Over the years, countries with strong manufacturing traditions risk becoming driven by cost, economies of scale and output. Portugal is not one of them — while goods exports have risen over the past decade to hit $67bn in 2019, ‘Made in Portugal’ has become synonymous with quality, innovation, sustainability and craftsmanship among in-the-know consumers. Big contributors include family businesses whose willingness to adapt has seen them thrive for generations.
Portugal now excels in sectors not historically associated with it, such as technology and pharmaceuticals. Meanwhile, traditional industries, such as textiles and machinery, are reinventing themselves — blending old know-how with the latest techniques.
Agrifood is another example: food represents more than 10% of the country's goods exports, and some of the most exciting exporters are in the Ribatejo region to the north-east of Lisbon.
Take the Sugal Group: one of the world’s largest tomato producers, it supplies brands and supermarkets in more than 70 countries which benefit from the family business’s vertically integrated operations. “We are not just a tomato producer, we are also farmers,” says chief executive João Ortigão Costa. “The production process starts in the fields by choosing the right seeds and variety for each customer and product.”
Its innovation centre works closely with farmers to adopt techniques requiring less water, less fertilisers and, in the future, less machinery. “Together, we are bringing this sector into the 21st century,” says Mr Ortigão Costa.
In 2012, he had the foresight to start production in Chile, making Sugal the only large tomato producer with significant production in the northern and southern hemispheres. “We are the only one that can harvest crops and supply its customers twice a year. It also means we are able to react to our partners’ needs more rapidly,” he adds.
Another sustainability leader from Ribatejo is Mendes Gonçalves, a condiments producer whose Paladin brand reaches more than 30 countries. The chillies for its piri-piri sauce are grown in an agroforest regenerative system with 8000 trees. “In the coming years we will take further steps to produce more food in this way,” says chief executive Alexandra Mendes Gonçalves.
The company’s mission is to become a reference for the ‘food of the future’. “That means having a positive impact on society and environment, reducing food waste, and delivering an on-trend product,” she says. The company sources nearly 90% of its raw materials from Portugal, only turning to foreign markets for items which not locally available. “We are very proud of our Portuguese origins and we fully believe that a good quality ingredient will influence our final product,” says Ms Mendes Gonçalves.
Its focus on tailor-made solutions means it has 1700 different products, and its R&D department is constantly experimenting. According to Mr Ortigão Costa, as a small country with an export-focused agrifood industry, this persistence is the key to success: “The only way we can compete is through quality. That can’t be imposed. It’s something that we work on every single day.”
This article first appeared in the February/March print edition of fDi Intelligence. View a digital edition of the magazine here.