Unemployment Approaches 12% in Brazil

According to the Institute of Geography and Statistics, the unemployment in Brazil in the quarter ending in July reached 11.6%. Based on IBGE numbers, the number of unemployed in the South American nation rose 37.4% compared to the same time period in 2015.

Another Brazilian files for unemployment benefits

The current rate of unemployment is the highest since 2012. In the first quarter of 2016 the unemployment rate was 11.2%, an increase of 3.8%.

In total, IBGE estimates that there are 11.8 million unemployed Brazilians. Of the 90.8 million workers that are employed, 34.3 million have signed workbooks. A signed workbook is used by the government to guarantee worker rights and benefits including, unemployment benefits.

With the increase in unemployment, the average worker's salary has also fallen. Currently, the average worker is making R$1,985 per month. Employers cannot legally lower employee salaries meaning new employees are being hired at lower rates. In relationship with the same time period in 2015, salaries dropped 3%. Average salaries remained stable compared to the previous quarter.

The number of people deciding to be self-employed, estimated at 22.6 million, rose 2.4% compared to 2015 and 1.5% compared to the first quarter.

Among the areas in which employers cut the most jobs, general industry fell 10.6%, and information technology, communication and financial activities, real estate, professionals and administrators dropped 9.8%. 

Source: Globo (in Portuguese) Unemployment Continues to Rise in Brazil

Ambev Releases Cold Beer Delivery Service

Latin America's largest brewer, Ambev, has recently announced it will provide delivery service for cold beer in Brazil.

The unique delivery service will first be available in the greater Sao Paulo area, Sao Paulo proper and Ribeirao Preto before being expanded into other regions and cities across the country.

The idea of cold beer delivery was born at Ze Delivery, an in-house delivery provider of Ambev. Ze Delivery offers Ambev's most recognizable brands and specialty beers and imported beers.

Customers can also request other alcoholic drinks as well as non-alcoholic drinks, such as soft drinks and energy drinks. Depending on the region in question, Ze Delivery will deliver even barbecue staples like meats, ice and charcoal.

Products can be delivered within an hour and come cold or frozen. To request a delivery customers must access the company's website, type in their zip code and choose their products. Payments can be made with credit or debit cards or cash, and the service is available through the late night.

Source: Supermercado Moderno (in Portuguese) Ambev Starts Cold Beer Deliveries

French Automotive Company Expands in Brazil

French automotive manufactuer, Renault, recently announced it will be producing two new models in Brazil. The news is welcomed in South America's largest economy as the country goes through its worse economic crisis since the 1930s.

Specifically, Renault will begin producing Captur, a sports utility vehicle, and compact car, Kwid. Production will take place in the country's Southern region in the capital of the state of Parana, Curitiba. The news was announced last Thursday by Renault-Nissan Alliance CEO, Carlos Ghosn.

In front of reporters in the city that will produce the new models, Ghosn said that he "sees the Brazilian market stabilizing after steep sales reductions amid the country's worst recession in decades."

According to association and manufacturer data, Renault ranked sixth among automotive manufacturers in 2015 having sold 180,532 vehicles, a -23.7% drop from the previous year. In Brazil in 2015, Fiat, Chevrolet, Volkswagen, Ford and Hyundai led manufactuers. Renault held the same position in 2014 when it sold 236,721 vehicles.

Among the top ten models sold in 2015, the compact car, Renault Sandero, held the eighth position with 77,838 vehicles sold, a decrease of -22.5% from the year before. Despite the decrease, the model moved up a spot from 2014 when 95,385 Sanderos were sold across Brazil.

Captur and Kwid models are expected to be with Brazilian car dealerships by 2017. Renault is betting on these models to help it increase its market share of 6.7% in the country. More specifically, the Brazilian-born Ghosn said he is targeting 8 percent share with long term goals of 10 percent.

Regarding the Brazilian auto market, Ghosn said:

"Right now we see Brazil's auto market recovery with great hope. I don't think anybody believes the Brazilian market will stay around 2 million vehicles (of annual sales)."

As recently as 2009, Renault had less than 4% of the market. After adding to its capacity and releasing popular new models, the company's share grew. In particular, the company's SUV, Duster, was able to take on other popular SUV models, such as the Ford EcoSport.

