Peru FoodNews 2010 - GBR

6
A Global Business Reports publication
A Global Business Reports publication
7
of a sudden there is no hake, but there is
octopus, you need to be ready to process
it. Today, Seafrost works with 15 different
species, and each of them allows us to
offer a wide range of products”, Bologna
maintains.
Having a diversified portfolio of clients
and destination markets is also important.
Gandules, mainly a capsicum exporter that is
now heavily investing in grapes, is exploring
the potential of the Latin American region:
“We are now more diversified in products
and markets than in 2002, when the U.S.
represented 85-90% of our sales. This is
very important, because the crisis in the
U.S. has hit Peruvian exporters that were
relying solely on that market”, affirms Juan
Varilias, Executive President of Gandules.
In 2008 the company entered the
Argentinean market, which accounted for
5% of the company’s sales by 2009. “This
success has prompted us to look at other
countries such as Venezuela, Colombia and
Uruguay”, continues Varilias.
Adding value
While food processors are investing in
fresh products like avocado and grapes,
they are also going down the value chain
and preparing final products that go
beyond the simple jarred pepper or canned
sardine.
Sociedad Agrícola Virú, Peru’s second
largest agro exporter, is adding something
extra to its green and white asparagus,
artichokes and peppers. “Our new lines
include antipasti-style grilled products
and sauces. We are very excited about
these value-added foods. We can be very
competitive both in terms of quality and
price”, claims Miguel Nicolini, General
Manager, Virú. The company processes
and exports over 60,000 tonnes of produce
annually.
Danper, an exporter of asparagus,
artichokes, peppers and fruits based in
Trujillo, also has a line of specialty items
which include asparagus salad and artichoke
tapenade.
According to Mr Varilias of Gandules:
“Final consumers in today’s world are very
busy with work and do not have the time to
cook, so they need semi-processed products
that are easy to prepare”.
The trend is also seen in the fishing and
aquiculture industry. Iny, Peru’s largest
hydrobiologicals exporter, thought that
it would be a good idea to sell skewers
containing two shrimps and one scallop,
with weight and size as required by the
clients. The public in tapas bars in Spain
is demonstrating a good response to the
product according to Elie Barsimantov,
General Manager of Iny. For Barsimantov,
the future of the company relies on
products like these skewers: “In the past
we have produced up to 20,000 tonnes
per year. We are now at 12,000 tonnes
because we are increasingly switching
from commodity products to value-added
products. Nevertheless, our average sale
price has increased threefold, improving
our total income. Our new products require
less volumes, but are sold on a regular basis
rather than as one-off transactions and offer
better margins”, explains Barsimantov.
Another benefit is increasing client
loyalty. Creating a unique product that
cannot be easily replaced by cheaper
imitations is a good way in which to maintain
a regular flow of orders. For Matarazzo of
Camposol: “We want to invest in our own
brands, because in the private label business
the margins are lower and there is no client
loyalty. The idea is to increasingly move
into value-added products”.
Employing thousands
One defining feature of the agro industry
is that it requires an enormous human
effort to put the value chain in motion.
During high seasons, the largest producers
employ thousands of people in fields and
processing plants (Sociedad Agrícola Virú,
for instance, needs 6,500 people during the
peak season).
After coffee, asparagus is Peru’s main agro-export product.
(Photo courtesy of Icatom)
The same applies to the fishing industry,
which is highly dependent in Peru on
the catch brought to the coast by artisan
fishermen. While the fishmeal business
is highly automated, the production of
hydrobiologicals requires lots of hands to
ensure that the product is properly taken
care of.
In this context, food exporters have
a wide impact because of the fact that
thousands of people’s livelihoods depend
on them. The development of the industry
to process anchovy for human consumption
is one significant example of the benefits
that moving up the value chain can have on
jobs.
“In the last five years, the anchovies
business has generated over 2,000 new direct
jobs, out of which 90% are for women”,
emphasises Hugo Vernal, President of the
Association of Anchovies Producers of Peru
and General Manager of Inversiones Prisco,
an anchovies and scallops producer.
Besides providing jobs, companies
are actually in a position where they can
improve the lives of those participating in
the value chain: “We have to improve the
lives of artisan fishermen because there are
poverty levels that need to be addressed.
