17/10/11 - 12h00

Rey Castro

Rey Castro, 28, Born in Santos, is a multi-lingual Brazilian marketing executive and market research/trends consultant, with experiences ranging from Foreign Trade, Food & Beverages to Cosmetics & Beauty Products in Brazil and Latin America.

Background

• Learning all your languages. Teaching English to Brazilian, Why don’t Brazilians speak English!
• Why Marketing and Communications as a profession?
• Do foreign business persons fully understand the potential for growth in Brazil?
• Why is it hard to explain?
• Beverages and Trends, Coconut water
• Is Brazil in a bubble?
• Brazil General Macro Trends
• Beauty Products Global Trends

Interview

Tom

Today we're gonna talk about Brazilian macro trends and marketing aspects in the consumer habits and the differences in the change of consumer habits with it I'm happy to have with us today Rey Castro. I met Rey on Twitter, actually, and then again through Linkedin and he's been a faithful follower of Talk2Brazil over the last months.

Rey Castro is 28 years old, he was born in Santos, in Brazil, he's a multilingual Brazilian Marketing executive, market research in trends consultant, with experiences ranging from foreign trade, food and beverages, to cosmetics and beauty products in Brazil and Latin America. So with that, Rey welcome and thanks for being part of Talk2Brazil.

Rey

Thank you very much, Tom. How are you?

Tom

Just fine, thanks. And this is the first real opportunity we're having to talk actually together, we've been exchanging tweets and e-mails and things like that, so it's a real pleasure, we're talking about speaking to people. One of the things that impressed me about you were all the different languages that you speak.

Rey

Yeah, that's really something I started really when I was a child. Thanks to my father's inspiration. He just said go, kid. Do what you can because you have the tools, you have Internet, you have everything and just focus and, you know, do as you have to do and have fun with the learning and you will get there when you are old and you'll see the benefits of being a multilingual in a global world . So 'm very thankful.

Tom

How many languages do you speak now?

Rey

About seven. Dutch, French, Italian as well, but I feel very confident with English, Spanish and German, but I would need like a week to pick up all these six languages plus Portuguese, which is my native language, so.

Tom

Right. You taught yourself all of these languages?

Rey

Yes, I taught myself all these languages, thanks to the Internet, most of all. I just look for the right resources, CV and government institutions that provided free material and, of course, music and diving, going deep into cultural aspects of these cultures, of these countries helped me a lot.

Tom

I can see that. When we first hooked up on Twitter I was impressed on how you were following Talk2Brazil and some of the comments that you've made. And actually I wasn't sure if you were Brazilian or not at the beginning, but then since you were "Rey Brazil" I thought it was, it could be a Brazilian.

Rey

Yes, well, yes. Apart from the languages I usually am called by the nickname "gringo", which is a gringo, a foreigner, an American or German because my physical appearance is a bit different from the most Brazilians you get to see.

Tom

Okay. How many of these different languages do you use day-to-day in your work? Have you used all of them?

Rey

No, no. I've been using mostly Spanish and English, and occasionally German. The other languages are actually not used, I use very little, for personal contacts or for personal interest. Never actually used from a professional point-of-view.

Tom

But here in Brazil, and throughout Latin America, yes you do need, besides English, obviously, Spanish and Portuguese to get around business-wise.

Rey

Oh, yes. Knowing Spanish, I think, is the first step because even though Brazil is the biggest and most important market in Latin America, you have a great chunk of the population of Latin America speaking Spanish as a native language and (inaudible) and what I see in Brazil, even though Brazilians don't officially speak Spanish, they do have more of an ability to understand better the Spanish language than Latin Americans, Hispanics, to learn Portuguese. So I think the first step is learning Spanish and then going for Portuguese.

Tom

I saw on your Linkedin profile one of the first, I guess one of the your first formal positions was with Arcor. Arcor is Argentinian, isn't it?

Rey

Argentinian, exactly.

Tom

Did you work for them in Argentina or here in Brazil?

