Thinking of Latin America as monolithic market bloc impairs business development, exec says

How this tendency came about is easy to understand if one looks at a globe, said Bill Driessen, technical sales director for the central region/LATAM for Japanese botanical ingredient supplier Taiyo​. North America, at least the portion north of the Rio Grande, is a huge swath of territory with the same language (French Canada excepted) and, from a global perspective, a very similar culture.

“The USA and Canada are both very large land-mass wise and they are somewhat similar. We have this tendency to look at everything down there in Latin America in somewhat the same way,”​ Driessen said.

Latin American countries share a dominant religion—Catholicism—and most speak Spanish, with the major exception of Brazil.  But that’s where the monolithic aspects of the culture end, Driessen said.

“While they might speak Spanish, they have their own history, their own slang, their own dialect, their own governments, their own set of regulations,”​ he said. 

Emerging markets​

Among the markets in Latin America Driessen said he excited about the emerging possibilities in Colombia.  The decades long insurgency in the country has lost followers and power in recent years and the era of the big drug lords seems to have passed. As a result, the market is awaking from something of a bad dream with a pent-up demand, he said.

“Colombia is a vibrant market right now.  It has to do more with their political situation. They went through some very difficult times during the past 10 years and there is now a rebirth of their country. They are relearning what it is to be free to go out and do what they want without fear.  The economy is growing and there is now a middle class. They are exercising more, going to the gym more,” ​Driessen said.

“Chile is an interesting market but the population there is relatively small compared to other countries,”​ he said.

Difficult regulations stymie full potential​

Many of the countries in Latin America base their regulatory structure for dietary supplements and their ingredients on models from North America or Europe.  Thus there is some degree of familiarity, Driessen said. The came can’t be said for Brazil, where a difficult-to-navigate regulatory structure serves to blunt the potential of this huge market, which dwarfs any in the region outside of Mexico.

“Brazil of course is the largest market down there.  But Brazil is very difficult from a regulatory standpoint to enter into business there as an outsider.  The Brazilian government seems to push people toward having a brick-and-mortar presence there. Their regulatory body—ANVISA—is unlike any European body or North American body,”​ he said.

Boots on the ground​

Getting an ingredient approved in Brazil can be a daunting task, Driessen said.  But even in other markets with theoretically more familiar regulatory structures, choosing the best way to go about things is often a matter of local knowledge, he said.

“I’ve had a similar experience in many Latin American countries. The example I like to give is here in the US if you want to sell hot dogs on the street corner there are hoops you have to jump through. You have to get  a permit from the city. You have to get a permit from the health department. In Latin America you just show up in the morning with a little cart and if someone gives you a problem, you show up the next morning on a different corner,”​ Driessen said.

That shall we say, flexibility, also seems to permeate the regulatory sphere and is what makes having trusted distributors with long in the experience in the various markets so valuable, Driessen said.

“If you say, OK, I’ve got this ingredient and some financial backing and I want to get it approved in a given country, you can ask three different consultants and get three different answers about how to do that. It’s not insurmountable, but you definitely need to budget some time to get it done. In some countries, if an ingredient has already been approved in the US or Japan or Europe, that can be a plus,”​ Driessen said.

Having local representatives who might already have relationships with local regulatory bodies is a big plus on the ingredient approval side but it also is of great help in building business, Driessen said.  He makes an annual sales trip to the region that last several weeks, but being able to compress his face-to-face time in the market to that degree is a matter of a network of trusted partners and long experience in the market.  Flying solo is a possibility, Driessen said, but is rarely time efficient.

“When you talk about growing business and having sales down there, you could get lucky quickly but otherwise it could take years. You can still do business there but you are going to exert a lot of time and money. If you are willing to share a little of the business with a local agent, things can go a lot quicker,” ​Driessen said.