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Food and Beverage Industry

The food and beverage industry of Brazil is a very important part of the Brazilian economy. It is one of the biggest contributors to the economy.

Brazil is one of the leading countries of the world for production and export of a variety of agricultural products. It is the largest exporter of coffee, juices, sugar and alcohol. Other major food exports of Brazil are fish and seafood, cocoa, cereals, fruits, tea, roots, meat, and fats and oils.

Brazil is a major exporter of orange juice. The country is also an exporter of exotic fruits found in the Amazon, such as Umbu and Cupua. Certain companies have come up with a technique that allows them to export frozen fruits in plastic bags.

Even though Brazil itself is a big exporter of wine, it also stocks wines from all over the world. Brazil also imports various kinds of liquors.

The Brazilian food and beverage industry is investing heavily in technical development and acquiring modern machines. Investors in the beverage industry should look to invest in the energy drinks sector. The health and energy drinks segment is growing at a very rapid rate.

The food and beverage industry of Brazil has undergone tremendous development in recent years due to inflow of foreign direct investment (FDI). Some major global food brands have made Brazil their home. Brazil is also home to some multinational beverage companies.

The Economic Stabilization Program (The Real Plan) has contributed heavily to the growth of the Brazilian food and beverage industry.  The industry underwent a dramatic transformation between 1994 and 2003 due to the opening up of the Brazilian market to foreign investment and a spike in consumption of food products in the domestic market. As the income of the people grew thanks to the Economic Stabilization Program, so did their spending ability for diverse food products. The expansion of the consumer base was the primary factor responsible for entry of foreign companies in the domestic food and beverage market.

The fiscal incentives offered by the Brazilian government, availability of low-cost skilled labor and easy access to raw materials, has made Brazil a very inviting place for investors. The implementation of the Real Plan also ensured deregulation, privatization and easier process for investment in the country. These macroeconomic reforms have played an important role in attracting foreign investment. The investment policies of the government have made investment in this sector even more lucrative.

The food and beverage industry contributed about $54 billion (food- $47 billion and beverage-$6 billion) in the year 2003. The Gulf is one of the main export markets of Brazil. In 2007, Brazilian imports accounted for nearly 12.5% of the region’s total food and beverage imports.

Currently, the Brazilian food and beverage industry is very competitive due to investment by multinational companies, improved distribution networks and demand for processed food.