Rey

No, no. In São Paulo on the Berrini office, but I must say that in my particular position I was in a joint-venture as a business unit of Arcor, which is a joint venture with Danone, the French company specialized in dairy products and wholefood products. They are actually conducting the cookies and biscuits business together in Latin America with Arcor and I actually see the top executive all mostly from Argentina and, yes, they... even though they could try hard to learn Portuguese and try hard to, you know, to try to get into the language and into the atmosphere of Brazil, they had a few difficulties and thanks to Brazilians' ability to accept and to understand and make use of the level of Spanish they have, things will go, will start flowing alright.

Tom

Reasonably well, hun?

Rey

Yes, exactly.

Tom

I saw you were also a teacher. You taught English to Brazilians?

Rey

Exactly. It was one of my first professional experiences. I was about age 17, 18, and I was actually...it was a way to get into the job market and with something that I had fun with and also I could make good money and find my way to the university and start my career at life. Seeking independence.

Tom

But I often say and we've said that many times here on the program that Brazilians seem...most Brazilians learn English, but few Brazilians speak English. Do you find that to be correct?

Rey

Yes, I find that to be correct. I can't tell you the percentage of Brazilians who actually speak English, but I'd say less than 10%. Although, as you said, many Brazilians are learning English, they don't actually go and embrace the story. They don't embrace the story. They see that as an obligation and plus we have a few cultural hurdles. Actually, a historical hurdle, I'd say, that thanks to the Brazilian education system that is actually very poor and Brazilians then had , even though we are open to the US and American culture, US people and American culture, from my point of view and I think you'll agree because you've been here for quite a long time.

Tom

No, I don't think it's a problem against any culture. I just think they're just shy and afraid to speak, that's all.

Rey

Most of all the historical hurdle because [Brazilian TV networks] broadcast all American foreign movies in Brazilian translated version. You know, the audio over speaking Portuguese spoken that is also... plus, for instance, names, movie names, book names, everything is translated into Portuguese for Brazil, so I think that is an obstacle to be overcome.

Tom

I agree with you. Even here at home, my wife, she's Brazilian, my kids were born in here but even now, in cable TV, obviously they all enjoy watching the programs in the original language, be that English, or French, or Spanish, or whatever. And sometimes it is sad to see that more and more all of the international programs are now being voiced over and dubbed into Portuguese which, obviously, for those people who don't speak English or another language is good, but for persons who are into learn a different language is not so good.

Rey

Yes, yes. They don't have that real contact with the language, and so they just absorb the content, they have fun with it, but they don't really...sometimes, when I go to the movies for instance I see people who don't laugh at some jokes because the movies mostly are in subtitles, Portuguese subtitles, somethings you just capture because you speak the language and they miss that and sometimes they think “why Americans are so funny?”.

Tom

Well I find that myself. I sit there laughing by myself and I see certain thing happening, so.

Rey

But I see three things going on. Apart from the World Cup and the Olympics story, I see the new youth is leading and inspiring the old, the adults, Brazilian adults to get into the English language culture and the atmosphere because it is necessary, there is a business pressure, a corporate pressure to learn English. You learn English and you'll have a better salary and you'll reach a better position in your career, and youth is having more contact, I believe, thanks to the Internet and also to cable TV to a certain extent, but these media, they do motivate you to learn English, to understand the music, understand what's being said, to sing along and I think that is the first step to reach...

Tom

So the best way to then to get a Brazilian to speak English is to sing?

Rey

Well, I would say that is a good idea. When I was 9, it was my first and my main ways of learning English, so I do believe in that as a helpful tool.

Tom

Well, then you went out to the university, got yourself involved in Marketing and Communication as a profession, what helped you choose that? I also saw that you had a technical background, you went through the Brazilian technical school called [Senai], is that correct? You had a technical background and then you changed to Marketing?

Rey

Yes. I had two passions. I think every Brazilian boy dreams of being a footballer, a professional star on the Brazilian team and also a Formula 1 driver, so football and cars are passions for every Brazilian boy and I grew up with this and I wanted to have this teenage dream of becoming actually a Formula 1 mechanic, not actually driver.

Tom

Oh, really?

Rey

Yeah, so I believe that Senai, which is a very traditional and very important school in Brazil would help me get there, but along the way I realized that I had another passion and also from my very first years of life, that is communication and I believe that Marketing and Communications give me the flexibility to move from a highly business and, basically saying, more oriented scenario, so more creative and insightful. Are you hearing me? Do you hear me?

