ADM 729 – Brand Management

Bazzar Challenge #4

Adrien Bourzat

December / 2010

Index

I. Introduction............................................................................................................................1II. Management of restaurant and food businesses............................................................1III. Global Strategy.....................................................................................................................3A. Entry into the US Market.....................................................................................................4B. Entry into Mercosul Market.................................................................................................6IV. Conclusion...........................................................................................................................10V. Exhibits.................................................................................................................................11A. Exhibit 1 – Top Word Associations with Bazaar According to the Word Associations Network.....................................................................................................................11B. Exhibit 2 – Average Retail Prices of Beverages (Off-Trade).......................................11C. Exhibit 3 – Average Retail Prices of Packaged Coffee.................................................11D. Exhibit 4 – Average Retail Prices of Packaged Foods.................................................12E. Exhibit 5 – Market Size of Beverages (Off-Trade).........................................................12F. Exhibit 6 – Market Size of Packaged Coffee..................................................................13G. Exhibit 7 – Retail Market Size of Packaged Foods.......................................................13H. Exhibit 8 – Bazzar current and proposed operational model.......................................14I. Exhibit 9 – Proposed Bazzar Growth Strategy...............................................................14J. Exhibit 10 – Paraguay demographics..............................................................................15K. Exhibit 11 – Paraguay Food Budget Shares..................................................................15L. Exhibit 12 – Chileans and Food.......................................................................................15

I. Introduction

Bazzar is experiencing different moments in its main businesses. Regarding the food business, it has a wide

spread coverage in many states of Brazil. As for the restaurant business, Bazzar is living a period of brand

recognition among the target customers in Rio de Janeiro. Meanwhile, the company has short-term plans to

expand both its businesses.

Two major challenges are examined in this study: defining how should Bazzar manage its restaurant and food

businesses and how can each business reinforce each other; and proposing a global strategy for Bazzar,

specifically, defining how to launch the Bazzar brand in the US and in Mercosul.

II. Management of restaurant and food businesses

Bazzar’s businesses stand for a brand encompassing different products and services. To develop an

approach for reinforcing the brand and its businesses, one should consider the most important aspect in

reinforcing brands: the consistency of the brand nature and the amount of marketing support the brand

receives.

The consistency proposed does not conflict with performing changes in the marketing program. On the

contrary, it stands for managing the brand equity during the necessary tactical changes in pricing, perceived

quality, product attributes, communications and brand extensions so as to maintain the strategic direction of

the brand. Nevertheless, in order to be successful, the managers cannot overlook the stability of the strategic

positioning of the brand. Moreover, certain key elements should never be abandoned in order to maintain the

brand meaning over time. Although brands should always look for potentially powerful new sources of brand

equity, the priority must be to preserve the current sources since they can be considered as having enduring

value to the brand.

The way that brand equity is reinforced may depend on the nature of brand associations. Bazzar’s core

associations are primarily related to symbolic and experimental benefits, counting on high perceived quality in

products and services. Therefore, in order to reinforce the brand, Bazzar should focus on expanding the

usage of current products by encouraging new and existing customers to buy more, through advertising

campaigns and well developed communication strategies.

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In that sense, the two core businesses of Bazzar have plenty of opportunities to reinforce each other, not only

in Rio de Janeiro where both businesses are based, but also in other states and regions of Brazil, where the

organization plans to expand.

The restaurant business has a strong appeal to the class A (upscale) customers in Rio de Janeiro, especially

in the noblest region of the city, the south area. The delightful cuisine and attentive service along with the

unique atmosphere of the restaurant provide a pleasant customer experience and create associations with

joy, exclusivity and status. Moreover, the upscale appeal of the restaurant also provides a high-end gourmet

experience for the customers and develops the habit of valuing and consuming upscale products, which

reminds customers of the pleasant moments experienced in the restaurant.

As for the food business, in Rio de Janeiro, where both businesses are currently developed, it represents a

huge opportunity for Bazzar to capture new customers, who might feel reluctant to try the restaurant in the first

place. In this sense, the home trial works as an incentive for new restaurant customers. Furthermore, the food

business increases contact with potential and actual customers leveraging brand recognition and developing

brand fidelity in both of the businesses. In other states, where Bazzar works solely with the food business, the

underlying opportunity is to feel the demand for upscale products and to understand the viability of expansion.

