On Chile’s pulses market and the pandemic impact/
An Interview with Sebastian and Branko Pavic of Nama Internacional

Nama International is one of Chile’s leading pulse traders, spanning more than 40 years in the business and witness to some of the country’s biggest changes. Luke Wilkinson spoke to Branko Pavic, Import/Export Manager, and Sebastian Pavic, Sales Manager, about Chile’s post-quarantine overstock, chickpea mayonnaise and the ready-to-eat revolution.

Could you tell me a little about Nama Internacional and the Chilean market?

Sebastian: Well it’s a family company, and we've been in the business for over 40 years in Chile. We played a different role in the past as previously we were a country of export – Chile in the 1980s exported more than Canada, and stocked the shelves of much of Latin America. But, over time, Chile stopped sowing pulses until we got to where we are today, which is that we sow practically nothing and we’re almost solely importers.

Branko: We used to grow a lot of black beans and lentils, which we sent to Mexico, Cuba and Venezuela, but these days most farmers have changed from pulses to something more profitable such as cranberries and different types of apples. That's why import has become so important.

The only pulse we export is called the Lupin bean, which mainly goes to Portugal, Spain and Italy in Europe, out to the Middle East and North Africa - mostly to Egypt. We also export a little bit of honey to Germany, but that depends on the year. There is sometimes a possibility to export pinto beans, but that depends on the market.

Sebastian: Chile has very little land. It's very thin and very long but there is a huge amount of desert and forest, so the government has been very aggressive in ensuring a policy of advancing irrigation technology - drip irrigation is used heavily and, as a result, wine and fruit have become popular crops. On top of that, the land is very expensive. Here, when we talk about big farms we are talking about 200 hectares whilst in Canada we’re talking about 3,000, 4,000, 10,000 hectares - it’s just a different thing. 

Could the acreage change? Do you think an increased interest in plant-based meat alternatives could make pulses a more interesting prospect?

Sebastian: I don't see it changing to be honest. Argentina has huge farmlands irrigated by rainfall, whilst here, as in many places in the world, there are difficulties with water. So, I can't imagine public policy from the state getting behind a switch back to those crops with greater added value. I see Chile becoming more involved in growing fruit, and trying to specialize and increase profits in that area.

Has Chile seen more interest generally in plant-based alternatives?

Sebastian: There never used to be but, in the last couple of years, there's been very strong development in that area. There is a big company here called NotCo that has developed an entire line of products. It's a big company with a lot of money behind it that uses software, which was initially developed to analyze the stars in space, to search for plant-based ingredients. They have milks, cheeses, meats - there was some competition between Notco and Beyond Meat but all of this was in the last two years. So, quite a boom.

Branko: NotCo is actually a client of ours; they have all kinds of things, like mayonnaise made of chickpeas and Lupin beans, things that are much healthier than the traditional mayonnaise. These days, you look on Instagram and you see more and more recipes of burgers made with beans and things like that. My own sister made brownies from black beans and you couldn't tell the difference!

What are some of the most important pulses and markets for you?

Sebastian: Firstly, lentils represent around 40 to 45% of pulse imports into Chile. They are definitely the most important. Then, there are beans – white beans and black beans from Argentina, then pinto beans from Canada and the US. The three types tend to stay in more or less the same percentages year-on-year. Then we have chickpeas, which here are peeled, unlike the rest of the world. It's a kind of national custom. We eat some green beans as well but here nobody eats cranberry beans, black eyed beans or fabas. We also have a locally grown gray bean that's called the Tortola bean. It's the only one that is grown and eaten here.

There are basically four main markets: supermarkets, which represent more or less 40% of consumption; the ‘Ready to Eat’ Industry, which has grown a lot in recent years with burgers made from lentils and chickpeas, with a small but growing snack industry alongside it. We also have government assistance, which consists of lunch for children in state schools and also represents a big chunk of consumption. Finally, there are farmers’ markets.

