Organic eggs: Raiar wants to be the largest in the world in the sector – 03/06/2023 – Market

They want to be giants in the production of organic eggs and, for that, they try to change a chain that, today, is still based on transgenic grains, the use of pesticides and, in the case of the farms, an unstructured network with a low level of governance.

With one year on the shelf, eggs from Raiar Orgânicos already rank second in the national market, behind only Fazenda da Toca, which is the largest in Latin America. The position, however, says little about the company’s plans, says CEO and co-founder Marco Menoita.

“At this rate, we should be the biggest in Brazil as of next year”, he says. “But that doesn’t mean anything, it’s a trophy worth nothing. The message behind it is important, which is the gain in scale. The more scale, the more competitive our egg is and the more accessible it is for everyone. “

The starting point of the business came from the observation of two movements. One, driven by consumers, who are increasingly concerned about the impact of what they buy and are also more comfortable eating eggs, a food that has ceased to be the villain of cholesterol.

The other comes from the field, from what also co-founder Luis Barbieri considers to be the exhaustion of the green revolution model (a term used to refer to the techniques and innovations that allowed for productivity gains).

“Little by little, small, medium and large producers are realizing that the intensive use of pesticides and chemical fertilizers is depleting life in the soil”, he says. “The health of agriculture involves restoring life, the microbiology of the soil. It involves organic and regenerative agriculture.”

Barbieri and the partners know agribusiness and the grain market well. He worked in the sector for 20 years, 16 of which for Louis Dreyfus, a giant of French origin that operates in the processing and trading of grains.

Menoita founded NovaAgri, another important negotiator in the agricultural sector, from which also came Leandro Almeida, director of operations at Raiar, and the third in the trio of founders.

They knew, therefore, that before eggs and even chickens, they would need to take care of the corn used in the feed. In egg production, 80% of the cost comes from the grains.

Visits to producers began in 2019, even before the farm where the aviaries, feed factory and egg room are located was purchased. Raiar’s production unit is in Avaré, 236 kilometers from São Paulo.

Within a radius of 200 kilometers from the property, says Barbieiri, around 90% of the beans produced in São Paulo are located. This region is also marked by many small properties, of around 50 hectares, and with little productive capacity, with degraded pastures.

In the surroundings, in addition to these small producers, there are also many agrarian reform settlements. One of these neighbors is the Santa Adelaide settlement, created at the end of the 1980s. According to the MST (Movimento dos Trabalhadores Rurais Sem Terra), the partnership with Raiar for the production of organic grains is already in its third year and comes from several regions of the country. state.

In all, there are 70 suppliers of organic corn, including agrarian reform settlers and other small producers, who are organized into a network named Folio. Articulated by Raiar, the non-profit foundation wants to facilitate the production of knowledge and awareness for the segment, putting universities, input industries and seed producers in contact.

To encourage the adoption of organic planting, Raiar helps identify the best seeds —which cannot be transgenic, but are the result of improvement, for example—, the best types of bioinput, provides and trains technical assistance and does all the means for the producer to obtain organic certification.

Switching from conventional planting to organic farming is not a trivial process. There is a soil detoxification time that can reach three years, a period in which there is a drop in productivity. For rural producer revenues, this tends to be offset by the organic premium, which pays 30% more than common crops, but even so, on properties with corn for Raiar, the company’s proposal is to initially use only part of production.

“We have to be very responsible with this process so as not to put either the individual at risk or the cause at risk”, says Barbieri.

The result of the first year of eggs for sale was positive. With the first cycle completed, it was possible to show that the indicators are viable. The company’s eggs are on the main digital platforms, in retail chains, in neighborhood produce, and reach the homes of subscribers who receive boxes of eggs on a recurring basis.

So far, investment in the complex in Avaré has been around R$200 million. In addition to the partners, 31 private investors put money into the business, and a new round should take place by the end of this year.

Currently, 120,000 productive chickens live on the Raiar farm. The pace of sales in the first year makes it possible, according to Menoita, to double production to return to growth.

With the new investment, the company expects to grow to 400,000 chickens in up to three years, and reach 700,000 in the following two years. The network of organic corn producers will already be able to meet this volume, but demand still needs to meet the height.

For a more distant future, Raiar positions itself as an organic protein company, with the possibility of going beyond eggs. For the near future, the partners are betting on the growth potential of the organic eggs market, which in Brazil is no more than 0.5%.

In Europe, this market already accounts for a share of 20%, and eggs from chickens in cages are already prohibited. In the United States, the share of organic eggs is 8%, where the consumption of organic chicken is also growing. In Brazil, in addition to the very low volume of this type of egg, the majority, around 95% according to Raiar, come from cages.

The European experience indicates that the change is slow, but it goes towards rejecting, progressively, the egg of the hen that is confined and treated with antibiotics. “This is changing in many parts of the world and in Brazil it is just beginning”, says Barbieri.

For Raiar’s CEO, the company takes the lead by identifying a “transformational wave” in a long production chain. This wave, Menoita bets, will reach traditional agribusiness in a short time. If not for values, then for necessity.

“It’s not because it’s organic. Several super good farmers are looking at the soil and seeing that it’s not going to continue like this, the pests are no longer dying”, he says. In his assessment, the appeal will be economic, but also one of survival.