Food Industry

Report Highlights:

The Brazilian food processing industry was valued at US$ 173 billion in 2009. Analysts expect that the market will increase 4.0 to 4.5 percent in the next five years. This increase is driven by key market indicators such as higher income levels, single-living trends, health and wellness concerns.

Post:

Sao Paulo ATO

Katty Corrente, Agricultural Assistant

Fred Giles, Director

Agricultural Trade Office, São Paulo

2010

Food Processing Ingredients

Brazil

BR10013

12/14/2010

Required Report - public distribution

SECTION I. MARKET SUMMARY

A. Market Overview

The food processing industry is the second largest sector among manufacturing industries in Brazil. According to the Ministry of Labor and Employment (MTE), the industry employs 1.4 million people in 38,486 establishments. In 2009, approximately 15,000 jobs were created in the sector. The Brazilian Food Processors’ Association (ABIA) reported that in the same year net revenue totaled approximately 173 billion dollars, an 8 percent increase compared to the previous year. Food and beverage industries made up 85 percent and 15 percent, respectively, of this total.

Brazilian Food Processing Industry Net Revenue (R$ Billion) 2005 2006 2007 2008 2009 Food Industry (A) 169.5 178.7 197.0 230.0 246.6 Beverages Industry (B) 26.2 29.9 34.3 39.0 45.0 Food Processing Industry (A+B) 195.7 208.6 231.3 269.0 2916 Source: Brazilian Food Processors' Association (ABIA) Brazilian Food Processing Industry Net Revenue (US$ Billion) 2005 2006 2007 2008 2009 Food Industry (A) 100.5 106.0 116.8 136.4 146.3 Beverages Industry (B) 15.5 17.7 20.3 23.1 26.7 Food Processing Industry (A+B) 116.1 123.7 137.2 159.5 173.0 Source: Brazilian Food Processors' Association (ABIA) Note: Exchange rate in December 3rd, 2010: US$1 = R$ 1.6860 Regarding distribution channels, the domestic market represented 77 percent of total net revenue in 2009, totaling 132.6 billion dollars, which includes US$ 3.7 billion of imports. Retail and food service sectors accounted for 71 percent and 29 percent, respectively, of total sales in the domestic market. The biggest food service buyers are restaurants and bakeries.