This year Brazilian fruit juice manufacturers Dafruta and Maguary were united under the company name EBBA (Empresa Brasileira de Bebidas e Alimentos); the result is one of the largest natural fruit drink suppliers in the country. With annual revenue for 2009 estimated at $220 million, EBBA is preparing a market shake up. Reuben Ford finds out more about the recipe and ingredients of this successful blend.
As a producer of real fruit juice, one of the greatest advantages of being based in Brazil is the access to so many fresh tropical fruits,” says André Tavares de Melo, vice president of EBBA (Empresa Brasileira de Bebidas e Alimentos). Both the company’s Maguary and Dafruta brands use fruit rather than flavorings, a fact which is of increasing importance in today’s market.
“Diet juice drinks with synthetic ingredients are no longer so popular. Instead, today’s consumer wants the natural benefits of the fruit, such as antioxidants, vitamin C, fiber and juice that is free from artificial preservatives and colors,” he explains. Like the growing demand for free range chicken and organic food, natural fruit juices are the future of the market and important to EBBA’s strategy.
Although the deal linking Dafruta and Maguary has been signed this year, both brands not only have extensive experience in the industry, but are also linked historically. Maguary was founded in 1954 as a national fruit juice manufacturer. The partners sold the company to Kraft Foods 30 years later, and established Dafruta.
Experience with the success of Maguary juices meant that Dafruta followed suit. “When it began in 1984, Dafruta was a copy of Maguary,” confirms Tavares. It quickly developed a special pride in being Brazilian, offering the best fruit flavors from the country, and became one of the leaders in the domestic juice drink market. In order to achieve this position, Dafruta embarked on two ambitious and successful plans: the first was to increase visibility of the brand in Brazil and abroad and the second was the construction of two factories. One facility was built in Aracati, in the state of Ceará in 1984, and the other in Araguari, in Minas Gerais state the following year. The locations were strategically chosen to allow access to the North, Northeast and Southeast of Brazil.
The plans paid off and Dafruta established representative offices around Brazil as well as trade relations with the U.S., Africa, Asia and Europe. Whereas the Maguary brand had actually been decreasing its considerable market share since the sale, Dafruta was growing at a rate of 40 percent a year, and peaked at 200 percent growth over a four-year period. The decision to buy back Maguary in 2009, returns the brand to its founders and unites it with a market leader.
FLAVORS OF SUCCESS
The two brands that make up EBBA produce a similar range of flavors; the most popular of which, according to the vice president, are cajú (the fruit from which the cashew nut is taken), passion fruit and grape. In total there are more than 16 natural flavors available, including orange, mango and guava. Both brands produce concentrated juice with no colors or preservatives, which is diluted by the consumer: Just 500 milliliters of concentrate produce one gallon of juice. Ready-to-drink juices are also available in one-liter, 200-milliter and 330-milliliter sizes. All of the fruits are from Brazil, with the exception of peach, which is imported from Argentina.
EBBA also combines the best production technology from the two companies. As well as juice and concentrate, the company prepares fruit products for sale as ingredients to food companies. The fruit is treated at the facilities; either boiled, freeze-dried or otherwise processed and packaged for delivery. As a specialist in Brazilian fruits and focused on their health benefits, EBBA supplies several forms of the acerola fruit, for example, which is exceptionally high in vitamin C. The same is true of the açaí berry from the Amazon that is purchased by health food companies, who manufacture supplement capsules and also used by food companies and confectioners, as well as prepared for export.
Specific techniques have been developed in-house by both brands. “We have a complete range of machinery and structure in place for the manufacture of the products, including ovens and boiling equipment and specialized chefs who manage the ingredients,” explains Tavares. The machinery is produced in Brazil and adapted for the requirements of each product.
BEST OF BOTH BUSINESSES
EBBA links the administration of two important brands. Maguary is a traditional household name associated with reliability and quality. Dafruta is a lower priced and more competitive brand that aims to offer value for money. “At the moment we are in the middle of marketing plans to adjust the two brand images, to make them even stronger and even more competitive,” says the vice president.
The acquisition has resulted in an extensive infrastructure. Tavares explains, however, that of the four industrial units, production will be moved to two – those constructed by Dafruta. Following the current restructuring of operations the two facilities, which cover areas of 30,000 and 15,000 square meters, will house the most modern technology, and increase the production volume of both brands.
Investment in the products does not stop here. The company is focused on the healthy option, to accompany the tastes of consumers, who are more concerned with nature and fair trading in all its forms. The best raw materials and ethical environmental practices are areas to which EBBA is dedicated. “Brazil on the whole is behind in terms of its network between the producer and the manufacturer. The country is not very well organized, and we are constantly working on our supply chain to ensure freshness and quality,” says Tavares.
The company’s products are packaged in Tetrapak cartons or glass bottles, which guarantee freshness and are environmentally friendly. Logistics are outsourced to a number of companies, depending on the delivery; whether from farm to factory, factory to local client or for export. In each case all of the partners are qualified and certified by industry standards. At present around 13 percent of goods are exported, mainly to the U.S. and Europe. EBBA’s clients range from retailers, such as major supermarket chains (of which Dafruta and Maguary are present in the 200 largest in Brazil), health food producers and soft drinks manufacturers.
A FRUITFUL FUTURE
“The client base and business have enormous potential to grow, as the market for pre-prepared, packaged juices is very small in Brazil,” Tavares says. The sale of freshly squeezed juice in bars and restaurants is still responsible for a major part of the country’s fruit juice consumption, however with the speed, convenience and quality of packaged juices becoming an ever more important factor, EBBA is confident that sales will continue to grow. It is estimated that the market will grow by about 15 percent a year; good news for Dafruta and Maguary. Between them, the two brands currently hold around 6 percent of the market share, in the ready-to-drink juice sector, and lead the domestic market in fruit concentrate. Tavares predicts that EBBA will enjoy a 15 percent market share in the near future and annual revenue of over $200 million in 2009 alone.
With more than 55 years of experience in the sector, the professionals directing Dafruta and Maguary are well versed in the sale and production of fruit juice and concentrate. The recent joining of the two brands planted the seed for a new industry leader, whose market sensitive and successful products promise to grow in the future. With strong strategies for marketing, logistics
and infrastructure, EBBA guarantees that the market is in store for a healthy taste of Brazil.