Marketing Overview

Executive Summary

Brazil is an upper middle income country of continental proportions. In 2019, Brazilian GDP reached US$1.85 trillion, preserving the country as the 9th largest economy in the world Brazil is the most influential economy in Latin America. Alone, it represents 48 percent of the land in South America and 49 percent of its population. Brazil is a major producer of food and agricultural products and a leading player in the global marketplace. Producers, food processors, wholesalers, retailers, food service operators, and food importers are all part of a well-developed agribusiness sector, contributing to a domestic scenario that is competitive and dynamic. Although self-sufficient in agriculture, Brazil is also an important buyer for the rest of the world. In 2019, imports of agricultural products reached US$11.8 billion, a decrease of 1.2 percent compared to 2018.

Imports of Consumer-Oriented Products

In Brazil, imported US$4 billion of consumer products, a similar result from last year. Mercosul, EU and China registered a slight increase on sales, nevertheless market shares of major exporting countries remained unchanged. U.S. exports to Brazil decreased 3 percent compared to 2018, reaching US$217 million. In a steady growth scenario, U.S. sales performance tend to be affected by stiff competition from EU. Products imported from the United States and Europe fit in the premium price category, therefore more susceptible to market turbulences. According to ATO contacts, European companies are quite aggressive and adjust quickly to the market scenario. In 2019, the United States decreased sales to Brazil by 3.5 percent, which led the country to lose one percentage point of market share. Although Brazil presents market opportunities to U.S. exporters, U.S. companies are much more risk averse, contributing to the downward result.

Food Processing Industry

The sector is composed by 36,100 companies (2019), where approximately 94 percent are considered micro and medium sized firms. According to the Brazilian Food Processors Association (ABIA), total sales of the food processing industry amounted to R$699 billion (US$177) in 2019, an increase of 7 percent in nominal terms compared to the previous year. Food and beverage sector is responsible for 9.6 percent of the Brazilian GDP and represents 80 and 20 percent in sales value, and employs near 1.6 million workers. Meat has the highest product growth rate in 2019.

Food Retail Sector

The Brazilian Supermarket Association (ABRAS) reported supermarket revenues of R$378.3 billion (US$9 billion) in 2019, 2.5 percent increase compared to the previous year. Cash-and-carry operations have pushed financial returns of the top 50 retail chains in 2018, with investments seeing double-digit sales expansion.  The sector results in 2019 represents 5.2 percent of the Brazilian GDP, with over 89 thousand stores and 1.88 million of employees, a steeply increase of near 1 percent compared to the previous year.

Food Service Industry

In 2019 the Brazilian Food Processors Association (ABIA) estimated food service market size at R$464 billion (US$117 billion). This result pointed to a 8 percent growth compared to 2018. The food service sector is marked by informality, approximately 1.3 million food service outlets are distributed throughout the country, with over 95 percent of establishments characterized as small-medium size, family-owned operations, while large and multinational food service chains represent less than five percent of food service companies. However, the COVID-19 pandemic is expected to cause severe economic impacts in Brazil.

Quick Facts

Top 10 Consumer-Oriented Products Imports
Food Preparations Nesoi ($50 million), Chocolate & Other Cocoa Preps, Not Bulk, Filled ($20 million),  Almonds, Fresh or Dried, Shelled ($14 million), Meat of Bovine Animals, Boneless, Frozen (10 million), Sauces Etc. Mixed Condiments and Seasonings Nesoi ($7 million), Ice Cream and Other Edible Ice, With Cocoa or Not ($6 million), Wine, Fr Grape Nesoi & Gr Must W Alc, Nov 2 Liters ($3 million)

Top 10 Food Ingredients Imports in 2020
Animal Feed Preparations ($47 million), Food Preparations ($39 million), Enzymes ($33 million), Odoriferous Substances (29 million), Milk Albumin, Including Concentrates of Two or More Whey Proteins ($17 million), Vegetable Saps and Extracts of Hops ($23 million), Edible Mixture Preparations of Fats, Oils, And others ($7 million)

Food Industry by Channel
. Food Industry Output $153 billion
. Food Exports $38 billion
. Food Imports $5 billion
. Domestic Market $110
. Retail $84 billion
. Food Service $26 billion

Economic Information
Population (millions): 211
GDP (billions USD): 1,434
GDP per capita (USD): 6,510
Source:  Brazilian Institute of Geography and Statistics (IBGE)
Exchange rate (Avg 12-month): US$1/R$5.16

Advantages Challenges
Multinational companies have demand for innovative and high-performance ingredients not present in the market. Brazilian import procedures are a burden, especially for new-to-market U.S. small/medium-sized companies.
The United States is known as a supplier of high-quality and consistent food products. The current depreciation of the Real to the dollar and market volatility inhibits U.S. suppliers from entering the market.
The Brazilian food industry views the United States in terms of Research & Development as highly qualified. Sourcing products and ingredients from the United States is not always an easy task as U.S. companies are oriented toward markets that offer more short-term profits.
U.S. exporters are inclined to work with high volumes and different partners. Importers are conservative and start with smaller orders. Exclusive contracts are part of the deal for most of the Brazilian companies.