Once the expansion is considered viable and the plan is put in place, the food market works as a door opener

for the restaurant business.

Regarding the operational model, the growth plan determines strategic re-organization to achieve synergies

and to ensure that the company will focus on the core competences and will not be overwhelmed by

operational decisions. Therefore, we propose a few changes (see Exhibit 8). One of the suggestions is to

create a marketing department to manage campaigns, promotions, pricing and channel strategy throughout

the country, ensuring consistency of communications and the brand strategy. Another important

organizational change is to define a unique supply chain department encompassing the logistical company to

serve both food and restaurant businesses. Despite the differences in amount purchased, frequency of

deliveries and diversity of the products, a structured department will allow economies of scale for Bazzar by

increasing synergy, reducing re-work and developing stronger relationships with the suppliers.

Regarding the growth strategy for Bazzar, we recommend a phased approach in order to conquer the markets

consistently (see Exhibit 9). The first phase, estimated to last about 3 years, encompasses expanding the

restaurant businesses to the states which have high demand according to market research and good

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acceptance of the products. Moreover, the organization should focus on developing a stronger connection

between the restaurant and food business in Rio de Janeiro by implementing stronger communication and

below-the-line promotions in order to reach the target customers.

Having acknowledged the receptivity of the new restaurant markets (São Paulo and Minas Gerais) and the

performance of the strategy for strengthening bonds between restaurant and food businesses in Rio de

Janeiro, the company will have all the elements to begin the second phase, which encompasses increasing

usage in São Paulo and Minas Gerais and expanding abroad (the elements of the expansion abroad will be

better detailed in section III). While the strategy applied in Rio de Janeiro might require a few changes to fit

the new markets, Bazzar’s experience in Rio will certainly provide a good level of information in order to face

the new challenges. In that sense, applying below-the-line marketing actions is the advised approach for São

Paulo and Minas Gerais. Once the brand is established and the profits begin to increase, an approach with

above-the-line institutional marketing programs is the next step for full establishment of the brand in the

national market.

The third phase stands for extending the global strategy as described in section III. The robust base in Brazil

and strong bond between its core businesses will allow Bazzar to develop a smooth and highly focused global

strategy. Furthermore, it is important to remember that international economic instability is another variable

that requires a more conservative approach while analyzing the best timeframe for going global.

III. Global Strategy

The book Brand Management by Kevin Keller explains many considerations to apply when planning a global

brand strategy. The book starts by explaining the advantages of global marketing in terms of economies of

scale, lower total marketing costs, power and scope, brand image consistency, speed to market, and

uniformity of marketing practices. The disadvantages to the global marketing program come in ignoring the

differences between cultures, wants, needs, and advertising reactions across geographies. A single marketing

program used across the globe also ignores the differences in competitive and legal landscapes between

markets. Particularly for the US market, Bazzar may need to regionalize its brand. Per Keller, the steps to

crafting a global brand strategy are to: 1) identify differences in consumer behavior and 2) adjust the program

accordingly through the choice of brand elements and marketing activities.

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A. Entry into the US Market

1) American associations with the brand

Following Keller’s recommended structure to defining a global brand strategy, one must first seek to

understand how Americans will perceive the current Bazzar brand. According to dictionary.com, Americans

apply three definitions to the word ‘bazzar,’ spelled ‘bazaar’ in English: a marketplace or shopping quarter,

especially one in the Middle East; a sale of miscellaneous contributed articles to benefit a charity, cause, etc;

and a store in which many kinds of goods are offered for sale.

Bazzar is also cited as being commonly confused with the word ‘bizarre’. Next, the Word Associations

Network at wordassociations.net explores American associations with the word bazaar. The two most

common word associations are awning and camel which reinforce the dictionary.com findings that Americans

sense a Middle Eastern connotation in the word bazaar. See Exhibit 1 which shows the top twenty

associations and marks those that possess a Middle Eastern skew. Since the Bazzar brand is Brazilian, a

Middle Eastern association is likely to confuse the American consumer who will not perceive a clear

relationship between the two geographies. Due to the variety of unintended associations, Bazzar should

select a different brand name for the American market.

2) Marketing plan for packaged goods

Positioning. Due to different perceptions between the Brazilian and American consumers, separate

positioning should be applied between the two markets. In the Brazilian market, Bazzar represents comfort

food with quality and charm and products in grocery stores compete with high-end gourmet import products.