Overall, auto sales in the South American giant have been cut in half since peaking in 2012. The main culprit is a gripping economic crisis that has led to high inflation, low consumer confidence and high unemployment. Furthermore, governmental and industrial policies have hurt the industry. The final cost of a car in Brazil may be composed of up to 50% in taxes.

Auto manufacturers are hoping the market has stabilized and growth is in store in the near future.

According to Ghosn Brazil has the potential to sell 3.5 million to 4 million cars a year.

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Read more at Business Insider Renault to Produce Two New Models in Brazil

Gol Airlines Makes Changes

Gol Airlines, the second largest Brazilian airline, has decided to swap their Chief Financial Officer and board members as the company restructures.

Gol's restructuring is taking place during an economic upheaval in the South American nation. Gol is the second largest airline behind TAM. Earlier this year TAM finalized its partnership with Chilean airlines, LAN, to create LATAM. Read more about the merger TAM Merger Best for Consumers

The Brazilian airline has decided to hand over the reigns to the chief financial officer who took the company public. The company also named two new board members as the company needs to restructure its debt as the economic crisis wrecks the country's travel industry. Gol is hoping these changes will attract bondholders' cooperation.

Gol Linhas Aereas Inteligentes SA began in 2001 and began offering international flights by the end of 2005. By 2014, the company owned 32% of the market share in the country. In 2016, the company staved off bankruptcy selling nearly half of their shares to American airline, Delta.

It was in 2003 that Gol's former and newly appointed CFO, Richard Lark, took the company public on the country's stock exchange, Bovespa. Lark held the position from 2003 to 2008. Lark's nomination to his former post was made public via a securities filing made last Thursday. Lark's seat will be filled by Andre Janszky who is the managing partner of the law firm, Milbank, Tweed, Hadley & McCloy's Sao Paulo office.

Current CFO, Edmar Prado Lopes Neto will continue with the company and "will take on new challenges within the group after the transition is completed," according to the securities filing. It was Neto who earlier this month noted that an unpopular bond swap was no enough to resolve the company's debt burden. The debt burden has resulted in four years of heavy losses and puts the company in a difficult situation as the country's economy continues downward.

Ana Luiza Constantino, who is a member of the company's controlling family, will take the board seat of Henrique Constantino. Henrique was arrested in July in the Lavo Jato corruption investigation, which has confiscated a large amount of funds and has arrested many politicians and businessmen. The investigation has also contributed to the suspension of Brazilian president, Dilma Rouseff.

Read more from Reuters Gol Substitutes Management

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Sales Rise for Coca-Cola in Brazil

In Brazil, sales for Coca-Cola totaled 9.264 billion Mexican pesos (US$ 493.2 million) in the second trimester of 2016. This represents a 5% increase in comparison to the same time period the year before.

While in value sales rose, in volume sales of Coca-Cola fell in the country. In volume, sales fell 4.6% between April and June equaling 148 million boxes. During the period, sales of soft drinks fell -5.2% in volume to 130.5 million boxes. In terms of revenue, sales of soft drinks rose 6.3%, according to the company.

Coca-Cola Femsa also presented a drop in volume in sales of water of -1.2% and other non-alcoholic drinks, -2.5%.

According to the company, revenue of beer in Brazil reached 1.514 billion Mexican pesos (US$80.6 million) in the second trimester.

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Read more at Supermercado Moderno (in Portuguese) Sales Rise for Coca-Cola in Brazil

Carrefour Relaunches E-Commerce in Brazil

For the second time, French company, Carrefour, will launch e-commerce in South America's largest economy. At first, the new operation will include non-food items. The sale of food items is projected to start in 2017.

Following an unsuccessful experience between 2010 and 2012, the Brazilian arm of Carrefour, Grupo Carrefour Brasil, relaunched its e-commerce platform yesterday, July 26. Carrefour.com is the result of two years of investments of high tech and specialized equipment for the sector. The new e-commerce that includes a team of 300 employees will be run by Francisco Donato, former Walmart.com and Magazine Luiza manager.

With the new e-commerce platform, the Brazilian operation of the company becomes the only one in the world with all formats.

"The beginning of the e-commerce operation in Brazil reinforces our omnichannel strategy. We invest in high performance technological solutions and in qualified professionals to construct an innovative operation," said Charles Desmartis, GEO of Group Carrefour Brasil.

