Brazil’s organic sector: Multinationals and supermarkets getting into the business is ‘significant’

23-Aug-2018 - Last updated on 28-Sep-2021 at 12:45 GMT

The Brazilian retail market for organic food and beverages is growing at 20-25%, and the imminent entry of some of the world’s biggest food companies is “huge”, says the executive director of the Brazilian Council for Organic and Sustainable Production.

Speaking with FoodNavigator-LATAM at this week’s Fi South America show in Sao Paulo, Ming Liu, Executive Director of Organis, said: “In the past two years, the big companies have started getting into the [organic] business, and the large supermarket have also started to develop segmented areas in the supermarket for organic.”

Carrefour, for example, is implementing a strong and aggressive road to offer organic products in their retail outlets, he added

Earlier this year, food giant Nestlé launched its first organic products in Brazil (a line of organic certified oats); a move which Liu says is significant.

“They [Nestlé] give a sign to the smaller producers that they can develop with technology with support,” he said.

However, consumers remain skeptical about the big food companies entering the organic space. “It’s not just Nestlé: In Brazil we have Mondelez, Coca-Cola, Pepsico, and in the US market they all have their own organic brands. So, this is a process that will happen soon in Brazil, and this is huge because it brings hope to the small producers that they can invest and the market will grow.”

“We’re kind of behind”

The market in Brazil is less developed than elsewhere, said Liu. The regulations for organic products in Brazil started in 2007 and were introduced in 2011 (compared to Europe in 2004 and the US in 2001).

“We’re kind of behind, and compared to the global market Brazil is what the US was in 2007 or 2008,” he said.

“[And] we still have a lot of challenges: Some of the animal products like dairy and meat are still not well developed [for organic].

“Most of the companies that are getting into organic are small and medium entrepreneurs, and then you have moves from multinationals like Nestlé and some Japanese companies that are buying small and medium sized family businesses to get into the health market, where organic, natural, and functional foods are now.”

Brazil’s organic market is growing at 20-25% currently, he said, and the retail market for organic is a little over $1 billion, “which is small”.

“We believe, as we are here at a trade show focused on ingredients, this market [for ingredients] has a lot of potential, and it’s much bigger than the retail market.”

For more insights from Ming Liu, please click HERE.