The high-end gourmet market is already saturated with strong brands in the US and the grocery store chains

may not give shelf space to a new Brazilian entrant. Bazzar should position as authentic, exotic, quality

Brazilian in the US market moving into the international food niche. The country of Brazil is increasingly

entering the minds of Americans through business, news, and sports. When Bazzar enters the American food

product market, the association to Brazil should become the leading brand element since it will play to

American curiosity.

Product Mix. Americans associate different countries with unique strengths in food preparation. The

challenge will be to modify Bazzar’s product mix or select products from the existing product lines to fit into the

food niches that Americans associate with the Brazil. Americans see Brazil as being strong in the following

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food types: coffee, sugar, meat, and exotic fruit. Exhibits 2-7 in the Appendix show the size and growth of the

American markets for each area in which Bazzar has products. The data is from Euromonitor’s Global Market

Information Database.

Our academic team’s understanding of the existing coffee joint venture is that the coffee is only to be sold in

the domestic Brazilian market. An additional joint venture might be pursued to deliver coffee to the American

market. The wet sauces that Bazzar produces for cooking meat should be successful because Americans see

meat preparation as a Brazilian strength. However, Bazzar should steer away from tomato based sauces

which Americans associate with Italy and curry-based and teriyaki-based sauces which Americans associate

with Asia. Similarly with the ice cream sauces, Americans do not associate Brazil with ice cream, chocolate,

raspberries, or strawberries but they do associate Brazil with exotic fruits. Passion fruit, guava, and acai for

example are becoming more popular in the US. Bazzar should cater to American perceptions by initially

marketing only the exotic fruit ice cream sauces.

Distribution. The grocery store distribution channel in the US is consolidated under a few large companies

that serve the majority of the US market through regionally branded or nationally branded grocery store

chains. Niche stores like Whole Foods, Trader Joes, and Cost Plus World Market all offer large selections of

foreign gourmet food products like Bazzar’s product. Consumers go to each of these stores to find gourmet

products that are interesting and healthy and the shelved products are not as mainstream as the typical large

grocery chain. These companies have favorable distribution policies that allow startups to put products on the

shelves locally in one area and then pursue national distribution if success is demonstrated over a period of

time.

3) The restaurant business

In 2009, according to Euromonitor, the American food service market was $425B USD ($1,384 per capita) and

the Brazilian market by contrast was $102B USD ($528 USD per capita). Consumer foodservice is comprised

of cafés/bars, full-service restaurants, fast food, home delivery/takeaway, self-service cafeterias and street

stalls/kiosks. The upscale comfort food restaurant concept that Bazzar uses in Brazil may not directly apply to

the US market because comfort food implies different dishes to Americans. The restaurant concept would

need to shift to be more specifically Brazilian, appealing to those looking for an exotic foreign meal rather than

comfort food.

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Bazzar should not initially pursue the expansion of the restaurant or café business into the United States. The

American restaurant market is highly competitive with a failure rate of 60% within 3 years1 and an average of

$500k-$1M USD2 required in startup capital. Since the Bazzar founders are local to Brazil, the startup capital

required would be larger, the understanding of the American consumer would be lower, and local control may

be more difficult leaving Bazzar to face greater risk and higher costs than competitors.

B. Entry into Mercosul Market

1) Paraguay

Potential market – Segmentation and targeting. The total population in Paraguay is around 6.349.000 and

the gross national income represented $27.678.156.100 in 2009. The GDP on a per capita basis is around

$4,700 but the real income has stagnated at 1980 levels. The population can be divided into several income

classes (from A to E) – see Exhibit 10. Since the top 10% of the population holds 43.8% of the national

income, Bazzar would need to target the AB+C1 income classes, which represent high income consumers.

So the target segment represents 634.900 people. These people usually live in the best neighborhood in

Paraguay, especially in the Capital Asuncion. AB classes accounts for 3% of Asuncion population (C1= 7%,

C2 = 20%, C3 =25%, D = 35% and E= 10%), therefore making Paraguay really small market opportunity, not

being considered as a priority in the Mercosul Region.

Food budget. The total food expenditure represents on average 27% percent of total expenditure3 (see

Exhibit 11). Paraguay is the country in the world where population spends the most to buy meat in their total

food budget. Every kind of products related to meat would be relevant to launch on this market.

