Case study : Bazzar Restaurant in Rio de Janeiro

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Case study : Bazzar Restaurant in Rio de Janeiro

  1. 1. ADM 729 – Brand Management Bazzar Challenge #4 Adrien Bourzat December / 2010
  2. 2. Index I. Introduction............................................................................................................................ 1 II. Management of restaurant and food businesses ............................................................ 1 III. Global Strategy ..................................................................................................................... 3 A. Entry into the US Market ..................................................................................................... 4 B. Entry into Mercosul Market ................................................................................................. 6 IV. Conclusion ........................................................................................................................... 10 V. Exhibits................................................................................................................................. 11 A. Exhibit 1 – Top Word Associations with Bazaar According to the Word Associations Network .................................................................................................................... 11 B. Exhibit 2 – Average Retail Prices of Beverages (Off-Trade) ....................................... 11 C. Exhibit 3 – Average Retail Prices of Packaged Coffee ................................................ 11 D. Exhibit 4 – Average Retail Prices of Packaged Foods ................................................. 12 E. Exhibit 5 – Market Size of Beverages (Off-Trade) ........................................................ 12 F. Exhibit 6 – Market Size of Packaged Coffee ................................................................. 13 G. Exhibit 7 – Retail Market Size of Packaged Foods ....................................................... 13 H. Exhibit 8 – Bazzar current and proposed operational model ...................................... 14 I. Exhibit 9 – Proposed Bazzar Growth Strategy .............................................................. 14 J. Exhibit 10 – Paraguay demographics ............................................................................. 15 K. Exhibit 11 – Paraguay Food Budget Shares.................................................................. 15 L. Exhibit 12 – Chileans and Food ....................................................................................... 15
  3. 3. I. Introduction Bazzar is experiencing different moments in its main businesses. Regarding the food business, it has a wide spread coverage in many states of Brazil. As for the restaurant business, Bazzar is living a period of brand recognition among the target customers in Rio de Janeiro. Meanwhile, the company has short-term plans to expand both its businesses. Two major challenges are examined in this study: defininghow should Bazzar manage its restaurant and food businesses and how can each business reinforce each other; and proposing a global strategy for Bazzar, specifically, defininghow to launch the Bazzar brand in the US and in Mercosul. II. Management of restaurant and food businesses Bazzar‟s businesses stand for a brand encompassing different products and services. To develop an approach for reinforcing the brand and its businesses, one should consider the most important aspect in reinforcing brands: the consistency of the brand nature and the amount of marketing support the brand receives. The consistency proposed does not conflict with performing changes in the marketing program. On the contrary, it stands for managing the brand equity during the necessary tactical changes in pricing, perceived quality, product attributes, communications and brand extensions so as to maintain the strategic direction of the brand. Nevertheless, in order to be successful, the managers cannot overlook the stability of the strategic positioning of the brand. Moreover, certain key elements should never be abandoned in order to maintain the brand meaning over time.Although brands should always look for potentially powerful new sources of brand equity, the priority must be to preserve the current sources since they can be considered as having enduring value to the brand. The way that brand equity is reinforced may depend on the nature of brand associations. Bazzar‟s core associations are primarily related to symbolic and experimental benefits, counting on high perceived quality in products and services. Therefore, in order to reinforce the brand, Bazzar should focus on expanding the usage of current products by encouraging new and existing customers to buy more, through advertising campaigns and well developed communication strategies. 1
