Consumer Goods sector

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

Posted on: 26 May 2012

Consumers and businesses have developed higher standards both for quality and value for money and Brazil has the largest middle class in Latin America .

Consumer Goods sector in Brazil The Brazilian Consumer Goods sector is one of the biggest in Latin America with a stable economy that grew 2.7% in 2011 becoming the 6th largest economy in the world. Market overview The strong domestic demand continues to drive the performance of the consumer goods sector. The rise of the middle class, which doubled in the last 10 years, and the increasing in the purchase power has boosted the Brazilian Retail Trade Volume Index. This created opportunities for UK companies working in the consumer goods sector that have the products, which this large and highly urban population of 200 million is keen to buy. Key opportunities Despite the world crisis, Brazilian GDP had an average growth rate of 4.5% from 2006 to 2010, compared to 2.7% in the previous five years. Consumers and businesses have developed higher standards both for quality and value for money and Brazil has the largest middle class in Latin America with an appetite for quality goods and services every bit as demanding as the consumers in London, Paris or New York. Respecting this consumption scenario, there are opportunities for UK companies in the following areas: ξ Food and Drink, Brazilian Food and Drink Sector is one of the most competitive in Latin America and is has emerged as one of the leading suppliers in the global food industry. ξ Cosmetic, Brazil is the world’s third largest beauty market just after Japan and USA. Brazilian women are 100% beauty conscious and spent US$ 3.7 billion on beauty products in 2011. ξ Luxury goods, Brazilian luxury market had a turnover of US$ 10 billion in 2011, which represented an increase of 11.5% compared to 2010. Brazilians usually spend 1.215,00 (GBP) every time they go shopping. A new Shopping Centre named JK is opening in Sao Paulo in May with the following luxury brands: Prada, Gucci, Carolina Herrera, Lanvin and Chanel. Burberry, Aston Martin, and Bentley to name a few are already extremely successful in Brazil. ξ Fashion, Clothing and Accessories, according to ABIT – Brazilin Textile and Apparel Association – the textile, fashion and clothing sector’s turnover of 2011 was of US$ 51 billion. Zara, C&A and UK fashion designers such as Issa, Stella McCartney are presented in Brazil. TopShop is opening at JK Shopping Centre and H&M is researching the market. Latest export opportunities – Brazil Getting into the market On the Consumer Goods sector there is not a specific model or best route to be followed. The best way into the Brazilian market will really depend on the mix of products or services to be exported. Most UK companies work through distributors, importers and local representatives. Depending on the product or service offered it can be either through a national or local distribution contract. The majority of Brazilian importers ask for exclusivity when it comes to luxury goods for instance. Franchise is another route to the Brazilian market so as the partnerships with experienced local players. To establish an operation or sell into a multi-brand store in a local shopping centre is also perceived as a successful way to enter Brazil. On line shopping is also growing fast in Brazil. Trade barrier: The strongest barriers for the consumer goods sector in general are taxes, customs bureaucracy and complex labour laws. Taxes applied on imports can raise a product’s cost up to 108%. Regulatory standards: on the food and drink and cosmetics sectors, foreign companies should be made aware that they need prior approval from ANVISA, which is the Brazilian Regulatory Agency created in 1999 to protect Brazilian population. The Brazilian government establishes specific regulations and licensing for food, drink and cosmetics products. In terms of cultural standards Brazilians are well informed business people and brand orientated. Brazilians are very sophisticated consumers, well travelled and fully aware of what the world can offer. Most of population does not speak English and business is done with people not with the companies. Personal relationship is fundamental to find success in Brazil. Under Brazilian law is mandatory to have catalogues and promotional material in Brazilian Portuguese. Price is usually quoted in US$. More about doing business in Brazil Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Simone Ricci, British Consulate, Sao Paulo, Brazil. Tel: +55 11 3094-2746 or email: ξ Vera Oliveira, British Conmsulate São Paulo, Brazil. Tel: +55 11 3094-1893 or email: Contact your local international trade team Events Sao Paulo Fashion Week 11-16 June 2012 Atualuxo, International Luxury Conference Dates: to be confirmed, 4th edition to take place in Rio de Janeiro Fispal Food Service 25-28 June 2012 Beauty Fair 8-11 September 2012 Useful links More about OMIS and other UKTI services for exporters
Posted: 26 May 2012

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