Food imports. Total Imports in Paraguay represent $6.886 billion in 2009. Brazil is the leading economic

partner with Paraguay. In 2009, Brazil accounted for 28.36% of Paraguay’s total imports while US is around

22.76%, Argentina 15.98%, China 8.96%. We can estimate that Brazilian products sold in Paraguay represent

$1,952 billion. Food imports in Paraguay account for 7% of total imports. Therefore food importation from

1 University of Ohio study published in the Dayton Business Journal, 1999.2 Leonard, Ashley. “How to Plan a Restaurant Business.” eHow.

3http://www.ers.usda.gov/Data/InternationalFoodDemand/RERUN.ASP? RUNID=344401015&RSTYLE=1&VIEW=FBS&FILETYPE=None&Country=Paraguay&Commodity=All%20commodities

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Brazil represents a market of $136.640.4 This figure shows that Paraguay does not import as much food from

Brazil as appears at first sight.

Positioning. The company should focus more on premium products than on the provenance of its products

due to two main factors. At first, people are not familiar with Brazilian food. Few Brazilian foods are already

sold in Paraguay. Secondly, as an American country, Paraguay enjoys the same resources than Brazil. This

means that Bazzar cannot place emphasis on the provenance of its products.

Marketing Mix

Products. The firm should first produce condiments to be prepared with meats. Then it could sell other kinds

of premium products that are difficult to obtain in Paraguay such as Açai, achieving a competitive advantage

over local food producers.

Price. Bazzar should be aware of the fact that Asuncion is considered as the cheapest city to live in the world

The city has ranked as the least expensive city to live in for five years running by Mercer Human Resource

Consulting5. A Very high premium price would not meet demand because people are used to buy things

cheaply.

Distribution. Bazzar products should be distributed in areas where high income people are gathered. The

best neighborhoods of Asuncion are located in the old town.

2) Chile

Segmentation and targeting. The total population in Chile was around 17,094,270 in 2010. Concerning the

economy, Chile has a GDP of $243.569 billion that has contracted an estimated -1.7% in 2009. People can

also be divided into income class (A, B, C1, C2, C3, D). The richest 10 percent of the population obtains 46.1

percent of the national income. Bazzar’s products should target these 10% of the total population to meet the

high income consumer’s needs. In Chile, a typical household earns $3,000 USD per month for C1, close to

$10,000 USD per month for B, and requires one to be a very significant multimillionaire to be an A. The target

has very high purchasing power.

However, Chile’s rapidly increasing GDP and recent copper boom have provided Chileans with a sense that

economically they are doing better than they actually are. The result has been people accumulating massive

levels of personal and household debt to pay for the lifestyle they are convinced they should be living. The

4 http://www.tradingeconomics.com/paraguay/indicators/

5 http://www.mercer.com/referencecontent.htm?idContent=1268475

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upper class aspires to a lifestyle they cannot afford and to pay for it, they are put into debt. In Chile, people

can pay all at once or in installments which allow the middle class to buy premium products such as Bazzar’s

products in order to reach the social status they could not otherwise afford. The “ABC1” class lives in the

biggest cities in Chile, especially in Santiago (5.4 million people), Greater Valparaiso (803,683 people) and

Greater Concepción (666,381 people).

Food industry and imports. Food imports in Chile represent 7% of the total imports of the country, reaching

$54.6 billion in 2010. Import partners are the US 15.6%, Argentina 12.6%, Brazil 11.8%, and China 9.7%.

Brazilian imports account for $6.44 billion. In terms of food imports from Brazil we can estimate that it

represents a market of $450.000.

Chileans and food. Chileans spend 23% of their budget to buy food (see Exhibit 12). Among these

expenditures, 21% is dedicated to buy meat and they consume as much meat as breads and cereals. Chile is

a major beef producer which explains the low expenses on meat. Chileans normally eat four times a day. The

first meal of the day is breakfast, which consists of light fare including toasted bread with butter and instant

coffee with milk, then lunch, and then an afternoon tea once each afternoon with bread and jam that often also

includes cheeses and palta (avocados). People consume more tea than coffee in Chile6. Therefore, the

products that are more likely to succeed in Chile are condiments associated with meat and tea.

Distribution. Class differences are primarily expressed in the strong spatial segregation that exists in large

Chilean cities. Bazzar should be careful to distribute products in the right cities and neighborhoods such as

Providencia or in the wealthy neighborhood of Las Condes in Santiago which gather high-income consumers.