  4. 4. In that sense, the two core businesses of Bazzar have plenty of opportunities to reinforce each other, not only in Rio de Janeiro where both businesses are based, but also in other states and regions of Brazil, where the organization plans to expand. The restaurant business has a strong appeal to the class A (upscale) customers in Rio de Janeiro, especially in the noblest region of the city, the south area. The delightful cuisine and attentive service along with the unique atmosphere of the restaurant provide a pleasant customer experience and create associations with joy, exclusivity and status.Moreover, the upscale appeal of the restaurant also provides a high-end gourmet experience for the customers and develops the habit of valuing and consuming upscale products, which reminds customers of the pleasant moments experienced in the restaurant. As for the food business, in Rio de Janeiro, where both businesses are currently developed, it represents a huge opportunity for Bazzar to capture new customers, who might feel reluctant to try the restaurant in the first place. In this sense, the home trial works as an incentive for new restaurant customers. Furthermore, the food business increases contact with potential and actual customers leveraging brand recognition and developing brand fidelity in both of the businesses.In other states, where Bazzar works solely with the food business, the underlying opportunity is to feel the demand for upscale products and to understand the viability of expansion. Once the expansion is considered viable and the plan is put in place, the food market works as a door opener for the restaurant business. Regarding the operational model, the growth plan determines strategic re-organization to achieve synergies and to ensure that the company will focus on the core competences and will not be overwhelmed by operational decisions. Therefore, we propose a few changes (see Exhibit 8). One of the suggestions is to create a marketing department to manage campaigns, promotions, pricing and channel strategy throughout the country, ensuring consistency of communications and the brand strategy. Another important organizational change is to define a unique supply chain department encompassing the logistical company to serve both food and restaurant businesses. Despite the differences in amount purchased, frequency of deliveries and diversity of the products, a structured department will allow economies of scale for Bazzar by increasing synergy, reducing re-work and developing stronger relationships with the suppliers. Regarding the growth strategy for Bazzar, we recommend a phased approach in order to conquer the markets consistently (see Exhibit 9).The first phase, estimated to last about 3 years, encompasses expanding the restaurant businesses to the states which have high demand according to market research and good 2
  5. 5. acceptance of the products. Moreover, the organization should focus on developing a stronger connection between the restaurant and food business in Rio de Janeiro by implementing stronger communication and below-the-line promotions in order to reach the target customers. Having acknowledgedthe receptivity of the new restaurant markets (São Paulo and Minas Gerais) and the performance of the strategy for strengthening bonds between restaurant and food businesses in Rio de Janeiro, the company will have all the elements to begin the second phase, which encompasses increasing usage in São Paulo and Minas Gerais and expanding abroad (the elements of the expansion abroad will be better detailed in section III). While the strategy applied in Rio de Janeiro might require a few changes to fit the new markets, Bazzar‟s experience in Rio will certainly provide a good level of information in order to face the new challenges. In that sense, applying below-the-line marketing actions is the advised approach for São Paulo and Minas Gerais. Once the brand is established and the profits begin to increase, an approach with above-the-line institutional marketing programs is the next step for full establishment of the brand in the national market. The third phase stands for extending the global strategy as described in section III. The robust base in Brazil and strong bond between its core businesses will allow Bazzar to develop a smooth and highly focused global strategy. Furthermore, it is important to remember that international economic instability is another variable that requires a more conservative approachwhile analyzing the best timeframe for going global. III. Global Strategy The bookBrand Management by Kevin Keller explains many considerations to apply when planning a global brand strategy. The book starts by explaining the advantages of global marketing