After observing how e-commerce functioned in Carrefour stores in France and Spain, Donato brought the European know-how and made adaptions for Brazilian consumers. In the beginning, the website will offer a variety of products from 12 categories divided between Home and Family, Tech and Electronics, Health and Well-Being and Kids.

"Our focus will be on Home and Family. Our research reveals that the image of Carrefour Brasil, our brand, is associated with Home and Family. We will sell electronics, because we need to sell electronics as well," explained Desmartis.

By the end of 2016, the website will increase its product offerings starting with its marketplace operation, including Automotive and Tools, Culture and Leisure, Fashion and Pets.

"We intend on being an Amazon. Our operation will be slim, but with quality," said Donato.

Food items are expected to be sold via the site next year.

"It's natural given that food sales is an enormous part of Carrefour. Besides this is something that is rarely explored in Brazil, and we want to be the leaders in this," explained Donato.

Looking to the long term future, the retailer is also betting on progressive integration of this platform with physical stores. This will make it possible for customers inside of the hypermarkets to acess the e-commerce site, integrating the channels and providing a wider variety of products. According to Donato, clients will be provided with many services that will make things easier like exchanges and returns and technical support of the e-commerce site inside the physical stores.

"By the end of the year we want to have 30,000 items available on Carrefour.com. In 2017, we want to have 200,000," said Donato.

In the first stage of the company's plans, the e-commerce platform with service the highly populated Southeast region of the country that includes Sao Paulo and Rio de Janeiro.

"First, we want to take a look at the performance of the operation in the Southeast and gradually expand to the South, Midwest, Northeast and North, respectively. This take place in the coming months," said Donato.

Carrefour.com will rely exclusively on a distribution center in Embu das Artes, Sao Paulo.

Read more at Supermercado Moderno (in Portuguese) Carrefour Relaunches E-Commerce in Brazil

Rivals Have Eyes on Brasil Kirin

Brasil Kirin, the Japanese beer maker in Brazil, has been the target of other large international brewers including Heineken, Ambev, and Carlsberg.

Five years after buying Schincariol, Japanese group Kirin, has seen its shares in Brazil become the target of international brewers. Since taking over the company for more than R$6 billion, Kirin has seen its position weaken amidst a crumbling economy and changing consumer behaviors. The company's capacity is significantly larger than its sales. Among the company's options include the total sale of shares or a large portion of them, according to sources.

According to the newspaper Estado de S. Paulo, Dutch brewer, Heineken would be interested in buying all of the company's shares. Negotiations have not yet been formalized. One source, however, has confirmed that representatives of Heineken have held a meeting with Kirin in Japan at the end of June to try to define the bases for formal negotiations.

Heineken's appetite is large as the company has seen its global position weakened after the fusion of AB InBev and SAB Miller, which today own approximately 30% of the global market of beers.

Within Kirin's global portfolio of beverages, Heineken's main interest is in Brazil. The Dutch company, which entered the country via the purchase of Femsa has been able to grow and solidify its brand as premium and has been able to beat out Kirin with 9.4% sales of the sector.

Among the other competitors, Carlsberg, would use Kirin to establish some type of relevance in the country. For Ambev, the purchase would represent a low cost acquisition of Kirin's factories. The purchase would also help protect the company's two-thirds dominance of the sector.

Kirin has publicly denied all speculation about its strategic position.

Read more at Supermercado Moderno (in Portuguese) Rivals Looks to Buy Kirin

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Possible Trade Challenge from Brazil Against Canada

According to Reuters, Brazil is mulling over a possible World Trade Organization challenge against Canada for state funding of its airplane manufacturer, Bombardier. Brazil, which is suffering from a devastating economic crisis, is looking to protect the overseas competiveness of its airplane manufacturer, Embraer.

Canada is funding the airplane maker, which has been struggling.

The announcement of the possible challenge came from Foreign Minister, Jose Serra, of Brazil's interim presidency. Current Brazilian president, Dilma Rousseff, is suspended and awaiting her impeachment trial.

More specifically, Serra, a presidential candidate in 2002, said that a $1 billion investment in the struggling airplane manufacturer by the province of Quebec was a "subsidy" and was unfairly advantageous over Embraer.

