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PARMALAT ALVARO NOVAES: [SAO PAULO, BRAZIL]

By Published on .

Alvaro Novaes sees the rose-shape logo of the Parmalat brand on a rapidly growing number of shelves in the supermarkets of Brazil and eight other Latin American countries.

But it wasn't always that way. In 1990, the Italian dairy products marketer had sales of just $30 million in Brazil. In five years, sales grew to $910 million a year and jumped by another 30% in 1996, making Brazil Parmalat's biggest market outside Italy.

As marketing director, Mr. Novaes, 43, has built Parmalat into the market leader in the milk products for which the company is best known, while also adding new products. In July, Brazil became the first market in which Parmalat sells coffee, followed by cereal in November.

Mr. Novaes attributes Parmalat's proliferation and growth to a combination of strong brand image, good distribution and high-quality products. "In a highly competitive market like Brazil, brand image is essential," he said.

He is also spreading the Parmalat brand name to the rest of Latin America. Last year, the company began welding dozens of newly acquired dairy products businesses in eight Spanish-speaking countries into a single identity by changing local brand names to Parmalat and introducing uniform packaging and advertising.

Aiding the efforts has been DM9, a highly creative São Paulo ad agency run by Nizan Guanaes, a leading Brazilian ad man. Last year Mr. Novaes decided to use DM9's creative work throughout Latin America, so he asked DM9 to assemble an informal network of agencies in Mexico, Argentina, Uruguay, Paraguay, Chile, Ecuador, Colombia and Venezuela to help adapt and run it. Parmalat spends 4% of sales on advertising, about $25 million in Brazil and $10 million for the rest of Latin America.

A DM9 spot for Parmalat milk products, showing children dressed in animal costumes and using the slogan "Because we are mammals," was the most popular commercial in Brazil in July, according to a monthly poll by São Paulo market research institute Datafolha.

The biggest seller in Parmalat's 116-product range in Brazil is shelf-stable Ultra High Temperature milk, a huge product category in Latin America because it doesn't require refrigeration. In Brazil, Parmalat has a 38% share of the UHT milk market.

"[Brazilian market] research shows that last year only 28% of households that only drink UHT milk had Parmalat," Mr. Novaes said. "This year, the number has grown to 54%."

Parmalat is boosting sales in Brazil with a promotion to give away Seiko watches to consumers who accumulate 100 points, earned when they buy Parmalat products. The promotion, the first Parmalat has tried outside its native Italian market, started in October, and points already are being redeemed for watches at the rate of 4,000 watches a day. By March, Mr. Novaes expects to give away about 2 million watches.

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