Dairy Industry in Brazil Adopts Vertical Integration Amid Import Pressure
As the Brazilian dairy industry faces heightened competition from imports, vertical integration is emerging as a key strategy to maintain competitiveness. Companies in the sector are investing in comprehensive control over their supply chains, which includes everything from the production of animal feed to the manufacturing of dairy products.
Angelo Sartor, CEO of RAR Agro & Indústria, explained that this approach helps reduce variables that could affect the quality of both raw materials and finished products. For instance, RAR Agro & Indústria has implemented a model where the entire process, from feeding cattle to producing dairy derivatives, is standardized.
This standardization begins at the farm level, where animal feed is kept consistent throughout the year. This practice aims to maintain the uniform characteristics of milk used in products such as cheese. By doing so, the company ensures predictable production and a consistent quality of goods supplied to the market.
Proximity between milk production and processing facilities is another critical aspect of this model. RAR Agro & Indústria reports that the distance between milking sites and the dairy plant is less than a kilometer, allowing immediate transfer of raw materials for processing. This minimizes the time and handling involved, further preserving quality and reducing operational risks.
In addition to streamlining production, there is an increased emphasis on traceability, driven by consumer demand for transparency regarding food origins. As consumers show growing interest in production practices, RAR Agro & Indústria highlights its certification in animal welfare, which includes practices to ensure comfort, health, and proper animal management.
The focus on these attributes coincides with a rise in premium dairy categories, such as specialty cheeses and differentiated butters. These products are gaining traction in markets that value not just the final product quality but also the production processes involved.
This strategic shift is gaining significance in the context of increased international competition. Elements like supply chain control, production proximity, and certifications are becoming central to maintaining competitiveness in the sector. The combination of efficiency, quality, and transparency is thus seen as a pathway for companies to protect their margins and strengthen their market position.