Bombardier and Embraer are among the world's largest airplane manufacturers. Both are fighting for market share as the industry struggles with slow growth.

Read more at Business Standard Brazil Considers WTO Challenge

Coca-Cola to Make Acquisitions in Latin America

Constantly releasing new products and making new acquisitions will be the focus of Coca-Cola states Xiemar Zarazua who will leave his post as leader of Coca-Cola in Brazil in October after right years at the helm. "We prepare for difficult moments," said Zarazua.

Despite leaving his post, Zarazua will not be leaving the company. In fact, he will take the role of vice president of strategic endeavors for the company in Latin America. The Mexican will be replaced by Brazilian, Henrique Braun, who worked for the company in China and South Korea.

"In Latin America there are enormous opportunities. We have already seen consolidation in the areas in which we are in and we need to enter those areas that we are not in. We have an appetite for all categories. We release new products or we buy," said Zarazua regarding Brazil and neighboring countries.

Under Xiemar's time, one of the longest presidents at Coca-Cola Brazil, the company bought at the end of 2015 Laticinio Verde Campos from Lavras, Minas Gerais. In June, the company bought Ades in Latin America from Unilever. The acquisition was done in partnership with the Mexican soft drink bottler, Femsa.

When Xiemar arrived in Brazil Coca-Cola had just purchased Leao Junior, a tea brand. A year before the company had acquired juice company, Del Valle, which led the leader to restructure the company's portfolio of products.

At the same time, the company reduced the number of franchised bottlers from 16 to 10 with joint ventures and acquisitions among bottlers.

These consolidation moves, according to Xiemar, brought the company scale-ability and reduced costs helping to the company to better position itself to face downturns in the company similar to the one Brazil is currently facing.

"We prepare for difficult moments and we did well. At the time we made changes, we didn't used to have this belief system, but the results have made us stronger. We are suffering for sure, like everyone, but we were prepared. I doubt any company in Brazil is not worried," stated Xiemar.

According to the System Control of Drink Production (Sicobe) of the country's Internal Revenue Service, overall soft drink production in the country fell 8.2% in June to 956.3 million liters, compared to the same month in 2015. In comparison with May, there was a drop of 16%.

Read more at Supermercado Moderno (in Portuguese) Coca-Cola Predicts Acquisitions in Latin America

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Dip Frangos Cuts Production By 12.5%

Dip Frangos, subsidiary of Diplomata Group, a chicken factory from the southern state of Parana, has announced a cut of 12.5% of production.

Production cuts are a result of higher prices of corn as well as lower demand for the white meat. According to executive-director, Othmar Rempel, the company will lower its number of chickens from 120,000 chickens to 105,000 chickens. The reductions are to take place within the next 45 days.

The cut of production will also result in the loss of approximately 100 jobs at the Capanema, Parana plant. However, Rempel claims their will not be any job losses. He states that the company will simply not rehire any new workers over the next 45 days. According to him, the company has high turnover with approximately 8% of workers leaving every month. Today, Dip employees 953 workers at the plant.

In 2016, Dip is expected to have revenues of R$225 million in chicken.


Read more at Supermercado Moderno (in Portuguese) Dip Frangos Cuts Production

Sales of 100% Grape Juice Slowdown

Sales of 100% grape juice grew just 0.41% in the first five months of 2016. While consumer habits have changed during the country's economic crisis, Brazilians are not necessarily removing grape juice from their shopping carts.

After a 2015 in which the product saw an increase of 29.8% in volume, the sales of 100% grape juice grew just 0.41% between January and May of this year compared to the same time period the year before. The main reasons for lower sales is higher unemployment and lower income among Brazilian consumers. Estimations are that sales will be much lower than 2015 considering the country's economic struggles.

Dirceu Scotta, president of the Brazilian Institute of Wine (Ibravin) also blames an increase in the cost of production given the drop in this year's grape harvest and an increase in the IPI and ICMS taxes. These factors mean a higher price that consumers see in the supermarkets.

Even so, Scotta doesn't believe consumers will stop buying the juice. Brazilians continue to purchase healthy products, though, the frequency and quantity of these purchases have fallen.

