The international spotlight is on Brazil. The world cup has begun, whilst the Olympics will be hosted in a couple of years. Brazil has declared that both international events will be the most sustainable on record. The 2014 FIFA World Cup Sustainability Strategy states it will promote organic and sustainable foods, use solar powered stadiums, offset carbon emissions and instigate positive social change. However, how sustainable is Brazil and how does Latin America compare with other regions?
Latin America has become a large producer of sustainable products, such as natural ingredients, organic foods, sustainable timber, and fair trade handicrafts. However, Organic Monitor research finds the region has not become an important consumer, with local consumption of sustainable products very low.
With 6.8 million hectares, Latin America has 18 percent share of global organic farmland. More than USD 1 billion of organic products is exported from the region per year, however local markets are insignificant in size. The region is also a major source of fair trade products, such as cocoa, sugar and coffee, yet there is no domestic market. Most Rainforest Alliance and UTZ Certified products grown in the region are also destined for Europe and North America.
As will be discussed at the Sustainable Cosmetics Summit, a major challenge for Latin America is to develop local markets for sustainable products. Various studies show consumer awareness of sustainability issues is rising; however awareness is not translating into demand. Low consumer knowledge of sustainable production methods and high product prices are cited as barriers to market growth.
Brazil has the largest market for sustainable products in the region. Its most successful retailer is Pão de Açúcar, which markets about 700 organic products under its Taeq private label. It has partnered with local farmers to secure supply of certified products. Other retailers, including Wal-Mart and Carrefour, are also investing in sustainable product ranges.
Native Products is one of the few Latin American sustainable food companies to build a strong market presence. Native organic products are in over 20,000 Brazilian outlets. Its success is partly because of its wide product range, spanning from sugar, coffee, juices, breakfast cereals, to snack bars. Native also supplies natural ingredients to the cosmetics industry.
A major obstacle to domestic market growth is consumer behaviour. Many Latin Americans perceive organic, fair trade and other eco-labeled products as luxuries. Consumers maybe becoming more aware of sustainability issues, however perceptions will have to change if local markets are to take root.
The challenges associated with sustainable production and consumption will be featured at the Latin American edition of the Sustainable Cosmetics Summit. The summit will be hosted alongside in-cosmetics Brasil on 10-12 September.