Tom

Yes, yes I can.

Rey

Alright, and moving from this highly oriented business scenario to a more creative and insightful scenario, which is more connected to advertising and communication, so.

Apart from that, I also believe that Marketing has a global vocation and I also, since I was a kid, I always had this desire to have an experience abroad, in the United States or Europe.

Tom

Okay.

Rey

I believe that, overtime, this career and the way that Brazil is booming in the sector as well that Marketing and Communications will also help me achieve this objective.

Tom

I can see that from your background, besides Arcor you've worked with other high profile consumer market type companies and you had a really diverse background. Obviously Arcor, you're mentioning the foods, the cookies and the sweets, then I saw your transition into coconut water.

Rey

Exactly. [It was a] very good moment in my career, or maybe the best. I moved from an Argentinian or French-Argentinian company, which was Arcor and the joint-venture with Danone, to an initially 100% Brazilian company, specialized in coconut and coconut water. So this company, these men who started this coconut water business were visionary and they believed that the next trend [in the beverage market] would be a shift drink from soft drinks and sodas to a more healthy and cool life style and that's what happened in Brazil. [inaudible] it simply started from zero to becoming one of the, actually the second growing segment in the healthy beverage market in Brazil just trailing soy based, which are...

Tom

To Brazilians, is one of the things few years ago, when I came here which stroked me was drinking coconut water, you would drink from an actual coconut and get it by the road side or on the beach or whatever and the street vendor would have that big machete knife, cut off the top, cut in a hole in it, put a straw in it and that became your beverage.

Rey

Yeah, you are very right, Tom, because we have this just like in the United States, we have a very huge coast line, but we also have a very huge countryside and we don't have, you know...in urban areas, major capitals for instance where the coconut water business has developed very quickly, we don't have the same access and the same habits of the coconut beach and the cool and healthy and sun scenario, so that was the opportunity that this business captured and that is why Pepsico, in the end, by 2009, ended up acquiring this coconut water business in Brazil, it started taking the idea to the US and at the same time a few other players in the US market started investing in coconut water in Brazil to take this new trend to America, which is, I think it fits very well in American highly urbanized areas and with the endorsement of celebrities such as Madonna, for instance, she does invest in the coconut water business in America and I see and they saw this great opportunity to develop a market that...with consumers...and Americans obviously want the best and the latest as well, plus this movement of cutting obesity and fighting obesity and going for a healthier life style, it all does fits very well with the coconut water business and I believe it is going to be one of the biggest new trends and actually I believe it's gonna be a boom in the US.

Tom

I think it seems to be taking off. Not only in the US, I guess throughout Europe and even here in Brazil. Is this drive to the healthier type beverages and the healthier type food, is that just with the young people or is that across the board, regardless of age?

Rey

No, it's regardless of age. Of course, along the coast line we also - when I say “we” it's because I'm from Santos, which is a beach – Brazilians along the coast line they already have this coconut, healthy life style already in their lives forever, but the urban, busy centers are also adopting this and it's not only among youth, but actually adults, household chiefs, let's say moms, dads and grandparents. Coconut water has a very strong acceptance among doctors from any expertise. It also has endorsement, technical endorsement from doctors, so...

Tom

I guess that it really is a healthy beverage for rehydrating. Principally here where you have dehydration as a major problem sometimes for you to get rehydrated very quickly, then coconut water is the thing to do.

Rey

Yes, and it is so much the thing to do, it is much more powerful than Gatorade, for instance, and without the artificial and all the chemical ingredients that are contained in Gatorade, so it's really a magical product but it's not all success. Being a natural product has its limits, its basically nature and landscapes, and land for cropping and developing new crops. Brazil has limited areas and believe that it does have, actually, very few interested investors in the coconut water and the crop and the culture...

Tom

Yes, for the tree. First of all you gotta have the tree and that becomes a cultivation type thing, but there's a lot of investment needed in that, a lot of hard work [to be done]. Obviously the coconut sort of grows by itself, but I think that when the level of consumption reaching the global level cities, that would be my question: are there gonna be enough coconuts to go around?

