COVID-19: Limiting Joy in Brazilian Food Culture

Interview with Reynaldo Barros, General Manager of Kerry Brazil and South Cone

Food is such an integral part of Brazil’s vibrant culture, but has COVID-19 forever changed the role food plays in the life of a Brazilian consumer?

Reynaldo Barros, General Manager of Kerry Brazil and South Cone, explains how COVID-19 has impacted food consumption in Brazil and how food manufacturers can be successful, as we look towards the new normal.

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Interview notes:

Damien: Almost a quarter of a billion consumers make Brazil one of the most important food markets in the world, but Covid 19 has broken the role that food plays in daily life for the Brazilian consumer. Will Brazil's food industry ever be the same again?

Meet Reynaldo Barros, General Manager of Kerry Brazil and South Cone and welcome to “On the Horizon”, a podcast series from Kerry Group, discussing top of mind business issues during the COVID-19 crisis. I'm your host, Damien McLoughlin, from University College Dublin. Reynaldo, welcome.

Everybody who's visited Brazil understands the role that food plays in that wonderful vibrant Brazilian culture we all admire so much. How has COVID-19 changed the Brazilian consumers consumption of food?

Reynaldo: Thank you, Damien. I'm very pleased to be with you today and I think the key point, in terms of the consumers, we have to take into account is that the meal occasions will continue the same, but the way that the consumers interact with the meal will be a little bit different. If you go into three pillars about how the consumers approach food, we can split in three. There is a very well-known market here in Brazil that we use to split in three. That is the society, the nutrition and the joy. I think these three elements are the elements that drive the consumers for the meal occasions. For society, what we have been observing is that consumers are looking for more affordable food, given the uncertainty that Covid has caused in terms of the disposable income. This is one of the changes that we have observed.

In terms of the nutrition, as you know, in Brazil we have a lot of approaches in terms of sports and workout people using nutrition in terms of shaping our bodies and things like that. And what we have been observing is that they are much more conscious about nutrition in terms of immunity. Consumers are looking for this aspect of the food to provide a benefit and prevent some situations, like COVID-19.

The third, and I think that this is one of the key elements of the Brazilian culture, is the joy during a meal moment. I think this would be something that we want to change because even in the office, when we have lunchtime with people, it’s a joy to have a meal together. At the weekend, or after hours, people go to restaurants or the shopping malls and it is a way of joy. This will be the dramatic change, because of preventing contamination and all of the social restrictions that we have, the joy of the meal is much more at home right now. Instead of being in a restaurant celebrating a birthday party, people celebrate with very close family. What we have been observing is for the future, this will continue to be at home. This would be the challenge for customers in foodservice: how to attract consumers back to the dining rooms for this really important piece of the meal. The nutrition and affordability are the other key elements on that.

Damien: There are some implications obviously for food service, but what about for people selling into the home? The trends aren’t obvious in terms of pack size and so on yet, but what are the implications of these changes for Kerry’s customers in Brazil and close by countries, such as Chile and Argentina which you’re also responsible for?

Reynaldo: The challenge of our customers in foodservice is how to replicate the experience at home to grab that piece of the business. The portion that move from the dining rooms into their homes—how can they replicate the experience of having a casual dining at home? It's completely different. This would be the point and this will be the challenge. How to preserve the taste, the texture, of that experience at home. This is the first thing.

Second thing with the same customers in the foodservice. How do they attract back consumers to the dining rooms at affordable prices, because capacity will be reduced due to social distancing enforcement. We will not have anymore 300 or 500 people in a dining room. Maybe there will be half of the capacity, and there is a cost implication in that. And maybe it’s possible that the income of consumers is not available for that price, so this is will be the challenge in foodservice.

Damien: If a person has a meal out, they don't necessarily always bring it home. But if they have the same meal at home, and they have a steak or a piece of chicken but they don't eat it all, they will save it for the next meal. That has to have some significant implications for food waste. What is your expectation of the scale of change in food waste? And then what's the implication of that for the food industry in Brazil?

