Brazil’s top organizations for the export of meat and machinery flocked to Georgia this week for the annual “poultry show,” making a case for deeper collaboration with its largest competitor in the production of proteins: the U.S.
Brazilian firms are deeply embedded in American meat production, largely through acquisitions that have given some of the largest players strong positions in the market.
Pilgrim’s Pride, for instance, is 80 percent owned by Brazil’s JBS, a global meat powerhouse that also owns the Gold Kist brand; both have had major production operations in Georgia for decades.
But during a seminar hosted by the Consulate General of Brazil Wednesday evening at the International Production and Processing Expo, it was clear that smaller Brazilian firms are also looking to break into the U.S. market, aided by a slew of Brazilian private industry associations and government-backed promotion agencies aimed at helping them go global.
The event began with a look at the industry associations that had accompanied a robust Brazilian delegation to the show: ABIQUIFI representing the active pharmaceutical agreement industry with nine companies in tow, ABIMAQ highlighting a Brazilian machinery sector that includes 8,000 producers employing 400,000 people and ABPA, the Brazilian Association of Animal Proteins.
Ricardo Santin, the ABPA president, highlighted Brazil’s advances in productivity and its role in sustainably and safely feeding the world.
With economies of scale, a favorable clean-energy mix and stringent regulations on the use of forested land (two-thirds of Brazilian forests are still preserved privately or by public decree) Brazilian-made meat can be shipped across the world and still contain less embedded carbon than the local option, Mr. Santin said. He cited what he said were outdated figures which in 2008 already showed Brazilian chicken exported to the United Kingdom to be less CO2-intensive than what was made locally.
Brazil is a powerhouse in the export of grains but also proteins, accounting for about a third of global market share compared to about 37 percent maintained by the U.S. across the main categories: pork, beef, eggs and poultry. That means the two largest countries of the Western Hemisphere by population combine to meet an astounding 70 percent of global protein export demand, which doesn’t seem to be in danger of slackening anytime soon as the world population blows past 8 billion, Mr. Santin said.
Sometimes the two countries butt heads, but they also can collaborate, Mr. Santin said, both trading with each other and in fighting for agreeable global trade standards.
“There should be no borders for food,” Mr. Santin said, noting that self-interested protectionism can drive up prices for the poorest in a world where food is ample but distribution is uneven.
Brazil exported 14.3 million tons of chicken meat last year, making it the top exporter of poultry, yet some countries maintain tariffs to keep Brazilian imports from harming less efficient local producers.
Georgia, Mr. Santin said, is often on his mind as the leading broiler-producing state. He sits on the executive committee as vice president of the International Poultry Council, an industry association based out of the same Stone Mountain offices as the USA Poultry and Egg Export Council. Jim Sumner, the USAPEEC president, is the secretary of the IPC.
From across the whole value chain in the production industry, Brazilian firms are aiming to break into the U.S. market, some of them through the Southeast.
During a one-minute pitch session, a representative from Vantec, based in the city of Xanxerê in the southern state of Santa Catarina, Brazil, hinted that it would soon expand to the U.S., perhaps via Georgia. The company, which makes machinery for recycling plants and lumber production, recently moved into the animal nutrition space and exports its products to 13 countries.
Brazil’s NewDrop Quimica, a São Paulo-based provider of cleaning chemicals, has already entered metro Atlanta, setting up a warehouse in Doraville as it learns the ropes of a market that is very different from back home, said Augusto Milani, who has led the expansion in North America for the last six months.
One of NewDrop’s business lines is chemicals for sanitizing food production facilities; in Brazil, these are cleaned by a company’s internal employees, while in the U.S., this function can sometimes be outsourced to other service providers, changing the sales process for a company, Mr. Milani told Global Atlanta.
Lessons like this, as well as tax and human-resources issues, are reasons that Brazilian companies would do well to set up a local affiliate instead of trying to serve the U.S. from afar, said Fernando Spohr, the Miami-based representative of export promotion and investment facilitation agency Apex-Brasil.
“Having an operation, a presence here can make the whole process much easier,” said Mr. Spohr, who along with Mr. Santin came to the IPPE when Brazil had a pavilion back in 2018. Apex-Brasil has incubation space at its Miami offices housing some 100 companies and their products. Its intelligence arm recently concluded a high-level research report on agribusiness opportunities in states like Georgia, California and Texas.
Danila Palmieri of Atlanta-based Connect Solutions says knowing the local landscape is especially vital for Brazilian investors, given how the laws vary among U.S. states and how salaries and work culture differ. Brazilian executives should come with their “eyes, minds and ears” open, armed with a solid plan.
“Leading people here in the United States is very very different than it will be in Brazil,” Ms. Palmieri said, noting that many don’t know that questions they commonly ask during interviews in Brazil may be forbidden here.
Ron Slotin, Brazil strategy director for Drummond Advisors in Atlanta, moderated the panel, which was attended by Brazil’s consul general, Luis Claudio Santos.
At a Global Atlanta Consular Conversation event a week ago,. Mr. Santos said his consulate would take an active role in fostering trade links where possible, including by inviting more Brazilian participation in shows like IPPE in Atlanta and beyond.
(Disclosure: Drummond Advisors has been the presenting sponsor of Global Atlanta’s Brazil coverage for the past year.)