Brazilian chocolate and candy producers are hoping to expand beyond traditional export markets such as the U.S. and neighboring countries by looking at other regions, including Arabic countries, which can be far away geographically but not culturally.
“In Brazil, we have 12 million [peope] who are descendant from Arabic people and there is a huge cultural influence,” Rodrigo Solano, export manager of the Brazilian Association of Cacao, Chocolates, Candies and Byproducts Industry (Abicab), recently said during a phone interview with the Latin Business Daily.
In countries such as Lebanon, Portuguese is one of the most spoken foreign languages because the Lebanese-descendant population in Brazil is much bigger than that of Lebanon, Solano said.
The expectation is that countries such as Saudi Arabia or the United Arab Emirates can become bigger markets although some Arab-speaking countries in the northern part Africa are already large buyers.
"The rate of sweets consumption in Arabic countries is higher," Solano said. "We have done comparison with Europeans and Americans, and they consume more. In addition, their sweets sections in supermarkets are bigger."
Brazil needs to compete for this market against other countries that are also big sweet producers and are strategically better located, including Turkey.
Brazil has a chocolate and sweets industry that is among the world´s fourth biggest alongside those of the U.S., Germany and China, which has surged in recent years. Brazilian producers are hoping that the Arabic market with 360 million consumers will help overcome certain challenges.
One challenge has been an embargo on any export that contains sugar from Brazil to Europe, which restricts the export possibilities to only some specialized premium products.
Another challenge has to do with the loss of price competitiveness in Brazil in recent years, Solano said.
“Until 2005, Brazil was a large sweets exporters," Solano said. "But with the current economic situation, we have to develop a strategy based on quality, not price."
Some parts of the country are producing a special cacao tree that yields a bigger quality product that can command a premium price. One specialty product being increasingly produced is Cupuacu, a cousin of cacao that also produces chocolate.
While the Amazon yields not only cacao but also exotic fruits that help produce premium and exotic products, some other areas of the country yield other goods used in confectioneries, including peanuts and other nuts.
Markets in Asia also are increasingly of interest to Brazilian producers, but the geographical distances are huge, and the markets are still little known and in need of more studies, Solano said.
Companies grouped under the Abicab association in Brazil represent 92 percent of the chocolate market, 70 percent of the candies and confectionary, 80 percent of the peanut market, and all of the cacao market, according to the organization.