There are four distribution chains in Chile (three domestic and one foreign) that have 52% of the market in

2007: D&S (domestic), Santa Isabel (foreign) Jumbo (domestic) and UNIMARC (domestic). In contrast with

countries like Brazil, Mexico, and Argentina, the participation of foreign chains such as Royal Ahold and

Carrefour is still relatively small. This can probably be explained by the fact that the large multinationals

prioritized those larger markets.

3) Argentina

Segmentation – Targeting. Argentina is one of the key players in the Mercosul Region. With an estimated

population of 40.5 million is the second biggest market in the area. The GDP per capita $13,400 and the

country’s GDP $351 billion, that contracted the last year. The per capita GDP is just behind Chile. Moreover,

6 http://www.faqs.org/nutrition/Smi-Z/South-Americans-Diet-of.html

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socioeconomic levels in Argentina are distributed as follows: ABC1C2 – 34.3%, C3 – 29.5 %, D1 -17.4% D2 –

9.8 %, E – 9.0%. Food and non-alcoholic beverages represent around 61% of the monthly expenditures in

Argentina.

Lately Argentina have been overcoming several economic crisis from 1999-2002. Argentina was subject to

military dictatorship for many years and as well as a dollarized economy. This had a big effect on the

distribution of wealth and the wealth gap between the 10% poorest and the 10% richest among the

population, grew continuously since 2001, and decreased for the first time in March 2005. The richest classes

in Argentina mostly live in the Buenos Aires Federal Area. This class distinguishes of from the rest that they

enjoy having great food without thinking about the price. Proud of their Italian and French origins enjoy the

fact of eating and having fun around eating experience. Therefore, this opens the doors to an upscale

distinguished brand like Bazzar and defines Argentina as the top priority for the Mercosul expansion.

Imports. Brazil represents 31% of the $37.13 billion imports. This is due to the economic treaty with the

region. Nevertheless, a protectionist approach has been taking place for several months by restricting food

imports in order increase domestic consumption. Food that fit on the import ban represents 1.6 % all imports,

but crucially, 45% of that total represents imports from Brazil (85 Million).We have to check on this issue this

means that taxes can wave Bazzar products out of the market.

Argentinean cuisine: One of the biggest producers of meat around the globe. The Argentinean cuisine is

highly influenced by the French, Italian and Spanish. Main Argentinean dishes are grilled meat (asado),

empanadas, dulce de leche, alfajores, bread and the Mate tea. The Argentinean will always have bread on

the table which they put some spread on. This is an opportunity for the salty sauces like the mustard. A big

trend in the Buenos Aires region are the ice cream stores specially gelatos and frozen yogurts. This makes a

really big opportunity for the sweet line of products.

Distribution. Most of the distribution is done through smaller convenience stores within the city. Gourmet food

represents 3% of the total supermarket sales. There are several international retail stores like Carrefour and

Norte together represent 30% of market share with 200 stores, Jumbo and Disco 23% with 233 stores and

Coto 16% with 102 stores. We should focus on the major supplier in upscale markets in Buenos Aires area as

well as small grocery stores.

4) Uruguay

Segmentation – Targeting. The smallest population in the Mercosul region consisting of 3 million. The capital

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city is Montevideo is the most populated with 1.3 million. Even though is the smallest population it has a good

GDP per capita at $12,600 (higher than the Brazilian one). Just 5% of the current population fit in the A class

sector, therefore making Uruguay a really small market opportunity, not being considered as a priority in the

Mercosul Region.

Imports. The trading balance is negative as Uruguay is importing more than what they are exporting. They

import industrial supplies, machinery & equipment, oil & fuels, non- durable consumption goods. And export

mainly food (Meat, grains, dairy), textiles and leather. Brazil represents the second largest importer just after

Argentina, with the estimated 17.5%.

With the opening of the economy, many of the small and inefficient local food industries were closed. There

are opportunities to export many food products to Uruguay, but particularly those in which the local industry is

not very competitive. Imported food products, especially from Brazil and Argentina, are substituting for many

domestically manufactured products. On the other hand, the wealthiest part of the society want to have

imported product a sign of status.

Uruguayan cuisine: Uruguayans as all of South American countries focus on the consumption of meat as

one of the main sources for food. We should look into the savory sauce segment.

