History

• Background – why Brazil?
In 1999 we conducted a comprehensive analysis of the global coffee market, and identified an opportunity in South America, a large geographical area with a very high coffee consumption rate and characterized by a strong culture of R&G coffee. At the same time, the coffee market in the area was still quite dispersed. After taking a closer look, we decided to focus on Brazil, the second largest consumer of coffee in the world, making up 40% of the South American market, and 6% of the world’s total coffee consumption. With Sara-Lee having been active in the Brazilian market since 1999, and as a result of its acquiring 3 companies, Sara-Lee had an 18% share of the market, but we still saw plenty of opportunity. This is partly due to the sheer size of the country, the high number of small local players and strong tendency to local-regional flavors; a tendency that made it difficult for companies to make their presence an advantage. We also perceived Sara-Lee’s presence as having been the first in the market who took on the task of educating the market.

We identified Santa Clara as the perfect strategic partner for penetrating the market and leading the process of consolidating the Brazilian coffee market. Despite this, after the negotiations with Santa Clara failed to produce an agreement, we had to alter our plans.

• Acquisition of Café Très Coracoes
In 2000 we acquired Café Très Coracoes. Located in the Minas Gerais province, Café Très Coracoes produced roast and ground coffee as well as cappuccino products, was one of the leading coffee producers in the country and ranked first place in its home region. The company’s cappuccino brand was ranked first in the country. Despite the cappuccino market still being limited in scope, Très Caracoes’ leading cappuccino brand made it a household name throughout the country, and we knew that the power of this brand could be the basis for future leverage. Since the acquisition, the brand’s activity has expanded beyond its home region into the Sao Paolo region.

• Strauss becomes the 2nd largest coffee company in Brazil – partnership with Santa Clara
At the end of 2005 we acquired 50% of Santa Clara. Realizing the partnership was made possible mainly due to the close relationship we had built up over the previous five years with the Lima family, the owners of Santa Clara, and also due to the similar DNA of the two companies. With the acquisition, Très Coracoes was merged with Santa Clara (who at the time had sales of $180 Million).

The merged company, that Strauss holds 50% of with the Lima family holding the other 50%, has an extensive portfolio of roast and ground coffee products, cappuccino, instant coffee, chocolate milk, as well as a company for storing and processing green coffee. The partnership with Santa Clara was a real step up for Strauss activity in Brazil, and transformed it to the second largest coffee maker in Brazil with a market share of over 13% and annual sales of  half a billion dollars. The partnership increased the geographic scope of Strauss in Brazil, which now also included the Northern part of the country.

The partnership with Santa Clara enabled Strauss to become a major coffee player in Brazil, provided the group with access to advanced knowledge in the field of green coffee, and access to some of the best coffee plantations in Brazil, the world’s largest supplier of green coffee.

• Business Overview
The partnership with the Lima brothers in Brazil employs some 2,400 in 4 coffee factories, 3 green coffee centers and 17 distribution centers throughout Brazil, with the company headquarters located in Fortaleza in the North East. The partnership made the company the second largest coffee producer in Brazil with a market share of over 13% and sales of half a billion dollars, while providing us with accessibility to a solid and important source of raw materials for our global coffee activities.

Contact Information
Santa Clara Ind. Com. Alimentos Ltda 
Rua Santa Clara, 100 
Eusebio - CE Brazil 
61760-000 
Tel: 55 85 4006-5500   
Fax: 55 85 4006-5524
Web addresses: www.santaclara.com.br www.3coracoes.com.br