The artisanal charcuterie market in Brazil and opportunities abroad: a call for small producers

PEIEX Campinas Center – Francisco Falsetti Xavier

The growth of artisanal products and producers of the most diverse types is evident to any attentive observer. Through an extensive literature review, Oliveira (2019) shows that over time consumers have shown behavioral changes in their relationship with food, and the increase in the search for artisanal products in recent years is the result of one of these changes. The interest in homemade goods has become a trend for several reasons ranging from the desire for healthier products to the attraction for something rescued from the past; a traditional form of production.

From the experience of PEIEX service to Defumatta Charcutaria Artesanal, a family micro-company based in the city of Indaiatuba (SP), it was possible to obtain some extremely relevant information for producers in the sector who wish to venture into the foreign market. However, the use of charcuterie products only serves as an example; The study ultimately aims to encourage artisanal producers from the most diverse sectors and show them how the foreign market can make them strategic actors for the promotion of their respective regions.

One of the products analyzed by the company, and which will be used as a reference for this study, was Coppa: pork sausage of Italian origin (Capocollo), which is commonly known and consumed in Brazil and around the world. The product is represented by NCM/SH 0210.19.00, which covers cured pork.

In order to understand the existing market, some quantitative data on Brazilian exports of these goods were collected through the Comex Stat platform: until 2018, only the three States in the South macro-region of Brazil presented themselves as exporters of this type of product. The year 2018 marks a turning point in this market, as other states in the country also begin to export goods included in the tax classification of 0210.19.00. This year marks not only the diversification of the origin of products but also the destination of these exports.

Currently, at least 18 states of the federation export cured pork, with Uruguay as the largest recipient. Even after the diversification of markets and producers, the country continued to purchase an average of 27% of all Brazilian exports of goods in this sector. As a counterpoint, it is worth mentioning that, when seeking to determine the participation of States in the sales of such products abroad, it was found that Uruguay never consolidated itself as a market for São Paulo charcuterie. In the last ten years, practically the only state that supplied such products to the neighboring country was Santa Catarina — with the exception of 2013, which also saw exports from Paraná (COMEX STAT, 2022).

In any case, according to the entire set of data analyzed, it makes sense to consider Uruguay as a potential market for artisanal charcuterie products from Brazil. The ApexBrasil5(2019) Opportunities Map tool, which identifies potential export markets by product, also highlighted Uruguay when searching for potential export markets for such products of Brazilian origin.

Taking the South American country as an analysis market, the next step was to understand the competition there: in 2020 figures, Uruguayan imports of products covered by HS 0210196 came from three countries: Spain (59%), Italy (29%) and Brazil (12%) (TRADE MAP, 2020). The origin of most products, together with their high average price7, indicates that the tax classification used well represents the products desired for the study.

The fact that there is a consumer market for these products already opens up a possibility for Brazilian producers. Furthermore, there are four other factors that also generate advantages for the supply side. Firstly, Mercosul's Economic Complementation Agreement 18 (ACE 18) gives the possibility for the importer to pay a tax rate of 0% on imports. It must be taken into account that, for any product that either does not originate in any of the four countries of the bloc or does not have an agreement with Mercosur, this tax would be at an ad-valorem rate of 10% (MERCOSUR, 2022). In this sense, importers of goods of European origin pay the full tax rate. A second factor to be considered would be the logistical cost, which is reduced due to geographic proximity and the availability of services.

Thirdly, it is a reality that the average price of a Brazilian artisanal product will be relatively lower than its European counterparts. Artisan charcuterie products from countries such as Spain and Italy have a high added value not only due to their quality, but also due to a psychological aspect that has to do with their representation as a traditional product in these markets. Brazilian producers can manufacture alternative artisanal goods of excellent quality and lower prices. It is important to comment that these will not necessarily compete with European products: they can reach a market segment that is also eager to consume artisanal products, but is unable to purchase them from traditional regions due to their high cost. Finally, the cultural similarity between both countries can be an important factor that facilitates the negotiation and insertion of small beginning producers in the foreign market.

In a recent conversation with Defumatta about how exports fit into their strategic planning after PEIEX and what its possible impact on the region, the businesspeople commented that, in general, returns are predicted in different ways: in the short term, the company will contribute to greater job creation due to the need to increase productivity; In the long term, it was explained that the constant search for quality increasingly means that all links in the production chain adapt to the rigorous demands of this market. This process can be costly at first, but eventually it improves the quality of the entire chain.

Finally, the intangible gains will also drive new activities: the credibility that the company will gain with its insertion abroad will reflect in the greater attractiveness of its products and services — such as its charcuterie school project, which will require the formation of a body of support that can be hired locally. The company's image gains and visibility will be reflected in the city as a whole.

Originally published in: https://portal.apexbrasil.com.br/transparencia/ -> Publications -> E-Books -> Essays 2022

Qualify your company for free at PEIEX – ApexBrasil's Export Qualification Program. The focus of the program is micro, small and medium-sized companies: https://portal.apexbrasil.com.br/qualifique-sua-empresa-peiex/