STRATEGIC PLAN FOR BRAZILIAN FRUITS: A PROPOSAL TO INCREASE THE
COMPETITIVENESS OF THE SECTOR IN THE INTERNATIONAL MARKET
JOSÉ GUILHERME AMBRÓSIO NOGUEIRA
School of Economics and Business (FEARP)
University of São Paulo
Av dos Bandeirantes, 3900, Ribeirão Preto (SP), 14.040-900, Brazil.
E-mail: [email protected]
MARCOS FAVA NEVES
School of Economics and Business (FEARP)
University of São Paulo
Av dos Bandeirantes, 3900, Ribeirão Preto (SP), 14.040-900, Brazil.
[email protected] / 55 16 36023903
Review copy for use of the IFAMA 2012 Forum & Symposium. Not for reproduction or distribution.
June 9th-14th 2012.
STRATEGIC PLAN FOR BRAZILIAN FRUITS: A PROPOSAL TO INCREASE THE
COMPETITIVENESS OF THE SECTOR IN THE INTERNATIONAL MARKET
ABSTRACT
The Agribusiness System (SAG) of fruit is one of the most important in Brazil. The fruit system
involves: fresh fruit, dried fruit, frozen fruit as well as its by products: fruit pulps, juices, jellies and
similar. The exports of fruit and their products, they are considered export volumes for most fruits,
excluding orange juice when analyzing the coefficient on export production; seldom result in values
above 3%.
In front of this obstacle to the internationalization of the sector, the study's goal is to make a
diagnosis outside the international market of fruits, in order to identify favorable and unfavorable
aspects in the literature and looking at primary data through interviews with 35 industry players,
issues favorable and unfavorable for fruit trees in Brazil.
To accomplish this objective, in-depth interviews were conducted based on a semi-structured
script. The analysis will be done through content analysis of interviews and by merging results from
the theory studied. The results of the research identify the main needs, barriers and critical factors
for the growth of fruit exports to Brazil.
Index Terms: Fruit trees, Strategic Plan, Agroindustrial System.
STRATEGIC PLAN FOR BRAZILIAN FRUIT: A PROPOSAL TO INCREASE THE
COMPETITIVENESS OF THE SECTOR IN THE INTERNATIONAL MARKET
INTRODUCTION
The agribusiness system (SAG) covers the activities related to agricultural production and also to
upstream and downstream links regarding to the supply of inputs, machinery and implements,
beyond the agro-industrialization and agro-commercialization, becoming competitive the
agribusiness companies that have the ability to develop and sustain a competitive advantage over its
competitors through product differentiation and cost reduction (SIFFERT FILHO; FAVERET
FILHO, 1998). For Goldberg (1968) the SAG's comprehend the segments before, within and after
the farm gate.
NEVES (2007) that when the agribusiness is analyzed, each researcher should have a detailed
attention to the SAG because it is extremely important to understand how the different stakeholders
interact in the production process. In this way, this study refers to the food system of fruits and
derivatives, which consists of two subsystems called agro-commercialization and agroindustrialization.
Several authors highlight the relevance of this sector regarding to the possibility of labor absorption,
employment and income generation, beyond its importance as an alternative to the Brazilian exports
of agricultural products (ANDRADE et al., 2007; BUAINAIN; BATALHA, 2007; QUINTINO,
2007; LOURENZANI et al., 2008; VITTI et al., 2009).
In the Figure 1 is possible to identify the links that go from this subsystem inputs, through the
producers, processing and commercialization of fruits for the wholesale and retail until they reach
the final consumer.
According to RUGGIERO et al. (2003), it is a great challenge and also an opportunity for
producers, in domestic and foreign markets, the commercialization of fruit and their
derivatives. Especially in regions considered hubs of fruit production in Brazil, the fact that
producers organize themselves into associations and adopt procedures adding value to the product,
brings benefits to producers, the producing region and also to the members.
In order that producers and exporters can compete in the foreign markets, it is required following
rules, trends and needs imposed by the international markets. From this it is evident the need of the
manufacturing companies are in a constant process of updating farming techniques and inputs. The
process of innovation and necessity for improvement, especially regarding to varieties, production
systems, machinery and equipment linked to the fruit industry and products is constant. BUAINAIN
E BATALHA (2007) point out that maintaining the current competitiveness of domestic fruit in the
international market depends on the country's ability to face challenges related to the institutional
environment, beyond the introduction of technological innovations in the organization, production
and post-harvest.
