TH true MILK Market Research Brazilian market PDF

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MARKET RESEARCHTH TRUEMILK IN BRAZILTP Hồ Chí Minh, ngày 22 tháng 9 năm 2021Subject: International Marketing Lecturer: Đỗ Thị Hải NinhGroup: Smiling Cows Members: Võ Tường Vy Tôn Võ Triệu Minh Nguyễn Hữu Phước Nguyễn Hoài Linh Đan Nguyễn Hoàng Phan Thanh Thanh Nguyễn Thị Quỳnh Trang OUTLINE 1. TH Tr...

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MARKET RESEARCH TH TRUEMILK IN BRAZIL Subject: International Marketing Lecturer: Đỗ Thị Hải Ninh Group: Smiling Cows Members: 1. Võ Tường Vy 2. Tôn Võ Triệu Minh 3. Nguyễn Hữu Phước 4. Nguyễn Hoài Linh Đan 5. Nguyễn Hoàng Phan Thanh Thanh 6. Nguyễn Thị Quỳnh Trang

TP Hồ Chí Minh, ngày 22 tháng 9 năm 2021

OUTLINE 1. TH True Milk Introduction Overview: ................................................................................................. 3 1.1 The corporation’s background: ....................................................................................................... 3 1.2 TH true NUT: .................................................................................................................................... 3 2. Brazilian overview: ................................................................................................................................. 4 2.1 Geography and climate: ................................................................................................................... 4 2.2 Culture and society: .......................................................................................................................... 4 2.2.1 Population and Labor:............................................................................................................... 4 2.2.2 Brazilian culture: ....................................................................................................................... 6 2.3 Economy (GDP, GNP, inflation, gap between rich and poor) ...................................................... 7 2.4 Local infrastructure .......................................................................................................................... 9 2.5 Political situation and law environment (government law and policies).................................... 10 3. Export and Import Policies and Regulations ..................................................................................... 11 3.1 Essential nut milk export licenses in Vietnam .............................................................................. 11 3.2 Import regulations and import duties in Brazil. .......................................................................... 11 4. Consumer behavior............................................................................................................................... 13 4.1 A shift from dairy products to dairy substitutes:......................................................................... 13 4.2 Brazilian consumer behaviors when purchasing dairy alternatives: ......................................... 14 5. Competitor Analysis ............................................................................................................................. 17 5.1 TH True Milk’s competitors: ......................................................................................................... 17 5.2 Competitor’s marketing strategy .................................................................................................. 17 5.3 Target consumer of Silk .................................................................................................................19 5.4 Strength and weakness of Silk .......................................................................................................19 REFERENCE ............................................................................................................................................ 22

1. TH True Milk Introduction Overview: 1.1 The corporation’s background: The TH Milk Joint-Stock Company as part of TH Group which was founded by the financial advisor of North Asia Commercial Joint Stock Bank is a well-known brand in the dairy industry of Vietnam (Linh, n.d.). With the vision and investment that focus on applications of advanced technology - science and technology as well as integrated management, TH Group has launched a chain of retail stores named “TH True Mart”, which provide consumers with products that meet international standards from TH Farm, including fresh milk, nuts, healthy drinks, fresh vegetables, facilities and so on. Founded in 2010, TH True Milk is one of the most well-known milk brands in Vietnam due to a revolution in fresh and clean milk, in particular, TH Group has carried out the project of raising dairy cows in concentrated barns and processing milk with the scale of 1.2 billion USD, 37,000 hectares of land, and 137,000 dairy cattle that are imported from the US and New Zealand. Simultaneously, thanks to implementing international technologies into the closed-loop manufacturing process from grass to glass, TH True Milk's canned fresh milk products are not only delicious and nutritious, but they also support digestion, strengthen the immune system, enhance physical fitness, and develop mental-health for a healthy life every day. Consequently, TH Milk owns more than 30% domestic market share for fresh milk in Vietnam. Moreover, in 2014, TH Group earned a revenue of over four trillion dong, which is expected to reach six trillion dong in 2015. The Group targets 23 trillion dong in revenue by 2017, which will account for 50 percent of local consumption. To date, TH true Milk products have been registered in more than 60 countries around the world. (TRAN, n.d.) Following the success of the high-quality TH True Milk products, the TH Group shifted its focus to organic production with the introduction of TH true HERBAL, a herbal drink made from natural ingredients; TH true NUT, a new line of milk-based nut beverages; and TH true MALT, a malt drink made from barley fermentation (Viet Nam News, 2018). 1.2 TH true NUT: TH true NUT is the first nut milk product that includes nutritious nuts like macadamia, walnuts, oats, etc., which assist humans in preventing cardiovascular disease, cancer, and the aging process. which assist humans in preventing cardiovascular disease, cancer, and the aging process. This is also the pioneer drink in the world utilizing date palms to generate natural sweetness instead of refined sugar. Therefore, this type of product can provide energy for people due to their high protein and lipid content without increasing blood pressure, especially is suitable for consumers who suffer from diabetes. In addition, TH true NUT is also the first nut milk product in Vietnam combined with fresh milk, creating a balanced, healthy nutrition source and appropriate to all ages.

