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The complete history of the company founded by Attilio Fontana, marked by pioneering spirit, innovations, family disputes and a crisis that led to the merger with Perdigão.
The history of Sadia is one of the most fascinating in Brazil. Visionary Attilio Fontana transformed a small family business into a global food empire. Innovations such as air transport of products fueled early growth. pioneer export of meat to the Middle East consolidated its leadership.
However, behind the success, there were intense family disputes. Risky financial decisions also put the legacy at risk. The global financial crisis of 2008 revealed a billion-dollar hole in the company. This forced Sadia to seek salvation from its biggest rival, Perdigão.
The visionary Attilio Fontana: from the countryside to the industrial dream
Attilio Fontana Attilio was born in 1900 in Santa Maria (RS). He was the son of Italian immigrants and grew up working on his family's small farm. From an early age, he showed a talent for business, successfully selling cookies at fairs. He learned that a 20% profit was reasonable. Initially, he worked as a farmer, planting and selling alfalfa with his brother Domingos. After the death of his father and brother, Attilio sought new paths.
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He moved to the west of Santa Catarina, a turbulent region at the time, but where saw opportunities. He realized the potential of the fertile lands and the arrival of the train for commerce. He began working for a local merchant, became a partner and prospered in the alfalfa business. At the same time, he began buying and selling pigs, which would change his life. In 1927, he formed an 18-year verbal partnership with the Mank brothers, expanding the pig business. In 1939, he decided that he wanted to be a banker or an industrialist, seeking new horizons.
Sadia is born: the opportunity in Concórdia and overcoming challenges
In 1942, at the invitation of the mayor of Concórdia (SC), Attilio Fontana visited a local meat packing plant and a local mill that were struggling. Seeing potential, he assigned his son Walter Fontana to successfully restructure the mill. In 1943, Attilio purchased most of the shares in the mill and also acquired the meat packing plant. He renamed the plant Sociedade Anônima Indústria e Comércio Concordia.
During World War II, he managed to buy equipment for the mill from Switzerland, increasing production. The meatpacking plant faced more difficulties in obtaining machinery, but Attilio bought equipment from a bankrupt meatpacking plant in Guaporé (RS). The machines began operating in November 1944.
Problems such as lack of ownership of the property led to initial losses of products. Even so, within six months, the slaughterhouse was slaughtering 200 pigs per day. Attilio then created the brand name: he combined the initials SA Industry and Commerce with the final syllable of Concórdayforming HEALTHY. In the late 40s, his nephew Victor Fontana, a chemical engineer, brought about crucial improvements in hygiene and conservation.
Sadia also invested in a partnership system (“fomento”) to share knowledge with its suppliers. An experiment by Victor in 1949, which created 114 kg pigs in 8 months (compared to the previous 3 years), revolutionized pig farming in Brazil when it was publicized in the region.
Innovation and national expansion
In the late 40s and early 50s, Sadia expanded to other states, opening a branch in São Paulo. The goal was to conquer the markets of São Paulo and Rio de Janeiro. The long road journey from Concórdia, however, compromised the shelf life of the products. Omar Fontana, Attilio's son, had the idea of renting a plane to transport the goods in 1952. Although it seemed extravagant, air logistics made financial sense.
Demand grew, and Sadia bought a plane and leased two others to obtain fuel subsidies. Attilio Fontana, who was also a politician (councilman, mayor, deputy, senator, vice-governor), used his influence. He obtained the Air Force license for the company in 1955, creating Sadia Transportes Aéreos. In 1973, the airline became Transbrasil. Air transport was vital to the beginning of Sadia.
In 1953, Sadia opened its headquarters in São Paulo and purchased Moinho da Lapa. In the 60s, it accelerated its growth, opening branches and entering the promising poultry farming business. Despite its lack of initial experience, chicken became a success and a trademark of the company. In 1964, it opened Frigobras, entering the semi-prepared and frozen food segment. A Board of Directors was created with members of the Fontana and Furlan families.
The company began a strong marketing campaign. By 1967, it was already selling throughout Brazil, with warehouses and offices in several cities. Sadia also continued buying and building mills and cold storage facilities throughout the country. In 1971, it became a publicly traded company. It launched iconic products such as smoked chicken (with its mascot) in 1972 and seasoned turkey in 1974, leading the market. In 1975, it began its pioneering export of frozen chicken to the Middle East.
Family conflicts and divided management
Despite the expansion, relations at the top of Sadia were not good. There was tension between the new generation in charge, such as Victor Fontana and Osório Furlan (Attilio's son-in-law). Reports indicate that the relationship was difficult, even leading to physical violence. Attilio Fontana, although focused on politics, maintained a centralizing profile and the final say in important decisions.
