Armed with a new marketing strapline ‘Frutas do Brasil’ (Fruits from Brazil), Abrafrutas – the Brazilian association of producers and exporters of fruit and its derivatives – has set itself the ambitious target of almost doubling Brazil’s fruit export value via a larger and diversified produce basket for markets including the UK. Produce Business UK speaks exclusively to Luiz Roberto Barcelos, president of the group that was founded just two years ago, to find out the significance for UK buyers
“Brazil is one of the world’s biggest fruit growers, yet we export less than 39% of our production, with the exception of melons, which is more like 50-60%,” explains Barcelos, who is also the founding partner and a director of Brazil’s leading melon supplier Agrícola Famosa and the chairman of COEX, the Brazilian Melon Exporters’ Association.
“Brazil is very good at producing but not as good at trading, except for products like melons, grain and soybeans. The average producer is more concerned with internal affairs than external markets. Our objective [at Abrafrutas] is to increase exports.”
“Brazil currently exports US$6 million-worth (£4.2m) of fruits a year,” continues Barcelos. “Our target is to reach US$1 billion (£696m) by 2017 and the plan is to increase our export volume by 30%. Brazil has the potential to become one of the most important fruit suppliers in the world.”
Indeed, Brazil has a huge food production capacity for many food products, including fruits, according to Abrafrutas. What’s important for the group, however, is that the country succeeds in satisfying demand without damaging the environment.
“We can achieve this simply by improving current production systems, using new growing technologies and also optimising production capabilities of sub-utilised farming areas,” Barcelos points out.
Brazil’s bigger offer
The fruits with the most potential for expansion include tropical fruits, such as melons, papayas, limes, mangoes, pineapples and bananas, plus table grapes, apples, avocados and watermelons, as well as promising Amazonian fruits like the already popularised açaí berry.
“We are a country gifted by the sun,” claims Barcelos. “Our tropical fruits taste very good and we have the right conditions to offer customers delicious fruits at a time when temperate fruits are not available in plentiful volume.
“Brazil has a very interesting market window during the winter in the UK when local fruits are not available in sufficient volume and quality requirements are very high. British consumers in general are also very open to fruits with exotic tastes that are produced by conscious growers with regards to sustainability, fair prices and reliable information.”
Barcelos claims flavour in particular is a point of difference for Brazil’s fruit offer. “We have a higher brix level [than other sources],” he asserts. “The transit time isn’t so long either. From the north-west of Brazil we are 10 days from Europe, so we can arrive with fruit with good shelf-life, brix levels and service. We’re faster than Costa Rica, Colombia and Peru, for example, and we offer the same tropical fruits.”
Barcelos points out that tropical fruits are also excellent for health and weight control – two ever present concerns among modern day consumers in the UK and elsewhere. “Diversifying our range offers many menu possibilities and can transform the act of eating into a wonderful experience. That is why Brazilians are so happy all the time! They eat tropical fruits!”
In terms of melons, the UK is already a star export market for Brazil and while volume has been stable over the last decade Barcelos says work on new varieties and growth with watermelons could open further doors in the future.
“The UK is a very good place to export our fruit, especially melons and watermelons because the importers fulfill the programme in terms of price and volume,” he explains. “The quality standard is very high but the programme has gotten more confident.
“In the last 10 years the volume has been stable for melons, increasing about 5% per year, but for watermelons it is increasing more, especially last year. Since we are developing better varieties in terms of brix level, colour and pulp resistance, the demand is increasing as well.”
This is the path already being taken by Agrícola Famosa, which following much consolidation in Brazil’s melon industry now ranks as the biggest grower-exporter, occupying a 60% share of the market, ahead of the four other melon players.
“We’re trying to improve our quality, shelf-life and sugar (brix) content,” reveals Barcelos. “The watermelon business is very small but very good, and we’re happy with it. The mini watermelons have very good flavour and a crunchy flesh. We’d like to push those more in the future.”
Learning from melon success
The UK is the second-biggest market for Brazilian melons, according to Barcelos, which makes the trade an ideal example for other Brazilian fruits to follow. “Brazilian melon grower-exporters have been supplying markets like the UK since the very beginning. Most of Tesco’s melons come from Brazil.”
Agrícola Famosa alone ships 8,000 containers of melons a year (350 containers a week), to the UK, supplying retailers including Tesco and Aldi. The range comprises Honeydew, Piel de Sapo, Galia and Cantaloupe. Barcelos says the group also sends to Tesco a small volume of mini seedless watermelons, and some papayas and bananas.
