Latin America: from sustainable production to consumption

Latin America: from sustainable production to consumption

Latin America has become a large producer of sustainable foods, yet local consumption of sustainable foods remains negligible. What can change this?

Latin America has become a large producer of sustainable foods. However, a major challenge for the region is to become an important consumer. Organic Monitor research finds Brazil is now a global source of sustainable coffee, soya beans, sugar, juices and herbs. Argentina and Chile are well-established southern hemisphere sources of organic fruits and vegetables, whilst Colombia and Peru are important exporter of natural ingredients. However, local consumption of sustainable foods remains negligible.

With 6.8 million hectares, Latin America has 18 percent share of global organic farmland. More than USD 1 billion of organic products is exported from the region per year, however local markets are insignificant in size. The region is also a major source of fair trade products, such as cocoa, sugar and coffee, yet there is no domestic market. Most Rainforest Alliance and UTZ Certified products grown in the region are also destined for Europe and North America.

As will be discussed at the Sustainable Foods Summit, a major challenge for Latin America is to develop local markets for sustainable products. Various studies show consumer awareness of sustainability issues is rising; however awareness is not translating into demand. Low consumer knowledge of sustainable production methods and high product prices are cited as barriers to market growth.

Brazil has the largest market for sustainable foods in the region. Its most successful retailer is Pão de Açúcar, which markets about 700 organic products under its Taeq private label. It has partnered with local farmers to secure supply of certified products. Other retailers, including Wal-Mart and Carrefour, are also investing in sustainable product ranges.

Native Products is one of the few Latin American sustainable food companies to build a strong market presence. Native organic products are in over 20,000 Brazilian outlets. Its success is partly because of its wide product range, including sugar, coffee, juices, breakfast cereals and snack bars.

Organic Monitor sees product portfolio as a key ingredient for local markets to develop. Most Latin American producers are focusing on agricultural commodities for export markets. Lack of domestic production is leading some retailers to import finished products like organic baby food and beverages from the US. High transportation and import costs further inflate product prices.

A bigger obstacle however is changing consumer behaviour. Many Latin American perceive organic, fair trade and other eco-labeled products as luxuries. Consumers maybe becoming more aware of sustainability issues, however perceptions will have to change if local markets are to take root.

The challenges associated with sustainable food production and consumption will be featured at the Latin American edition of the Sustainable Foods Summit. The summit will be hosted in São Paulo on 27-28th March. Leading organizations involved in sustainable foods will be participating; they include Native Products, Unilever, Sodexo, OrganicsBrasil, Pão de Açúcar, Wal-Mart, IBD Certification, Fairtrade International, Marine Stewardship Council, UTZ Certified, Rainforest Alliance and Imaflora.


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