Supermarkets will have to pay close attention to those factors that determine a consumer's purchasing decisions at the time of purchasing. According to the manufacturer, Famiglia Zanlorenzi, social classes A and B choose the based on the type of packaging. Then, they make their decisions based on brands, effectiveness, price and label information. Social classes C and also are concerned by the packaging type, but only after evaluating the price.

Making consumers aware of the products health benefits can also help increase sales. It's important that the consumer knows about the absence of preservatives and sugar as well as the fact that the product doesn't raise glucose levels. They also need to know that it is 100% natural fruit juice.

According to specialists, the drink helps protect the body from toxins and free radicals. It is also reduces the formation of fat in the blood, which helps reduce the levels of bad (LDL) cholesterol and raise the level of good (HDL) cholesterol.

Read more at Supermercado Moderno (in Portuguese) Grape Juice Sales Down

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National Wines and Sparkling Wines See Lower Sales

The sale of nationally produced wines and sparkling wines dropped 6.3% over the first five months of 2016 in Brazil. Ibravin, the Brazilian Institute of Wine, reported the sales numbers, which are a comparison of the same time period in 2015.

The main culprit in the drop in sales is the fall in the grape harvest in the Southern region of the country. Compared to last year, the harvest fell 57%. Additionally, the rise in taxes on the products resulted in lower sales.

"With the increase in the IPI and ICMS taxes in a lot of states, taxes now account for 56% to 77% of the product's final price," said president of Ibravin, Dirceu Scotta.

Before federal tax accounted for just R$0.73 per bottle, but now represents 10% of the value of the unit.

Up to 2015, the market fought back the country's economic crisis and sales rose 1.68% in comparison to 2014.

"The strong dollar had a positive impact at first, but with the high tax rate we lost the competitive advantage we had obtained."

Harvesting at the Salton Vineyard in Rio Grande do Sul fell from 15 million kg to 6 million kg this year stated the executive-director, Luciana Salton. "Before the stocks that were problematic ended up being our salvation."

Salton is expected to limit its product line of wines and sparkling wines due to the lack of natural resources. One solution is to launch products using Malbec grapes from Argentina. "Our first importation will be 40,000 boxes."

Despite the problems in the sector, sales for the company in the first half of the year were stable. According to Salton, in 2015, the company had revenues of R$338 million.

Read more at Supermercado Moderno (in Portuguese) Wine Sales Fall

Sales of Appliances Fall 16.5% in Brazil

The sale of appliances have dropped 16.5% in South American's largest economy. In particular, the fall in sales comes mostly from the "brown" line appliances, such as televisions and audio equipment.

Reasons for the drop in sales include the difficulty of consumers getting credit and low consumer confidence leading consumers not to want to take on debt.  The fall in appliance sales has led to numerous store closings of major appliance brands like Ponto Frio.

According to results released by the Brazilian Institute of Geography and Statistics (IBGE) on Tuesday, retail sales in volume have dropped for 14 consecutive months in Brazil. Overall, the decrease has totaled -7.3%. Appliances have fallen for 16 consecutive months.

The brown line of appliances tend to be more expensive and sales often depend more on financing for consumers, something which is rare today in Brazil.

Via Varejo, owners of Casas Bahia and Ponto Frio, closed 21 stores in the first trimester of 2016 due to low sales of appliances. In 2015, the company had closed 39 stores.

According to the association of manufacturers, Eletros, sales of brown line appliances have fallen 40% in 2016. The country produced 2.5 million televisions through April, a drop of 29.72% compared to the same time the year before and a decrease of 58% compared to 2014.

Lourival Kicula, president of Eletros, the devices have high penetration in the market. In times of crisis, there is little motivation to upgrade.

Right now, the expectation is that sales and production numbers could get worse in the second half of the year.

For more go to Supermercado Moderno (in Portuguese) Appliance Sales, Production Down

Real Estate Powerhouse to Invest R$1 billion in Betim

Brazilian real estate giant, MRV, has plans to invest R$1 billion in Betim in metropolitan Belo Horizonte in the state of Minas Gerais.

Reasons given for choosing Betim by the company include trained, ready workers, high income among area residents and ability to find large tracts of land.

"Let's make something new in Betim," said an excited Rafael Menin, CEO of the Minas based company.

