The Northeast of Brazil

An Expert's View about Food , Beverages and Tobacco in Brazil

Posted on: 30 Jul 2012

The Northeast (NE) of Brazil encompasses the states of Bahia, Pernambuco, Ceara, Maranhao, Paraiba, Rio Grande do Norte, Alagoas, Piaui and Sergipe.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary - Public Date: 7/10/2012 GAIN Report Number: BR12010 Brazil Post: Sao Paulo ATO The Northeast of Brazil Report Categories: Market Development Reports Approved By: Robert Hoff, Agricultural Counselor Prepared By: Fred Giles and Fabiana Fonseca Report Highlights: The Northeast (NE) region of Brazil has a population of over 53 million people. Aggregate and per capita income growth have been on the rise, growing significantly faster than the national averages. The growth trend of consumer goods sales reflects the overall rapid GDP expansion and has attracted the attention of major Brazilian and foreign conglomerates to the region. Various multinational companies have built manufacturing facilities in the NE to meet the booming demand and to benefit from the wave of prosperity. General Information: The Northeast (NE) of Brazil encompasses the states of Bahia, Pernambuco, Ceara, Maranhao, Paraiba, Rio Grande do Norte, Alagoas, Piaui and Sergipe. It has long been considered one of the most impoverished regions of Brazil and a drain on government resources. Over the last decade and especially in the last four years, however, this strategically located area has been growing at a rapid pace. This growth has been fueled by public and private sector investments, increases in the minimum wage, the implementation of highly successful conditional cash transfer and housing programs, and booming consumption. Improvements in purchasing power and infrastructure together with strong and diversifying consumption trends make the NE a natural market for U.S. consumer-ready food products. With a population of over 53 million people, if the NE were a country, it would be the third biggest country in Latin America, behind Brazil and Mexico. The largest cities in the NE are Salvador, capital of Bahia (2.68 million people, 19 percent of Bahia state); Recife, capital of Pernambuco (2.45 million people, 29 percent of Pernambuco state); and, Fortaleza, capital of Ceara (1.54 million people, 17 percent of Ceara state). Bahia, Pernambuco, and Ceara account for 60 percent of the population of the NE and 50 percent of the total consumption. The capitals of these three states make up 12.5 percent of the NE population and are region’s primary consumption centers. Historically, the NE region has been known for its pleasant weather, stunning beaches, and cultural attractions, which have supported tourism, in the main, from Europe and Brazil’s Center-South. Although tourism continues to grow rapidly and the NE is also attracting visitors from the U.S., South American countries (e.g., Argentina and Chile) and Asia, other developments are changing the way the NE is seen by Brazilian companies and foreign investors. Aggregate and per capita income growth in the NE have been on the upswing, growing significantly faster than the national average. While the Brazilian gross domestic product (GDP) increased 180 percent from 2002 to 2011, the NE GDP growth grew at 192 percent. Per capita income growth in the region has also surpassed the national rate. Brazil’s per capita income increased 152 percent from 2002 to 2011, while the growth rate in the NE reached 165 percent. NORTHEAST OF BRAZIL 2011 POPULATION GDP % A % PER CAPIT (US$ INCOME Billion) BRAZIL 192,379,287 100.00 2,071.51 100.00 10,768 Northeast 53,501,859 27.81 279.91 13.51 5,232 Bahia 14,097,534 7.33 87.655 4.23 6,218 Pernambuco 8,864,906 4.61 50.155 2.42 5,658 Ceara 8,530,155 4.43 42.015 2.03 4,926 Maranhao 6,645,761 3.45 25.485 1.23 3,835 Paraiba 3,791,315 1.97 18.365 0.89 4,844 Rio Grande do 3,198,657 1.66 17.845 0.86 Norte 5,579 Alagoas 3,143,384 1.63 13.58 0.66 4,320 Piaui 3,140,328 1.63 12.17 0.59 3,876 Sergipe 2,089,819 1.09 25.28 0.61 6,049 Source: Brazilian Institute of Geography and Statistics (IBGE) Note: Estimated numbers Exchange rate US$=R$2.00 The NE has rapidly emerged as one of the most prominent markets in Brazil. In fewer than 10 years, the regional profile has changed and the NE has become a major focus of the Brazilian government’s (GOB) attention. Despite its lower per capita income compared to the relatively prosperous Center-South, whose major cities are Sao Paulo and Rio de Janeiro, the NE has an increasing number of individuals living at or above the monthly minimum wage. Reduced interest rates, low and controlled inflation, real wage gains, steady economic growth, and inclusive social programs markedly contributed to this scenario. Within Brazil, the NE has become a magnet for investment, receiving capital from a wide variety of industries. The GOB is also investing billions of dollars to upgrade existing and create new port and transportation infrastructure. A large percentage of the GOB’s Growth Acceleration Program (PAC) has been focused on the NE. These public sector investments, which run into the billions of dollars include the modernization of ports, airports and railroads. Brazil will host the World Cup in 2014 and the Olympic Games in 2016, demanding massive investments in areas of energy, telecommunications and transport infrastructure. Some of these investments are being made in the NE, and they will also contribute to continued growth. In response to these emerging opportunities, there has been a migration of professionals from the Center-South to the NE bolstering human capital, and increased investments in higher education and vocational training programs. These trends have undergirded the regional economic boom and augur well for continued rapid growth. BRAZILIAN CONSUMPTION EXPENDITURES BY REGION – ESTIMATES FOR 2012 HOW MUCH BRAZILIAN FAMILIES SPEND PER MONTH: BRAZIL US$ 1,004 1 North US$ 850 2 Northeast US$ 1,294 3 Center-West US$ 1,568 4 Southeast US$ 1,515 5 South US$ 1,004 Source: Brazilian Institute of Geography and Statistics (IBGE) Exchange rate US$=R$2.00 GROWTH RATE OF CONSUMPTION EXPENDITURES ESTIMATED FOR 2012: BRAZIL 13.5% 1 North 26.5% 2 Northeast 24.1% 3 Center-West 19.4% 4 Southeast 6.5% 5 South 19.7% Source: Ibope Inteligencia The growth trend of consumer goods sales in the NE reflects the overall rapid GDP expansion and has riveted the attention of major Brazilian and foreign conglomerates. Multinationals such as Kraft Foods, Bunge, Nestle, and AMBEV, have built plants in the NE to meet the booming demand and to benefit from the wave of relative prosperity. As a case in point, Kraft recently installed its third biggest plant in the world in Vitoria de Santo Antao, located about an hour from Recife. By 2013, the total investment in this plant which makes cookies, crackers, and candies for distribution to the NE and the North will total close to US$180 million. In the NE, where recent socio-economic changes have been more pronounced than other parts of Brazil, millions of new consumers are entering the market while the explosive growth of lower-middle income consumers shapes a new consumption driven culture, still in its infancy. There is a general sense that its rich cousins in the Center-South are finally waking up to the NE’s vast potential and that everything in the NE is “up for grabs”. Despite their major contribution to total consumption, lower-middle income consumers are extremely sensitive to prices. This target group spends nearly 50 percent of its income on food. National and global companies are adapting to meet the needs. Many manufacturers have developed reduced-sized packages to allow for lower pricing. To fit the consumption profile, products are also branded under names that make sense to the region. According to regional retailers, the portfolio of food products available at supermarkets has changed considerably. Five years ago, low-end consumers did not buy branded products; subsistence consumption was still the norm. In the current environment, poor quality and cheap items have practically disappeared from supermarket shelves as diets have improved and diversified. Consumers