Small family firms and small-farmer cooperatives have a special status in Brazil.
They receive state support: a number of cooperatives exhibited on a joint stand of the Ministry for Rural Development, and 18 family businesses were located in the pavilion of SEBRAE. SEBRAE is a non-profit organization that, in all of Brazil’s federal states, offers training and advanced training courses specifically for small businesses. It also issues loans and organizes and finances the attendance of firms at trade fairs. Some of these small businesses are already successfully engaged in exporting – for example, Ecocitrus sends citrus oils to France and orange and mandarin juice to Voelkel in Germany (pictures below). With the help of MDA, SEBRAE and Organics Brazil, other small firms are preparing to export their products. (Picture: The Demeter farm Terra Nova preparing to become an exporter)
(Pictures from left: Mate and quia, coffee, jams, guaraná and fruit juices are typical products of small businesses)
The International Forum of Sustainable and Organic Agriculture brought together some of the main leaders of the sector in Brazil – representatives of the Ministry of Agriculture and Social Development, Agricultural and Environment Departments of the State of São Paulo, Sebrae, Itaipu Binacional, IBD – and from all over the world: the speakers included IFOAM President André Leu and Denise Godinho (IFOAM), Matthew Holmes from the Canadian organic trade organization COTA, Julie Tyrell from the international natural and organic cosmetic association Natrue, Toshifumi Ayukawa, the representative of NürnbergMesse in Japan and Cauê Suplicy from Brazil, who talked about the success of his company, Wholesome Valley Foods, in the United States.
(Picture: Andre Leu and Denise Godinho from IFOAM International)
More information Organics Brazil
Bio Brazil Fair/BioFach America Latina