BRF’s distinctive characteristics allow it to stand out from the competition and maximize growth opportunities. A portfolio of brands and products positioned to serve different consumer profiles, plus a robust physical structure, efficient operational capabilities and human capital make up a set of intangible assets that give the Company a competitive edge.
Brands - as the owner of strong brands that enjoy widespread public recognition and are benchmarks for quality - such as Sadia, Perdigão, Chester, Batavo, Elegê and Qualy, in Brazil; and Perdix, Sadia, Hilal, Paty and Dánica, in Argentina, to name a few -, BRF has invested in the positioning of its corporate image and is now making progress towards being recognized as a leading brand in its segment and also admired in all its chosen markets in Brazil and overseas.
Portfolio - With a sound and diverse portfolio that includes over 3.3 thousand products, BRF reaches different consumer audiences and conveys a sense of trust to all of them. Over the year, around 300 products were launched on the domestic and international market among processed, frozen, industrialized, ready-to-consume, pizza and dairy lines.
Innovation and technology - Acknowledged as one of the 100 most innovative companies in the world according to the 2012 Forbes magazine ranking, the Company invested R$ 106million in a new technology center. Built in the city of Jundiaí (SP), in the same complex already occupied by a distribution center and a laboratory, the research facility houses the activities previously carried out at the Vieira (SC) and Concórdia (SC) centers. Concentration in a single site will bring synergies to research and development activities as will the single team of 250, facilitating interaction with the marketing teams based at the São paulo headquarters. The center has physical-chemical and microbiological laboratories as well as those for sensorial analysis, materials and packaging in addition to eight experimental kitchens. There are also facilities for developing and testing food service products. Another highlight in 2012 was the implementation of a unified Information Technology system at all units so that activities and processes may now operate under the same management and procedures model.
Production structure - The operational structure is distinguished by the geographic location of its production units, which, in line with the agreement with Cade and the implementation of a unified manufacturing management model, mark the beginning of a new phase of optimized production capacity. The new model was responsible for defining and implementing identical procedures and practices for all operations and will be replicated in the dairy products area during 2013. The high level of automation at our plants and our skilled labor force are additional competitive advantages, further improved in 2012 with the introduction of new technology intended to automate repetitive processes.
Logistics and distribution network - BRF’s supply chain is one of the largest operations of its kind among Brazilian companies. Products are shipped from 52 units in 11 states and are distributed to 150 thousand points of sale across Brazil. The physical distribution matrix and the production system are synchronized such that production is able to meet demand in terms of quantity, quality and range of orders. Logistics is responsible for making deliveries at the precise place and time agreed. BRF employs practically every mode of transportation to get its products to the points of sale. In the domestic market, most of the cargo is shipped by trucks of various sizes (an outsourced fleet of 8 thousand vehicles) and rail although there was an increase intheuseof coastal shipping in 2012. Distribution will be come even more synergistic and efficient in 2013 with deliveries of all segments and brands made possible from a single truck and also as a result of the integration of warehouses. Internationally, the development of the distribution network is a challenge. In 2012, progress was made in distribution in Saudi Arabia: with the incorporation of the joint venture partner responsible for importing and distributing our products in the local market, BRF gained more than 2 thousand points of sale. Again, in May 2012 the joint venture in Asia also helped boost retail and food service distribution in HongKong, Macao and Continental China.
Human capital - all employees at BRF are critical to the Company’s expansion and consolidation process and regarded as its most important intangible asset. With a team of experienced, professional executives, the Company maintains training courses that include a leadership program which serves as a forum for the exchange of experiences. Although employee profiles change from one job position to another, our human capital is made up of people who are aligned with the Company’s values, adaptable to a constantly changing arena and committed to the results and goals set out in the BRF 15 plan.
Management - BRF’s management model focuses on planning and is aligned with the best transparency practices in the market. Its main distinction lies in the ability to execute and maintain operations under complex scenarios. The major work done in 2012 to comply with the conditions in the agreement with Cade is proof of the Company’s managerial efficiency.
The Company adopts a long-term strategic stance and begins 2013 aligned with the objectives and goals laid out in the BRF15 Strategic plan to be one of the world’s premier food companies by 2015, admired for its world-class brands, innovation and results. On the cusp of the new cycle, internal discussions are to begin on the BRF 20 Strategic Plan, preparing the Company for the coming decade. All the work done in 2012 laid the foundations for a new cycle that now begins. After consolidating the agenda of obligations and tasks associated with the BRF-Sadia merger, the Company shifts focus to strategies for meeting the existing organic growth plan, including the goal of doubling 2010 sales within five years.
It will be a period of slower investments. although the numbers are not small, the curve will drop in 2013-14. The focus will be on efficiency via increased productivity and the optimization of and return on invested capital, exploiting existing capacity in order to consolidate a globalized BRF with a wide and innovative portfolio of products to satisfy the diverse consumer profiles around the globe. Domestically, the Company will make efforts to identify the role and positioning of each product category. The potential of the Sadia name as an iconic brand will be exploited for its characteristic of vitality and as a source of pleasure and enhancing the concept of sociability. The perdigão brand, in turn, will be addressed in order to keep it relevant in consumers’ minds, even with the volume loss arising from the agreement with Cade, conveying a sense of caring and protection.
Synergic gains are linked to increased productivity and efficiency at a low cost, the result of distribution centers able to operate with the full spectrum of brands, deliveries using the same trucks, and joint bills-of-sale to invoice products from a single legal entity.
The corner stone of internationalization is based on four points: brand, portfolio, progress in distribution and local production, themes that are complementary and directed towards the desired change in the overseas market. Long-term planning will change BRF’s international profile and position it to focus less on commodities and more on processed goods. To this end, strategic moves will be based on acquisitions of processors and distributors in the international market, the construction of factories and the development of products and marketing campaigns for different cultures and tastes, consolidating Sadia as a premium brand.
Sustainability as a strategic pillar
In a year of major challenges, BRF did not ignore the sustainability factor. Theconcept is already crystallized in its culture and has been addressed in several activities over the course of 2012, such as training for procurement area negotiators, the integration of new employees and meetings with suppliers. Sustainability at BRF is supported by a set of guidelines, practices and actions intended to achieve positive outcomes, simultaneously on the economic and financial, environmental and social fronts.
Furthermore, sustainability has practical applications and a concrete impact on employee routines, as it is part of the variable compensation for executive goals. For the management process, the Company has established six pillars that, in line with the BRF15 plan, drive the business strategies and contribute to building a global food company.