have traded up. In contrast to the low-end consumers and adding to the dynamic of higher demand, more affluent consumers are beginning to mimic consumption patterns of well-off, more sophisticated consumers in the Center-South. To indulge themselves or to secure luxury items, these high-end consumers are constantly travelling, since these goods are typically scarce in the NE. As a consequence, they are in tune with trends in developed markets and desire to engage in high-end consumption as part of their daily routine. Since the major market for high-end goods is concentrated in the Center-South of Brazil, companies from the NE have historically sourced products from Sao Paulo, which are then shipped to major Northeast markets such as Salvador, Recife and Fortaleza, distances of over 1,500 miles. With the number of individuals moving up the pyramid, however, local importers and retailers have begun to redesign marketing strategies with product availability and distribution as their main focus. The upgrading of regional ports and transportation infrastructure, together with this increase in demand, have allowed exporters to ship these products directly to the NE, thus lowering costs and better serving this emerging market. DISTRIBUTION OF BRAZILIAN POPULATION BY SOCIAL CLASS (%) SOCIAL CLASS A B C D E Family Monthly Income Above 3,373 - 2,587 - 600 - Up to (US$) 3,373 2,587 600 376 376 Source: Brazilian Institute of Geography and Statistics (IBGE) Exchange rate US$=R$2.00 Geographically, the Northeast is in an advantageous position to increase trade with the United States and Europe with major NE ports closer to Florida than to Santos, the port of Sao Paulo. As the market grows, shipments of imported goods which are trucked up from the Center-South are diminishing. With consistently high volumes, shipping products directly from the United States and Europe to the NE will be more profitable by eliminating costs associated with goods received in and transported from the Center-South. According to NE distributors, freight costs, mark-ups and interstate taxes increase the price of products coming from Sao Paulo by 20 to 45 percent. The states of Recife, Salvador and Fortaleza are heavily investing in port infrastructure. Ports and airports have been modernized and continue to benefit from on-going investments. The leading port in Recife, Suape, is able to service large container vessels (15.5m) arriving in Brazil and has the most modern equipment to load and unload containers in the country. It has been evaluated as the best public port in Brazil. The ports of Mucuripe and Pecem in the state of Ceara have also been modernized, which has greatly facilitated trade. Some food distributors from Recife, Salvador and Fortaleza are already clearing goods in the ports of their respective cities. NE food importers usually hail from European families. In part, this explains the limited selection found in NE supermarkets: wine, pasta, olive oil, sauces, dried fruits, etc. While exporters are beginning dedicate more effort to understanding better the consumer profile in the NE, distributors of luxury goods, a segment that includes imported food products, have observed that overall, wealthy consumers in Brazil have similar tastes and preferences. For example, these consumers value appearances and are motivated to buy products that make them feel that they belong to a select group. Importers are aware that consumers are motivated to purchase due to factors such as the prestige inherent in the brand and have taken advantage of phenomenon to expand, for example, sales of upscale whiskeys and wines. In the NE, this mentality is even stronger. In fact, to diminish promotional expenditures on imported food products, importers are constantly looking for top selling brands in their country of origin. For example, a jar of a popular brand of U.S. peanut butter typically sells for US$2-3 in a U.S. retail outlet. In Sao Paulo, the cost of the same peanut butter jar is US$8-9, and in Recife it reaches US$12. Clearly, there are consumers in the NE who are willing to pay