in terms of economies of scale, lower total marketing costs, power and scope, brand image consistency, speed to market, and uniformity of marketing practices. The disadvantages to the global marketing program come in ignoring the differences between cultures, wants, needs, and advertising reactions across geographies. A single marketing program used across the globe also ignores the differences in competitive and legal landscapes between markets. Particularly for the US market, Bazzar may need to regionalize its brand. Per Keller, the steps to crafting a global brand strategy are to: 1) identify differences in consumer behavior and 2) adjust the program accordingly through the choice of brand elements and marketing activities. 3
  6. 6. A. Entry into the US Market 1) American associations with the brand Following Keller‟s recommended structure to defining a global brand strategy, one must first seek to understand how Americans will perceive the current Bazzar brand. According to dictionary.com, Americans apply three definitions to the word „bazzar,‟ spelled „bazaar‟ in English: a marketplace or shopping quarter, especially one in the Middle East; a sale of miscellaneous contributed articles to benefit a charity, cause, etc; and a store in which many kinds of goods are offered for sale. Bazzar is also cited as being commonly confused with the word „bizarre‟. Next, the Word Associations Network at wordassociations.net explores American associations with the word bazaar. The two most common word associations are awning and camel which reinforce the dictionary.com findings that Americans sense a Middle Eastern connotation in the word bazaar. See Exhibit 1which shows the top twenty associations and marks those that possess a Middle Eastern skew. Since the Bazzar brand is Brazilian, a Middle Eastern association is likely to confuse the American consumer who will not perceive a clear relationship between the two geographies. Due to the variety of unintended associations, Bazzar should select a different brand name for the American market. 2) Marketing plan for packaged goods Positioning.Due to different perceptions between the Brazilian and American consumers, separate positioning should be applied between the two markets. In the Brazilian market, Bazzar represents comfort food with quality and charm and products in grocery stores compete with high-end gourmet import products. The high-end gourmet market is already saturated with strong brands in the US and the grocery store chains may not give shelf space to a new Brazilian entrant. Bazzar should position as authentic, exotic, quality Brazilian in the US market moving into the international food niche. The country of Brazil is increasingly entering the minds of Americans through business, news, and sports. When Bazzar enters the American food product market, the association to Brazil should become the leading brand element since it will play to American curiosity. Product Mix.Americans associate different countries with unique strengths in food preparation. The challenge will be to modify Bazzar‟s product mix or select products from the existing product lines to fit into the food niches that Americans associate with the Brazil. Americans see Brazil as being strong in the following food 4
  7. 7. types: coffee, sugar, meat, and exotic fruit. Exhibits 2-7 in the Appendix show the size and growth of the American markets for each area in which Bazzar has products. The data is from Euromonitor‟s Global Market Information Database. Our academic team‟s understanding of the existing coffee joint venture is that the coffee is only to be sold in the domestic Brazilian market. An additional joint venture might be pursued to deliver coffee to the American market. The wet sauces that Bazzar produces for cooking meat should be successful because Americans see meat preparation as a Brazilian strength. However, Bazzar should steer away from tomato based sauces which Americans associate with Italy and curry-based and teriyaki-based sauces which Americans associate with Asia. Similarly with the ice cream sauces, Americans do not associate Brazil with ice cream, chocolate, raspberries, or strawberries but they do associate Brazil with exotic fruits. Passion fruit, guava, and acai for example are becoming more popular in the US. Bazzar should cater to American perceptions by initially marketing only the exotic fruit ice cream sauces. Distribution.The grocery store distribution channel in the US is consolidated under a few large companies that serve the majority of the US market through regionally branded or nationally branded grocery store chains. Niche stores like Whole Foods, Trader Joes, and Cost Plus World Market all offer large selections of foreign gourmet food products like Bazzar‟s product. Consumers go to each of these