2. Brazilian overview: 2.1 Geography and climate: - With total area is 8.5 million square kilometres, Brazil is the world’s fifth largest nation, which is located in the Southeast of South America, bounded by the Atlantic Ocean on the East and Brasilia is the capital (CIA, 2021). - The topography of Brazil is very diverse and complex. Much of the territory in the north of Brazil is lowland covered by the Amazon forest. The southern part of the country is mainly hills and low mountains. The coastal area bordering the Atlantic Ocean has many high mountains. Brazil is one of the countries with the largest number of river systems in the world. The territory of Brazil is divided into five regions: North, Northeast, Midwest, Southeast and South and the climate varies from region to region but is mostly tropical (Trung tâm xúc tiến thương mại và đầu từ Thành phố Hồ Chí Minh, 2019). The average annual temperature is rather high, about 25 degrees Celsius and in some regions the temperature can reach 40 degrees Celsius. + The North region occupies 45.27% of Brazil's territory but it has the lowest population. Many indigenous people live here. This region has a low level of industrialization and development (except for Manaus, which has a duty-free industrial park). In addition, it has many lush tropical rainforests and a large number of Red Indians. + One-third of Brazil's population whose majority is African descent lives in the Northeast. This region has a diverse culture, influenced by Portuguese colonial, African and Red Indian cultures. The Northeast has a warm climate all year round, the land is suitable for agricultural development. But it is also the poorest region in Brazil. + The Midwest is the second largest region in Brazil, but the population density is low, mainly indigenous people. This region has a hot dry climate and has the capital of Brasilia and it is also the most important agricultural area in the country. The largest cities in this region are Brasilia and Goiania. + The Southeast is the most resource-rich and most populous region. The two largest cities Rio de Janeiro and São Paulo, which are located on the shores of the Atlantic Ocean, are in this region. The landscape is rather diverse with the main commercial center of the country - Sao Paulo, the historic city of Minas Gerais, and the famous Rio de Janeiro beach. + The South is the wealthiest region in Brazil with the best standard of living and service quality are appreciated. This is also the coldest region in the country. There are many European immigrants, mainly Germans, Italians and Slavs who have come to Brazil long years ago. The largest cities here are Curitiba and Porto Alegre. 2.2 Culture and society: 2.2.1 Population and Labor: - In the middle of September 2021, Brazil's current population is 214,278,037 people with population density is 26 people/km2 and in sixth place in the world (Danso, 2021). Because of its large population, we can see that Brazil is a potential market for consumer products such as food

and garment. Therefore, TH True Nut has the ability to penetrate into Brazil to meet their food needs. Table 1: “Race and ethnicity in Brazil” (Wikipedia, 2010) White

47.73%

Pardo

43.13%

Black

7.6%

East Asian 1.1% Natives

0.4%

Table 2: Brazilian Population 2016-2019 (Danso, 2021) Year Population

% Population change Birth rate

Urban residents % Urban residents

2019 211.049.527

0.75

1.76

184.407.548

87.4

2018 209.469.323

0.79

1.76

182.546.459

87.1

2017 207.833.823

0.81

1.76

180.633.872

86.9

2016 206.163.053

0.83

1.76

178.669.587

86.7

Brazil has a 0.87% annual rate of change in urbanization from 2020 to 2025 (CIA, 2021). With the rather stable population rate, the chance of entering the market is wider. Table 3: Population in the largest cities of Brazil in 2018 (Wikipedia Bach khoa toan thu, 2018) São Paulo