stratospheric prices for goods they recognize as valuable. Although some food products are not viewed as particularly prestigious in their country of origin, because they are imported, branded, and expensive, they are commonly positioned as a premium products in Brazil, and therefore perceived as a luxury items. However, distributors are well aware they need to build a consistent base of consumers and must increase profitability via the sales of larger volumes, a trend which is clearly taking hold in the NE. According to “Tendencias Consultoria”, a leading consulting firm specialized in economic matters, the average growth of retail sales in the NE is expected to continue at 7 percent from 2012 to 2016, while the national average for this same period is projected at 6.1 percent. Sales in the NE for the Pao de Acucar Group, the largest retail chain in Brazil, account for 11 percent of their total sales. In the short run, the group expects these sales to increase to 15 percent. In the interim, all large retailers are aggressively competing for market share. Pao de Acucar, Carrefour, and Wal-Mart are the principal competitors and recently the Chilean group Cencosud entered the fray, acquiring the regional supermarket chains Perini, GBarbosa, Super Familia, Mercantil and Cardoso. Regardless of the store profile, a common goal enunciated by the main players is to increase the share of imported foods in the food product portfolio. Distributors are also playing an important role, especially with regard to products which demand a well functioning cold chain. They serve not only larger retailers but traditional supermarket chains, hotels and restaurants. Specialty stores are also gaining space, while wine and whiskey stores are in early stages of development. Food retailers and distributors in the NE constantly look to the Sao Paulo market to identify trends. They are less aggressive in terms of introducing new-to-market products and are less inclined to look for foreign buyers. They expect buyers to come to them. To that end, PRO- CHILE, the export arm of the Chilean government, has a busy office in Salvador, Bahia, and other countries have already taken notice. The boom in the NE presents real opportunities for U.S. exporters given the cultural affinity between the U.S. and Brazil as well as the strategic location of the NE, which can be accessed from major U.S. ports. Executives from different industry segments are very optimistic about the future growth of the regional economy. To capitalize on the opportunities in this fast-growing market, U.S. companies will need to dedicate time not only to understanding consumption differences but also learning the prevailing business etiquette. The major market targets are Salvador, Recife, and Fortaleza, although there is also significant opportunity in other major NE cities, especially the capitals. BEST PROSPECTS ATO/Sao Paulo has identified the following categories of products as best prospects for U.S. companies looking to enter the Brazilian market: dairy and cheese; alcoholic beverages (whiskey and wine); confectionery products; bakery items; and sauces, dressings and condiments. DAIRY AND CHEESE The Brazilian dairy market increased 85 percent from 2006 to 2011, an average growth of 13 percent per year, reaching US$25.5 billion in 2011. The dairy market is divided into four categories: cheese, drinking milk products, yogurt and sour milk drinks and other dairy. Soft cheese had a strong growth of 107 percent from 2006 to 2011, due to the healthy image of its products such as white cheese (called “queijo fresco” in Brazil) and ricotta. Fine cheeses such as Emmental, Gruyère, Gorgonzola, Brie and Camembert are still niche products in Brazil due to their high unit prices; key consumers of these varieties are mainly from the upper-income socioeconomic strata. The overall performance of packaged hard cheese will continue to be driven by sales of mussarela and queijo prato. Packaged hard cheese performed the fastest current value growth of 127 percent from 2006 to 2011. Such products are commonly used in