stores to find gourmet products that are interesting and healthy and the shelved products are not as mainstream as the typical large grocery chain. These companies have favorable distribution policies that allow startups to put products on the shelves locally in one area and then pursue national distribution if success is demonstrated over a period of time. 3) The restaurant business In 2009, according to Euromonitor, the American food service market was $425B USD ($1,384 per capita) and the Brazilian market by contrast was $102B USD ($528 USD per capita). Consumer foodservice is comprised of cafés/bars, full-service restaurants, fast food, home delivery/takeaway, self-service cafeterias and street stalls/kiosks. The upscale comfort food restaurant concept that Bazzar uses in Brazil may not directly apply to the US market because comfort food implies different dishes to Americans. The restaurant concept would need to shift to be more specifically Brazilian, appealing to those looking for an exotic foreign meal rather than comfort food. 5
  8. 8. Bazzar should not initially pursue the expansion of the restaurant or café business into the United States. The 1 American restaurant market is highly competitive with a failure rate of 60% within 3 years and an average of 2 $500k-$1M USD required in startup capital. Since the Bazzar founders are local to Brazil, the startup capital required would be larger, the understanding of the American consumer would be lower, and local control may be more difficult leaving Bazzar to face greater risk and higher costs than competitors. B. Entry into Mercosul Market 1) Paraguay Potential market – Segmentation and targeting.The total population in Paraguay is around 6.349.000 and the gross national income represented$27.678.156.100 in 2009. The GDP on a per capita basis is around $4,700 but the real income has stagnated at 1980 levels. The population can be divided into several income classes (from A to E) – see Exhibit 10. Since the top 10% of the population holds 43.8% of the national income, Bazzar would need to target the AB+C1 income classes, which represent high income consumers. So the target segment represents 634.900 people.These people usually live in the best neighborhood in Paraguay, especially in the Capital Asuncion. AB classes accounts for 3% of Asuncion population (C1= 7%, C2 = 20%, C3 =25%, D = 35% and E= 10%), therefore making Paraguay really small market opportunity, not being considered as a priority in the Mercosul Region. 3 Food budget.The total food expenditure represents on average 27% percent of total expenditure (see Exhibit 11). Paraguay is the country in the world where population spends the most to buy meat in their total food budget. Every kind of products related to meat would be relevant to launch on this market. Food imports. Total Imports in Paraguay represent $6.886 billion in 2009. Brazil is the leading economic partner with Paraguay. In 2009, Brazil accounted for 28.36% of Paraguay‟s total imports while US is around 22.76%, Argentina 15.98%, China 8.96%. We can estimate that Brazilian products sold in Paraguay represent $1,952 billion. Food imports in Paraguay account for 7% of total imports. Therefore food importation from 1 University of Ohio study published in the Dayton Business Journal, 1999. Leonard, Ashley. “How to Plan a Restaurant Business.” eHow. 2 3 http://www.ers.usda.gov/Data/InternationalFoodDemand/RERUN.ASP?RUNID=344401015&RSTYLE=1&VIEW=FBS&FIL ETYPE=None&Country=Paraguay&Commodity=All%20commodities 6
  9. 9. 4 Brazil represents a market of $136.640. This figure shows that Paraguay does not import as much food from Brazil as appears at first sight. Positioning. The company should focus more on premium products than on the provenance of its products due to two main factors. At first, people are not familiar with Brazilian food. Few Brazilian foods are already sold in Paraguay. Secondly, as an American country, Paraguay enjoys the same resources than Brazil. This means that Bazzar cannot place emphasis on the provenance of its products. Marketing Mix Products.The firm should first produce condiments to be prepared with meats. Then it could sell other kinds of premium products that are difficult to obtain in Paraguay such as Açai, achieving a competitive advantage over local food producers. Price.Bazzar should be aware of the fact that Asuncion is considered as the cheapest city to live in the world The city has ranked as the least expensive city to live in for five years running by Mercer Human Resource 5 Consulting . A Very high premium price would not meet demand because people are used to buy things cheaply. Distribution. Bazzar products should be distributed in areas where high income people are gathered. The best neighborhoods of Asuncion are located in the old town. 2) Chile