The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios de Rabobank, México
7 - 11 de Enero de 2008

The World

It’s not a diet but a way of life: When a brand runs the course of its lifecycle, companies adopt various strategies to revive the brand. Sometimes strategies can be as mundane as just repackaging the product. At other times it involves a reformulation or a line extension. Kraft finds themselves dealing with that problem with their South Beach Diet line of foods. Interestingly, according to Kraft it is not so much that the South Beach diet is no longer the “in” diet. Rather, they don’t see the future of brand positioned as a diet product. In fact, the feel that the word “diet” has “had a powerful and not necessarily positive connotations among consumers, bring to mind older folks struggling, and often failing, to lose weight.” Kraft isn’t the only company that has dropped the word “diet”. Coca Cola changed the Diet Coke to Light and when they introduced their new diet cola they branded it as Zero. Dropping “diet” Kraft is looking to broaden the appeal by rebranding their South Beach Diet line as South Beach Living. The idea is to reposition the brand to consumers “pursuing a healthy, natural lifestyle”. In other words they are betting that there are people looking to eat healthy than those who are dieting.

Brazilians buying more of the Argentine market: It seems that Marfig Frigorificos e Comercio de Alimentos, the third largest Brazilian beef exporter, could hardly wait for the new year to begin in order to announce their latest acquisition in Argentina. With the acquisition of Marib, this brings the total number of Marfig's acquisitions in Argentina since last October to five: Best Beef and Estancias del Sur in October and Quickfood and Establecimientos Colonia in November. Mirab is "Argentina's leading producer of meat-based snacks" and exports to a number of markets. What also makes this deal especially interesting is that it represents Marfig's "first investment in the United States, where Mirab operates through its subsidiary Mirab USA.". While there have been acquisitions in other countries by Brazilian companies, Argentina seems to be a natural choice for Brazilian agribusiness capital. Not only is it geographically attractive and has a developed agribusiness sector, but also with Brazil's strong currency and the Argentine peso which, according to analysts, is undervalued, acquisitions are a bargain. So don't be surprised if there are more cross border deals on the horizon.

Mexico

Week one of the NAFTA opening: As far as we are aware there were no massive imports of corn, milk powder, nor even sugar last week. That of course did not stop the protests. In what has to be a cynical manifestation of the attempts to manipulate public opinion, the opening of the market is being blamed simultaneously for lower corn prices to farmers and for higher tortilla prices to consumers (energy prices also were said to have contributed to the higher prices). What you hardly hear about, however, is that the U.S. is now open to all Mexican agricultural products including, among others, orange juice, peanuts and even sugar.