Brazilian cooking or to prepare snacks in which the most popular sorts of cheese are mozzarella and queijo prato. Spreadable processed cheese is a popular type of cheese consumed in Brazil, accounting for 20 percent of total sales in 2011, in which requeijão (a more liquid cheese spread specific to Brazil) represents the bulk of sales. In general, such products are very popular due to the tradition amongst Brazilians of eating requeijão with French bread for breakfast or brunch. Drinkable yogurt versions performed more strongly than spoonable yogurt from 2006 to 2011, particularly thanks to the growing demand for functional yogurt. For instance, Danone’s Activia, which promises 100 percent effectiveness against slow intestine transit with regular consumption of Activia, increased 252 percent in value sales between 2006 and 2011. Fruited yogurt flavors remain the most popular for Brazilians, amongst which strawberry, plum and mixed fruits were the top flavors in 2011. Brazilian Market Size - Dairy (US$ Million) Categories 2006 2007 2008 2009 2010 2011 Dairy 13,773 16,254 18,945 19,275 21,829 25,480 Cheese 3,199 3,923 4,543 4,827 5,619 6,613 Processed Cheese 718 858 943 948 1,087 1,269 Spreadable Processed Cheese 658 787 859 861 991 1,160 Unspreadable Processed Cheese 60 72 83.5 87 96 109 Unprocessed Cheese 2,480 3,064 3,600 3,879 4,533 5,345 Hard Cheese 1,286 1,599 1,942 2,087 2,433 2,869 Soft Cheese 1,195 1,466 1,659 1,792 2,100 2,477 Spreadable Unprocessed Cheese - - - - - - Drinking Milk Products 7,097 8,317 9,746 9,276 10,406 12,063 Flavored Milk Drinks 603 715 864 878 1,064 1,330 Flavored Powder Milk Drinks 802 840 924 995 1,093 1,180 Milk 4,119 4,718 5,513 5,004 5,495 6,369 Powder Milk 1,283 1,682 1,984 1,872 2,117 2,417 Soy Beverages 291.5 364.5 462.5 529 638 768 Yogurt and Sour Milk Drinks 2,067 2,491 2,953 3,391 3,810 4,545 Sour Milk Drinks - - - - - - Yogurt 2,067 2,491 2,953 3,391 3,810 4,545 Drinking Yogurt 1,002 1,214 1,446 1,650 1,874 2,277 Spoonable Yogurt 1,065 1,277 1,507 1,741 1,936 2,268 Other Dairy 1,411 1,524 1,704 1,782 1,994 2,260 Chilled and Shelf Stable Desserts 172 185 193 194 205.5 222 Chilled Snacks - - - - - - Coffee Whiteners - - - - - - Condensed/Evaporated Milk 547 584 697 703 786 883 Cream 435 462.5 491.5 541 601 683 Fromage Frais and Quark 258 292.5 322 343.5 402 472 Source: Euromonitor Exchange rate US$=R$2.00 ALCOHOLIC DRINKS The Brazilian alcoholic drinks market showed a positive performance in 2011. The whiskies category outperformed in 2011 with growth of 7 percent and 20 percent in total volume and current value terms, respectively. The food service channel – mainly bars and restaurants – is the main distribution channel for spirits. Alcoholic drinks imports increased 31 percent in 2011 compared to 2010 and 66 percent compared to 2009, an average growth of 29 percent per year, reaching US$152 million in 2011. In general, vodka, gin and other blended Scotch whiskies are changing consumption among super-premium, premium, standard and economy price brands in the latest years due to Brazilian increased consumer power. Brazilian Imports - Alcoholic Drinks (US$) Categories 2009 2010 2011 2012 1/ Alcoholic Drinks 91,787,653 115,825,219 152,383,598 44,491,325 Spirits obtained by distilling grape wine or grape marc 565,795 716,488 1,269,108 195,974 Whiskies 73,426,825 92,558,307 115,563,695 33,009,968 Rum and tafia 166,576 178,602 275,084 128,447 Gin and geneva 192,609 271,642 256,963 99,903 Vodka 9,089,805 10,936,243 17,481,496 5,589,606 Liqueurs 3,951,194 4,989,934 7,102,320 2,301,651 Other alcohol drinks 4,394,849 6,174,003 10,434,932 3,165,776 Wine & Beer 209,480,776 270,210,609 335,341,085 96,224,353 Beer made from malt 13,378,504 18,641,042 40,620,100 22,771,288 Wine of fresh grapes, "champagne" type and sparkling 19,473,089 27,961,112 32,605,594 9,800,875 Other wine, grape must, fermented to added alcohol 176,572,723 223,564,239 262,057,103 63,622,726 Oth.vermouth and other wine of fresh grapes, flavoured or not 56,460 44,216 58,288 29,464 Total 301,268,429 386,035,828 487,724,683 140,715,678 Source: SECEX – Foreign Trade Secretariat 1/ January - April CONFECTIONERY The confectionery market in Brazil increased 74 percent from 2006 to 2011, an average growth of 11.6 percent per year, reaching US$10.5 billion in 2011. The Confectionery market is divided in chocolate confectionery, gum and sugar confectionery. The category chocolate confectionery doubled its size from 2006 to 2011, led by tablets (109 percent growth during the same period), and followed by boxed assortments with a 108 percent growth. Despite the positive socioeconomic indicators that have helped to push the sales in several industries in Brazil, the impact that the global economic slowdown will have over domestic demand remains uncertain, in particular for chocolate confectionery. Manufacturers continue to make investments in new product developments and new packaging as they are optimistic that Brazil will continue to perform well compared to US and European economies. Middle- and low-income consumers are still expected to be the key to chocolate confectionery’s continued growth. Multinational manufacturers continue to dominate sales of chocolate confectionery. The top five companies, comprising Kraft Foods Brasil, Chocolates Garoto, Nestlé Brasil, Arcor do Brasil Ltda and Hershey do Brasil Ltda, held 83 percent of the market in 2010. The gum category, despite its small size, saw an increase of 58 percent from 2006 to 2011, with an annual average growth of 9 percent. The functional and sugar free gum categories are expected to show the biggest increases in volume and value terms. In an attempt to constantly introduce new items to consumers, manufacturers continue to introduce different flavors such as watermelon, red fruits and green apple. But the most popular flavors continue to be tutti frutti, mint, fruit, strawberry, citrus and grape jelly. Brazilian Market Size - Confectionery ( US$ million) Categories 2006 2007 2008 2009 2010 2011 Confectionery 6,069 6,601 7,479 8,176 9,341 10,548 Chocolate Confectionery 2,375 2,821 3,224 3,633 4,150 4,748 Bagged Selflines/Softlines 62 70 78 98 114 133 Boxed Assortments 754 970 1,083 1,072 1,323 1,570 Chocolate with Toys 161 186 221 277 306 359 Countlines 328 398 456 496 426 455 Seasonal Chocolate 436 467 516 623 684 802 Tablets 557 646 756 862 1,062 1,167 Other Chocolate Confectionery 77 83 115 206 236 262 Gum 1,178 1,149 1,396 1,536 1,676 1,862 Bubble Gum 380 348 416 416 430 471 Chewing Gum 798 801 980 1,121 1,246 1,392 Sugar Confectionery 2,516 2,632 2,859 3,007 3,515 3,938 Boiled Sweets 351 402 444 436 507 555 Liquorice - - - - - - Lollipops 593 555 586 578 669 751 Medicated Confectionery 456 486 514 535 563 593 Mints 385 430 510 524 596 692 Pastilles, Gums, Jellies and Chews 489 519 532 668 832 930 Toffees, Caramels and Nougat 181 172 214 192 263 321 Other Sugar Confectionery 62 68 60 73 85 96 Source: Euromonitor Exchange rate US$=R$2.00 BAKERY The bakery market in Brazil increased 35 percent from 2006 to 2011, an annual average growth of 6 percent, reaching US$28.5 billion in 2011. The bakery market is divided into baked goods, biscuits, and breakfast cereals. Unpackaged/artisanal bread which is included in the baked goods category represented 62.6 percent of the total market. Other items that had positive growth results from 2006 to 2011 include: packaged/industrial bread (80 percent), cakes (69 percent), cookies (190 percent) and filled biscuits (48 percent). In Brazil it is common for consumers to go to bakery stores and purchase fresh French-style bread for breakfast or afternoon breaks. This cultural habit has slowly been changed as a growing number of consumers have developed the preference for convenience products such as packaged/industrial baked goods. As a result, an increasing demand for packaged/industrial baked goods has been clearly noticed in urban areas, where people have less time to spend on cooking or shopping. As reported by Euromonitor, white packaged/industrial bread has been losing sales to multigrain, mixed wheat and wholemeal bread, which are perceived as healthier as they are higher in fiber and rich in