Felipe Bernardes Antunes, international sales supervisor at Emabré, told ConfectioneryNews at the ISM trade fair in Cologne that 2015 had been a tough year for the company's confectionery business in Brazil.
Inflationary Brazilian market
"We have lost some sales in both domestic and international markets. Inflation in Brazil is really high - in food,” he said.
The cost of food in Brazil was up 12.9% in January 2016 versus the same month last year, according to data from the Instituto Brasileiro de Geografia e Estatística (IGBE).
"People move in other directions," said Antunes. "If they want something to eat they are not going to spend their money on candy or chocolate, they will buy rice or meat. The mentality changes at this tough time."
Emabré will therefore concentrate on export markets and has upcoming projects in North America and Asia.
“With our currency the way it is, it's the best strategy,” said Antunes.
Around 35% of the company's confectionery business comes via exports to 45 countries.
"We have had in the past about 50% of production of confectionery exported. Our goal is to at least go back to the 50-50,” said Embaré’s sales supervisor.
Coming to America
Embaré sees the most potential in the US, where it currently produces milk caramels for three private label customers.
"It's a huge market with such huge consumption,” said Antunes.
"It's the only country where we do private label...United States is the only one [export market] that does not do our brand,” he added.
Emabré plans to launch its own brand in select stores in the US, while adding around four private label customers for its milk caramel.
Own brand launch
"We have a project starting in Florida and then spreading around with our brand,” said Artunes.
He added there would be no conflict of interest between the company's own brand and its private label business.
“The project under our brand is to specific chains and we've agreed with all our other customers that these chains we're going into, they should not approach.
"The stores that we're going into are stores with no milk caramel in there,” he said.
Embaré is keeping retail chain names under wraps, but says they are mid-market department stores that have confectionery aisles at checkouts.
The company’s own brand will hit US stores three years after Hershey introduced Lancaster Soft Caramel Cremes to the US.
Embaré – Milk and confectionery
Embaré is the number six milk company in Brazil. Confectionery accounts for around 8% of the company's business. The majority of the firm’s confections are mass-market, milk-based products containing artificial colors and flavors. The company began producing jams and jellies in 1935 and soon after moved into lollipops and candies. It started the dairy business in 1959 and today claims to be the leader in certain Brazilian tastes. Its main competitor for milk caramels in Brazil is Argentinean confectioner Arcor. The overall firm has annual turnover of of 1.4 billion Brazilian Reais ($368m) and it has 1,600 employees. Embaré’s single factory is based in Lagoa da Prata, within the state of Minas Gerais. The firm says it has residual capacity at the plant.