21,314,716

Rio de Janeiro

12,389,775

Belo Horizonte 5,142,260

Recife

4,021,641

Brasilia

3,986,425

Porto Alegre

3,894,232

Salvador

3,863,154

Fortaleza

3,594,924

Curitiba

3,387,985

Goiania

2,347,557

- 87.4 percent of the population live in urban areas in 2019, so we should care about the customers here. - Life expectancy of Brazilians in 2019 was 33.9 years old. People at this age prioritize healthy diets, “green lifestyle”, therefore nut milk products meet their needs perfectly. - The Brazilians are mainly concentrated along the coast and the inland population density is rather low. This makes it difficult for investors to determine the location to build material facilities and distribution foundations. But they can do so in Sao Paulo and Rio de Janeiro because these cities are the largest and most populous ones of Brazil. - Brazil has a workforce of more than 210 million people (6th of the worldwide) (Wikipedia, 2019). The recovery of the Brazilian labor market is mainly due to the increase in informal workers and semi-unemployment workers. 2.2.2 Brazilian culture: a. Religion: About two-thirds of the Brazilian people adhere to Roman Catholicism. Much of the rest of the population is Protestant, including fundamentalist and Pentecostal groups. Accordingly, the majority of Brazilians in the country identify as Roman Catholic (64.6%), thus reflecting its historical relationship with Portugal and the Catholic Church. Of the remaining population, 22.2% identify with a Protestant tradition, including Seventh Day Adventist (6.5%), Assembly of God (2.0%), Christian Congregation of Brazil (1.2%), Universal Kingdom of God (1.0%) and other forms of Protestantism (11.5%). There is also a small number of people who identify with another form of Christianity (0.7%), ‘Spiritist’ (2.2%), other (1.4%), none, (8.0%) and unspecified (0.4%) (est. 2010).

- Catholicism in Brazil Catholicism was made the official religion of Brazil and was formally institutionalised into the country’s political and social system. Whilst this formality has loosened greatly, Brazil has one of the largest Christian populations in the world. Numerous significant events in Brazil revolve around the Catholic faith, such as Brazilian festivities hinging on events in the Catholic calendar, or relate to Christian saints. Influences of the religion can also be seen throughout the country through Catholic iconography and buildings. (Chara Scoope, n.d.)

b/ Language: Portuguese is the first language of the vast majority of Brazilians, but numerous foreign words have expanded the national lexicon. In fact, due to Brazil’s huge population, it’s made Portuguese one of the world’s major languages. Brazilian Portuguese has even overtaken the Portuguese spoken in Portugal to become the standard version of the language worldwide. Brazil is also home to more than a dozen indigenous languages, as well as a swathe of minority languages, ranging from Spanish, to Ukrainian, to Korean. (The Editors of Encyclopaedia Britannica, 2021) English is compulsory in Brazilian schools and is becoming increasingly common. Most younger Brazilians will have a good grasp of English - even if they aren’t entirely fluent. In major cities, older Brazilians will also likely have some knowledge of English, as well as other languages like Italian and German. Brazil is becoming increasingly bilingual, with English now having leapfrogged Spanish as the most learnt second language. (Ronald Milton Schneider, 2021) 2.3 Economy (GDP, GNP, inflation, gap between rich and poor) - Brazil is a free economy country, mostly export-oriented. Brazil’s economic sectors consist of agriculture, a variety of services, and industry. In 2018, 75.8% of the country's GDP belongs to the trade and services sector, while 60% is the services sector and 13% is the trade sector. This “tertiary sector” (services and trade) includes a lot of activities: financial service, accommodation, F&B, transportation, public administration, services for business, commerce, education, social and health service, sports, research, and development (Wikipedia, 2019).

