Building trust in the Brazilian market: Interview with Marcia Cioffi,Brazil, food safety,

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FOOD AND HEALTH ESSENTIALS

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Building trust in the Brazilian market: Interview with Marcia Cioffi

As a country, Brazil is the fifth largest market in the world for food and food products, with annual food expenditures estimated at over 330 billion euros1. But despite rapid national growth over recent decades, the effects of the global economic recession in 2008/2009 have lingered. Per capita gross domestic product has shrunk by 25 percent between 2012 and 2016, even as the population has grown modestly during the same period2. At the same time, political turmoil and allegations of corruption by high-level government officials has deepened concerns about Brazil’s long-term outlook, further eroding the levels of trust in government and institutions of all kinds.

Against this backdrop, food producers and importers seeking to take advantage of significant market opportunities in Brazil must deal not only with the effects of a prolonged economic recession but an increasing level of suspicion and distrust among consumers. These challenges are not limited to new market entrants but extend even to well-established players in the food industry and to widely-recognised food brands. Therefore, building and maintaining trust among consumers is essential in successfully navigating Brazil’s turbulent environment.

Marcia Cioffi is the General Manager Commercial for TÜV SÜD’s operations in Brazil, with more than a decade of experience in the development and oversight of production chain models for food, health and beauty products. At TÜV SÜD, Cioffi is responsible for working with food industry clients to establish mechanisms to reduce operational and marketing risks for their products and to support their brand protection efforts.

Cioffi recently spoke with Food & Health E-ssentials about the current situation in Brazil, how the economic and political situation is affecting the food industry as well as trust among consumers, and the steps that food producers and importers can take to navigate the challenging environment in her native country. 

Food & Health E-ssentials: Tell us a little bit about yourself and your professional background.

Marcia Cioffi: I graduated with a degree in Veterinary Medicine in 2002 and finished my master's degree at the University of São Paulo in 2006. Currently, I’m working on a specialisation in inspection, hygiene and sanitary surveillance of food of animal origin, and expect to complete that in April 2019.

I started my career in the laboratory in 2003, and since then I have been involved in business development activities in the Environment and Consumer Goods market segments. I have extensive experience in the food market, and have worked in commercial technical management operations of companies that provide specialised technical services, such as systems and products certification, testing and analysis, risk assessment, training and inspection for food safety. 

F&HE: Brazil continues to undergo significant political turmoil and economic challenges. In general, how would you characterise the chief concerns of the food industry in the face of these challenges?

MC: In my view, Brazil still faces uncertainty in the year ahead. The current recession, which started in the second quarter of 2014, is one of the deepest and most prolonged our country has experienced in recent decades. Labour market conditions remain unfavourable, with our unemployment rate expected to rise from an average of 11.5 percent in 2016 to 12.8 percent this year.

In 2016 and 2017, the government proposed a number of fiscal measures, including a cap on government spending (Constitutional Amendment 95) and Social Security reform (PEC 287/2016). Our Congress also approved additional measures such as the outsourcing law (Law 13429/2017) and labour reform (PLC 38/2017) aimed at improving the business environment and consequently economic efficiency. 

One bright spot in Brazil’s economic picture is the impact of our agricultural activities. Most of the country’s GDP growth in the first and second quarter of 2017 was attributable to agricultural production. In addition, some key industry sectors like capital goods, and services like transportation directly benefited from the growth in agricultural output, demonstrating the strength and importance of this sector in the overall Brazilian economy.

Agribusiness is one of the main sectors of the Brazilian economy. Despite the economic crisis, the increased global demand for food will help to ensure strong prospects for Brazilian agribusiness in the coming years. A 2017 report by Brazil’s Ministry of Agriculture, Livestock and Supply (MAPA) predict growth in several sectors of the national agribusiness in 2018 and 20193

Also looking ahead, Brazilian presidential elections will take place once again in 2018. Brazilians are full of expectations and optimism that the effects of the political crisis, especially on private investments, will decrease in the coming year, resulting in a more positive economic scenario and an end to our deep and long-running recession.

F&HE: How have these political and economic challenges affected your fellow Brazilians when it comes to their confidence in corporations and major retail brands?

MC: The reduction of consumer confidence in Brazilian brands and institutions is a result of a combination of factors, such as corruption scandals involving large companies in the food sector, and other irregularities identified by the Carne Fraca Operation.

Carried out by Brazil’s Federal Police, the Carne Fraca Operation was an investigation that revealed a countrywide scheme of corruption involving meat producers and inspectors. According to Federal police, a criminal organisation involving MAPA officials facilitated the production of adulterated food in exchange for money, and were also involved in several other irregularities.