Rey

No, I don't think so, but I see coconut water in the future, in the near future becoming part or the main part of a compound, a mix of beverage drinks or mix drinks, juices or any sort of other healthy, I'd say healthy “Splash”, “be cool” beverages because I believe that's the way to capture the young people because, in Brazil, coconut water is highly used among adults and seniors. Of course it has a penetration in youth, but it is heavily used by adults and seniors because of its healthy aspect. Bringing the cool aspect to the product, and of course it also faces brand building, but the cool aspect of the product is what I believe is going to make this product, this business boom worldwide. And of course, this booming worldwide means booming in the US. I don't believe it's going to boom worldwide if doesn't boom in the US.

Tom

Right. Do you believe that's, not only talking about coconut water, is that true to all products? Is the United States still a foco point? If something doesn't go in the [United] States, it isn't going anywhere?

Rey

No, I think that, for instance, Brazil and China, but let's say Brazil is an important market also in many categories we have Brazil naturally standing as a top 5 market worldwide, so if something doesn't really boom in the US, it doesn't necessarily mean that it will not boom at all, but I believe that something goes global, its objective is to boom in the US, to spark, to ignite in the US. The US still and it is going to be in my opinion the most important country in all aspects of life: economy, business, even creativity and culture, pop culture, which is something that influences consumer behavior, mass consumer behavior.

Tom

So you don't see the present economic crisis, you don't see the United States, let's say, losing favorites? Still a very marketing stand point, still a foco point?

Rey

No, I believe that other markets such as Brazil and the now booming BRIC's, but I think the US is still the main foco point. Of course, now new markets have developed in Brazil [and] China. We have also a new group of markets being mentioned by Goldman Sachs, in Colombia in Latin America for instance; Mexico, that is recovering from its own crisis with the swine flu story; and Argentina, that still has a big potential, it was a big economy and it's struggling to recover its glorious times. And, also, we can not forget Venezuela, which will also drive Latin American economy, I believe, in the next years once it...

Tom

Yeah, but I would agree that Colombia less, I think there is a lot happening right now, but if you're talking [about] Argentina and Venezuela, those are things maybe a little bit further down the road. The way I look at Latin America the potential that can be had in a very short period of time is Brazil. It really is. If you put all Latin America together, the potential is here, the potential for growth, but obviously it's not only the potential, things are happening and Brazil is growing. And my question to you: do you see, in your dealings with foreign business persons, is it hard for them to understand the growth in Brazil?

Rey

Yes, I think that's still a bit hard to understand because the news that Brazil is booming is everywhere, but it takes more than reading the New York Times. It really takes coming here, setting office here or before setting an office here, of course learning the language. You don't have to become fluent, but getting in touch with the local, getting an idea of the story because it is not as simple as it looks, “it's simply booming and let's go there and do business because we're going to serve this positive way”. No, I believe there are several pitfalls along the way, the cultural and population diversity is one of the aspects. The tax system, we have a few complexities that need to be understood and need to be drafted and learned, I believe, from our local experts.

Tom

Yeah, and a couple of things you mentioned when you send me a flyer, you mentioned the age shifting and the different income gains and also the evolution of the new C class. Is that where Brazil growth is coming from? From this new emerging class of people?

Rey

Yes, it is, I believe that. We've seen, over the last years, household income gains, in all social classes, but this new C, which is a new middle class, emergence is really what's driving growth. We're talking about 35, 40, 45 million people coming from a no credit situation to an access to credit situation and we're talking of people who had limitations in consumption, they had to be very careful with brands and basic consumption. I'm not talking about apartments, or living. I'm talking about milk, or the bread, or a soft drink or beer and they are now, step by step, having access to credit and actually entering a new world. This is what's been driving growth and this is what is going to be driving a growth in Brazil for the next decade, I believe, because there is still much ahead, many millions of people to come from a poverty and misery situation to a more accessible life style situation and this is what's been happening.

Tom

Then you don't think Brazil is the middle of a bubble? If you're looking ten years down the road and you see this growth to continue, so this is not a short range thing, and it's not a bubble that could burst?

Rey

No, I think, in my opinion I think the world is a bit bubble now, there are several bubbles, mini bubbles worldwide and Brazil is one of them. But I believe that overtime, over this decade specially Brazil will manage to keep the bubble under control, in my opinion.

Tom

How do you control a bubble?

Rey

Well, maybe not inflating it too much

Tom

Good one!

