One of Brazil’s biggest dairy producers imports important foodstuffs, increasing the blend of products available and broadening the domestic market. Reuben Ford takes a taste of Tangará.
Despite an inward-oriented economy, around 4 percent of Brazil’s total merchandise imports is food. For one of the country’s most successful importers, supplying the continued demand with the right ingredients from overseas has been just the recipe.
Tangará Foods is the fifth largest producer of dairy blend (milk substitute) from imports and is also an established name in imports of fish, garlic, and rice in Latin America.
Dairy blend, a milk substitute, is made from dairy derivatives without losing the flavor and goodness of milk. As Tangará’s leading product, it can be used across the board as the dairy ingredient in food preparation with lower costs and higher efficiency than milk, but with the same, or better nutritional value.
Finding the Right Recipe
Marketing Director Arlindo Cruzi Júnior begins by explaining that Tangará Foods is the fruit of over 40 years of experience. Although founded in 1993, the family-owned group brought together the knowhow of different food industry sectors.
The Tangará factory, which officially opened in 1993, received imported products and ingredients and processed them for wholesale in Brazil. “The main products were cod fish, milk, garlic, cheese and rice – and we continue to import them today,” he continues.
However, in order to break into the retail industry, Tangará began focusing on dairy derivatives – namely powdered dairy blend, the milk substitute.
With domestic demand outweighing supply, the market was receptive to the tasty and cheaper alternative to milk and together with a strong commercial strategy; Tangará was making its mark.
“Together with the strong support of our researchers and food engineers, Purelac (brand name for Tangará’s flagship product) is a perfect solution. It can replace milk in any recipe, for any type of food. With the right technology the dairy blend brings advantages in to production times, logistics and storage, and can save up to 50 percent on the cost of traditional milk,” Arlindo Júnior explains.
The acquisition of a dairy factory in Rio Grande do Sul state has broadened Tangará’s range of products.
Today, the company sells Purelac in various forms: powder with added vitamins and iron, full fat and skimmed dairy powder, whey protein composites, concentrated whey protein and powdered cocoa. Purelac is more cost effective than milk, with reduced cholesterol, trans-fats and high protein content. It is ideal either as an ingredient for wholesalers in chocolate and confectionary market and dairy products industries, or for the consumer as a milk substitute.
Dairy blend and its forms account for 45 percent of Tangará’s sales.
Meanwhile, traditional food imports are still an important market for Tangará Foods. Potato flakes, vegetable oil, gluten and confectionary ingredients are among the other products offered by the company.
A second acquisition in Rio de Janeiro state expanded Tangará’s retail food line, bringing Tangará’s total facilities up to three: The company headquarters in Vila Velha, Espírito Santo state, the dairy factory in Estrela, Rio Grande do Sul state and wholesale groceries and dairy products factory in Queimados in Rio.
Shaking it Up
The mix of products and their well-structured processing are a success. Tangará Foods has grown by 25 percent over the last five years and Arlindo Júnior confirms annual revenue of $0.7 billion in 2012 and estimates a rise to $1 billion in 2013.
The favorable figures come at a time when family-run Tangará is turning to investment funds to structure future expansion and spending. Arlindo Júnior says: “We are working with NEO Investimentos, which is improving corporate governance to prepare us for IPO in around five years’ time.”
The financial shake up follows Tangará’s $24 million investment in the two acquisitions. Both the facility in Estrela, which was purchased in operation and the Queimados factory, cost approximately $12 million each.
“We have always reinvested our resources, the changes are a step towards an even stronger future,” adds Arlindo Júnior.
Securing its future is an intelligent move for Tangará Foods, whose volatile relationship with the Brazilian Real demands strict strategies and careful calculation. “Focusing on the internal market has been the solution to unfavorable exchange rates – the valuation of the Real caused a 25 percent drop in exports, fortunately we continued importing to Brazil and selling internally,” Arlindo Júnior explains.
Tangará has product lines exclusively for export. Although current export figures are 5 percent of total production, the company possesses the structure and know-how to export to the five continents – in particular South America, North Africa and the Middle East.
“We have direct competitors in each of the segments we work in, but launching 50 new products a year, as well as maintaining existing lines, means that measuring market share is almost impossible,” says Arlindo Júnior.
His words are modest. Tangará is increasing its infrastructure and has been nominated the best dairy and derivatives company in Brazil, by industry magazine ‘Exame’ for the last four years. By 2015 the company plans to open 20 more distribution centers and concentrate on direct sales.
Tangará sells to small and mid-sized supermarkets, food services, restaurants, bakeries and ice cream stores as well as confectionary and food factories. Arlindo explains the benefits; “…by targeting retail directly through distribution centers we cut out the middle man and compete directly with small factories, which puts us in a good position.”
In spite of expansion, Tangará has not lost its touch. Proud of its personal service and technical support, the company uses its considerable storage facilities to control delivery to all sizes of clients, prioritizing their needs.
Arlindo Júnior also defines the company’s success by the strong research and development team. “We have eight nutrition engineers, who monitor our food and run tests on new products in our laboratories. We aim to provide intelligent solutions – well-formulated and tasty ingredients…”
Delivering the products is as important to Tangará as the process of creating them. As well as strategically located facilities close to important ports, the company manages logistics centrally and controls them via its distribution centers.
From beginning to end, Tangará Foods has it covered. Whatever the recipe, Tangará is the right ingredient.