The Interview - Vladmir Maganhoto

Dear Vladmir, it is a great honor for us to be able to interview you. As part of BRF, a company with more than 85 years of history and a great team of more than 90 thousand employees, could you give us a brief personal and company introduction?

BRF is present in more than 117 countries. Its purpose is to offer quality food, increasingly tasty and practical, for people and their pets around the world, through the sustainable management of a long and complex living chain, which provides a better life for everyone, from farm to table. Owner of iconic brands such as Sadia, Perdigão, Qualy, Biofresh, Balance and GranPlus, the Company bases its actions on the fundamental commitments of safety, quality and integrity. The company bases its strategy on a long-term vision and aims to generate value for its more than 100,000 employees around the world, more than 350,000 customers and approximately 10,000 integrated producers in Brazil, all its shareholders and for society.

The phrase "Better life" is the purpose that guides the company, we would like you to tell us what that precious motto means to you?

Our purpose is to offer quality food, increasingly tasty and practical, for people all over the world. We do this through the sustainable management of a long and complex living chain that provides a better life for everyone, from farm to fork. Our story began 87 years ago. Since then much has changed in the world and we have also been changing to continue evolving and writing our history. We are part of a large ecosystem and we know that our role in the world only makes sense if we contribute to a better life for those who are also part of it.

Regarding the market growth in your country, Brazil, how much do you think the demand for Pet Food ingredients will continue to grow? How do you think the Pet Food market will look like in a few years?

The pet market has enormous growth potential. We estimate a double-digit increase per year, reaching retail sales of more than R$ 40 billion. Our expansion into Pet Food is one of the main growth paths of the Company's strategic plan, Vision 2030, to triple its size by 2030. Specifically in this segment, we are the 3rd largest player and we´re working to be one of the two big players by 2025. Adding the acquisitions of Mogiana Alimentos and Grupo Hercosul, BRF Pet reaches approximately 10% market share, according to data provided by ABINPET – Brazilian Association of the Pet Products Industry.

BRF Ingredients states that "a better future will demand quality food", and in line with that belief there is a phenomenon of "humanization of pets"… what feeding trends do you think will prevail for our four-legged friends? What are the trends that could last over time?

As mentioned in the question itself, there is indeed a greater connection between owners and their pets, and this close interaction between them is absolutely genuine. Through our brands, we are investing heavily in products with high nutritional value, which benefit the health and longevity of dogs and cats. A good example of a trend in the Pet Food segment is natural products. According to Mintel's 2021 report 'A year of innovation in pet food and products', Pet Parents are increasingly looking for more natural food options for their animals. In addition, according to the survey, the owners showed a preference for foods that contain safety and functional benefits for the animals. The survey also reflects consumer concerns about transparency regarding food ingredients used in production.

In our portfolio, for example, we have the Guabi Natural and Biofresh brands, two benchmarks in the natural pet food market. The recipes are developed by experts in animal nutrition and add the most nutritious ingredients to each ingredient, without GMOs, artificial colors or flavors.

In addition, BRF Pet has a robust portfolio of brands for a wide universe of owners and pets that includes the Balance, Faro and Herói brands, which are aimed at the supermarket channel, while Three Dogs, Three Cats, Primocão, Primogato, Apolo and Átila, Guabi Natural (market leader in the Super Premium Natural segment), GranPlus (deputy leader in the High Premium segment), are aimed at the largest sales channel in Brazil: specialized pet stores (pet shops and veterinary clinics). With this robust portfolio, we can offer quality, reliability and adequate nutrition for different profiles of Parents and their pets, in different sales channels in Brazil and in the world.

As Director of BRF, could you tell us if you are developing any new products for the Pet Food industry?

After completing the integration of operations with Hercosul and Mogiana Alimentos, earlier this year, we are now focused on expanding our Pet business. For the second half of the year we will work on the execution of our growth plans, such as: launching new natural products for dogs and cats; increase in production capacity; logistics optimization and factory automation.

We are committed to our innovation plan and to meeting the needs of our customers and the market.

With this move we will have a complete portfolio of brands and products, mainly in the premium and super premium segments, reinforcing our operations in the specialized channel. In addition, we will use all of BRF's robust platform to obtain relevant competitive advantages, such as obtaining grains at more competitive prices. We are committed to becoming one of the leaders in pet food in the country. Our Vision 2030 project is underway and we are focused on bringing the best products to this market, which has enormous growth potential. We are excited to take the next steps and consolidate our position as one of the main market players in Brazil and worldwide.

BRF is also a company committed to the environment, could you tell us what actions you take to promote and develop sustainable management?

Sustainability is in the BRF Culture, in our 2030 Vision, in the business strategy and in the day-to-day management of our activities. For BRF, sustainability is a journey that has not yet begun. We are committed to continuing and inspiring each person to be an agent of change. Our ambitions reflect the awareness of our responsibility. We know that it is always possible to do more to provide a better life for people and the planet, in line with our Purpose, and to increase our transparency and reinforce our ambitions, we have established global and transversal Commitments with ESG (Environment, Social and Governance). , connected with the Company's Growth Vision. We are ready for a sustainable growth journey, thanks to the consistency of our management, strategy and competitive advantages (brands, people, digital transformation and operational excellence in the integrated chain).

We work on several fronts to improve our performance, including projects to reduce water in equipment, infrastructure modernization and application of the Lean philosophy (lean production) in factories, valuing waste control without prejudice to the sanitary field. Through actions such as the reuse of water (avoiding new extractions from the environment), the prioritization of surface catchment (with greater renewability of the resource), the treatment of wastewater for its release and the return of about 95% of the water captured from the environment. In addition, we also invest in green projects. The issuance of green bonds allowed the Company to increase its investment capacity in green projects, focusing on categories such as energy efficiency, renewable energies, sustainable forests, reduction of greenhouse gas emissions, water management, packaging, reduction of the use of raw material or waste management.

On the wake of pandemic, we have seen a growth in online sales. How did the company manage to adapt to this marketing trend? Does BRF consider it favorable, and do you think incorporating it in the future?

The evolution of the e-commerce in the pet segment is a movement that has intensified in recent years, mainly with the acceleration of digital use since the start of the pandemic, but also with the entry of large players in the country on large platforms. usability, relevant investments and offering differentiated services. BRF Pet has been supporting these partner customers and investing to grow together and even exceed expectations in the pet food category.

This is a favorable trend for Pet Parents, mainly due to the convenience and practicality generated by access to services such as delivery, pick-up and through subscription programs. It is also favorable for the industry, which ensures that its products are available and accessible with a click of the owner.

As we were commenting before, and also as a significant change since confinement, as well as the demands of pet parents when it comes to feeding them. How do you think this benefited the Industry? Do you believe that companies are ready for this requirement?

Pet Parents are increasingly demanding, they seek information and knowledge to choose the best food for their pets. As with human nutrition, they began to understand that good nutrition promotes a longer and healthier life, as well as helping to prevent diseases and improve the quality of life of dogs and cats. This trend, added to the great level of humanization existing in the relationship between owners and pets in Brazil, favors our industry, and in particular BRF, which has the same purpose of providing a high nutritional level and quality of life to pets.

In addition, we have a solid portfolio of innovations, which seeks the best in technologies and ingredients, combined with extensive technical experience in animal nutrition to provide increasingly innovative foods with high nutritional value to meet the entire dog feeding process. and cats, including dry food and wet food and treats.

Source: All Pet Food