One of my favorite things to do when I traveled in Brazil or abroad was to visit fairs, markets, and supermarkets, even before working with international trade and agribusiness, I find it fascinating to see different products and learn about the most varied food habits. Now that visiting retailers in foreign countries has become a professional requirement, one fact has caught my eye: the absence of Brazilian food on market shelves.
Once, while visiting an upscale market in France, a famous retail chain was presenting what they considered to be “exotic” foods to its local consumers – a trade promotion project full of opportunities for Brazilian companies. There were products from several countries, but from Brazil, I only saw a candy tucked away (literally) in the corner of a shelf.
The Brazilian candy was so different when compared with similar products offered, not only for its inferior packaging, but its quality was incompatible with the higher standards of that market’s consumers. I asked the organizers the reason for the lack of options for Brazilian products and the answer was surprising: they did not find suppliers who were interested in participating in the promotional event . They only put that candy there to say that they had something from Brazil. It didn’t sell.
I remembered this story when analyzing recent data on the export basket and observing the exceptional performance of three products: honey, with an increase of 124.6% in the first seven months of this year when compared to the same period of the previous year; fruits (29.7% growth); and dairy products, which had a 57.2% expansion. In general, these are chains made up of small and medium-sized producers who normally have difficulties in accessing international shelves and, above all, in maintaining such a stable and permanent business relationship.
Although exceptional, it is not a surprising performance. In Agro.BR, a trade promotion project that I develop at CNA, the great interest of small and medium-sized rural companies in the international market is evident. The number of participants grows every day and export results have been quick. Companies that have never exported are managing to prepare the product according to international standards and find buyers elsewhere in the world, including some small producer cooperatives – a very interesting case of how collective organization can generate results in the international market.
We live in a favorable moment to sell our products to consumers around the world. There is a strong demand for food (especially in China), international food prices are at high levels, and our currency is undervalued in the foreign exchange market. The effects of this combination of factors on Brazilian agricultural exports are undeniable – by July, it reached US$ 72 billion, an increase of 19.9% over the same period last year; an absolute record that benefited the entire sector in different products – new and traditional. However, there is a long way to go between exporting and developing an export strategy, and it still needs to be paved. This is what the story of the Brazilian candy that was tucked away in the corner of a shelf in the French market stands for.
At that time, there were a different combination of factors. International food prices were at interesting levels for sellers, but it was Brazilian internal demand that was at a high, and the exchange rate was not so favorable to exports. In general, only large companies had exports in their business agenda. This French market was a missed opportunity because it was the right time to introduce diversified merchandise with premium quality and impeccable presentation. It was an opportunity to delight the French consumer, prepare their taste buds and create a good product image. Exporters could not only find a consumer niche but to maintain a position in that foreign market, understand consumer preferences, take better advantage of business opportunities faster, and be prepared for the changes in the tides of trade and international economy.
In Brazil, it is common for exports to take place under favorable conditions, though they are interrupted whenever there are changes in the economy. As a result, Brazilian companies do not retain customers and are unable to have enough presence to introduce new products. To reach the international market, it is necessary to professionalize the management and invest in quality, certifications, and the development of the right product for consumers’ taste. This is not done with intermittent exports.
Brazil has become a benchmark in some production and export chains, such as soy and meat, but for some sectors, the international market is still very restrictive and will continue to be if there is not at least some level of collective organization and the establishment of medium- and long-term strategies.
Companies and industry entities need to make strategic decisions now, while we are riding the wave of high prices and demand, to structure international market projects based on long-term opportunities. Achieving a greater degree of professionalization in food sector companies will be essential to diversifying the export agenda. The inclusion of small and medium-sized rural producers in export chains is the most feasible way to consolidate market share – and this can generate interesting opportunities for economic groups operating in the sector.
It may seem complex in theory, but the implementation of very simple measures in present-day reality could have a good international effect, such as the creation of websites and social media communication in other languages; encouragement to add value to export products; or the creation of sectorial strategies for brands or Geographical Indications.
Showing a Brazilian product to be sold abroad is not enough for consumers to go for something new just because it is available. The risk of Brazilian products ending up on the corner of a shelf is enormous if there is no promotion strategy in the consumer market.
Lígia Dutra is the director of International Relations at the Brazilian Confederation of Agriculture and Livestock (CNA)