Monday, October 20, 2014

Cheese market grows in the country and attracts foreigners

The Brazilian market of cheeses, which will move approximately r $ 19 billion in 2014, has advanced consistently in recent years and called the attention of foreign companies, who see opportunities for growth here.
The best recent example of this movement is the French for Lactalis, which just acquire units of the LBR-Brazil and Dairy BRF and had joined in the country last year through the purchase of a company specializing in cheeses, the Balqis.
But, faced with the potential of this market in Brazil, the interest of foreign companies in the segment must endure. The Emmi, for example, a leader in the Switzerland dairy, with net revenue of € 2.68 billion last year, is one of the prospectaram already-and continue to prospect-opportunities in the country. The company already exports its fine cheeses for Brazil.
Questioned by the value on the subject, the Emmi responded, through its communication Advisory, that "whereas the European markets are saturated, attentions turn to developing markets".
The company added, in a note, that the countries of Latin America are interesting for the company, once the Emmi already has operations in Chile and in Mexico. "The main option will then strengthen the activities in these markets and, eventually, into additional market, among which Brazil is an option".
Brazilian companies also believe in the growth potential of the market of cheeses and have invested to expand production. The Tirolez (see Tirolez will invest $ 100 million by 2017 to enlarge production).
Just look at the numbers of the segment in Brazil-mainly-consumption data to understand the logic that drives the strategy of these companies. In Brazil, the average per capita consumption of cheese is only 5.1 pounds per year. Far behind European countries or even from neighboring Argentina, where reaches 11 pounds. In France and Italy, for example, consumption is about 25 pounds per capita a year, while in Europe the average is 20 pounds, according to Fabio Samuels, President of Associação Brasileira das Indústrias cheese (Abiq). "There's nowhere else to grow in those countries," says Samuels, referring to the mature consumer market in Europe.
When were you in Brazil, last August, during the final negotiations to acquire assets of the LBR and BRF, Director of mergers and acquisitions at for Lactalis, Erick Boutry, did not hide his enthusiasm for the dairy market of Brazil. "I'm here because of LBR, BRF and other [companies]," he said, on occasion, to the value. Among the units that the French bought the LBR are two cheese factories.
By Abiq estimates, per capita consumption of cheeses in Brazil should reach 11 pounds, on average, in 2030, after having advanced 76% between 2005 and 2013 (see chart). Considering the total consumption, the advance was of 8% to 9% per year, on average, in recent years. In 2013, achieved 1.032 million tons.
The President of the Abiq States that the increase in consumption away from home-in restaurants, for example-was one of the main reasons for the growth in demand for cheeses. Moreover, the advancement of the population's income also contributed. "The food service grows at rates higher than retail," he notes.
In recent years, he adds, the cheese industry also expanded the product offering for sale on the market. Irene Fonseca, of marketing of Abiq, claims that in Brazil there is a diverse market of families of cheeses. "People are trying new flavors," says Samuels.
Another factor that explains the advancement of demand for the product, in addition to income and changes in consumption habits, is the own vegetative growth of the population. "Who hasn't consumed went on to consume and who already consumed is consumed more," he says. But it is still possible to grow more. "The people have come to buy, but there's still room to continue growing," reiterates Kajal.
The estimation of the Abiq is that the total consumption needs, move 5% to 6% this year, below the average of recent years. Some factors may explain this reduction in growth rate: there have been months of lower demand due to the World Cup and the winter-which typically pulls the consumption of special cheeses-was not as rigorous as the Abiq.
Of the total of 1.032 million tons of cheese consumed in Brazil in 2013, a slice of 3% were imported products, according to the data of the Association. The numbers just consider cheese manufactured by companies with some kind of sanitary inspection (federal, State or municipal).
The Abiq have 80 associates in Brazil, which account for 70% of the national production of cheeses. "This data shows that there is potential to grow", reinforces the President of Abiq. There is also potential for diversification, since currently 70% of cheese consumed in Brazil are of a kind mozzarella, plate and curd.
Samuels sees positively the coming of "companies in the world" for the Brazil dairy. That's because, he says, they bring innovation, technology and stimulate the practice to achieve good quality. Silmara Forbes adds that the arrival of these players stimulates the search for productivity and efficiency.
Valter Galan, a member of the Intelligence MilkPoint, MilkPoint consultancy arm, goes in the same direction and asserts that the arrival of companies like the French for Lactalis "helps raise the level of quality in the segment (...) and encourages the professionalization of the market ".
Valor Econômico - 20/10/2014
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