But not all Brazilian melon producers are involved in the export deal. “Other exporters don’t have the same mindset,” Barcelos suggests. “We’re trying to change that [through Abrafrutas]; by explaining how to export and reassuring them that it’s easy to ship overseas.
“The UK is a very good market already for our melons. We’re very happy with the trade with the importers. We know them well – we’ve been loading melons to the UK for more than 20 years – and the market is fair. We now supply melons directly to Tesco, and we’re trying to introduce more growers to the UK importers. Recently we introduced Fesa UK to a Brazilian mango producer and they’re very happy.
“We’re also showing the exporters that if they advance in their logistics and distribution they will add more value to their products and buyers will pay more. Right now, they have all the risk and little profit.”
How Brazil plans to grow
With the Brazilian market feeding 200 million people and labour costs having risen substantially, Barcelos says supplying domestically was the most profitable venture for Brazil’s producer-suppliers, compared with exporting. But the situation has since changed.
“It’s why the local market became so good,” he notes. “But the exchange rate of the US dollar versus the Brazilian Real has risen, so now exporting is more attractive again. This will help us so much, especially in markets like the UK.
“As the value of the US dollar has increased, so have production costs (because prices for all farming inputs have risen). On the other hand, it makes for more competitive prices for distributors and, therefore, for final customers in overseas markets. Converting local prices into US dollars when the value is high makes the price of fruit in US dollars lower than when the exchange rate is the opposite.
“For example, the lower value of the local currency when compared to the British pound will make our fruits cheaper in the UK market. As quality is not an issue, we are very optimistic. It’s just a question of providing more information to customers through aggressive promotional campaigns to improve the knowledge of tropical fruits.”
To achieve its ambitious goal of raising exports to US$1 billion (£696m) in value by 2017, Abrafrutas has defined a series of strategic steps for its members that aim to ensure:
the consistent quality and supply of products,
food safety standards,
sustainability (economic, social and environmental),
consumers appreciate all the elements present in Brazilian culture about life being a positive experience for everyone.
In addition, Abrafrutas has discussed an innovative and aggressive marketing promotional strategy to be carried out in the near future, which focuses on destinations including the UK. “Regarding the UK, we have no doubt we need to increase our marketing activities in order to make our fruits known by the customers,” Barcelos admits. “Brazilian fruits are not yet well known by the British population.”
To further Brazil’s chances Abrafrutas is also trying to push the Brazilian government to seek a free trade agreement with the Mercosur group of countries in South America and the European Union.
“It would help so much,” admits Barcelos. “On average we have to pay a 10% tariff. It’s a lot of money when other countries pay nothing. For example, limes and grapes are very important fresh fruits in Brazil’s export portfolio, especially for the UK. But grapes are suffering since Brazil lost the GSP [Generalised Scheme of Preferences] benefit. Our grapes must pay 14% in duty, while our competitors like Peru or Colombia have zero duty. It puts us in a very difficult position in terms of price. But even so, the UK remains an important destination for our grapes.”
In addition, by encouraging more producers to develop export-quality fruit lines, Barcelos notes that the internal market will ultimately benefit too. “The export markets demand more quality, which gives Brazil the opportunity to offer a new [premium] fruit offer for the local market.”
Using the force of the industry
Abrafrutas currently counts on the membership of 60 well-known Brazilian fruit producers and exporters, including Abanorte, Abpel, ABPM, Agrícola Famosa, Labrunier, Bollo Brasil, Brapex, Coex, Cutrale, Fisher, HLB Tropical Food, Itacitrus, Itaueira, Jaguacy and UGBP, among others. Combined, they represent 90% of the South American country’s fresh fruit offer. See the list of members here.
Pierre Pérès – the long-time president of the Brazilian apple growers and exporters association, ABPM – is supporting Barcelos in his role as vice-president of Abrafrutas. Their overarching mission is to represent and promote on the international market Brazilian fruit, including: melons, mangoes, limes, table grapes, bananas and papayas. The priority goal is to raise exports by strengthening marketing activities and undertaking both institutional and business-led promotional campaigns.
“Abrafrutas is still very new – just one-and-a-half years old,” Barcelos comments. “We’re based in Brasilia and we get some financial support from Apex-Brasil to go to trade fairs like Fruit Logistica and Fruit Attraction.”
Abrafrutas also has an institutional partnership agreement with the Brazilian Farming and Ranching Confederation (CNA) and the CNA Institute (ICNA), uniting exporting fresh fruit producers and processors and manufacturers of food derived from fruit on an individual basis and also through their national and regional associations and cooperatives.