Brazil: Land of Untapped Opportunities Understanding cultural differences and finding a local expert can open many doors.
By Lee Gimpel
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When Ryan Black and Ed Nichols, both 33, took a surfing trip to Brazil in 2000, they discovered açaí and resolved to bring the delicious and nutritious purple fruit back home to the United States to make smoothies, drinks, supplements and more. But they knew that Sambazon --the company they cofounded with Ryan's brother, Jeremy, 34--would have to keep one foot in Brazil because these "superfruits" grow nowhere else on earth. In fact, in addition to their San Clemente, California, headquarters, they've since put down roots in the form of a processing plant in the Amazonian state of Amapá, which is only accessible by boat or plane.
In a way, Sambazon's ties to Brazil and its exotic, in-demand offerings are emblematic of the untapped opportunities the expansive country offers North American companies. Brazil is far and away South America's largest nation--it's nearly the size of the United States--and boasts a $1.8 trillion economy. It is also home to some 190 million people and borders all but two countries on the continent.
The motto on Brazil's flag proclaims "Ordem e Progresso," but for many years there wasn't enough "order and progress" to make Brazil a suitable trading partner. However, last year it took in more than $37 billion in foreign direct investment--double its 2006 tally. The rise bespeaks foreign favor, but Brazil ranks only 122 on the World Bank's scale that measures how easy it is to do business in various countries; Mexico is 78 spots better.
Paulo Rocha, owner of HRM International Inc., a management consulting firm that helps American companies do business in Brazil, insists that U.S. entrepreneurs find a "harbor pilot"--a Brazilian to navigate the business shoals of the only Portuguese-speaking country in the Americas. Sambazon found theirs in 2002--an American expatriate who had been in Brazil for almost 10 years, was an açaí expert, and not least of all, had married into a prominent Brazilian family. As Catherine Lee, author of The New Rules of International Negotiation, points out, one's extended family network plays an important role in Brazil, so it shouldn't be surprising to do business with a partner's cousin. Also, nepotism is common.
And while Ryan opted for shorts and flip-flops in the steamy Amazon, his laid-back attire earned him dirty looks from some Brazilians, he says. For a business meeting, Lee recommends wearing a conservative suit--never jeans--to a 10 a.m. rendezvous and then going out for a nice lunch. As you're getting to know your partner, expect physical contact (such as a touch on the shoulder or a pat on the back) and close proximity to them; backing away can be perceived as insulting.
Despite cultural differences, Sambazon has found success in Brazil. "Working with Brazil and in Brazil has been a great experience," says Ryan, whose company reached nearly $20 million in sales last year. "Brazilian laws and regulations are quite favorable to foreign direct investment."