In an effort to regain the confidence of Brazilian consumers and the international marketplace, MAPA has ended the political appointments in state’s superintendence since May 2017, and announced that is studying significant changes in its food inspection system in order to improve the sector’s sanitary performance.

The Carne Fraca operation had international repercussions with quite significant consequences for Brazilian exports. Currently, only four of the 93 countries to which Brazil previously exported meat and meat products remain closed to Brazilian exports. Thirty-three countries have resumed regular trading practices related to meat and meat products from Brazil, while an additional 56 have implemented stronger inspection programmes applicable to Brazilian exports.

In an effort to regain the confidence of Brazilian consumers and the international marketplace, MAPA ended the political appointments in state’s superintendence beginning in May 2017. MAPA also announced that is engaged in intensive internal discussions regarding significant changes in its food inspection system that would improve the sector’s sanitary performance. 

The Carne Fraca operation resulted in international repercussions with quite significant consequences for Brazilian exports. Currently, only four of the 93 countries to which Brazil previously exported meat and meat products remain closed to Brazilian exports. Thirty-three countries have resumed regular trading practices related to Brazilian meat and meat products, while an additional 56 have implemented stronger inspection programmes applicable to Brazilian exports. 

F&HE: During the past few years, what changes (if any) have you observed in the food buying and consumption habits of consumers in your country? What factors seem to be driving these changes?

MC: In recent years, we’ve seen an increase in Brazilian consumers who are interested in natural and/or organic diets. We also seen a greater demand for food products without refined sugar, gluten, lactose or chemical additives. In addition, the practice of “conscious consumption” grows every year, along with increase consumer concern regarding the origin of the food they purchase. This last concern has driven the domestic food industry to offer more food products that have been produced with attention to animal welfare considerations, and we’re already seeing several options in supermarkets that address these preferences, such as free-range chicken.

In general, many Brazilians are willing to spend more on food and food products that they believe to be healthier and with greater nutritional value, and that are produced in a manner consistent with their environmental and sustainability values. 

F&HE: In your opinion, why is trust such an important issue in the decisions by consumers regarding the food and food products that they buy? And what are some of the actions that food producers, suppliers and retailers can take to address the “trust gap” with consumers? 

MC:Clearly, the mood of Brazilian consumers has been affected by our country’s ongoing political crises, the recent corruption scandals, and the irregularities in food safety inspections. Because domestic consumption is one of the main drivers of the Brazilian economy, this is a point that cannot be ignored by food producers, suppliers and retailers. Trust is the foundation for consumption. If a consumer does not trust the brand, he or she will not buy products associated with that brand, and is unlikely to recommend such products to friends and family.

Therefore, quality and reliability is a key focus of corporate marketing campaigns, as it helps to reinforce the strength of brands with consumers. But it also important that a company’s commitment to quality and reliability goes deeper than its advertising messages, and is reflected in every aspect of its operations. In other words, companies must have a legitimate commitment to comply with applicable laws and requirements, as well as the expectations of consumers. This means establishing clear criteria for food safety, with a controlled and monitored process all along the production chain, from the acquisition of raw food materials to the final food product that is placed on the market.

F&HE: How can TÜV SÜD support food producers, suppliers and retailers in successfully dealing with the unique opportunities and challenges in the Brazilian market?

MC: In addition to the hygiene measures required by law, and the application of other best practices in manufacturing, pest control, etc., food companies must analyse and manage risks, which are essential components of the concept of prevention and protection of brands.

TÜV SÜD works with organisations in the food industry through specialised technical services that provide safety and quality throughout the production chain. Based on a true partnership with our clients, we inspect and audit all elements of production and distribution. In addition, our food labs around the world conduct tests and analysis to verify the safety and compliance of raw materials and ready-to-eat finished products.

Locally, our Brazilian laboratory complies with the requirements established by ABNT NBR ISO/IEC 17025: 2005, and is accredited by MAPA and the CGCRE/INMETRO. Our food testing facilities have also been qualified by the Brazilian Network of Analytical Laboratories in Health (REBLAS), enabling us to consistently deliver the highest standard of analytical quality and excellence in the services provided to our clients.

Finally, our technical staff is comprised of experienced and highly-trained professionals, who are regularly evaluated on test procedures and analytical methods.

[1] “Projects volume of the world’s largest food markets for 2015,” report by Statista. Available here (as of 1 November 2017).
[2] “Brazil Economic Outlook,” a report by FocusEconomics, October 10, 2017. Summary available here (as of 1 November 2017).
[3] “Agricultural Projections, 2017-2027,” a report by Brazil Ministry of Agriculture, Livestock and Supply,” August 2017. Available here (as of 19 November 2017).

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