This feud between the Furlan and Fontana clans would last for years. In 1983, Walter Fontana Filho accused Osório Furlan of irregularities in the purchase of shares, resulting in Osório's departure. Despite the heated tensions, new businesses emerged, such as the brokerage firm Concórdia.
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In 1989, Attilio Fontana passed away. A shareholders' agreement was made to keep the heirs together, but in practice it created problems. The shares could only be sold among descendants, but no one had the individual means to buy out another's share. This kept many heirs in the company without a clear role, worsening the climate. The management began to have divergent views: some advocated professionalization and aggressive expansion, others wanted to preserve traditional values.
In 1994, the third generation took over: Luiz Fernando Furlan on the Board and Walter Fontana Filho as CEO. However, the two leaders rarely communicated between 1994 and 2003, causing confusion and a lack of cohesion. Even so, revenue grew from R$3,3 billion (1993) to R$9,8 billion (14 years later). During this period, competitor Perdigão, bought by pension funds in 1994, began its recovery and gained market share.
Black September: derivatives, crisis and the merger with the rival
Family conflicts worsened. In 2003, a meeting with 40 young heirs revealed the distance between the families and the lack of knowledge about the administration. A Family Office was created to prepare the fourth generation, but it had little effect. In the same year, Luiz Fernando Furlan left to become a minister and appointed his father, Osório Furlan (removed from office in 1983), back to the board, generating more friction.
At the same time, Sadia invested in sophisticated and risky financial operations, contradicting the precepts of Attilio Fontana. An alarming fact: between 2002 and 2007, Perdigão's sales grew 73% more than Sadia's.
In 2006, under the management of Walter Fontana Filho, Sadia attempted to buy Perdigão through a hostile bid, which failed and tarnished the company's image, including a case of information leaks. Sadia's finances were excessively dependent on financial operations (43% of profits, compared to the industry average of 10%). The treasury carried out derivatives operations that bet on the fall of the dollar.
With the global financial crisis of 2008, the dollar soared. In September 2008, huge losses on derivatives were revealed (estimated at US$720 million). The company's cash flow plummeted. The crisis exposed serious flaws in governance and led to more internal disputes over responsibility for risky operations. In March 2009, the 2008 balance sheet showed a loss of almost R$2,5 billion. Walter Fontana Filho was removed from office.
Merger with rival
With the company going bankrupt, Luiz Fernando Furlan took the lead in negotiations. The only viable solution was a merger with Perdigão. After months of negotiations and with government support, the merger was finalized on May 19, 2009. Brasil Foods (BRF), a giant in the sector, was created. However, the agreement was unfavorable for Sadia's controlling shareholders.
They kept only 32% of the new company (12% for the Fontana and Furlan families). Perdigão kept 68%, and its executive, José Antônio Fay, took over as president of BRF. The Fontana and Furlan clan lost control of the company that Attilio Fontana founded.
The legacy of the Sadia brand and the lessons of history
For some family members, the merger represented a betrayal of the legacy of Attilio Fontana. For others, it was the only way to preserve some value. Sadia's CNPJ was canceled on December 31, 2012, after 68 years of existence. However, the Sadia brand survived and continues to be extremely strong and valuable in the Brazilian market, managed by BRF.
The history of Sadia demonstrates the need to balance the family legacy with modern corporate challenges. The lack of structured governance and effective mechanisms to resolve internal conflicts proved fatal for the company as an independent entity. We learned from a great story of Brazilian pioneering.
Unfortunately, everything that the visionary built was destroyed by the lack of unity and, as far as we can see, the family's incompetence, but the brand is so deeply rooted that it will never end!;;;
It's never too long. Just keep making mistakes and time will take care of the rest.
For the originals it was certainly a great fall, but the Fontanas made an eternal contribution to the development and progress of Brazil.
Excellent article. Congratulations. I read the story of Atilio Fontana in his memoirs. The beginning of his career in Luzerna, SC, at the time Bom Retiro, until he took control of the meat packing plant and the mill in Concórdia, is described in a fictionalized way in my book Ângela Angelina Angélica, which portrays the saga of Italian immigration to Brazil. By the way, Ângela Angelina Angélica is on Amazon. Congratulations Bruno Teles.
40 heirs with no notion of Administration was the fatal flaw. Did they forget to provide qualified education for their children?
They were just heirs, not successors.
I went to work at a company that I will never forget, congratulations Atílio Fontada