Plant-based brands in Brazil have a meaty competitor to contend with.
Brazil’s meat industry is described in superlatives: it is the second largest beef producer; second biggest poultry producer; fourth biggest pork producer and biggest beef exporter in the world.
Brazilians also eat a lot of meat; despite a much lower GDP per capita, the average Brazilian eats just 180 g less meat than the average US citizen, according to USDA figures, and there are strong cultural beliefs around eating meat.
“For most Brazilian homes, barbecue is an important tradition, and it is very attached to the culture of gender roles here – men like to do barbecues, light the fire, cook the meat. Men are also afraid to ask for veggie options," said Gustavo Guadagnini, managing director at the Good Food Institute (GFI) in Brazil.
‘This is the year things will change’
However, a series of scandals have racked the country’s meat sector in recent years and left consumer confidence shaken – and more open to alternatives.
The rotten meat scandal in 2017 implicated some of Brazil’s biggest meat processors, including BRF and JBS, in selling rotten meat certified by fake food safety and hygiene certificates, and bribing government officials.
“All of this is changing how consumers feel,” said Guadagnini.
Research conducted by Datafolha found that 63% of those surveyed said wanted to reduce their meat consumption following the rotten meat scandal.
“There is a market here both in Brazil and the rest of Latin America because the products sold on the market are simply not as good as in the US,” said Guadagnini told FoodNavigator-LATAM. “Most of the products we have here don’t have a lot of tech.”
According to Guadagnini, a typical vegetarian burger in Brazil will be a patty made from quinoa or chickpeas; meat-free but not similar to the taste or texture of meat in any way.
“But we think that this is the year things will change,” he said.
9,000-strong survey: Health & animal welfare top concerns
Snapcart conducted a survey for GFI, questioning over 9,000 Brazilians who identify as either vegetarian or vegan or are interested in reducing their meat intake.
Health was the number one motivating factor (54% of vegetarians, 70% of reducetarians) while animal welfare came in at number two (21% of vegetarians, 17% of reducetarians).
All other reasons – environmental issues, family, ethical, religious and social reasons - were cited by less than 5% of respondents in each group.
Price is definitely a barrier to uptake:
Over one-third (34%) of respondents thought plant-based alternatives were “much more expensive” than animal products and nearly one-quarter (24%) said they were “a little more expensive”.
NPD: ‘Prioritise alternatives to red meat’
Market research company Euromonitor considers Brazil to be the fifth most important market in the world for healthy-positioned food. It is also growing at a rate of 20% compared to the global average of 8%.
“Even though the Brazilian market is relatively new, the number of people who consider themselves vegan or vegetarian is already comparable to the number in countries where the market is long-established,” said GFI in an accompanying report 'Consumer research: Plant-based market in Brazil'.
“Even a small shift away from meat consumption has major implications: Brazil has a large population and its market potential for plant-based alternatives is vast."
Based on the survey findings, GFI concluded: “The primary focus of the plant-based industry for new products should be on taste, price, and convenience. Vegetarians and reducetarians miss red meat, so plant-based alternatives to red meat should be priority products.
“Finally, because survey participants stated their dietary choices were influenced by concerns about their own health, plant-based producers should consider advertising on health."
Costly imported brands offer opportunities for local players
One possible barrier to growth for plant-based meat alternatives, however, could be the price point.
Imported products from brands such as Impossible Foods, Beyond Meat or Gardein will be hit by Brazil’s relatively high import tax and weaker currency, leading to a very premium positioning and high price tag, Guadagnini said.
“[These brands] could be a big deal in Brazil but I don’t think they will be cheap enough. So here is a market opportunity for a local player,” he added.
Even if these imported products remain niche and accessible only for Brazil’s wealthier consumers, GFI believes they will be important in raising the profile of plant proteins, prompting local manufacturers to launch their own versions.
“For sure, 2019 is the year this will happen,” Guadagnini said. “But, as this is the first time Brazilian consumers will taste something that looks and tastes like meat but isn’t meat it’s hard to know how long it will take to scale up the offering and bring the cost down.”
What’s in a name…?
The terms manufacturers use to describe meat and dairy alternatives has become somewhat of a legal battleground around the world.
The Europe, for instance, the EU Court of Justice ruled that purely plant-based products cannot be marketed with names such as milk, cream, butter, cheese or yogurt.
In Brazil, there are currently no standardized rules for plant-based labeling, and the Brazilian Health Regulatory Agency, ANVISA, has been ruling on a case-by-case basis.
It forbade one of the biggest plant-based brands on the market, Superbom, from using the Portuguese word for cheese, queijo. It responded by trademarking the name Vegan Cheese® for its products.
Other manufacturers specify the type or flavor. Novah, for instance, sells Lactose-Free Cheddar, without mentioning the word cheese and others opt for a non-conventional spelling like ‘CheezCake’.
However, this patchwork situation could change. In fact, Guadagnini is meeting with representatives of Bolsonaro’s newly formed government in Brasilia tomorrow (31st January) to discuss the issue.
“They are still understanding the work we do and the needs of this sector. We hope to be a positive agenda for the government,” he said.
GFI has been conducting research on the Brazilian market and will release a report in March this year.