If we consider the volumes exported, melon, mango and apple occupy positions satisfactory to
Brazil in terms of international market. However, for other fruits, when analyzing the coefficient on
export production, rarely result in values above 3%. Thus, even with significant numbers of export
of some fruits, the country is still marginal in world trade in fresh fruits, as participates in only 0.5%
of international trade. There are few fruits whose export is representative in terms of production.
Uncontrollable variables - PEST
Product, Service, Communication
$(Payment), Request, Information
Producers
Agrocommercialization Subsystem
(47% of fruits, while 2% to exports)*
Producers
Fruits
Varieties
Production
Syst.
Producers
I
N
P
U
T
S
Fruits
Beneficiation
Producers
Producers
Producers
Fruits
Producers
Boutiques Fruit
Primary
Transformation
Producers
Producers
Producers
Producers
Supermarkets
Fruit Retail
Concentrates
Juices
Pulps
Producers
Hypermarkets
Byproducts
Beverage
Industry
Juices
Nectars
Refreshments
Sodas
Confectionery
Dairy
Ice Cream
Cosmetics
Other
etc..
Industries
Fairs
Convinience
Juice Houses
Restaurants
Hotels
C
O
N
S
U
M
E
R
Events
Agroindustrialization Subsystem
Delivery
(53% of fruits, while 29% to exports)*
Bakery
Facilitator agents
* 2008, in Brazil
Figure 1. Fruit Agrifood System.
Source: authors, from IBRAF (2010) e NEVES (2004).
The study focused on the two subsystems and, more specifically, tried to understand the difficulties
faced by Brazilian products in the export process. The products were classified into five lines,
which are: fresh fruits, dried fruits, frozen fruits, purees and juices. The question that this article
seeks to answer is: How to develop a strategic plan that can be applied in the Brazilian fruit sector
allowing a best competitiveness in the international market?
OBJECTIVES
The main objective of this project is to propose a strategic plan that can be applied in the Brazilian
fruit in order to expand the competitiveness of this sector in the international market.
MATERIALS AND METHODS
The proposed study can be characterized as an exploratory research, so it is demand and discovery
driven helping the researcher to delve into the subject (HAIR at al. 2003). Checking secondary data
and previous research on the development of strategic plans in the agro-industrial sectors, was
detected the need to apply the Planning Method and Strategic Management of Agribusiness
Systems (GESis) proposed by NEVES (2004), which was used in the study for the design of the
strategic plan for internationalization of the fruit industry and its products. This method, proposed
by Neves (2004), has been applied in the past seven years in the Brazilian agribusiness systems
(wheat, milk and orange), Uruguayan (wheat) and Argentine (milk) for the preparation of strategic
plans and management of agribusiness systems. According to the literature were identified other
methods of strategic marketing planning that could be used in the preparation of strategic planning,
however the methods still had little applicability in agribusiness systems. The step number 4 of the
Gesis method, which concerns the development of the strategic plan, has proven the effectiveness in
other studies in the agribusiness and so was used to prepare the plan.
Figure 2 below shows the steps that could be used for the preparation of a strategic plan for the next
five years.
Figure 2. Market Planning Method (Gesis)
Source: NEVES, 2006.
Thus, the proposed method Gesis was developed for agribusiness systems and can be used in this
research.
The project is developed on three main steps:
STEP 1: Understanding and Collection of Secondary Data
The first step of this work was based on documents and secondary data (desk research). Among
them were studied the document provided by IBRAF, "Strategic Master Plan for 2010-2020",
articles in newspapers and magazines in the sector of fruit and their products. In this step it must be
carried out interviews with IBRAF. After collecting the information, it has been prepared the script
for further research that will be applied in the second stage of this work. At this stage yet,it is
applied a semi-structured script.
STEP 2: Interviews and Data Tabulation
Interviews
We selected 50 potential companies that currently export or have the intention of exporting,
however only 35 companies were able to answer or even have your script analyzed and data
sufficient to be tabulated, seeing that other respondents could not provide some information. The
first contact of the authors was with IBRAF, and so the Institute has made available data and
contacts with companies that could help us, and was sent e-mail explaining the intent
and importance of their participation in the study. After sending the e-mail, the researchers
contacted by telephone, with each company to schedule the interview.
The interviews were conducted in Markestrat, research center and marketing strategies linked to the
University of São Paulo - USP, based in Ribeirao Preto-SP, by phone or sending the script to search
by e-mail address. At the end of each interview was sent an email of thanks for participating.