Segmentation and targeting.The total population in Chile was around 17,094,270 in 2010. Concerning the economy, Chile has a GDP of $243.569 billion that has contracted an estimated -1.7% in 2009.People can also be divided into income class (A, B, C1, C2, C3, D). The richest 10 percent of the population obtains 46.1 percent of the national income. Bazzar‟s products should target these 10% of the total population to meet the high income consumer‟s needs. In Chile, a typical household earns$3,000 USD per month for C1, close to $10,000 USD per month for B, and requires one to be a very significant multimillionaire to be an A. The target has very high purchasing power. However, Chile‟s rapidly increasing GDP and recent copper boom have provided Chileans with a sense that economically they are doing better than they actually are. The result has been people accumulating massive levels of personal and household debt to pay for the lifestyle they are convinced they should be living. The 4 http://www.tradingeconomics.com/paraguay/indicators/ 5 http://www.mercer.com/referencecontent.htm?idContent=1268475 7
  10. 10. upper class aspires to a lifestyle they cannot afford andto pay for it, they are put into debt. In Chile, people can pay all at once or in installments which allow the middle class to buy premium products such as Bazzar‟s products in order to reach the social status they could not otherwise afford.The “ABC1” class lives in the biggest cities in Chile, especially in Santiago (5.4 millionpeople), Greater Valparaiso (803,683 people) and Greater Concepción (666,381 people). Food industry and imports. Food imports in Chile represent 7% of the total imports of the country, reaching $54.6 billion in 2010. Import partners are the US 15.6%, Argentina 12.6%, Brazil 11.8%, and China 9.7%. Brazilian imports account for $6.44 billion. In terms of food imports from Brazil we can estimate that it represents a market of $450.000. Chileans and food.Chileans spend 23% of their budget to buy food (see Exhibit 12). Among these expenditures, 21% is dedicated to buy meat and they consume as much meat as breads and cereals. Chile is a major beef producer which explains the low expenses on meat.Chileans normally eat four times a day. The first meal of the day is breakfast, which consists of light fare including toasted bread with butter and instant coffee with milk, then lunch, and then an afternoon tea once each afternoon with bread and jam that often also 6 includes cheeses and palta (avocados). People consume more tea than coffee in Chile . Therefore, the products that are more likely to succeed in Chile are condiments associated with meat and tea. Distribution.Class differences are primarily expressed in the strong spatial segregation that exists in large Chilean cities. Bazzar should be careful to distribute products in the right cities and neighborhoods such as Providencia or in the wealthy neighborhood of Las Condes in Santiago which gather high-income consumers. There are four distribution chains in Chile (three domestic and one foreign) that have 52% of the market in 2007: D&S (domestic), Santa Isabel (foreign) Jumbo (domestic) and UNIMARC (domestic). In contrast with countries like Brazil, Mexico, and Argentina, the participation of foreign chains such as Royal Ahold and Carrefour is still relatively small. This can probably be explained by the fact that the large multinationals prioritized those larger markets. 3) Argentina Segmentation – Targeting. Argentina is one of the key players in the Mercosul Region. With an estimated population of 40.5 million is the second biggest market in the area. The GDP per capita $13,400 and the country‟s GDP $351 billion, that contracted the last year. The per capita GDP is just behind Chile. Moreover, 6 http://www.faqs.org/nutrition/Smi-Z/South-Americans-Diet-of.html 8
  11. 11. socioeconomic levels in Argentina are distributed as follows: ABC1C2 – 34.3%, C3 – 29.5 %, D1 -17.4% D2 – 9.8 %, E – 9.0%. Food and non-alcoholic beverages represent around 61% of the monthly expenditures in Argentina. Lately Argentina have been overcoming several economic crisis from 1999-2002. Argentina was subject to military dictatorship for many years and as well as a dollarized economy. This had a big effect on the distribution of wealth and the wealth gap between the 10% poorest and the 10% richest among the population, grew continuously since 2001, and decreased for the first time in March 2005. The richest classes in Argentina mostly live in the Buenos Aires Federal Area. This class distinguishes of from the rest that they enjoy having great food without thinking about the price. Proud of their Italian and French origins enjoy the fact of eating and having fun around eating experience. Therefore, this opens the doors to an upscale distinguished brand