Marketing and production of snacks made from organic ingredients
Marketing and production of snacks made from organic ingredients
Business Model Description
Promote a portfolio of healthy snacks made from organic ingredients representing the diversity of Peru, rescuing the nutritional value of these ingredients and transforming them into high-nutrient products for consumers' tables.
Expected Impact
Generating higher income for organic producers through the transformation of their products into nutritionally rich foods
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Macroregion Selva
- Macroregion Sur
- Region Lima y Callao
Sector Classification
Food and Beverage
Development need
-In 2022, the weight of the agricultural sector in the GDP is 6.1% (3)
- In December 2022, the year-on-year variation of the Agricultural Production Index was -0.96%, due to a decrease in agricultural activity of -2.43% (1).
- By the end of the year, the agricultural sector grew by 4.3% compared to the same period in 2021, driven by increased production in the Agricultural subsector (+5.5%) (2).
Policy priority
- Institutional Strategic Plan 2019-2024 (Modified) - MIDAGRI (Implement initiatives to improve agricultural services) (5).
- Agricultural Policy Guidelines: A guiding framework for decision-making by public and private sector actors (6).
- Food and Nutritional Security Law No. 31315: Development of public policies on food security (4).
Gender inequalities and marginalization issues
Income disparities between men and women can affect consumption patterns in the food and beverage sector, such as:
-The average income of women is 69.6% of men's income - INEI (Sep-2022)(10).
-In 2021, men's labor income increased by 10.7%, while it decreased by 1.1% for women(11).
Investment opportunities introduction
- In 2021, it achieved a GDP growth recovery of 13.6% (12).
-The National Agricultural Policy (PNA) guides public investment towards providing services that strengthen the sector (14).
-Strategic National Development Plan 2050: references agricultural production within the framework of a broader vision of sustainable country development (7)
Key bottlenecks introduction
-Inflation was 6.43% in 2021 and 8.56% in 2022. This reduces the purchasing power of the population (15)(16).
-Agriculture in Peru has low productive efficiency, with 85% of farmers having plots smaller than 10 hectares (17).
-17% of companies in the extractive sector reported difficulties in finding qualified personnel (18).
Food and Beverage Retail
Development need
- According to the "State of Food Security and Nutrition in the World" (SOFI), in 2022, Peru has 16.6 million people facing food insecurity (22), which corresponds to 49.7% of the Peruvian population (9).
- In 2020, the cost of a healthy diet in South America was USD 3.61 (24).
Policy priority
-Law No. 29196 - Law on the Promotion of Organic or Ecological Production, which promotes sustainable and competitive development of organic or ecological production in Peru (25).
- National Concerted Plan for the Promotion and Development of Organic or Ecological Production - PLANAE 2021-2030 (27).
- Law No. 1062 - Law on Food Safety and its Regulations (30).
Gender inequalities and marginalization issues
In Peru, in 2022, in the commerce sector, women make up 27.5% of the labor market, while for men, it's 20.4% (31). However, women spend an average of 40.2 hours per week on unpaid work, while men spend 16.3 hours (33).
Investment opportunities introduction
Ethnic foods, meal replacements, and other food categories experienced growth in South America in 2022 (35). In line with this, MIDAGRI (Ministry of Agriculture and Irrigation) approved the creation of the National Organic Production Seal as a distinctive element for the trade and promotion of organic products (34) to enhance the competitiveness of the sector.
Key bottlenecks introduction
The prices of organic products are relatively high compared to other snacks, and the purchasing power has decreased due to inflation. This also directly affects the production cost, in addition to the difficulty in accessing raw materials and the high level of informality in employment, which accounted for 76.8% in the industry in 2021 (26).
Food Retailers and Distributors
Pipeline Opportunity
Marketing and production of snacks made from organic ingredients
Promote a portfolio of healthy snacks made from organic ingredients representing the diversity of Peru, rescuing the nutritional value of these ingredients and transforming them into high-nutrient products for consumers' tables.
Business Case
Market Size and Environment
< USD 50 million
5% - 10%
For the year 2019, the sale of snacks in the Peruvian market amounted to USD 150 million (41).
As of the end of 2021, SENASA announced that Peru currently has 464,546.85 hectares dedicated to organic production and 95,157.84 hectares in the transition process, certified by organizations authorized by SENASA. This has allowed for better conditions to improve the supply of these products (36).