Luckily along the coast there are no hunger
problems, but we need to improve the
housing, the education and other aspects”,
affirms Humberto Speziani, Advisor to the
Board of Tecnológica de Alimentos and
Vice-President of the National Society of
Fishing (SNP).
Jorge Arangurí, Director of Sales and
Marketing at Danper, a large agro exporter
based in Trujillo, points out: “At some
instances we have up to 5 000 employees
and we aim to turn this human resource
into human capital by providing them with
education and health facilities. With human
capital you can build a society. Otherwise
in a hundred years you find yourself in the
same place; with low education, low health
and poor infrastructure”.
In the long run, it will be the companies
who will benefit from being good employers:
“Peru needs to grow and to develop, and
there is a big difference between these two.
We are a business, we need a margin in
order to make profit and fight in the market;
but at the same time we need a sense of
social responsibility. We have focused
the company to be sustainable”, Arangurí
concludes.
Exporter or
multinational?
There are a number of Peruvian companies
that have aggressively entered international
markets over recent years, not merely
exporting products, but also setting up plants
abroad via either organic growth or through
acquisitions. An example is Alicorp, Peru’s
mass consumption products giant. Alicorp
has grown its sales from USD 100 million
in 1991 to USD 1.2 billion in 2009. It has
operations in Argentina, Colombia and
Ecuador, while it also exports products
elsewhere from Peru, including Omega 3
concentrates.
Alicorp’s CEO, Leslie Pierce, affirms
that many mass consumption products are
already well served by strong players in
other countries and that therefore acquiring
operations can be the best option to grow
in other markets rather than introducing a
new, competing product. But on the other
hand, he sees opportunities in certain
Peruvian products: “Peruvian gastronomy
is experiencing a boom abroad, and the
ingredients required are unique to Peru. We
have products like rocoto and ají sauces
that are already consumed abroad by the
Peruvians that live overseas. We still do
not have a strategy to export these in large
volumes as the conditions for that are still
not met, but I see lots of potential for the
future”, he says.
An astonishing success story is Ajegroup,
a company born in Ayacucho in the 1990s
in the carbonated drinks business. Back
then, the Andean area was badly affected by
terrorism and the distribution of drinks from
the coast was very unreliable. What is said
to have started with an initial investment
of USD 30 000, is today one of the most
globalised Latin America’s corporations,
with revenues of around USD 1.3 billion,
10 000 employees and operations in a dozen
countries in Central and South America, as
well as Mexico and Thailand.
“Wherever we decide to go, we set up our
own plant and aim for substantial marketshare.
We are a true multinational”, affirms
Jorge López-Dóriga, Global Marketing
Director of Ajegroup. The company likes
to be seen as a producer of quality drinks
at fair prices: “In Thailand, for instance,
we have a 15% market share after just three
years in the country. We have achieved this
by expanding the market and democratising
the consumption”.
Finally, another example of a Peruvian
multinational company is Gloria. Since
buying a Nestlé-owned plant in the 1980s
the company has become a large food
company with revenues of $770 million
in Peru (2009). The Gloria Group also
owns separate sugar plants in Peru and
food operations in several Latin American
countries.
Like Ajegroup, which is identifying
the opportunities that countries with high
temperatures like Thailand or the Dominican
Republic have for carbonated drinks
consumption, Gloria has been actively
exporting canned evaporated milk, its star
product, in markets to which it adapts very
well.
As Fernando Devoto, Legal Corporate
Advisor of Gloria, explains: “We have a
small can, equivalent to a glass of milk,
that we call the baby can. It is the one we
export the most, to countries mainly in
Africa and the Middle East where there
are refrigeration issues and there is not a
cold chain. Our product is very suitable to
solve this problem”. Last year the company
exported evaporated milk worth over USD
50 million.
The companies mentioned in this article
are some of the most significant examples of
how the Peruvian food industry is prepared
to compete on the global market. It is not
just a question of availability of resources:
Peruvian entrepreneurs are proving that
although they have only truly entered
the market economy in the last couple of
decades, they are capable of implementing
the processes and obtaining the quality
certifications that buyers and governmental
bodies require anywhere in the world. It is
probable that more Peruvian companies will
follow their path.