vitamins. Brazilian Market Size - Bakery ( US$ Million) Categories 2006 2007 2008 2009 2010 2011 Bakery 21,142 21,877 23,486 24,962 26,413 28,538 Baked Goods 16,319 16,897 18,168 19,247 20,319 21,995 Bread 14,792 15,262 16,431 17,285 18,083 19,514 Bread Substitutes 103.5 110 120.5 127.5 130 142.5 Packaged/Industrial Bread 832 905 1,010 1,120 1,286 1,499 Unpackaged/Artisanal Bread 13,857 14,247 15,300 16,038 16,668 17,873 Cakes 1,244 1,345 1,431 1,635 1,884 2,100 Pastries 283 291 307 328 352 381 Biscuits 4,484 4,603 4,914 5,271 5,623 6,032 Savoury Biscuits and Crackers 1,085 1,092 1,239 1,353 1,422 1,564 Sweet Biscuits 3,399 3,511 3,675 3,918 4,201 4,469 Chocolate Coated Biscuits 62 62 64.5 67 75.5 73.5 Cookies 61 68.5 85 109 155 176.5 Filled Biscuits 527 534 584 658 738 781 Plain Biscuits 1,468 1,565 1,559 1,606 1,677 1,787 Sandwich Biscuits 1,281 1,281 1,384 1,479 1,556 1,652 Breakfast Cereals 339.5 376.5 404 444 472.5 512 Hot Cereals 95.5 99 113 123.5 132.5 135.5 RTE Cereals 244.5 277.5 291 320.5 339.5 376 Source: Euromonitor Exchange rate US$=R$2.00 SAUCES, DRESSINGS and CONDIMENTS The sauces, dressing & condiments market in Brazil is estimated at US$ 4.4 billion in 2011, a 55 percent increase from 2006, and an average annual growth of 9 percent. The market is divided into cooking sauces, dips, pickled products, table sauces, tomato pastes and purées and other sauces, dressings and condiments. The category cooking sauce attained significant results, with an 85 percent growth rate during the aforementioned period, led by pasta sauces with 134 percent growth. The sauces, dressings and condiments category is relatively fragmented with the top three players – Cargill Agrícola, Unilever Bestfoods Brasil and Ajinomoto Interamericana – holding a combined share of 35 percent in 2010. The mayonnaise category accounts for the bulk of sales within table sauces, with a 41 percent share in 2011. The product is part of 88 percent of Brazilian households, and key consumers are mainly lower and middle-income groups. In order to encourage consumption, Unilever Bestfoods Brasil created an advertising campaign stating that one spoonful of mayonnaise does not contain a high number of calories. Other market strategies adapted by Cargill and Bunge include low-fat mayonnaise and low-price products. Many manufacturers within sauces, dressings and condiments have been investing in pouches. It is very common to see pouch packaging in categories such as pasta sauces, mayonnaise and tomato pastes and purées. According to trade specialists, this packaging type offers storage advantages, lower costs in terms of transportation and lower risk of breakages, while offering maximum visibility supermarket shelf. Brazilian Market Size - Sauces, Dressings and Condiments ( US$ Million) Categories 2006 2007 2008 2009 2010 2011 Sauces, Dressings and Condiments 2,837 3,105 3,466 3,668 4,102 4,399 Cooking Sauces 970 1,104 1,266 1,369 1,599 1,792 Bouillon/Stock Cubes 374 432 436 455 494 526 Dry Sauces/Powder Mixes 4 4 4 4 4 5 Herbs and Spices 175 189 224 238 265 295 Monosodium Glutamate (MSG) 3 3 3 4 4 4 Pasta Sauces 405 464 587 656 819 949 Wet/Cooking Sauces 9 10 12 12 14 15 Dips - - - - - - Pickled Products 417 459 507 523 565 599 Table Sauces 729 785 821 887 955 1,006 Tomato Pastes and Purées 365 359 448 440 478 461 Other Sauces, Dressings and 356 399 424 449 505 541 Condiments Source: Euromonitor Exchange rate US$=R$2.00 Brazilian imports of dressing, sauces & condiments reached a record of US$52 million in 2011, a growth of 13 percent compared to 2010 and 120 percent compared to 2009. Imports were led by the USA (US$16.8 million), followed by Uruguay (US$8.7 million) and Mexico (US$5.1 million). Brazilian Imports – Sauces, Dressings and Condiments (US$) Categories 2009 2010 2011 2012 1/ Sauces and Condiments 19,346,294 37,637,868 42,548,382 13,143,919 Spices 6,672,121 7,705,249 9,701,189 3,101,134 Total 26,018,415 45,343,117 52,249,571 16,245,053 Source: SECEX – Foreign Trade Secretariat 1/ January - April
Posted: 30 July 2012

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