'Dual forces' of consumer awareness and legislation are evolving LATAM food industry

By Niamh Michail contact

- Last updated on GMT

© GettyImages/LightFieldStudios
© GettyImages/LightFieldStudios

Related tags: reformulation, sugar reduction, harmonisation

Latin American consumers want to buy better, safer food and companies need to react, according to R&D company AINIA. 'The dual forces of consumer awareness and legislation are evolving the market,' says its director of international projects.

“We were created to help SMEs to be more competitive," ​director of international projects at Spanish technical center AINIA Jorge Saludes said. "We do this by providing technical services – everything that food manufacturers need to compete but are not big enough to have, such as labs or pilot plants.”

AINIA has over 13,000 m2 of facilities including laboratories, sensory testing rooms and pilot factories for packaging, microencapsulation, microalgae cultivation, and spectroscopy, among others.

The Paterna, Spain-headquartered company does not have ‘sister laboratories’ or subsidiaries around the world but part of its business proposition is to help other countries set up institutes like its own, Saludes explained, and many of its clients are Latin American government agencies and ministries.

It has worked closely with Technical Institute of Production (ITP) of Peru’s Ministry of Production for the past 20 years, as well as with equivalent institutional bodies in Colombia and Mexico.

A dynamic market

According to Saludes, this type of technical assistance allows Latin America to “develop its own internal market”.

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Jorge Saludes © AINIA

“The Latin American region needs to be seen as a very dynamic region [in terms of] the evolution of the economy. They are exporting more and more to the US and EU, while the process of the war in Colombia coming to an end is affecting all the others – Ecuador, Peru… -  to compete harder because now there is a new player.

The biggest source of growth and increase in development in Latin American is within their own markets. They have millions of new consumers wanting to buy better and to buy safer products.

"At the same time, it's a market of 350 million people so it’s very interesting for international operators and everyone wants to be present." 

Food security, quality, and nutrition

AINIA also works with private companies across the LATAM region and, according to Saludes, there are three main issues of concern for consumers (and therefore manufacturers) in Latin America.

The first is food security; ensuring there is enough food for everyone. The second is a matter of food quality, to be sure it is safe; and the third is making sure it is balanced and healthy with not too much junk food.”

“When people start to earn money, the first thing they want is to eat better, dress better, and have better housing – but eating better is the first priority because we do it every day,” ​he added.

The push to reformulate

Food safety and reformulation – salt, sugar and fat reduction – are therefore of particular interest.

In the past, for instance, it has trained engineers from Argentina’s dairy sector on hygienic design for processing equipment and helped Colombian officials conduct food controls by providing chemical analysis services.

Asked whether regulatory changes, such as Mexico’s sugar tax or Chile’s nutrition warning labels have triggered an increase in LATAM companies looking to reformulate to make products healthier, Saludes said: “Of course, legislation can make a change but I must say the biggest factor of change is always the consumer. You can’t set into force a law suddenly without giving companies a chance to adapt and change their products – it would put out of business lots of operators.”

Saludes said social movements and newspapers play an important role in raising awareness of how certain foods are associated with obesity and type 2 diabetes. Governments then bring in to diminish the impact of certain products at a societal level.

“The product itself is still valid and legal but companies then want to adapt to the trends and, right now, that clearly means producing food and drink with less sugar, salt, and fat or even free from substances that can produce an allergic reaction.

“We need both the awareness among consumers plus legislation to pull companies. These dual forces are at work and we need them to have an evolving market.”

Innovation through harmonization

As for ensuring future innovation and market development, Saludes said governments should do more to strengthen ties between countries through the region’s trading blocs, the Pacific Alliance, Mercosur, and the Andean Community.

“For me, the effort of Latin American countries should be [focused] on creating as big a market as possible, following the example of the EU […] with common regulations and common systems of control.

“Creating a single market of consumers would help small and medium-sized companies to grow,” ​he added.

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