BRF From Brazil to the world regions
BRF accounts for 14% of the world poultry market; in its domestic market it serves 95% of all households with over 40 brands.
FleischWirtschaft spoke with the CEO for Europe and Eurasia, Roberto Banfi, about current developments at the Brazilian food giant.
How has BRF developed nationally and internationally in the past few years?
Roberto Banfi: BRF underwent major structural and strategic changes in 2013. We carried out organisational restructuring, adopted a new strategic vision and now focus completely on our customers. We now have a stronger innovation-orientation; we've reviewed our product range and invested in more profitable products with greater value-added.
These changes started to yield results in 2014. We've become quicker, more innovative and more single-minded. And the results have been well received by the market - as witnessed by the increase in our share price, and by the awards we received during the course of the year. Today, we're an established company. Our products are bought by 95% of all Brazilian households and we are one of the top 100 most innovative companies on the planet.
How is the company structured?
Banfi: We are one of the leaders in the food industry and are among the world's top suppliers of animal protein with a total of 44 plants: 35 in Brazil, where we are represented in all regions, six industrial plants in Argentina, two in Europe (in the UK and the Netherlands) and one in Abu Dhabi in the United Arab Emirates.
BRF also has one of the largest supply chain structures in Brazil and works closely with more than 50,000 partners in the areas of agriculture, operating supplies, grain, bran, oils and logistics. We also have 22 international offices serving customers in more than 120 countries on five continents.
Having exported over 4.7 million tonnes of animal protein, BFR has for the first time exported more than it sells at home. How are you going to maintain this trend? Is the Brazilian market saturated?
Banfi: In 2014 exports accounted for 46.8% of the company's operational net income. Our strategy now is to consolidate our competitiveness while taking account of the importance which eating out has now attained in the Brazilian market.
What are the latest countries in which the group is expanding? Why are these markets of interest?
Banfi: We've just launched our Sadia brand in Central and Eastern Europe and in Russia. The Russian food retail market is the largest in Eurasia, and one of the largest worldwide. This makes it an important market for our global Sadia brand.
What is the BRF strategy in Europe? What about Germany? What are the challenges in these markets?
Banfi: Despite its low economic growth, Europe remains a very important market for us. However, European agriculture has a strong lobby in Brussels, and its local producers often consider importers - in particular Brazilian importers - as a threat. We see this a misjudgement, as most European production is in the form of chilled meat, which puts Brazilian poultry out of the running. The frozen poultry that we supply goes mainly to local food processing industries.
We sell no pork products to Germany because no hygiene agreement was ever concluded for pork between Brussels and Brasilia following the global swine fever epidemic in the 1950s. Nevertheless, we do provide poultry feedstock to local processing companies in Germany, and also in France and the UK.
Selling to retailers is not our primary focus right now. Our top priority is on moving away from raw product to offering customised solutions for the local processing industries. Then, we want to offer more innovative solutions for the food service segment, which is our main sales channel and driver of innovation and growth.
Apart from the fresh produce, can all the products of a South American group be marketed directly worldwide, or are specific brands and developments necessary for local markets?
Banfi: As a global company with targeted business approaches and knowledge of the local markets, we have adapted our global strategy and innovation policy to meet the needs of our customers around the world and to align our international strategy to specific markets. This includes partnerships with local players such as processors and distributors, the construction of new plants and the development of products and marketing campaigns that are suitable for different cultures and tastes. Sadia is our premium international brand.
This year we strengthened the presence of Sadia in Europe by introducing our new Cubox packaging and a marketing concept for the food service sector in several southern European markets.
Are organic products and animal welfare of relevance for BRF? What about traceability along the entire production chain?
Banfi: Animal welfare is an integral part of our business. Our animal welfare procedures are in line with the global World Animal Protection (WAP) recommendations and are continuously updated in line with the latest scientific research. Animal welfare is deeply rooted in all our processes and we attach a great deal of importance to preventing unnecessary suffering: this is one of BRF's golden quality rules.
We make sure that our teams comply strictly with these rules and that all staff involved with the handling, transportation or processing of live animals - both our own employees and those of our suppliers - receive regular training. This allows us to offer our European customers a highly reliable source of poultry products because our 16,000 farmers are fully integrated into our "from farm to fork" concept.
How do you rate the high value attached to consumer opinion which is currently exerting such a strong influence on food companies in Germany? Does this apply to BRF, too?
Banfi: One of the most important changes made by BRF in the past year was to strengthen its consumer orientation. This has enabled us to accelerate the development of new products. Putting the consumer at the heart of our business strategy has proved the right decision. We invest in opinion polls and studies which allow us to anticipate market trends and continuously update our range, thereby ensuring a perfect match with our customers' profiles. This is attested to by the 120 or more new products which we launched in 2014.
What kind of products currently have the greatest sales potential worldwide?
Banfi: People's habits are changing. They spend less time preparing meals. That's why the demand for ready meals is growing. Consumers are increasingly looking for convenience products and innovations. We've responded to this trend by launching the new Sadia range in key markets in Europe and Russia.
Which path does BRF plan to take globally in the future?
Banfi: BRF aims to continue its global strategy of being more market-oriented, of developing its range of standard feedstock products into modern processed products which offer greater value-added, and at the same time of ensuring the dependability of its fully integrated supply chain.
Our goal is to continue to develop and consolidate the relationships with our most important regional customers and partners in each key segment. Innovation will be the key to our success, especially in Europe. The management team appointments we have made over the past year enable us to pursue a strategy which is tailored to the needs of the individual regions.