Brasil Foods - Brf

London[pic 2]

School of Business

& Finance

POST GRADUATE CERTIFICATE IN BRAND MANAGEMENT

Strategic Marketing Operations

Lecturer: Ben Botes

Intake: September 2014

Brasil Foods - BRF

Group Members

André Haddad – A4082375

Eleonora Villari – A4086377

Jimena Hernandez - A4082570

Marcela Roméro  - A408692

Priscilla Berbert – A4084521

London, December 12th, 2014

INDEX

BRF BACKGROUNG        3

PESTEL Analysis        4

SADIA’S STRATEGY        6

BRF CHALLENGE        7

SADIA’S NEW STRATEGY        9

BRF BACKGROUNG

BRF was created in 2009 after the merger of Sadia and Perdigão. Then, it became one of the main companies in the global food market. In 2010, BRF reached R$ 22.7 billion mark in sales which 40% of this amount is destined for foreign market, reinforcing the company's global potential. It’s also Brazil’s third biggest exporter and leader in the global production of grains.

At the third year running in the market, BRF was nominee the Best Company in Corporate Governance by the consumer goods sector and top 5 in Latin America by IR Global Rankings Awards. In 2011 BRF expanded its global operations. It purchased Quick Foods in Argentina, 49% of Federal Food (a Sadia distributor in the Middle East) and created a new company to join forces with Dah Chong Hong to distribute Sadia’s products in Hong Kong and Macao. In 2013 the company’s Innovation Centre was inaugurated in Jundiaí, São Paulo.

Today, BRF is the world’s seventh largest food company in market value, one of the main exporters of animal protein on the planet with food items that reach 110 countries over 5 continents. The Company’s focus today is efficiency, and it will achieve their goals by increasing productivity, optimization and return on invested capital by using existing capabilities to consolidate a global BRF, with broad and innovative product portfolio that satisfies different consumer profiles worldwide.

BRF has a portfolio of brands and products positioned to suit different types of consumers. The company operates in the meat, processed meat, dairy, margarine, pasta, pizza and frozen vegetable segments, with renowned brands such as Sadia (58% of participation), Perdigão (27%), Qualy, Batavo (6%) and Elegê (9%), among others. The public recognize these brands for their quality - in Brazil and in the world. BRF portfolio includes more than five thousand products and they keep improving and developing new releases at the Innovation Centre. Such diversity makes up a set of intangible assets and provides competitive advantages to the company. BRF has more than 100 thousand employees spread out in 49 factories in Brazil and has a solid network through 33 distribution centres; it takes its products to consumers in 95% of the Brazilian territory. The company moves forward to be recognized as a leader in the food segment in the Brazilian and international markets.

BRF has, as a main competitor, JBS. They own brands like Gold Kist Farms, Cabaña Lilas and Friboi. They are in the same market as BRF for sixty years, spread in twenty-four countries and have 300 thousand clients. In order to be stronger and compete with JBS, BRF has a long-term project change its international profile and project it to act less in the commodities market and more in the processed market. To reach this goal, the company has as strategies purchase of new processors and distributors in the international market, construction of plants and development of products and marketing campaigns for different cultures and tastes, with Sadia consolidating itself as a premium brand.

PESTEL Analysis

Going to the environmental analysis BRF is really aware of all kind of concerns and problems that can be involved in their business. Even so, we’ll try to cover most of those issues below:

Political Factors: BRF need to be aware of new regulations of the food market, not just about how to sell and freezing conditions but also concerns about how to raise animals, how to plant seeds and any regulation involving logistic and supply chain. Another two issues that these BRF need to be aware are related with policy and level of control through import and export goods. Until now a days, it isn’t a real problem but BRF have to be alert for any changes at the political situation at Brazil and any other countries that BRF usually import or export their resources.

Economic Factors: By this time, the economic situation of Brazil isn’t going so well but as BRF is a food company, people will still buying the products because BRF products are related with basic needs of the population (food). The biggest problem concerning about economic factors is the country receive less investments in infrastructure and less resources coming from abroad. This might be the big issue involving economic factors.

Social Factors: One of the biggest challenges of BRF is to provide healthy food for their customers. As BRF is a frozen food company, the portfolio of not fat goods is not big. If the concerns about healthy food increase, people might be able to substitute BRF’s products for an another kid of products. Another reaction of the society could be people stop eat animals protein and turn into a vegetable nutrition. It might affect the BRF revenues once the company’s focus is animal protein.

Technological Factors: The technology in this market is just related with industries. BRF as well as your competitors have already reached the most high tech equipment for their production. Even so, companies in this market need to be aware about any new technology that can come to improve the quality or the speed of their production.

Environmental Factors: It’s a trend for all companies think about social-environmental issues, especially nowadays. BRF and your competitors have already think about these concern once the sanitary vigilance and the government always stress then keeping the process sustainable as much as they can.