Perspectives for sustainable products from Brazilian agribusiness in the European Market

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1 Perspectives for sustainable products from Brazilian agribusiness in the European Market Issues to keep in mind and marketing possibilities Simpósio Internacional sobre iniciativas de sustentabilidade e tendências na Europa e na América Latina: identificação e promoção de sinergias 10 de abril de 2013, Campo Grande

2 Overview Introduction Issues to keep in mind Solutions for SME Three practical examples Outlook 4/16/2013 2

3 Introduction EU sustainable Development Strategy (2001, reviewed 2009) Climate change and clean energy Sustainable transport Sustainable consumption & production Conservation and management of natural resources Public health Social inclusion, demography and migration Global poverty and sustainable development challenges Different pace of implementation across sectors 4/16/2013 3

4 Introduction Trend towards sustainability in industrial sectors: Energy ( energy transition ) Energy efficiency and energy conservation Heat insulation of buildings Nuclear power phase-out Environment Emission Trading System (ETS) 4/16/2013 4

5 Issues to keep in mind The case of sustainability in agriculture: Increasing public awareness Sensitivity to crisis of the sustainability concept GMO and sustainability Added value of sustainability: tangible vs. emotive quality certifications 4/16/2013 5

6 Issues to keep in mind Key success factors for certification processes: Strategic choices Create value Capture value Value Network Driver of business model: Public sector Market Producer organization 4/16/2013 6

7 Issues to keep in mind Relationship: Provider-Consumer 1. Credibility creating trust salesman s dilemma: CSR initiatives perceived as greenwashing 2. Regionality Sustainable production is strongly linked to regional production 3. Variety of certifications watering down informative value 4/16/2013 7

8 Issues to keep in mind Relationship: Provider-Provider 1. Trade-off: individual commercial advantage vs. economies of scale through cooperation 2. Natural competition along the production chain bottle-necks with higher bargaining power 4/16/2013 8

9 Solutions for SME Creating long-lasting, cross-boarder alliances vertical integration of production chain + long-term commitment + know and tell about your provider Local cooperatives to augment competitiveness and reach Lack of market power can be compensated by specialization Integrate commercial and non-commercial actors Simulate hands-on experience for customers First-mover advantages 4/16/2013 9

10 Three practical examples 1. Beef for restaurant chain High quality Constant demand Sustainability: key premium attribute 2. Non-GMO soya Growing market (current estimate: 15% market share of GMO-free soya in Germany) role model Austria (chicken feed) Comparative advantages of Brazil (approx. 20% GMO-free) Soya Livre (Embrapa) positively perceived by BMELV 4/16/

11 Three practical examples 3. Tea & Fruit Infusions Atypical use of product (lemon peel or rose petal) Condition: untreated 4/16/

12 Outlook EU market highly regulated, but characterized by high continuity and stability essential for SME to achieve an adequate ROI Tendency towards further enforcement and control of sustainable production ongoing First-mover advantages and trickling down of best practices Timely ROI rather in niche markets, in the long run most likely also in commodities 4/16/

13 Thank you very much for your attention. 4/16/

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