Segmenting

GENERAL MARKET SPACE:

Broadly speaking, we are interested in entering into the produce industry in Brazil. More specifically, we see an opportunity in the expansion of local food systems in urban areas as related to the increasing popularity of urban gardens and farms. Arguably, gardens are more ethical and sustainable food sources than the traditional farm alternative, and the developing trend of urban gardens/farms suggest the potential for unique distribution systems of fresh produce. Connecting producers directly to consumers provides opportunities for value creation that arguably have been compromised in European and North American markets, as described as a growing disconnect between farm and table. However, we are concerned with much more than the aura of authenticity and healthiness of locally produced food; our principal objective is income generation for urban farmers, most belonging to socioeconomically marginalized classes.

At present, the produce retail market in Brazil is divided between a few “big players,” such as Wal-Mart and the Brazilian Distribution Company (Companhia Brasileira de Distribuição), sharing approximately 55% of the retail market, while smaller, locally-owned independent retailers represent the remaining 45% of the market. Despite the globally reaching economic repercussions of the Great Recession, the Brazilian food retail market has forecasted growth of 26% by 2017.

Like the larger food retail market, urban gardening is growing, encouraged greatly by the initiatives of governmental and non-governmental organizations such as the Ministry of Social Development and Combat to Hunger (MDS) and Cities Without Hunger (CSF). In 2012, MDS announced that it would dedicate five million dollars to the development of urban agriculture (planting, installation of hydroponics, soil cleansing) throughout the nation. The majority of these efforts have been targeted towards those with a monthly income of less than $30 dollars, in an...