The investment will be divided between two projects. One plan is the construction of 8 apartment buildings with nearly 4,000 units. The construction is expected to take five years and cover an area of 642.44 thousand square meters.

"This will be a new neighborhood with sensational urbanization. It will have a cooper boulevard, 500 imperial palm trees and a marvelous park. It will be a place for a community."

Most apartments will have two bedrooms. They will also be part of the government housing project, Minha Casa, Minha Vida. These apartments are scheduled to be ready by the end of 2017. The average price of the units is expected to be R$160,000 with total sales of R$700 million.

"The boulevard is expected to be ready in November where we are investing almost R$40 million," said Menin. The boulevard called, Boulevard das Cachoeiras (Boulevard of Waterfalls), is a 2.2 km roadway that will connect the construction to the highway BR-262 as well as a park and cultural square in Betim.

The second plan of the investment includes the construction of a new industrial park, the Industrial Park of Betim (PIB). The R$500 million investment will cover an area of 6 million square meters and will be constructed by Log Commercial Properties. Log is the logistical arm of MRV.

"It will be the largest, private industrial park in Minas Gerais," stated Menin. The CEO claims the park has the potential of generated 66,000 jobs directly and indirectly once companies are installed.

MRV's construction plans for the eight apartment buildings are expected to create 1,360 direct jobs and 4,000 indirect jobs.

MRV is a publicly traded company on Brazil's stock exchange, Bovespa. MRV is present in 142 Brazilian cities with 240 construction sites.

Read more from O Tempo (in Portuguese) MRV Invests 1 Billion

Tang Looks to Win Tea Market in Brazil

Tang, the brand most known for its iconic powdered orange drink, is now setting its sights on taking over the tea market in South America's largest economy.

Currently owned by international food and drink conglomerate, Mondelez, the brand will look to compete with a focus on social classes C and D. Tang intends on selling their powdered tea packets for around just R$.

The Tang tea products are similar in format and packaging as the brand's powdered juices. The format and packaging types are cheaper and more affordable for lower social classes as well as middle and higher social classes as the country is going through its worst financial crisis since the 1930s.

Tang's push into powdered teas started earlier in the year as a bet on the country's summer season. Summer runs from December to March in Brazil. Most of the brand's advertising will take place at points of sales in hypermarkets and supermarkets.

Mondelez did not release how much they invested in this endeavor.

"Among the beverage categories in which we compete indirectly, ready teas is the category that grew the most. This is a big opportunity for us," said Fabio Melo, the brand's marketing manager, to magazine, Exame.com.

The expectation is that the product will win over social classes C and D with a low price. "Besides being in powdered form, it is the closest thing to iced tea. Ready tea is refreshing and people want to buy it, but it costs almost R$5. Tang is a R$1 product and produces 1 liter of beverage," said Melo.

Tang powdered tea is already sold in Mexico and Argentina. It took the company two years to produce flavors favorable for Brazilians taste. Delays were also caused by the company evaluating the right time to launch the product to the national market.

Sales to retailers started in September, and the product was available on the shelves in June 2016. Flavors include Mate Tea with Guarana, Black Tea with Lime, Black Tea with Peach and Mate Tea with Orange.

Source: Supermercado Moderno (in Portuguese) Tang Enters Brazilian Tea Market

Coconut Water, Tea and Mineral Water Continue to Grow

In 2015, coconut water, tea and mineral water were the only beverage categories to expand. Coconut water grew 12.4%, liquid teas 10.3% and mineral water 5.2%.

According to a study by The Nielsen Company, these three categories were the only non-alcoholic categories to continue to grow in 2015. From May 2015 to May 2016, 11 categories were studied by Nielsen. RTD teas had the greatest growth during this time period at 5.8%. Next was mineral water with a 2.8% increase and coconut water, which expanded 1.8%.

When looking at just 2015, these three categories were also the only ones to expand with coconut water at 12.4%, 10.3% for teas and 5.2% for mineral water. Other beverages included in the study were soft drinks, ready juices, powdered juices, energy drinks, soy-based drinks, sports drinks and guarana. All of these categories fell last year.

Reasons given for the changes in consumer preferences include healthiness of the products as well as promotions, economical packaging and cheaper brands. Soft drinks is one of the categories that suffered the most as consumers replaced the sugary drinks with powdered juice, ready juice or juice made at home.


