Small businesses add value to Brazilian exports

When these enterprises export, they stimulate the economy of the neighborhoods and municipalities where they are based. They also export higher value-added products, such as manufactured goods, rather than commodities with little or no processing, thus generating significant income in the country. And the number of exporters in this sector has grown substantially.

These are Brazil’s micro and small enterprises, blowing favorable winds for the country with their export efforts. Between 2008 and 2022, the number of exporters among small businesses increased three times more than in the medium and large business group, reaching 11,400.

According to a 2023 survey by the Secretariat of Foreign Trade of Brazil’s Ministry of Development, Industry, Trade and Services, in collaboration with Sebrae, which promotes the competitiveness of small businesses, micro and small businesses now represent 41% of all Brazilian companies and have grown by 76% over 14 years. They’ve also made significant strides as exporters.

“The value exported by these companies now represents almost 1% of the country’s total exports, amounting to USD 3.2 billion. Quantitatively, this is not very significant, but 70% of the products they export are manufactured items, which have higher added value, while most of the volume exported by medium and large companies comes from agribusiness, consisting of lower added value products,” says Márcio de Carvalho, an international trade consultant at Sebrae-SP.

When talking about these companies, it’s important not to focus solely on the numbers, according to Carvalho. “They bring more than just profit; they create more jobs and have significant impacts on local economies, such as neighborhoods and municipalities where they are present.”

According to Caravalho, the growth of small and micro enterprises has been driven mainly by awareness and export promotion efforts made by institutions like Sebrae, as well as the increase in digitalization and the use of online sales platforms such as marketplaces.

“We show these companies that it’s possible to sell to markets outside Brazil. If a company is based in São Paulo, for example, and already sells to the [country’s] Northeast and North regions, we demonstrate that exporting to Mercosur is just as easy as selling to other regions of the country,” says Carvalho. “We emphasize that Mercosur should be one of the first markets to target due to its geographical proximity and the smaller cultural distance compared to Brazilians.”

The United States is currently the top importer of products from Brazilian micro and small enterprises, receiving goods from two thousand companies. After it, the leading buyers of Brazilian products are Arab nations, Argentina, and China.

“Depending on the product, we also encourage companies to sell to Portugal due to the shared language. After Mercosur, Latin America is another market we encourage companies to invest in. The Middle East is emerging as a growing market; in 2023 over 700 companies exported to this region,” explains the Foreign Trade Consultant at Sebrae-SP.

Following promotional actions in the Middle East carried out by Sebrae, exports to the region are expected to increase. Due to their large populations, Saudi Arabia and Egypt are expected to present the greatest opportunities for Brazilian companies.

“Despite our cultural differences and significant geographical distance, Brazil already has a long-standing trade relationship with Arab countries, and this is slanted to continue with small businesses. I believe that this commercial trust and the reputation of Brazilian products will major drivers for this growth,” said Carvalho.

The advantage of buying from small businesses

Producing and exporting a wide range of products, Brazilian small and micro enterprises offer everything from aerosol sprays for greasing baking pans to açaí. In the food sector, ice creams also stand out, and there are companies that export perfumes, gemstones, cosmetics, footwear, marble, and furniture.

One of the key advantages of doing business with smaller companies is the closer relationship. “With microentrepreneurs, it’s easier to build a bond and a higher-quality relationship than with a large business. They provide more attention both during the sale and in post-sale services, which tends to result in a more customized experience,” says Carvaho.

In times of economic crises, small businesses tend to be more advantageous, according to Carvalho. “This happens because during such times, medium and large companies are avoided. They rely on only one or two major suppliers to develop their products, which raises concerns, whereas small businesses source from various smaller suppliers.”

Primarily present in Brazil’s South and Southeast regions, the leading micro and small exporting businesses are in the state of São Paulo. Aidu and Açaí Town are two of these small companies based in São Paulo.

Aidu exports food-grade aerosol products

Founded in 1999 with an initial focus on reselling products like ice cream syrup and food coloring, Aidu now specializes in producing food-grade aerosol for greasing baking pans.

“After conducting market research to find where the consumers of this type of product were, we decided to start producing it to create a Brazilian competition. Before that, besides the US, the only producers and sellers of this product in Brazil were Germany, New Zealand, and Belgium,” says Lucas Onofre Gibertoni, Product Research and Development Analyst at Aidu.

At first, the company sold to its existing clients. After some time and increased brand awareness, other consumers began to discover them. Now Aidu sells across the entire country, with the largest orders coming from the states of Minas Gerais, São Paulo, and Rio de Janeiro. With its own factory, the company receives empty aerosol cans and fills them with their product, turning them into the final product.

Once finished, the products are sold to Brazilian consumers by Aidu’s buyers. The company’s clients are mostly bakers and pastry chefs, as well as home cooks.

The export of the aerosol began in 2022 to the United Arab Emirates. “After undergoing a year-long consultancy with Sebrae, where we managed to get the company in excellent shape with a strong working capital and focused on aerosol for greasing baking pans, we participated in an incubation and acceleration project, also with Sebrae, to support our export efforts,” explains Gibertoni.

“Six months later, we were exporting to the UAE. The first sale was 13,720 cans,” Gibertoni says. With a smooth and friendly relationship, sales continue to thrive two years after the initial exports. In the near future, the factory will relocate to a larger space, and the company will seek to obtain the halal certification, which is recommended in Muslim-majority countries.

“Even though our product doesn’t require the certification to be sold, we were advised to obtain it to increase trust among Arab consumers. Next year we also plan to start exporting to more Arab countries,” says the Product Research and Development Analyst at Aidu.”

Around the world with Açaí Town

Açaí Town is a small Brazilian family-owned business that was created in response to market demand. The owner, Murilo Santucci Lavezzo, was working in marketing when he was introduced to the açaí market in 2013. After visiting a successful açaí store in the state of São Paulo, he was initially concerned that it might be a passing trend, until he spoke with suppliers of the product.

“Listening to suppliers from different parts of the country, I saw this was a strong product with growth potential. Motivated by this, I decided to open an açaí shop in Tatuí, where people could enjoy it like ice cream, with various topping options. Three years later we started offering takeout and opened a factory to scale up production. I also took several courses to better understand the market,” says Lavezzo.

After running campaigns on Google and preparing promotional materials in English and Spanish, Lavezzo turned his attention to exporting his products. In 2018, following the first international sale to Canada, the brand expanded its reach to Portugal, the UAE, Paraguay, Morocco, Qatar, Jordan, Oman, Bahrain, and Saudi Arabia.

Serving over 20 international markets, with 70% of its revenue coming from exports, the brand continues to operate a brick-and-mortar store and a factory. In addition to selling on its own website, the company also serves customers through dark kitchens—kitchens built in buildings to cater to app-based orders—in São Paulo city and Sorocaba.”

Source: Anba

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