Rey

And I think what is most inflated now is not the bubble, but the ego of the news that's [been] going worldwide about Brazil. Brazil is booming, is growing, has been growing and will grow, but let's go, let's take it easy and go step by step because much has to be done in education, health, systems and this is also, in my opinion, a key to sustain this recent growth.

Tom

But do you still see a change? You are a young person, you've come up through a technical school, you've gone through the university, you're now working, you have worked in several different companies, what is your opinion of the education? Is it changing, what needs to change to make it better, to make a better business environment, working environment for most Brazilians?

Rey

Well, I think it is changing at a very slow pace, but I think it is changing and I see that the private sector is playing an important role investing in education, there are several private institutions becoming education giants in Brazil, but the public education system is still very weak, the school is not a friendly place that the student, the youth would like to be [at], so they go, they see the obligation and they have, of course, on the other side, a dissatisfied teacher, as a professional that is poorly paid and poorly recognized. It's a cycle that has to be broken and restarted in my opinion and I believe that this is, for the next decade, if Brazil touches the education system and makes a radical change in it, I believe that this bubble will not burst anytime soon.

Tom

Yeah, obviously when you have a better educated population they obviously start adjusting to some of the health issues as well, so a more educated society becomes a healthier society.

Rey

Exactly! And, well, for the health part of the story, I think that Brazilians, from their own culture, they have this very special thing with health, coming mostly with showering and washing hands. I think Brazilians are very careful with this detail, thanks to climate also, climate conditions across the country obligate people to take two showers a day depending on the place, so that does help – it's more than that, of course. And...

Tom

So you're saying Brazilians are cleaner than other cultures or are they more aware of cleanliness than other cultures?

Rey

I believe so. I can't say that it's because we are better or not better, that's not the point, but climate conditions and also the mixture of races and cultures way back in the past centuries with the Portuguese, the native Indians, the black slaves, all these mixtures and the climate conditions...I think this helps building this cleanliness culture that is so visible in Brazil, among all... within all social economical levels.

Tom

And Brazilians because, not only the cleanliness, when talking about the beauty market, are Brazilians more conscious of their physical aspects, of the way they look? Is that part of it?

Rey

Yes. It's a delicate aspect, actually because in a country where you have a very diversified population from the ethnical point-of-view, you have...okay, we have 47% of Brazilians who are declared white, but you also have another 45% of Brazilians who are declared mixed, which is (inaudible) white, or native Indians, whites, or blacks, so...

Tom

A little bit of everything.

Rey

Yes, in order to avoid racial prejudice, and it is also a bit impossible to have a big racial prejudice because we don't have actually a very clear...you can't look at a Brazilian and say “Okay, this is a Brazilian because he's white or black, or a Japanese Brazilian”.

Tom

That's a good point. What does a Brazilian look like? It's hard to explain.

Rey

Yes, so more important than the ethnic or the race aspect, is the cleanliness and the beauty appearance aspects, looking good, being well dressed, properly dressed for every occasion – it doesn't necessarily mean formal, but looking good, having a good scent and all these aspects of cleanliness playing an important role in breaking social obstacles, mostly from this new emerging C class is, actually experiencing this – thanks to this additional income – they are looking after this cleanliness aspect in order to climb up the social economical level stairways and they are managing, they are doing it. You see many, many stories from Brazilians who had a very basic life style and they are now (inaudible) their share with special treats and this is a very important part among Brazilian women. Mostly they have curly hair and they're having a very straight American style hair, [it] is also a very trendy thing in Brazil and every woman wants to have, so all these little aspects of beauty and cleanliness playing an important role, after all, in the social acceptance of this new emerging class.

Tom

Do you think it all started... we talked about the coast line and all the beaches. Is this consciousness of how you look and how you feel and the health thing, ain't it part of what I see when I go to the beach or even Santos or other cities, other capitals around the beach, you actually see that people are different and I think that beach makes them different, I think it makes people more aware of how they look and then from the health and the beauty aspect obviously, since you're on the beach and you're in the sun, then people seem to be more aware of hydrating creams or sunblocks and all these other things, everybody carries bags full of things to the beach to help protect the skin and then once they leave, more things to put on the skin to protect it after the sun and the salt would have you.

