Major Brazilian supermarket chain, Pao de Acucar

Brazil has no signed regulatory equivalence agreement in International trade and is only willing to accept equivalency agreements if other countries provide audits, a participatory guarantee system, and social control, said Ming Liu, executive director, Organis, the Brazilian National Council for Organic and Sustainable Production, and executive coordinator of Organics Brasil.

Brazil also has no organic equivalence agreements between its regulation and any other foreign regulations.

At the presentation “Brazil Market Trends and News” during BIOFACH 2017 in Germany, Mr. Liu said that the vast South American nation has: an organic regulation set in 2011; three certification systems with seven audit certification bodies accredited by the MAPA agency; 18 participatory certification agencies accredited; and a program of social control registration with family farming and direct sales of organics to consumers only.

Mr. Liu said that Brazil started discussions on an organic equivalency agreement with Chile in 2016, but it's not a third-party certification with audits done by organizations such as Ecocert, IMO, etc., as it cannot provide the level of traceability needed. "It is an initiative between farmers and stakeholders. We only accept third party audits in our organic certification system," Mr. Liu said.

"Imported products have to comply with the Brazilian regulation, and these are limited to ingredients and inputs, while every company must be certified by a certification body approved to sell organic products in the Brazilian market."

Looking at the development of the organic market in Brazil, Mr. Liu said that the country’s system of social control is unique, as the farmer must meet the small family farmer registration and can only sell directly to the consumer.

"They cannot sell into the supermarkets or by direct delivery; it's a way to promote social, local and environmental aspects and has no food miles issues," he added.

Medium size and large supermarkets account for 55 percent of the Brazilian retail organic market. Speciality stores account for 15 percent of organic sales. Interesting to note that organic and agro-ecological street markets (647 farmer's markets) account for 25 percent of organic retail. Buying groups that value sustainability issues and home delivery services account for 5 per cent of organic retail distribution.Apana,one of the main natural food retailers when it first opened in Sao PauloApana ,one of the main natural food retailers when it first opened in Sao PauloApana , one of the main natural food retailers when it first opened in Sao Paulo

Apana, one of the main natural food retailers when it first opened in Sao Paulo

Sales channels are split into two-thirds conventional retailers and one-third specialized shops, online retailers and farmers’ markets. 

The Brazil economy has been in recession since 2015 and expects a zero-growth rate in 2017, while global demand is higher than what Brazilian organic producers can supply.

"The Brazilian organic sector grew 25 per cent in 2016 and is expected to grow by 20 per cent in 2017," Mr. Liu said. More companies offering not only organic but also lactose-free and gluten-free products are growing, and so is the BioBrasil -BIOFACH America Latina trade show.

Brazil had 13,232 registered organic producers in 2014, and 15,590 in 2016. Market turnover in 2015 was $US812 million, $US975 million in 2016 and it's expected to reach $US1.2 billion in 2017, with a 45 per cent of organic production for exports.

The US and Germany are the largest export markets, led by products such as nuts, sugar, honey, fruit juices and palm oil. 

Participation at international trade shows such as BIOFACH, Anuga, Expo West, NOPE and Sial Canada have helped Brazilian firms finding new markets. 

Brazilian organic producers and suppliers use the Brazilian organic seal and don't pay for an extra seal, while most Brazilian companies exhibiting at trade shows are supplying only one or single ingredients such as cashew nuts, Brazil nuts, acai, honey, palm oil or mate tea.

"All single products are easier to sell in Europe but don't offer added value such as a cereal or energy bar made with Brazilian fruits and nuts," Mr. Liu said. "And it's easier for the single product producers to apply and pay for the EU organic certification."

Sustainable production trends that are assisting the growth of organics in Brazil are: increased consumer awareness towards a healthier diet and lifestyle; more media coverage about organic and agroecological production systems; a national program to increase public school purchases direct from producers; and more organic products available direct from farm to table.

ORGANIS

The growth of the organic market brought to Brazil the challenge of structuring the organic chain. The development of the organic regulation in Brazil took almost 8 years. This delay contributed to the disruption of the communication and cooperation among the different segments of the supply chain.  “The farmers were distant from the industry and processing plants in the main discussions. And processors and the service entities took a long time to build a relation with the retail sector,” said Mr. Liu. “The retail sector was not prepared and oriented to work with the organic industry. Retailers adopted practices from the conventional market, forcing several small producers and small entrepreneurs out of the market”, he said. “These disruptions were a major obstacle to the growing and development of the sector”.   

The Brazilian Council of Organic and Sustainable Production (ORGANIS) was created in January 2015 as an entity with focus on the promotion of the development of the primary and secondary sectors and services up to the final consumer. The new entity took the challenge to develop an open work group with players from all segments of the organic supply chain: Large farmers and small producers, processors, industry service providers and the retail sector. 

Organis was launched in November 2015 in Brazil, and officially presented to the international market at BIOFACH 2016 in Germany. "It was necessary to have an institution to be recognized as a legitimate interlocutor of producers, processors, and Brazilian entrepreneurs of the production chain for organic and sustainable development," Mr. Liu said.