Brief description of the Pasta Sector in Brazil
The total volume of pasta sales in Brazil was around 0.8 million tons in 2018, according to the Brazilian Association of Crackers and Cookies, Pasta and Breads & Industrialized Cakes Association – ABIMAPI, being the 7th most globally.
The productive process for pasta allows a pasta manufacturer to produce any type, requiring only small adaptations in the productive process and low investments. The industry’s flexibility in adapting the productive process requiring low investments, allows the producer to offer a large variety of pasta. Therefore, the pasta industry presents low barriers to entry in terms of product diversity.
Pasta is a low value added product and the freight has a significant relevance on its final price, justifying the implementation of regional production, consumption and distribution centers.
Recent Performance of the Pasta Sector in Brazil
The process of economic openness experienced by the country since the 1990s introduced new challenges in the Brazilian consumer goods market and resulted in structural changes in the industry.
In the pasta sector, this process has taken on decisive contours in terms of market consolidation and has driven companies to invest in technology, state-of-the-art equipment and training of their professionals. The result of these investments is production facilities among the most modern in the world and perfectly able to provide quality products.
Dried pasta in Brazil is produced almost entirely from soft wheat and is segmented into: semolina pasta with eggs, semolina pasta, regular pasta and homemade pasta. The name “noodles” is popularly used, including in packaging, as synonymous with “pasta”.
Many companies in the industry have an integrated process with wheat mill and overall have a broad portfolio with other products derived from wheat, such as flour, cake mix, crackers and cookies, ready-made cake, etc. Instant noodles are one of the products offered by companies, with the possibility of adapting flavors to the target market.
Until 1997, the Brazilian pasta market was very dispersed, with the two main representatives of the sector, Adria Alimentos do Brasil (acquired by M Dias Branco in 2003) and Santista Alimentos, respectively, holding 6.8% and 6.7%, respectively, of consumption. The concentration in the industry became more significant with the intensification of mergers and acquisitions. Currently, more than half the market, in terms of volume sold, is dominated by six companies: M. Dias Branco, J. Macedo, Selmi, Santa Amália, Vilma and Piraquê. The table below shows the market share of competitors in the domestic pasta industry and the Northeast and Southeast regions of the country for the period indicated:
| Pasta Sector Market share in terms of Volume sold |
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| Brazil | Northeast | Southeast | |
| M. Dias Branco | 36.0% | 63.5% | 28.2% |
| J. Macedo | 12.5% | 12.7% | 16.7% |
| Selmi | 8.6% | 1.3% | 10.4% |
| Santa Amália | 7.0% | 0.2% | 14.7% |
| Vilma | 4.9% | 2.8% | 8.4% |
| Tondo | 3.1% | 0.0% | 3.4% |
| Outros | 26.9% | 19.5% | 18.2% |
| Source: AC Nielsen (2018) | |||
| Pasta Sector Market share in terms of Sales |
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| Brazil | North | Southeast | |
| M. Dias Branco | 33.0% | 62.5% | 26.3% |
| J. Macedo | 11.5% | 13.1% | 14.6% |
| Selmi | 10.5% | 2.2% | 11.6% |
| Santa Amália | 8.4% | 0.3% | 16.6% |
| Vilma | 5.0% | 3.3% | 8.3% |
| Barilla | 4.6% | 0.6% | 6.6% |
| Outros | 27.0% | 18.0% | 16.0% |
| Source: AC Nielsen (2018) |
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According to AC Nielsen data for 2018, the Southeast region accounts for 46.5% of the pasta
volumes sold in the Country, the Northeast region accounts for 31.8%, South for 13.8%, MidWest for 6.3% and North for 1.7%.
Pasta Consumption
Unlike the retraction perceived in the previous year, 2018 was a period of recovery and growth for the category. For pasta, the growth was driven mainly by the most affordable segment: common pasta, with 5.2% growth and already representing 26% of all pasta consumption in Brazil. Except for semolina, with a decrease of -1.1% in volume, the other Pasta segments (+ 1.3%) and Instant Noodles (+ 3.9%) posted growth.
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