Right now, our company is a leader in both supermarkets and the ‘Ready to Eat’ industry but we do have some involvement in the other markets as well.

In what ways has the pandemic impacted the consumption of pulses in Chile?

Sebastian: It affected the market drastically, mostly when the pandemic began and the uncertainty led to people being closed in at home without knowing how long they would have to go without shopping. People looked for ways to find protein that they could store at home. And, basically, the two alternatives in this case are tinned fish and dried lentils. This led to stocks running dry in supermarkets while, on the other hand, the government intended to send out 3 million food packets, each of which carried 3 kg of pulses.

We're talking about 9,000 tons of pulses. In a normal year, the Chilean market consumes roughly 40,000 tons of pulses, so when in one month the government decides to buy 9,000 more on top of the supermarket demand, importers weren't prepared - we didn't have the stock and there were empty shelves. As the government had promised the packets, they paid very high prices, including to people who had never been involved in the imports of pulses previously. People who arrived first made some great business and a lot of money but, afterwards, when a lot of people were bringing in pulses, there was a very serious overstocking.

In four months, five years of normal chickpea consumption came into the country. So what we have is an overstock that continues to this day. We saw a huge rise in prices and then a big drop in the internal market after the overstock. In fact, we've seen international prices rising very aggressively in the last six months but we're just starting to notice this in Chile because the overstock didn't allow the prices to rise.

How do you think the markets will change post-pandemic?

Sebastian: What we're seeing at the moment in the supermarkets shows us that consumption is going back to the normal trend. It hasn't risen. It could be that it's risen a little bit but perhaps 5%. The 30% 40% rises of 2020 haven't been replicated. In peoples houses, there's also an overstock - people have a lot of pulses in their pantries, so we're going to have to wait and see.

Aside from the pandemic, we are seeing a growing trend in Chile towards increased consumption. We are seeing healthy diets, vegan diets and a general movement towards more environmentally-conscious food consumption. For the moment, this is still a small section of the population but it is clear that it's growing so pulse consumption, which had gone down slowly in the last 15 years, has halted its slide and now we're starting to see a slow growth in the medium and long-term. Immigration has had a huge effect also, given that the Venezuelans, Colombians and Haitians that arrived have a pulse consumption per capita that’s two, three, four or even five times higher than Chileans.

We are seeing that this shift towards environmental awareness, wellness and greater respect for animals is pushing up the consumption of pulses by perhaps two or three percentage points per year. The negative trend that started between 2000 and 2010 has started to change. Sadly, for a long time there has been a negative association between pulses and poverty: people saw pulses as a poor peoples’ food that they didn't want to be associated with but that seems to be easing.

Are there initiatives in place to try to increase pulse consumption in the population?

Branko: Yes, we have the Vivir Sano program, through which the government works to promote the consumption of pulses and healthy foods in general. In Chile, unhealthy foods appear with a warning that indicates that they are high in sodium or high in fat and much of the government campaigning encourages eating foods that do not have these warnings, such as pulses.

How do you see the future of pulse consumption in Chile and what are Nama Internacional's goals moving forward?

Sebastian: We spent the last couple of years looking at what's happening with pulses in the United States, Europe and Asia, where dried pulses play a role, but pulses are more important in snacks. Ready-to-eat is much more important than dried. As a company, we are putting a lot of emphasis on certification and the quality of our processes as it's very likely that there will be developments in the future in that area. Especially with the big supermarkets that we have here like Walmart, which requires particular certification.

We are focusing on quality, technology, certification and development - that's the route we’re looking to go down. Then, there are the plant-based foods that we’ve spoken about, which are becoming more and more important, so we will try to be involved in that. The pulse market isn't going to have the same logic that it had over the last 50 years - the housewife that stayed at home and looked after the children and cooked is no longer there. These days, they work and don't have the time to cook with pulses that they used to, so we have to try to understand these new trends and see how pulses adapt to the new world.