Tabulation of Data Collected
The first analysis was made of a sample of 10 companies and from the responses will be possible to
develop a preview of the results to check for errors in the script and the direction of questions aimed
at their goal.
STEP 3: Preparation of Strategic Plan - Results and Conclusion
After analysis and tabulation of data was designed a set of necessary actions that could be
implemented
by
the
relevant
authorities
in
Brazil.
Occurred at this stage the preparation of the strategic plan for the sector, based on data from
interviews of selected companies, as well as information collected from secondary data. Results,
conclusions and limitations of the research will be discussed in this step.
RESULTS
Involvement of the Participants: Interviews
Companies participating in the interviews were segmented into exporters and non exporters. Among
the exporters, were classified into five segments. They are: In Development, Intermediate,
Experienced and Internationalized.
The interviews with the companies analyzed five different aspects, they are:
Verticalization degree: To study the degree of vertical integration (Low, Medium and High) in
which companies in the fruit and their products are, evaluation criteria were adopted based on the
identification and analysis of some points along the chain.
Marketing orientation: To understand the degree of marketing orientation (Low, Medium and
High) some criteria were adopted: to determine whether the respondent or any employee of the
company performs technical visits to locations where exports; if you have knowledge about the
culture and consumption habits of the target country to identify how they obtain this information,
the trend is accompanied by consumption of other fruits that are not produced and / or exported by
the company.
Infrastructure and Skills to Meet the International Market: In this analysis some issues were
listed as: the implementation of innovations in products and services at least once a year, the
existence of the company employees who speak other languages and product catalogs other
languages.
Main competitors: To analyze the company's main competitors and what factors that give
advantage in exports, research criteria were used based on prices charged by competitors in the
variety and quality of products offered by them and advantages in logistics and trade (differentiated
and / or other advantages) they have.
Planning and Target Markets: In this analysis we adopted criteria capable of identifying the main
target markets for the following years and see if companies have today, a long-term planning to
strengthen exports.
Sector Overview Versus Company Overview: In this section, the intention was to compare the
vision of the respondent in relation to the export sector of the Brazilian fruit, with the vision of the
company's situation over the next five years. With this, the views of business and industry, could be
classified as optimistic or pessimistic.
Project Need and Responsibility: To identify the projects and responsible, respondents were
encouraged to discuss projects they believe are necessary to remove the main barriers to exports and
who could be responsible for such projects. This criterion made it possible to identify issues such as
tariffs, phytosanitary barriers, internal regulation, infrastructure problems, registration of
agrochemicals, logistical problems, organization of specific sectors of the fruit, among others.
From the analysis of answers given by the participating companies, it was possible to prepare the
summary table below, showing the needs of companies with different levels of export.
Non Exporter
In Development
Exporter
Medium
Exporter
Experience
Exporter
Internacionalized
Verticalization Degree
LOW
LOW
LOW
LOW
HIGH
Marketing Orientation
LOW
MEDIUM
MEDIUM
MEDIUM
HIGH
Infrastructure and Skills to
Meet the International Market
LOW
MEDIUM
HIGH
HIGH
HIGH
Competitiveness Degree
MEDIUM
HIGH
HIGH
HIGH
HIGH
Planning and Target-market
Only Inside
Market
Europe (east),
Asia e Middle
East
Europe, China,
Middle East,
Canadá and
USA
Sector: Pessimist
Company: -
Sector: Optimist
Company: -
Sector Expectation x
Company Expectation
Sector: Optimist
Company: Optimist
Germany, France
China, Saudi
Arabia, Emirates
and USA
EU and
USA
Sector: Pessimista Sector: Pessimist
Company: Empresa: Pessimist
Figure 3. Summary of the final outcome of the study.
Source: authors
VISION
An important tool for strategic planning is to create a vision for the future. Technically, she should
express what the industry wants to be in five or ten years, serving as a compass that guides over the
years. Based on the concerns of entrepreneurs and industry experts, has formulated a vision for the
future of agro-industrial system of fruit and their products:
“Being a highly competitive industry in the production and marketing of fruit products, with strong
focus on trends in consumer markets, anchored by sectoral actions to establish effective policies to
create a business environment that allows companies to access target markets, reduce costs and
work in an organized, innovative and promoter of sustainable territorial development.”