For more information go to Supermercado Moderno (in Portuguese) Healthy Beverages Still Growing

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Sony Mobile to Look Past Brazil

Japanese technology company, Sony, announced that their smartphone business will "defocus" in the US, India, China and Brazil. The announcement was made during the recent investor day in Tokyo.

It is believed the decision is to reduce the major operating losses of the company's smartphone division in these countries. In the case of Brazil, the country is going through an economic crisis not seen since the 1930s. Inflation is rampant and consumer confidence is low. Furthermore, the country's currency, the Real, has been greatly devalued against other currencies, such as the dollar, meaning multinational companies would be forced to increase prices significantly to make up the difference.

Overall, Sony;s global average annual growth of the smartphone market dropped 1.4% because of slow growth in emerging markets, like Brazil. Emerging markets account for 45% of the volume market.

Despite directing their business to East Asia, Europe and the Middle East, Sony will maintain it's status in Latin America.


Source: University Herald Sony Defocuses on Brazil

Monsanto, Microsoft to Invest in Brazil

Agricultural powerhouse, Monsanto, and technology giants, Microsoft and Qualcomm, have formed a partnership in the form of a fund to invest in agricultural technology startups in Brazil.

The Brazilian investment fund was originally setup by Microsoft. Monsanto will be investing up to R$300 million, but the fund will continued to be managed by Microsoft. Monsanto will look for new digital tools that can be applied to agricultural production in the country.

The fund will initially chose ideas and provide up to R$1.5 million in funding for early development. The investment will have to be paid back to the fund or project owners will have to provide equity after three years.

For more read this article from the St. Louis Post-Dispatch Investment in Brazilian Agricultural Startups

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Industrial Production Remains Stable

According to the Brazilian Institute of Geography and Statistics, industrial production fell in May in 8 of the 14 cities studied. Overall, on a national level industrial production was stable.

The numbers on production were based on the industrial production in May compared to the previous month. The greatest drops occurred in the states of Parana (-3.5%), Goias (-2.3%), Para (-1.9%), and Sao Paulo (-1.6%).

On the other hand, Amazonas' industrial production grew 16.2% between April and May. The state's capital, Manaus, is home to a free trade zone. The state had suffered a decrease of -12.5% in April.

Other states with industrial production growth were Rio Grande do Sul (4.4%), Espirito Santo (3.8%), the Northeast region (1.6%), Ceara (1.4%) and Santa Catarina (0.1%).

Compared to May 2015, industrial production dropped 7.8% in 2016. 12 of the 14 cities studied had less industrial production than the year before. The states that loss the most were Espirito Santo, which fell -18.9% and Parana at -11.0%. On a positive note, Mato Grosso expanded 14.6% and Para 7.8%.

Between January and May 2016 national production fell in 12 locations. The national average was -9.8%. Espirito Santo led the way at -21.6%, followed by Amazonas -18.8% and Pernambuco -18.7%. States that have grown since January include Para at 9.6%, Mato Grosso at 7.4% and Bahia at 1.2%.

Source: Globo (in Portuguese) Industrial Production 2016

McDonald's Adds Rustic Potatoes to Brazilian Menu

McDonald's is known for a lot of things, but one menu item that has been a staple since the beginning is the fast food joint's crispy, delicious French Fries. Now, in Brazil, McDonald's plans to add a new potato along with their classic.

The inspiration for rustic potatoes didn't come from the company's American headquarters, but instead French franchisees of the chain who already found success with the menu item. The rustic potato comes in a noticeably thicker format and is covered with paprika and other spices.

"To develop the rustic potatoes we used the same potatoes we use for the McFritas, a flavor icon for our customers," said Ives Uliana, Supply Chain Manager for the company.

McFritas is side dish of French Fries covered in melted cheddar and bacon.

In recent years, McDonald's has seen increased pressure in Brazil from rival Burger King. Additionally, the country is going through a burger craze with many opening up gourmet burger shops. Finally, McDonald's and Burger King have had to rethink their pricing as the country is gripped by a serious economic crisis.

Wendy's to Open Up Shop in Brazil


Source: UOL (in Portuguese) Rustic Potatoes at McDonald's in Brazil