like Bazzar and defines Argentina as the top priority for the Mercosul expansion. Imports. Brazil represents 31% of the $37.13 billion imports. This is due to the economic treaty with the region. Nevertheless, a protectionist approach has been taking place for several months by restricting food imports in order increase domestic consumption. Food that fit on the import ban represents 1.6 % all imports, but crucially, 45% of that total represents imports from Brazil(85 Million).We have to check on this issue this means that taxes can wave Bazzar products out of the market. Argentinean cuisine: One of the biggest producers of meat around the globe. The Argentinean cuisine is highly influenced by the French, Italian and Spanish. Main Argentinean dishes are grilled meat (asado), empanadas, dulce de leche, alfajores, bread and the Mate tea. The Argentinean will always have bread on the table which they put some spread on. This is an opportunity for the salty sauces like the mustard. A big trend in the Buenos Aires region are the ice cream stores specially gelatos and frozen yogurts. This makes a really big opportunity for the sweet line of products. Distribution. Most of the distribution is done through smaller convenience stores within the city. Gourmet food represents 3% of the total supermarket sales. There are several international retail stores like Carrefour and Norte together represent 30% of market share with 200 stores, Jumbo and Disco 23% with 233 stores and Coto 16% with 102 stores. We should focus on the major supplier in upscale markets in Buenos Aires area as well as small grocery stores. 4) Uruguay Segmentation – Targeting. The smallest population in the Mercosul region consisting of 3 million. The 9
  12. 12. capital city is Montevideo is the most populated with 1.3 million. Even though is the smallest population it has a good GDP per capita at $12,600 (higher than the Brazilian one). Just 5% of the current population fit in the A class sector, therefore making Uruguay a really small market opportunity, not being considered as a priority in the Mercosul Region. Imports. The trading balance is negative as Uruguay is importing more than what they are exporting. They import industrial supplies, machinery & equipment, oil & fuels, non- durable consumption goods. And export mainly food(Meat, grains, dairy), textiles and leather. Brazil represents the second largest importer just after Argentina, with the estimated 17.5%. With the opening of the economy, many of the small and inefficient local food industries were closed. There are opportunities to export many food products to Uruguay, but particularly those in which the local industry is not very competitive. Imported food products, especially from Brazil and Argentina, are substituting for many domestically manufactured products. On the other hand, the wealthiest part of the society want to have imported product a sign of status. Uruguayan cuisine: Uruguayans as all of South American countries focus on the consumption of meat as one of the main sources for food. We should look into the savory sauce segment. Distribution. Supermarket penetration is really small is about 40% with 3 major supermarket chains Disco, Devoto and Tienda Inglesa. Most of the sales are done through specialty stores. Most import good are sold through these kinds of stores which have no chain (40 in Montevideo and 30 in Punta del Este). IV. Conclusion This paper has provided the academic group to explore opportunities of enhancing and developing the brand and the businesses of Bazzar. Throughout the paper, the group could identify the common thread between the businesses (food and restaurant) and the synergy opportunities. Developing a structured approach for a global expansion, comprising branding and marketing strategies, was a challenge that led the group onto important conclusions as the choice of countries to expand, the brand name associations, the best time frame as well as determining the regional appeal for different products. Finally, we understand Bazzar, which enjoys good brand recognition along with high quality products and services, has a promising future inside and outside Brazil. 10
  13. 13. V. Exhibits A. Exhibit 1 – Top Word Associations with Bazaar According to the Word Associations Network Number Word 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Awning Camel Selling Bustle Merchant Eastern Shop Whip Bought Market Famous Sell Pipe Folk Buy Slave Street Crowd Worth City Potential Unintended Middle Eastern or North African Associations X X X X X X X X B. Exhibit 2 – Average Retail Prices of Beverages (Off-Trade) 2009 Pricing $USD/liter White Spirits Brazil USA Still Bottled Water Brazil USA Carbonated Bottled Water Brazil USA 11.86 15.18 0.25 0.61 0.65 1.14 C. Exhibit 3 – Average Retail Prices of Packaged Coffee 2009 Pricing $USD/kg Fresh Coffee Brazil USA Instant Coffee Brazil USA 4.78 11.35 23.49 32.45 11