STRATEGIC OBJECTIVES:
As reported in interviews, making sure the needs of agents developed five strategic objectives for
the short-term export development of fruit growing in the international market. They are: increasing
the participation of Brazilian companies Brazilian total exports of fruits and derivatives, increasing
the participation of brazil on imports of fruit and derivatives of the target countries, increasing the
number of exporting units, promoting the export culture among small and medium producers and
agribusiness, strengthen collective action to stimulate the synergy between the companies;
SHORT TERM PROJECTS
Figure 4 below shows the projects of short-term goals, relating them to the profiles of companies,
thereby facilitating the actions of some companies.
Company Export
Degree x
Related projects
Project
Website Project Buyer Image
Trainning
e Business
and
campaigns
Capacitation
Internati Prospectio Cooperative Cooperativ
onal Fairs ns Missions action with
e actions
food retail with other
brazilian
companies
export
sectors
Non exporter
In Development
Medium Exporter
Experienced
Exporter
Internacionalized
Figure 4. Details of Projects Relating to Short-Term Objectives
Source: authors
We will see yet, the great need for long-term projects, where coordination of institutional actors
such as government and its bodies will be required for the development of fruit growing in the
country.
LONG TERM PROJECTS
Figure 5 below presents the main long-term strategic objectives. The related projects are related to
the involvement of agents. Objectives related to strategic coordination and institutional capacity
building related goal, objectives related to production, R & D, Products and Innovations and
Objectives related to logistics and distribution.
Objetivos
Relacionados
Objectives
Related à
Coordenaçãoand
e Institucional
Coordination
Institutional
•International negotiations to reduce tariffs
•Negotiating agreements for phytosanitary
(regionalization of protocols)
•Registration of pesticides
•Dismemberment of NCMs
•Release of imports of pesticides directly by
producers
•Tax exemption - Compensation of PIS / COFINS
•Facilitate access to credit lines and creating special
lines for fruit
•Negotiating for lower port charges
•Export Insurance
•Organization of producers and agribusinesses for
marketing
•Policies to curb the appreciation of the real
•Mapping and Simplification of export
(export saver)
•Unify state laws for processed products
Objetives
Objetivos
Related
Relacionados
to trainning
à Capacitação
and capacitation
 Information System (Market Intelligence) that
allows companies to plan production, set and
access markets. Among other data, this system
should be a tendency of the market, potential
demand, certifications required by country.
Objetivos
ObjectivesRelacionados
Related to Production,
à Produção,
Products,
Produtos,
R
& P&D
D ande Innovations
Inovações
Partnerships with universities and research
centers to increase the technical level of the
chain fruit;
Factory Revitalization
Plant Protection, especially on imports of fruit.
Objectives
Objetivos Relacionados
Related to theà Distribution
Distribuiçãoand
e Logística
Logistics
 Improvement and modernization of transport
infrastructure (roads, ports and airports)
Opening of new marketing channels
Figure 5. Summary of Long-Term Strategic Objectives (5 years) with involvement of Stakeholders
Source: authors
CONCLUSIONS
In the development of a strategic plan for fruit, the methodology was effective, allowing its use in
business and academia. The method was simple and straightforward, the information obtained by
primary and secondary data enabled better development in the plan, and the implementation of the
script to the first 10 respondents was important to validate it. The SAG of fruits and its derivatives
saw the necessity of implementation actions in this segment, since the sector is losing its
competitiveness for others producing countries and still have great relevance in the international
market, except the orange juice. Although there are large industries, producer and businessman
suffer
from
high
fiscal
aspects
and
bureaucracy.
Another aggravating factor is the lack of capital of the entrepreneurs, aggravated by rising
production costs, high interest rates charged by financial agents, logistics costs and poor
infrastructure, beyond other factors. Note that the fruit is still living the same problem as other
segments in the Brazilian agriculture, such as lack of coordination and associations. So Brazilian
producers have to work alone to seek new channels and new ways of products commercialization.
Added to this, the barriers that affect the Brazilian market for fruit and their products are
increasingly strict. Import quotas, antidumping, countervailing duties and measures of protection
are some ways to hinder the entry of Brazilian products in these countries. With the development of
the plan with goals and vision of the industry seeking the international market, this article brings up
different projects for different spectra types of companies for the actions to be implemented are
somewhat assertive and decisive for the growth of the Brazilian fruit sector in foreign markets.
Acknowledgment
IBRAF and APEX Brasil.
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