The healthy snacks market has grown by 24.7% between 2020 and 2021 (41).
Indicative Return
> 25%
Feasibility studies for the implementation of healthy snack production companies estimate a return on investment between 45% and 55%. (42)
Investment Timeframe
Short Term (0–5 years)
The estimated payback period for a project implementing a healthy snack production company is 3 to 4 years. (42)
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Market - Politcal Instability
Market - Volatile
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Improving working conditions in agriculture and reducing labor informality are important objectives.
As of 2022, the anemia rate in children aged 6 to 35 months is 40.9% nationwide. Additionally, chronic malnutrition is at 11.5%, and efforts are being made to reduce it to 11%. (42)
Gender & Marginalisation
A higher proportion of women than men suffer from chronic health problems. In 2021, 44.3% of women reported experiencing a permanent ailment, which is 9.7 percentage points higher than men (34.6%). (8)
The number of women with permanent health problems has been increasing rapidly. In 2011, it affected 40.4% of women, and by 2021, it had increased by 3.9 percentage points. In the case of men, it has grown by 2.5 percentage points. (8)
Expected Development Outcome
It integrates small Andean farmer associations into its supply chain. It aims to reduce the poverty gap for small Andean farmers by providing them with access to the market at fair prices along with technical assistance to enhance productivity.
Gender & Marginalisation
By working directly with local producers, it allows them to improve their income not only through fair payment for their products but also by ensuring a consistent flow of trade, enabling them to plan their processes and create employment for more members of their communities.
Primary SDGs addressed
12.2.2 Domestic material consumption
In 2020, the food industry sold 17,583 million soles, achieving a 30.8% share in the gross value added during the period 2019-2020 (37).
Objective 2 of the Health Policy for 2023 in Peru is to improve infant and maternal feeding practices by incorporating iron-rich, diverse, nutritious, locally-sourced, and appropriately portioned foods within a context of healthy eating.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Outcome Risks
The production costs can be increased due to access to raw materials and inflation, raising the selling price.
The prices of the products are relatively high compared to other snacks, and the purchasing power today has decreased due to inflation.
Gender perceptions deeply rooted in society can affect the marketing of organic products.
Impact Risks
Variability in the quality of products received at the time of raw material reception.
If women do not have equal opportunities in this industry, it could have a negative impact on the communities where organic input production takes place, affecting the economic and social stability of those communities.
Impact Classification
What
Income generation through agricultural production using agroecological practices.
Who
Peasant communities from whom products generated through agroecological practices are purchased
Risk
Shortage of raw materials - Inequality in the quality of raw materials at the time of sale.
Contribution
Contribution to the improvement of people's healthy diet. -Strengthening the economic activity of rural communities.
Impact Thesis
Generating higher income for organic producers through the transformation of their products into nutritionally rich foods
Enabling Environment
Policy Environment
National Strategic Development Plan 2050: State Policy 34, Territorial Planning and Management, promotes, among other things, the understanding and research of the exceptional diversity of the territory and the sustainability of its ecosystems. It also encourages dialogue, citizen participation, and prior consultation with indigenous or native peoples. (7)"
Law on the Protection of Access to Peruvian Biological Diversity and the Collective Knowledge of Indigenous Peoples - Law No. 28216. (28)
Law on the Promotion of Investment in the Amazon - Law No. 27037. (29)
Financial Environment
Financial incentives: Agrobanco provides financing to small-scale agricultural producers with the aim of boosting their productivity and integrating them into the financial system. ALIDE (Latin American Association of Development Financing Institutions) promotes the improvement of risk management and agricultural credit practices in the small farmer sector.
Regulatory Environment
Ministerial Resolution 591-2008/MINSA - Sanitary Standard that establishes microbiological criteria for sanitary quality and safety for food and beverages for human consumption (32).
Sanitary Standard for the Application of the HACCP System in the Manufacturing of Food and Beverages, Ministerial Resolution No. 449-2006/MINSA (20).
Regulation on Surveillance and Sanitary Control of Food and Beverages (Supreme Decree No. 007-1998-SA and its amendments) (19)
Marketplace Participants
Private Sector
WASI ORGANICS, Perúoils, Amaru Superfood
Government
MINAM, Dirección General de Economía y Financiamiento Ambiental (DGEFA) del Viceministerio de Desarrollo Estratégico de los Recursos Naturales (VMDERN) del PRODUCE, MIDAGRI.