- In Latin America, Brazil’s national economy is the largest. In the world, it is the ninth-largest economy and the eighth largest in “purchasing power parity (PPP)” (2018) (Wikipedia, 2019). - The GDP per capita of Brazil in 2019 ranked 78 th in the world (The Global Economy, 2019). And the GDP (PPP) per capita is 88th place of worldwide (14763.87 USD) (The Global Economy, 2019). Table 5: GDP (The World Bank, 2020b) and GDP growth of Brazil (The World Bank, 2020a) for the period 2016 – 2019 Year Current US$ (Trillion) GDP growth (%) 2019 1.878

1.411

2018 1.917

1.784

2017 2.064

1.323

2016 1.796

-3.276

Table 6: Brazil's GNP for the period 2016 – 2019 (Số liệu kinh tế, 2020). Year

USD

Change

2019 1.827.512.816.467 -36.130.922.853

% Change -1,94

2018 1.863.643.739.320 -161.286.722.137 -7,97 2017 2.024.930.461.457 267.326.798.724

15,21

2016 1.757.603.662.733 -10.698.575.597

-0,61

Table 7: Inflation (%) (consumer price) 2016 – 2020 (The World Bank, 2020b). 2020 3.212 2019 3.733 2018 3.665 2017 3.446 2016 8.739

Brazil's economy in 2017 continued to show many signs of prosperity, coming out of the crisis but was still rather slow. However, the inflation rate is in the range of 2 - 5% (2017 – 2020), which is stable, so the economy develops stably. The government has more options to stimulate investment in domestic currency. Besides, the unemployment rate fell and consumption increased. Brazil is also a member of economic organizations such as G20, SACN, Mercosur and a trading partner of the EEC, the United States, and Asian countries, including Vietnam. Even though Brazil is a big country with rich resources and a rather strong economy, it still has a gap between rich and poor. There are still about 53 million people living below the poverty line and in poverty (Trung tâm xúc tiến thương mại và đầu từ Thành phố Hồ Chí Minh, 2019). About 16 million Brazilians are officially considered illiterate. This contributes to Brazil's economic inequality. 2.4 Local infrastructure - Transportation: The Brazilian transportation sector can be segmented into cargo rail, passenger rail, logistics infrastructure, roads, ports, public transportation, urban mobility and smart transportation systems. According to the World Bank’s 2018-2019 Logistics Performance Index, Brazil ranks 56th out of 160 countries in the quality of its infrastructure. Trucks are the primary method of cargo transport, which makes logistics more expensive and contributes to the “Custo Brasil” concept that higher operational expenses are the cost of doing business in Brazil. Logistics costs account for around 12% of Brazil’s GDP (5% more than in the U.S.), reflecting an inefficiency that results from poor transportation infrastructure. (Country Commercial Guides, 2021) - Opportunities: GoB interagency worked to make projects more attractive to foreign investors and legislators passed needed reforms to improve the investment environment in Brazil. For example, the “BR do Mar” (“Ocean Highway”) project will bring an incentive package for cabotage aimed at opening the market to increase supply, foster competition, lower costs and create new routes.

- Water and Wastewater Subsector: The Internet of Things (IoT) is trending in Brazil’s water and wastewater market. In 2018, Sabesp initiated a pilot project to test the IoT coverage in part of its networks, and given the positive results, in 2019, Sabesp contracted an IoT company to monitor water consumption. Some utilities already use telemetry, GIS for digital mapping and public works monitoring, among other technologies. The “New Pinheiros” is a river clean-up project in the city of Sao Paulo, which demands onsite sewage treatment solutions. The river pollution is mostly due to sewage disposal. Several areas of the city are informally occupied and are not accessible to the traditional wastewater collection network, creating a major pollution problem. + Solid Waste Management: The Ministries of Environment and Energy regulated the sector and provided the necessary legal security to attract private investors. There is an increased interest in waste-to-energy technologies in Brazil, as some sanitary landfills are reaching full capacity. 2.5 Political situation and law environment (government law and policies) Brazil's politics are governed by a multi-party system and a federal presidential representative democratic republic, in which the President serves as both head of state and head of government. The federal government, the 26 states and a federal district, and the municipalities make up Brazil's political and administrative structure. Legal system: Brazil adopts a civil law system, based on the Roman-Germanic tradition. Although custom and case law are part of the legal framework, written law prevails over them from an interpretive point of view. Federal law provides that a judge can only resort to analogy, custom and general principles of law if the law is silent on a matter. Parties to arbitration can freely choose...