Amid volatile domestic market, Brazilian candy manufacturers look to the US
Many companies are ramping up their US efforts, bringing in iconic snacks and beverages from all around the world to a consumer-base with a strong currency and a curiosity for new flavors and textures.
In the case of Brazilian manufacturers, expanding US efforts also means finding refuge from uncertainty and potential losses. A continental-size agricultural superpower with the fifth largest population, Brazil has been in a storm of political turmoil with the impeachment of President Dilma Rouseff, a seesawing currency, and a crippling Zika epidemic.
“For exporting, it’s been going normally,” Antonio Romualdo Silva, the International Business Director of candy manufacturer Riclan, told FoodNavigator-USA at the Sweets & Snacks Expo 2016 a few weeks ago in Chicago. “The problem is with the domestic market, it’s a little bit slow, so we’ve had more offers to export.”
According to Silva, who is also the vice president of exports for the Brazilian Cocoa, Chocolate, Peanut, and Candies Manufacturers Association (ABICAB), sales from export efforts this year will be better than the last, though he didn’t specify a value.
“If you analyze, until before 2015, the dollar rate in Brazil doesn’t help us too much to have a competitive price. But our rate started to be better so we raised [exports] a little bit, and the advantage continues to this year,” he said.
A hard-hit middle class
Earlier this year, The New York Times published a feature depicting how hard Brazil’s middle class has been hit by Brazil’s economic instability—dropping oil prices led to layoffs, and medical visits for babies with microcephaly, often linked to the Zika virus, are draining the wallets of young families.
To keep the Latin American nation’s sugar market going (Brazil alone accounts for 25% of the world’s sugar, leading with 721 million metric tons in 2013, far ahead second place India with 361 million metric tons), Silva said that candy and confectionery manufacturers are aggressively pushing their products in North America.
This has meant maneuvering through several preferential differences—brands are rebranding with easier-to-pronounce names for an Anglophone market, or going the traditional route of selling their goods for private labels, which Silva said is the more popular and affordable way to market Brazilian goods in the US.
Another move is re-positioning a product. Riclan, where Silva works, produces menthol candies which are a popular everyday treat among Brazilians. “It’s not eaten in the [US], it’s considered here like a medicine or something like that,” Silva said. The company has been selling its menthol products as private label throat lozenges here in the US since 1973 to a company that Silva did not specify.
Speaking of medicine, Silva added that another advantage Brazil has in the US is the abundance of outlets where candy can be sold—such as drug stores. “Twenty years ago our export efforts were controlled by importers and wholesalers,” Silva said. “Nowadays, since 15 years ago, chains of stores like Walgreens and CVS started to sell a big and important amount of candy.”