Distribution. Supermarket penetration is really small is about 40% with 3 major supermarket chains Disco,

Devoto and Tienda Inglesa. Most of the sales are done through specialty stores. Most import good are sold

through these kinds of stores which have no chain (40 in Montevideo and 30 in Punta del Este).

IV. Conclusion

This paper has provided the academic group to explore opportunities of enhancing and developing the brand

and the businesses of Bazzar. Throughout the paper, the group could identify the common thread between

the businesses (food and restaurant) and the synergy opportunities. Developing a structured approach for a

global expansion, comprising branding and marketing strategies, was a challenge that led the group onto

important conclusions as the choice of countries to expand, the brand name associations, the best time frame

as well as determining the regional appeal for different products. Finally, we understand Bazzar, which enjoys

good brand recognition along with high quality products and services, has a promising future inside and

outside Brazil.

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V. Exhibits

A. Exhibit 1 – Top Word Associations with Bazaar According to the Word Associations Network

Number Word Potential Unintended Middle Eastern or North African Associations

1 Awning X 2 Camel X 3 Selling 4 Bustle X 5 Merchant X 6 Eastern X 7 Shop 8 Whip X 9 Bought 10 Market 11 Famous 12 Sell 13 Pipe X 14 Folk 15 Buy 16 Slave X 17 Street 18 Crowd 19 Worth 20 City

B. Exhibit 2 – Average Retail Prices of Beverages (Off-Trade)

2009 Pricing $USD/liter

White Spirits Brazil 11.86 USA 15.18 Still Bottled Water Brazil 0.25 USA 0.61 Carbonated Bottled Water Brazil 0.65 USA 1.14

C. Exhibit 3 – Average Retail Prices of Packaged Coffee

2009 Pricing $USD/kg

Fresh Coffee Brazil 4.78 USA 11.35 Instant Coffee Brazil 23.49 USA 32.45

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D. Exhibit 4 – Average Retail Prices of Packaged Foods

2009 Pricing $USD/kg

Wet/Cooking Sauces Brazil 6.67 USA 12.85 Pasta Sauces Brazil 3.16 USA 4.96 Table Sauces Brazil 8.54 USA 6.91 Tomato Pastes and Purées Brazil 2.59 USA 3.40 Vinaigrettes Brazil 13.00 USA 8.78 Salad Dressings Brazil 8.54 USA 8.39 Soup Brazil 19.27 USA 3.73 Chocolate Spreads Brazil 11.31 USA 9.37 Chocolate Confectionery Brazil 14.76 USA 11.25

E. Exhibit 5 – Market Size of Beverages (Off-Trade)

mn liters & $mn USD Per Capita Liters & $USD

2006 2007 2008 2009 2010 2009

White Spirits Brazil Volume 26 27 26 25 27 0.1 Brazil RSP Value 224 269 288 300 359 1.5 USA Volume 403 425 451 482 506 1.6 USA RSP Value 5,914 6,245 6,751 7,322 7,722 23.9 Still Bottled Water Brazil Volume 3,235 3,621 3,879 4,236 4,575 21.5 Brazil RSP Value 744 967 1,164 1,069 1,190 5.4 USA Volume 19,423 21,171 20,670 20,008 19,608 65.3 USA RSP Value 12,053 12,875 12,578 12,226 11,959 39.9 Carbonated Bottled Water Brazil Volume 376 410 425 446 462 2.3 Brazil RSP Value 230 284 324 289 307 1.5 USA Volume 409 419 421 417 411 1.4 USA RSP Value 447 468 472 477 471 1.6 *Current Prices – Year-on-Year Exchange Rates. 2010 figures are forecasts.

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F. Exhibit 6 – Market Size of Packaged Coffee

Tonnes & $mn USD Per Capita Kg & $USD

2006 2007 2008 2009 2010 2009

Overall Brazil Volume 552,433 566,825 575,199 587,629 605,970 3.0 Brazil RSP Value 2,673 3,619 3,802 3,234 3,401 16.4 USA Volume 667,565 661,391 658,400 688,920 723,066 2.2 USA RSP Value 6,647 7,069 7,606 8,238 8,962 26.9 Fresh Brazil Volume 531,907 544,015 552,427 564,879 583,041 2.9 Brazil RSP Value 2,232 3,004 3,138 2,699 2,851 13.7 USA Volume 644,725 640,395 638,508 669,232 703,411 2.2 USA RSP Value 6,021 6,460 6,987 7,599 8,296 24.8 Instant Brazil Volume 20,526 22,810 22,771 22,750 22,930 0.1 Brazil RSP Value 441 615 664 535 551 2.7 USA Volume 22,839 20,996 19,892 19,689 19,654 0.1 USA RSP Value 626 608 620 639 666 2.1 *Current Prices – Year-on-Year Exchange Rates. 2010 figures are forecasts.

