Monday, 22 February 2010

Brazil and the Food Sector, one step at a time

For a long time the food and beverage industry has been seen as not interested in embracing management systems (MS)standards such as ISO 9001. Apparently, the reason behind could be the number of regulations they have to follow; which until not that much time ago has given the impression that controlling the quality of their products was enough to keep them in business.
It was only more recently that they started thinking about the potential damage to their brand reputation that food safety scares could cause.
Perhaps another reason which has convinced the food industry sector to consider adopting a management systems approach to help them keep their business under control is the fact that in order to be more competitive, food organisations started seeking different alternatives to traditional suppliers; some of them being used for decades.
These new suppliers caused supply chains to become more complex to control, generating not only higher but more complex risks which demand a more robust system to manage them.
In line with that, until very recently major players in the market used their own protocols to assess their suppliers. This was time consuming and imposed costs to suppliers as such protocols were not mutually accepted by different buyers.
In terms of adopting a system to improve their own internal controls; there were those that had already identified the need to have a more structured and documented system to demonstrate  to their customers their capability to deliver quality and compliance to contractually agreed specifications and went for ISO 9000 certification.
In Brazil , LRQA's first contract with the food and beverage industry came in 1992 with a global cocoa powder and butter producer with sites in Ilhéus and São Paulo.  With the support of the UK we got our local assessor force trained for the food sector, in line with the main client interest at that time, which was compliance with ISO 9002. Over the years we managed to get the major players in the citrus industry so that by the year 2000 we were working with almost all of the key regional organisations located in Brazil.  Other important organisations also decided to implement ISO 9001 in the alcoholic drinks sector with certification by LRQA delivered to several large organisation in the sector. Further, sugar mills across Brazil also recognised the benefits of LRQA's unique Business Assurance approach and began working with us.
If at the beginning the interest was just compliance to the specified standard; with time, maturity and education, large organisations across Brazil have started to consider the use of management systems to improve overall organisational performance, achieving customer and client expectations, promoting continual improvement, demonstrating a commitment to quality, or in other words continued evaluation of customers’ performance to sustain and improve results.
With more and more food safety scares appearing in the press and the availability of standards such as FSSC 22000, users of MS in the food/beverage sector are placing more importance on reducing risks which can have a direct impact on their brand reputation, risks which could eventually put their company out of business.
Focusing on the Brazil auditing and certification market, LRQA's Business Assurance approach has us very optimistic regarding the food and beverage sector. Here are some of the reasons for our optimism:
The Potential:
• Brazil has the largest productive land area (size of the whole Europe) for growing almost any type of vegetables and fruits (good weather, well distributed and abundance of fresh water, among other factors)
• Our food industry sector is well developed also in the processed food area and able to produce food for export in large scale and at a competitive price ( refer to figures given below )
• Brazil as a sugar and ethanol producer: the number of sugar mills just in the State of São Paulo is increasing from the current 350 to 430 by year 2012 what will enlarge our ability to export alcohol as a fuel alternative.
• Brazil has the largest cattle herd ( over 180 million ), is one of the largest exporters of cow meat as well as pork and chicken.
• Organic agriculture is becoming an important market and we are quite developed in this area : consider coffee, cocoa, sugar and vegetables.
• Brazil is the largest producer and exporter of concentrate orange juice, not mentioning tropical exotic fruit juices.
• Wine sector is achieving quality and productivity that in medium term future will place Brazil as an important exporter.
• The presences of international food or drink giants like Kraft, Unilever, Nestle, Mars, (you name it) in our Country is a good sign of the importance of Brazil.
• Despite the fact that we have 9,000 Km of sea coast fishing farms are producing an important range of different fishes for which there is internal and external markets

2000-2008, Brazil and the Food and Beverage Industry:

                                                        2000          2008       Variance

Brazil population ( millions ) :            171.3          192.1       12.1%

Exports ( Total in USD bi)                 55.1          197.9        259%

( Food/Beverage USD Billions)           7.7           33.3          333%

(Total in USD Billions )                    55.8           173.2         210%

( Food/Beverage USD Billions)         1.6              3.4          113%

Brazil  is a large food exporter to markets such as Europe, Asia and the Americas and this means there is and there will be demand for auditing and certification services.
With a global force of almost 500 food sector assessors, a commitment from LRQA's global senior management to the food sector and technical expertise on both a regional and global level, we are confident that we can meet the rapidly changing needs of Brazil's food sector organisations.


  1. By constitutional determination regarding the educational system, the aforementioned legislation still applies as long as it does not go against the Constitution. This ambiguity is a consequence of the absence of a new Bases and Guidelines Law and characterizes a transition phase until the new law is finally elaborated and enacted. The bill has already been submitted to congress.

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    Jesper Gronkjaer
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