April 22, 2013 5:21 pm

Rich pickings

An aerial view of the Jurua River, a major tributary of the Amazon and one of the habitats of the Pirarucu, the largest freshwater fish in South America, September 1, 2012. Picture taken September 1, 2012.©Reuters

There are few nastier looking plants than the murumuru palm. With spines as long and sharp as stilettos, this native of the Brazilian Amazon guards its nutty fruit jealously until it falls to the ground.

It was formerly considered a nuisance by farmers in the state of Pará, where it was eradicated in preference for its more popular rival, the açaí palm, whose fruit is sold as a health supplement around the world. That was until Natura Cosméticos, Brazil’s biggest cosmetics company, began using oil from the seed of the murumuru in its products, particularly for hair.

“We used to see this palm as a pest here,” says Candido Pereira of the Jauari Association, a community co-operative whose small family plantations lie along the banks of Pará’s sleepy Moju River. “Now everyone is collecting murumuru.”

More

On this story

On this topic

IN Management

Oil of murumuru is a success story in Brazil’s growing push to source more products from the Amazon region and its vast forest. From ingredients for cosmetics and cooking to fruits for flavours in ice cream and sustainable timber for housing, the Amazon offers companies a chance to differentiate themselves from competitors and gives poor local communities an opportunity for extra income.

But sourcing from the region without upsetting either the environment or local social structures is a delicate process, requiring an unusual degree of patience and sensitivity from the businesses taking an interest.

It also requires a change of mindset. Aside from a few select Brazilian companies, the concept of the Amazon as a source of innovative products is relatively new in Brazil, which is accustomed to valuing imported goods and brands over domestic ones.

“Foreigners often value the Amazon more than many Brazilians. The average Brazilian likes the Amazon – he figures that it is his patrimony – but it’s just that no one does anything about it,” says Ulisses Sabará, the president of Beraca, which sources ingredients from the Amazon and works with Natura and France’s L’Oréal and L’Occitane.

Home to about 25m people, Brazil’s “Legal Amazon” area occupies about 60 per cent of its territory but on average has only about half the national per capita income.

The question of how to exploit the Amazon to improve the livelihood of its residents while leaving the forest standing is one of the big questions facing modern Brazil. So far, aside from açaí, the most successful commercialisations have been guaraná – used for a fruit-flavoured stimulant because of its high concentration of caffeine – and Brazil nuts.

Guilherme Peirão Leal, co-chairman of Natura, which has annual sales of R$6.35bn ($3.2bn), says the company wants to increase the amount of ingredients it sources from the Amazon from the present 10 per cent to 30 per cent of the total by 2020. It has agreements with 36 communities in the region, such as Mr Pereira’s. The deals cover 3,571 families and generate a total of R$12m in income and other benefits for the communities.

Fruits give a new flavour of Brazil

One rainforest byproduct yet to be fully exploited internationally is the dazzling variety of fruits found in the Amazon region. While the world is increasingly familiar with açaí and a few other rainforest fruit flavours, in Belém, Pará state, near where the Amazon meets the sea, a bewildering array of further different fruits with exotic names is on offer.

The first to exploit these commercially seem to have been the ice cream makers, such as Cairu, a Belém speciality that has expanded to other Brazilian cities. Its products feature fruits from the less familiar murucí, mangaba, cupuaçu and uxí.

Do not expect them to be widely available outside Brazil in the near future. As Alex Atala, a celebrity São Paulo chef and a pioneer of using Amazon ingredients, recently told the Financial Times, supply chains for exotic products from the region hardly exist, even to important cities such as his own.

Also, many have yet to be legalised for use in food.

“Brazil has one of the greatest natural patrimonies in terms of biodiversity,” Mr Leal says, speaking at the opening of a new “innovation centre” in Manaus that Natura hopes will serve as an incubator for commercialising res­earch in the vast region. “How do we transfer this patrimony into wealth that can be shared by all?”

He explains that increasing by threefold the percentage of products sourced from the Amazon is more challenging than it might seem. Of the 10 per cent of ingredients Natura obtains from the Amazon now, about 8 percentage points is common palm oil, the base of many of the company’s soaps and other products. Only 2 percentage points of Natura’s raw material comprises more exotic products from the small community associations, such as murumuru. “That’s why when we say to grow from 10 to 30 per cent, it’s huge,” he says.

The Amazon yields a promising range of nuts whose oil can be ex­tracted for beauty care products. But Natura needs to find communities that are willing to form associations to create the economies of scale necessary to make growing and collecting a nut or fruit profitable. Natura’s own profit margin of nearly 24 per cent last year based on consolidated earnings before interest, taxation, depreciation and amortisation, depends on commoditising its inputs.

Mr Sabará says Beraca sells about 20 per cent of its produce to Natura, with about 45 per cent exported. L’Oréal uses butter of murumuru in hair products.

Beraca, which has been operating in the Amazon for 13 years, has found novel ways to commercialise the reg­ion’s natural wonders. In one such case, it noted that during the rainy season on the island of Marajó, also in the state of Pará, the women collected andiroba seeds – a source of essential oils for beauty companies – that washed up on the beaches and river banks. Beraca helped them commercialise their harvest, had it certified organic, introduced them to L’Occitane, which donated €40,000 ($52,000) for a headquarters, and built a factory to convert the seeds to oil. A kilogramme of seeds costs R$0.60 to R$1 while 1kg of oil is R$15. “It’s not easy working with small communities  . . . but everyone gains,” says Mr Sabará.

Working with community associations and micro-enterprises in the region poses financial challenges too. Loy Pires, Brazil head of the International Finance Corporation, the World Bank’s private-sector arm, says the organisation had wanted to invest in some small producers of fine timber for use in housing. But few companies were willing to go to the expense of being audited. “The singular problem with many of these companies is that they are really very informal,” Mr Pires says. He says the IFC is now looking at a private equity fund that will specialise in small and medium enterprises in the Amazon.

Guarana©Alamy

Guaraná: used as a stimulant

At the Moju River, Mr Pereira receives guests in Jauari’s simple but impeccable wood­en meeting hall. In spite of the almost Eden-like atmosphere, with each family connected to the world only by its own pier jutting into the river, the community faces problems, particularly poverty.

Most of the big families here scratch a living earning the equivalent of a minimum salary – about $300 a month. Almost all are on Bolsa Fam­ília, the government’s benefits programme that pays a stipend to parents who send their children to school. The murumuru, therefore, has been literally like manna from heaven as the farmers have to wait for it to fall to harvest it. The fruits are then dried and cracked, a tough manual job that requires a hammer.

Murumuru has put some cash in people’s pockets, Mr Pereira says, allowing them to buy home appliances, such as washing machines. “Bolsa Família is only enough for gas,” he adds.

Related Topics

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.