Target Locations
Macroregion Selva
Macroregion Sur
Region Lima y Callao
References
- (1) INEI (2023). Informe técnico de producción nacional diciembre 2022.
- (2) MIDAGRI (2022). Informe del Valor Bruto de la Producción Agropecuaria.
- (3) BCRP (2023). Notas de estudios diciembre 2022
- (4) Congreso de la República (2021), Ley N° 31315 - Ley de seguridad alimentaria y nutriciona
- (5) MIDAGRI (2022), Plan Estratégico Institucional 2019-2024 (Modificado)
- (6) MIDAGRI (2015), Lineamiento de política agraria
- (7) PCM (2022), Plan Estratégido de Desarrollo Nacional al 2050
- (8) INEI (2022). Perú Brechas de Género 2022
- (9) GOB.PE (2022). Población peruana en el 2022
- (10) INEI (2022). Estadísticas con Enfoque de Género
- (11) GOB.PE (2022). Brecha de ocupación laboral - Nota de Prensa
- (12) EY (2022). Guía de Negocios e Inversión en Agricultura y Agribusiness en el Perú 2022/2023
- (13) GOB.PE (2020). Gobierno crea el FAE-AGRO para inyectar S/ 2,000 millones en créditos a pequeños productores - Nota de prensa
- (14) MIDAGRI (2021), D. S. N° 017-2021-MIDAGRI, Política Nacional Agraria 2021-2030
- (15) BCRP (2022). Reporte de Inflación . Diciembre 2022
- (16) INEI (2023). Variación de los Indicadores de precios de la Economía. Diciembre 2022
- (17) MIDAGRI (2022). Problemas tipo de la agricultura peruana
- (18) MTPE (2022). Encuesta de Demanda Ocupacional (EDO)
- (19) MINSA (1998). D. S. N° 007-1998-SA. Reglamento sobre Vigilancia y Control Sanitario de Alimentos y Bebidas
- (20) MINSA (2006). R.M. N° 449-2006/MINSA. Norma Sanitaria para la Aplicación del Sistema HACCP en la Fabricación de Alimentos y Bebidas
- (21) MTPE (2021). Tablero Interactivo del Empleo Informal
- (22) FAO (2022). Nota de prensa "El Perú es el país con la Inseguridad Alimentaria más alta de Suramérica"
- (23) INEI (2012). Inequidad de género en la actividad agropecuaria
- (24) FAO (2022). The state of food security and nutrition in the world
- (25) Congreso de la República (2008), Ley de promoción de la produccio orgánica o ecológica. Ley N° 29196
- (26) MTPE (2021). Tablero Interactivo del Empleo Informal
- (27) MIDAGRI (2021), Plan Nacional Concertado para la Promoción y Fomento de la Producción Orgánica o Ecológica - PLANAE 2021-2030:
- (28) Congreso de la República (2004). Ley de protección al acceso a la diversidad biológica peruana y los conocimientos colectivos de los pueblos indígenas. Ley N° 28216
- (29) Congreso de la República (1998). Ley de promoción de inversión en la Amazonía. Ley N° 27037
- (30) Presidencia de la República (2008), D. L. N° 1062. Ley de inocuidad de los alimentos
- (31) BCRP (2021). Actividad Productiva y Empleo. Memoria 2021
- (32) MINSA (2008). R. M. N° 591-2008-MINSA. Aprueban “Norma Sanitaria que establece los criterios microbiológicos de calidad sanitaria e inocuidad para los alimentos y bebidas de consumo humano"
- (33) CEPAL (2023). Observatorio de Igualdad de Género de América Latina y el Caribe
- (34) SENASA (2022). MIDAGRI aprueba la creación del Sello nacional de producción orgánica para mejorar la competitividad del sector en el país
- (35) KPMG (2022). Perspectivas en M&A para la industria de Consumo y Retail 2022
- (36) SENASA (2021). Crece producción orgánica en Perú con más de 460 mil hectáreas certificadas
- (37) INEI (2021). Comportamiento de la Economìa Peruana en el 2020
- (38) WASI ORGANICS
- (39) PERÚ OILS
- (40) AMARU SUPERFOODS
- (41) ADEX (2022): nacks de Cacao y Cereales: Evolución del mercado mundial y nacional
- (42) MINSA (2023): Minsa reducirá al 39 % el índice de anemia en menores de 3 años a nivel nacional