Rey

Exactly. What I see is that yes, we have the huge coast line and all these points that you've mentioned, but what beauty players in Brazil are capturing is the opportunity in urban, no coastal areas which represent the largest share of Brazil's population and their busy life styles, they're always “short on time”or “out of time” life style, or going from air cleanliness to the cleanliness of the streets and all these have been captured, also emotional necessity of Brazilians. Brazilians are very emotional, so...

Tom

That's true. Very emotional.

Rey

Yeah, and most Brazilians don't actually capture, when the market players don't capture a real solid opportunity they create a new behavior, develop new habits through emotion touch points.

Tom

But do you see that from a marketing stand point then, is it safe to say that Brazil and these different consumer habits is becoming more homogenized? That's it's less Rio and beaches and all of the interior is equally interested in, not in the beauty aspects, but all sense of consumption?

Rey

Yes, I agree with you and I believe that because one: Rio is the post card of Brazil for the world, but it does not necessarily represents all aspects of Brazilian culture and Brazilian people. As I said, the urban, no coastal areas are much [more] important in terms of population number and this, specifically in the countryside, the northeast region of Brazil, which is the fastest growing region and also the poorest region in the country and this is where the market is being developed. So, okay, you have the coast line over the capitals, such as Salvador, Fortaleza, but you also have the countryside cities that are being quickly urbazined, getting access to electricity, to water, to basic

Tom

Sanitation, right?

Rey

Yes, exactly, and this is also enabling these people to ask, to demand for more and this is what the market is capturing and this is also a great part of the growth in consuming goods market, and not only consuming goods, but consumption as a whole in Brazil. This is where it's coming from. The country has...

Tom

Yeah, you also mentioning that new general macro trends, not only besides the northeast in terms of product consumption, but also the youth and the women, it's women power. Is there a change to that? Are women becoming more powerful consumers? Are they becoming better consumers, or just more women are consuming ?

Rey

I think all the options, actually, now under president Dilma, I think this is a symbol of the emergence of women in Brazil, which is build as a macho culture country and I think that under Dilma Roussef, under the, emergence, the importance of other important celebrities most of all, such as Gisele Bundchen, for instance, women are getting inspired also they are being, the market commendation is also being sent more intensively and directly to this target, to women and the youth, mostly to women because they are the new household chiefs, as I like to say, 'cause there's a growing, a very large number of families that's been totally run by women, no longer by men, specially in the lower social economic levels and in the emerging C class. So women have the power and will have the power in consumption in Brazil, it's a trend that it's coming to stay. And also, from the...

Tom

So for our global listeners there or global business persons interested in coming to Brazil, obviously one of the points you would make is “pay attention to the women”.

Rey

Yes, pay attention to women because they are having more importance in the household and this cannot be simply disregarded, they have an important role, not only taking care as a house owner, not only taking care of the kids, but actually deciding what's coming, what's being purchased, what's being chosen to the kids and what's being served as the dinner and also all aspects of household, I'd say, management, women are growing in importance.

Tom

Yeah, now with a female president in Brazil, I think women are becoming even more politically active and more interested in politics in general as well.

Rey

Exactly. And this is a movement that started in South America before with Argentina and Chile, they also have the female presidents and now Dilma, which is the president of the biggest and most important country and Brazilians are feeling this, they are having - even Brazilian in the streets you will start noticing that they are having - a more careful eye towards women as a whole. So women also really...

Tom

So really less macho?

Rey

Yes, I believe so. I think there is still a strong macho culture and that's not going to change overnight, but the acceptance of women in the liberal market, in terms of income salary gap between men and women, I think this is something that it's going to be reduced overtime the next years. And thanks to this female president, I think she's playing an important role.

Tom

So the bottom line is "pay attention to the women".

Rey

Yes.

Tom

Well, Rey, I wanna thank you. We're coming to the end of our time again and we'll be talking more and more about the different trends, to what's happening in Brazil, but I do wanna thank you for being with us today and sharing your view and also we wanna command you on the fact that you've learned so many different languages and the fact that you use all these different languages. One thing is to learn, the other thing is to use, so...Thanks again for being part of Talk2Brazil.

Rey

Thank you very much, Tom. Thank you very much for the opportunity.