January 9, 2018 / 3:31 PM / a year ago

UPDATE 2-BRF launches processed meats brand for cost-conscious shopper

(Changes headlines, adds details, updates share performance)

SAO PAULO, Jan 9 (Reuters) - Brazilian food company BRF SA launched a new meats brand aimed at cost-conscious buyers, venturing into the discount market that represents about one-third of the country’s processed food sales, a company executive said on Tuesday.

Some 14 products including sausages, hamburgers, and cold cuts will be sold and primarily distributed at cash-and-carry outlets, BRF vice president for Brazil, Alexandre Almeida, told reporters during a conference call. Sale are set to begin in February, the company said.

The launch of the discount brand follows the lifting of antitrust restrictions last July, allowing BRF to target a segment that grew during the country’s recession.

Antitrust agency Cade lifted brand limits established in 2011 at the time it approved the merger of Sadia and Perdigão, which created BRF SA.

“Kidelli will compete in a market which registered robust growth in the last few years,” Almeida said referring to the new brand name. He declined to offer sales or margin forecasts related to the launch.

The new processed products will cost 15 percent less than the average of more traditional brands in the market, Almeida said, and be produced at five of the company’s 29 plants in Brazil.

The new brand will have a sales force independent from BRF’s leading Sadia and Perdigão brands, the company said. In the last three years, BRF has invested 560 million reais ($172 million) in “innovation” projects, part of which went to develop the new brand, Almeida said.

Shares rose 0.55 percent to 39.91 reais in early-afternoon trading, after the announcement. The stock has risen about 9 percent this year, reflecting expectations of an improved outlook for the company as Brazil’s economy recovers from a deep recession.

BRF sees “healthy growth” in the food market this year, an improvement from the prior three years, Almeida said.

The launch will help BRF, Brazil’s largest chicken exporter, reduce idle capacity at its Brazilian plants and allow it to compete again with regional brands on a national scale after the end of the antitrust restrictions. ($1 = 3.2496 reais) (Reporting by Ana Mano and Alberto Alerigi; Editing by Chizu Nomiyama, Frances Kerry and Jeffrey Benkoe)

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