G. Exhibit 7 – Retail Market Size of Packaged Foods

Tonnes & $mn USD Per CapitaKg & $USD

2006 2007 2008 2009 2010 2009

Wet/Cooking SaucesBrazil Volume 1.5 1.6 1.7 1.8 1.9 0.0Brazil RSP Value 8.4 10.5 13.5 12 15.1 0.1USA Volume 39.6 34.6 35 35.7 36.4 0.1USA RSP Value 422.3 415.1 430.9 458.9 482.3 1.5Pasta SaucesBrazil Volume 138 166 182 208 241 1.1Brazil RSP Value 372 477 640 657 898 3.4USA Volume 374 372 390 397 401 1.3USA RSP Value 1,734 1,772 1,878 1,968 1,978 6.4Table SaucesBrazil Volume 15.9 16 16.1 16.2 16.4 0.1Brazil RSP Value 110 131 147 138 163 0.7USA Volume 180 167 162 172 177 0.6USA RSP Value 1,096 1,095 1,107 1,185 1,226 3.9Tomato Pastes and PuréesBrazil Volume 179 172 167 170 174 0.9Brazil RSP Value 336 369 488 440 524 2.3USA Volume 145 147 147 153 159 0.5USA RSP Value 419 433 475 519 558 1.7VinaigrettesBrazil Volume 0.3 0.3 0.3 0.3 0.4 0.0Brazil RSP Value 2.9 3.5 4.1 3.9 4.6 0.0USA Volume 83.1 80.3 79.6 82.4 83.0 0.3USA RSP Value 681.0 668.5 685.2 723.6 735.2 2.4Salad DressingsBrazil Volume 3 3.3 3.5 3.7 3.8 0.0Brazil RSP Value 22.4 28.4 35.0 31.6 38.0 0.2USA Volume 153 149 145 147 146 0.5USA RSP Value 1,215 1,187 1,192 1,235 1,231 4.0

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SoupBrazil Volume 11 13 15 17 20 0.1Brazil RSP Value 166 227 292 333 438 1.7USA Volume 1,321 1,308 1,323 1,280 1,276 4.2USA RSP Value 4,327 4,457 4,686 4,780 4,826 15.6Chocolate SpreadsBrazil Volume 6.0 6.1 6.2 6.4 6.5 0.0Brazil RSP Value 55.2 66.0 73.3 72.4 83.8 0.4USA Volume 2.2 2.3 2.5 2.7 2.8 0.0USA RSP Value 19.1 19.8 21.9 25.3 27.2 0.1Chocolate ConfectioneryBrazil Volume 192 225 242 240 256 1.2Brazil RSP Value 2,184 2,898 3,517 3,542 4,542 18.3USA Volume 1,681 1,660 1,613 1,515 1,401 4.9USA RSP Value 15,778 16,166 16,530 17,046 17,627 55.6

*Current Prices – Year-on-Year Exchange Rates. 2010 figures are forecasts.

H. Exhibit 8 – Bazzar current and proposed operational model

I. Exhibit 9 – Proposed Bazzar Growth Strategy

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J. Exhibit 10 – Paraguay demographics

AB + C1 C2 + C3 + D + E0

20

40

60

80

100

10

90

48 52

% of the population %Gross national income

K. Exhibit 11 – Paraguay Food Budget Shares

11

15

10

43

13

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10 Beverages & tabaccobreads & cerealsdairyfats &oilsfishfruits & vegetablesmeatothers foods

L. Exhibit 12 – Chileans and Food

Country Beverages & tobacco

Breads & cereals Dairy Fats &

oils Fish Fruits & vegetables Meat Other

foodsTotal food expenditure

Chile 13.414 21.483 11.193 4.595 2.063 17.334 21.791 8.127 22.961

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7 Source: USDA, Economic Research Service, using the 1996 ICP data. From the ERS report Cross-Price Elasticities of Demand Across 114 Countries (TB-1925)

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