São Paulo – The Brazilian Soluble Coffee Industry Association (ABICS) launched a brand this month (pictured above) for the worldwide promotion of the product: Explore&Enjoy – Instant Coffee Brazil. The brand was created as part of the cooperation agreement signed in February 2018 with the Brazilian Trade and Investment Promotion Agency (Apex-Brasil). Soluble coffee is prepared by the dehydration of the roasted bean, a process that can be done through different methods.
The new brand’s main goals include showing the country’s leading role in the industry. “Brazil is one of the greatest soluble coffee producers and exporters, but it didn’t have a brand that showed this,” said ABICS Institutional Relations director Aguinaldo José de Lima. Although a brand for the domestic market has also been created, Crie&Curta, the focus is on the foreign market, announcing it specially to clients that sell directly to the consumer. “One of the [planned] actions was to establish a Brazilian soluble coffee brand, since we sell to the leading companies that pack it in their own brands and distribute it in the market of each country,” explained Lima.
Brazil’s soluble coffee exports in 2018 amounted to 3.7 million 60-Kg bags. In 2019, ABICS expects to increase it by 5%. “H1 2019 already saw a 9.6% [year-over-year increase],” said Lima. “Overall strategic plan, since 2016, is to increase by 50% the exports volume by 2025,” he added.
Arab market
The Arab countries’ market is one of the focus of the association work. “We are interested in the Arab market, which accounts for 5.8% of our exports,” the director pointed out. The overall volume of coffee exported to the Arab countries in H1 2019 was 872,620 bags, up 53.9% year-on-year. The exchange earning amounts to USD 102 million.
The leading purchaser in the bloc is Saudi Arabia. In May, for example, the volume of Brazil’s soluble coffee exported to that country was 19% higher from a year ago. Historically, the Saudis leads the Brazilian soluble coffee buyer’s market in the region, followed by the UAE, Lebanon, Qatar and Djibouti.
“There’s an upward trend and we’re opening up another front, one of negotiation of tariff barriers. We have instances in the Arab market, such as Djibouti, that has a 13% tariff. Egypt, despite having an agreement with Mercosur, which foresees a soluble coffee tariff reduction within ten years, still has a 24% [tax],” Lima pointed out.
Sixteen Arab countries import Brazilian soluble coffee. There are many examples of those who have tariff barriers. The Comoro Islands apply a 20% tariff. Yemen, Morocco and Sudan 25%, while Algeria 30%. Among the Brazilian competition are European countries such as Germany, Spain and Netherlands.
In order to plead a tariff reduction, the association is preparing for a backstage work. “We’ll ‘poke’ the governments of Brazil and the countries that interest us. [Through] agreements with Mercosur or bilateral ones. For example: what does Morocco wishes to export and Brazil charges a tariff over? There should be a trade of products. Brazil reduces two products’ tariff, and Morocco reduces one,” he explained. Morocco and Mercosur are negotiating a free trade agreement in the lines of the one the South American bloc signed with Egypt.
ABICS has been a member of the Arab Brazilian Chamber of Commerce for three years and in H1 2019 it send a representative to Egypt. “We made some visits scheduled by the Chamber, asking to decrease the 24% tariff more quickly. We were also at the Algeria’s embassy [in Brasília] to learn which products we could offer in exchange,” said Lima. Other countries that are in ABICS strategic plan are Djibouti, Iraq, Morocco and Sudan.
Now, 90% of the Brazilian product is for the foreign market. Seven soluble coffee industries control the production. They include Nestlé (São Paulo), which created the first soluble coffee method, and Cacique (Paraná and Espírito Santo), Brazil leading exporter. See below the video that was created for the brand launch explaining the processes for the soluble coffee production.
Translated by Guilherme Miranda