  14. 14. D. Exhibit 4 – Average Retail Prices of Packaged Foods 2009 Pricing $USD/kg Wet/Cooking Sauces Brazil USA Pasta Sauces Brazil USA Table Sauces Brazil USA Tomato Pastes and Purées Brazil USA Vinaigrettes Brazil USA Salad Dressings Brazil USA Soup Brazil USA Chocolate Spreads Brazil USA Chocolate Confectionery Brazil USA 6.67 12.85 3.16 4.96 8.54 6.91 2.59 3.40 13.00 8.78 8.54 8.39 19.27 3.73 11.31 9.37 14.76 11.25 E. Exhibit 5 – Market Size of Beverages (Off-Trade) mn liters & $mn USD Per Capita Liters & $USD 2006 White Spirits Brazil Volume Brazil RSP Value USA Volume USA RSP Value Still Bottled Water Brazil Volume Brazil RSP Value USA Volume USA RSP Value Carbonated Bottled Water Brazil Volume Brazil RSP Value USA Volume USA RSP Value 2007 2008 2009 2010 2009 26 224 403 5,914 27 269 425 6,245 26 288 451 6,751 25 300 482 7,322 27 359 506 7,722 0.1 1.5 1.6 23.9 3,235 744 19,423 12,053 3,621 967 21,171 12,875 3,879 1,164 20,670 12,578 4,236 1,069 20,008 12,226 4,575 1,190 19,608 11,959 21.5 5.4 65.3 39.9 376 230 409 447 410 284 419 468 425 324 421 472 446 289 417 477 462 307 411 471 2.3 1.5 1.4 1.6 *Current Prices – Year-on-Year Exchange Rates. 2010 figures are forecasts. 12
  15. 15. F. Exhibit 6 – Market Size of Packaged Coffee Tonnes & $mn USD Per Capita Kg & $USD 2006 Overall Brazil Volume Brazil RSP Value USA Volume USA RSP Value Fresh Brazil Volume Brazil RSP Value USA Volume USA RSP Value Instant Brazil Volume Brazil RSP Value USA Volume USA RSP Value 2007 2008 2009 2010 2009 552,433 2,673 667,565 6,647 566,825 3,619 661,391 7,069 575,199 3,802 658,400 7,606 587,629 3,234 688,920 8,238 605,970 3,401 723,066 8,962 3.0 16.4 2.2 26.9 531,907 2,232 644,725 6,021 544,015 3,004 640,395 6,460 552,427 3,138 638,508 6,987 564,879 2,699 669,232 7,599 583,041 2,851 703,411 8,296 2.9 13.7 2.2 24.8 20,526 441 22,839 626 22,810 615 20,996 608 22,771 664 19,892 620 22,750 535 19,689 639 22,930 551 19,654 666 0.1 2.7 0.1 2.1 *Current Prices – Year-on-Year Exchange Rates. 2010 figures are forecasts. G. Exhibit 7 – Retail Market Size of Packaged Foods Tonnes & $mn USD Per Capita Kg & $USD 2006 Wet/Cooking Sauces Brazil Volume Brazil RSP Value USA Volume USA RSP Value Pasta Sauces Brazil Volume Brazil RSP Value USA Volume USA RSP Value Table Sauces Brazil Volume Brazil RSP Value USA Volume USA RSP Value Tomato Pastes and Purées Brazil Volume Brazil RSP Value USA Volume USA RSP Value Vinaigrettes Brazil Volume Brazil RSP Value USA Volume USA RSP Value Salad Dressings Brazil Volume Brazil RSP Value USA Volume USA RSP Value 2007 2008 2009 2010 2009 1.5 8.4 39.6 422.3 1.6 10.5 34.6 415.1 1.7 13.5 35 430.9 1.8 12 35.7 458.9 1.9 15.1 36.4 482.3 0.0 0.1 0.1 1.5 138 372 374 1,734 166 477 372 1,772 182 640 390 1,878 208 657 397 1,968 241 898 401 1,978 1.1 3.4 1.3 6.4 15.9 110 180 1,096 16 131 167 1,095 16.1 147 162 1,107 16.2 138 172 1,185 16.4 163 177 1,226 0.1 0.7 0.6 3.9 179 336 145 419 172 369 147 433 167 488 147 475 170 440 153 519 174 524 159 558 0.9 2.3 0.5 1.7 0.3 2.9 83.1 681.0 0.3 3.5 80.3 668.5 0.3 4.1 79.6 685.2 0.3 3.9 82.4 723.6 0.4 4.6 83.0 735.2 0.0 0.0 0.3 2.4 3 22.4 153 1,215 3.3 28.4 149 1,187 3.5 35.0 145 1,192 3.7 31.6 147 1,235 3.8 38.0 146 1,231 0.0 0.2 0.5 4.0 13
  16. 16. Soup Brazil Volume Brazil RSP Value USA Volume USA RSP Value Chocolate Spreads Brazil Volume Brazil RSP Value USA Volume USA RSP Value Chocolate Confectionery Brazil Volume Brazil RSP Value USA Volume USA RSP Value 11 166 1,321 4,327 13 227 1,308 4,457 15 292 1,323 4,686 17 333 1,280 4,780 20 438 1,276 4,826 0.1 1.7 4.2 15.6 6.0 55.2 2.2 19.1 6.1 66.0 2.3 19.8 6.2 73.3 2.5 21.9 6.4 72.4 2.7 25.3 6.5 83.8 2.8 27.2 0.0 0.4 0.0 0.1 192 2,184 1,681 15,778 225 2,898 1,660 16,166 242 3,517 1,613 16,530 240 3,542 1,515 17,046 256 4,542 1,401 17,627 1.2 18.3 4.9 55.6 *Current Prices – Year-on-Year Exchange Rates. 2010 figures are forecasts. H. Exhibit 8 – Bazzar current and proposed operational model I. Exhibit 9 – Proposed Bazzar Growth Strategy 14
  17. 17. J. Exhibit 10 – Paraguay demographics 90 100 52 48 50 10 0 AB + C1 C2 + C3 + D + E % of the population %Gross national income K. Exhibit 11 – Paraguay Food Budget Shares 10 11 15 34 10 Beverages & tabacco breads & cereals dairy fats &oils fish fruits & vegetables meat 13 3 4 others foods L. Exhibit 12 – Chileans and Food Country Beverages tobacco Chile 13.414 & Breads cereals 21.483 & Dairy Fats & Fruits & Other Fish Meat oils vegetables foods 11.193 4.595 2.063 17.334 21.791 8.127 Total food expenditure 22.961 7 7 Source: USDA, Economic Research Service, using the 1996 ICP data. From the ERS report Cross-Price Elasticities of Demand Across 114 Countries (TB-1925) 15

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