Reynaldo: If we look at global numbers and Brazil numbers, in terms of the food chain in Brazil, they estimate wastage of about 30% in some cases. It could rise, depending on the type of the food. If you go to dairy products or fresh meat, for sure the wastage is larger than with processed food, where you have a little bit less than that. But anyhow, the consumption at home will mean the consumers will take care because they will really perceive that they are wasting money if they trash that. This sensation would impact, we don't have a number, but there's a lot of studies going on to measure the impact of COVID-19 on that, especially in Brazil foodservice. At the end of the day, there is a cost for serving that wastage. And the impact for the customer, maybe they would experience some reduction on their orders because of that reduction, but it will be a balance.

Key point here will be how we offer the solutions for the food industry, or for the food service industry, to preserve and gain one day or one week more or to preserve the food characteristics at home. Let's say, the golden part of some things could be if we have French fries, how to make the French fries travel through delivery. And going beyond that, French fries going to deliver at home, how can we reheat French fries, in a fry pan or in a microwave, and get some benefits in terms of the pleasure of the texture in that. This will definitely be a change in a consumer.

Damien: Reynaldo, the last thing I wanted to ask is, and this is crystal ball time, how permanent might these changes be? Can this great celebration of Brazilian food—which we have all enjoyed—is that gone forever or can we expect, in a year or two's time, to get back to how it was in the old days?

Reynaldo: This is the real crystal ball. I think many people in the food industry want to know that. Consumers view changes to their habits based on that, because we have a very strong external factor compiling that. It could be the income, could be the social restrictions on this, social distances. But for sure, we will not be the same. Many people say about the new normal. This will be different. People will continue to meet. People will continue to look for food for society, for nutrition or for joy, but will be somehow different. And, to your point in terms of the business reduction based on the wastage, I think that it will be a more sustainable business, than a business reduction, because the value will be over the table anyhow.

Damien: Thank you, Reynaldo for your insights. They’re terrific and I wish you continued success. We have been on the horizon. Stay safe, stay well and we'll see you next time. Thank you.

Reynaldo: Thank you, Damien. Stay safe.

Damien: I think I've learned four things from Reynaldo’s comments, I thought was worth sharing. First, that we should never forget that the Brazilian and the Latin culture of joy around food is something any of us fortunate to be there have had this tremendous experience, but that is significantly challenged, and that is challenging the food industry in that part of the world. Those firms that wish to deal with that need to focus on ensuring that the taste profile stays the same when food is consumed in different locations and also that the nutrition value remains high, because the consumer is now more concerned about her or his immunity.

While volumes of food consumption may be lower, there is a societal benefit from that because we have less food waste. But we also have this opportunity for clever firms that can focus on the preservation of food, in fact, to increase the size of their business.

The final thing we learned is that, while the joy of food in Brazil is certainly not going to go away, the Brazilian consumer will change, and there's a real need for those supplying those consumers to change with them. We've been on the horizon. Stay safe, stay well and we’ll see you next time. Thank you.

About Reynaldo:

Reynaldo Barros is the General Manager of Kerry Brazil and South Cone. Reynaldo joined Kerry in 2018 as the Vice President of Strategic Marketing for the LATAM region and became General Manager at the start of 2020. He has more than 20 years' experience across international trading, marketing, strategic planning, mergers and acquisitions, sales management and business management.

Before joining Kerry, Reynaldo built a strong professional career including serving for three years as President and General Manager for Ingredion Peru and spending two years of his career in Colombia.

Reynaldo studied business administration and international trading management at the Universidade Ibero Americana and has a Master’s in International Marketing from UNIP. He also has three executive MBAs from the Universidade de São Paulo/Vanderbilt University. Reynaldo participated in the Global Executive Program of Thunderbird School of Global Management.

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