Agricultural trade highlights

42 Pages·1998·2.8 MB·English

by  United States. Foreign Agricultural Service

Historic, Archive Document
Do not assume content reflects current
scientific knowledge, policies, or practices.

USDA United States
Department of
Agricultural Trade
Agriculture
Wool
Foreign
Highlights
Agricultural
Service
Circular Series
ATH 2 98
February 1998
Bites & Bits
Global Consumer Market Information for the U.S. Food and Agribusiness Community
Small Stores Squeezed in
JUST IN FROM TAIPEI
Singapore...New multinational
supermarket chains have entered
Taiwan Market to Expand for U.S. PR0DUCTS...On February 20th, the
Singapore, competing for the $1.5
United States and Taiwan announced a comprehensive market-opening
billion retail food market, reports
agreement for U.S. consumer food products. The agreement includes
ATO Singapore. In October 1997,
both immediate market access and phased-in commitments and will allow
Royal Ahold (Dutch), NTUC
immediate access for products that have been banned, such as U.S. pork,
FairPrice (Singaporean), and
poultry, and variety meats. In addition, the agreement calls for significant
Carrefour (French) each opened new
immediate tariff reductions for many other U.S. consumer food products
supermarkets. Increased competition
including potato products, pears, grapes, grapefruit, sunflower oil and
has led to lower prices, better
soup. Taiwan currently is the eighth largest market for U.S. consumer
quality, and a wider range of
food exports. In 1997, exports totaled a record US$596 million.
products. Industry sources believe
there is room for the new players and
further store expansion. Currently,
Historic Supermarket Opening in Korean Food Industry Weighs in on supermarkets account for 15 percent
Hong Kong...Wellcome super¬ CRISIS...Supermarket sales have of Singapore’s organized retail food
markets opened two new stores on improved while other sectors of the sales compared with 60 percent in
February 20, bringing its store tally food industry have suffered, the United States.
to 220, according to ATO Hong according to a recent roundtable
inside This Issue:
Kong. This is the first time the chain discussion hosted by ATO Seoul.
has opened two stores in one day. Korean executives gathered from all Frozen Food Trade &
The new stores feature in-store sushi sectors of the food and beverage Brazil’s Northeast
and bakery operations, and U.S. industry to discuss the effect of the
produce, meat, and poultry products economic crisis. Supermarkets seem
Page
are prominently displayed. to have benefited from the
Supermarket sales are up by as much downturn, as consumers eat more Bites & Bits, continued .... 2
as 10 percent over the same time last meals at home instead of dining out. Consumer Food Trends .... 4
year and industry experts indicate Supermarket sales are up 20 percent, Regional Spotlight:
that consumers are eating at home and products such as frozen pizza Brazil’s Northeast.6
more to cut expenses. Although and ramen are in demand. Sales at Frozen Food
much of this business is in the lower- discount stores are also doing well. Trade Trends .11
end, lower-margin areas such as rice, Five star hotels and importers of Foreign Exchange Rates ... 30
cooking oil, and fresh produce have luxury items, such as wine and USDA Trade Show
also been turning over at a higher chocolate, have been hit the hardest. Calendar.31
rate than similar periods in the past
few years.
Bites & Bits
Global Consumer Market Information for the u.S. Food and Agribusiness Community
Restaurants Cut Some Slack for represent half of total sales. Some Supermarket Heroine Stars in
Korean Franchises...In response to pet owners prefer the snacks to Japanese MoviE...“Supa Onna” or
the economic crisis and sharp have a functional advantage, such “Super Woman,” the latest
declines in fast food and family as keeping the animal’s digestive Japanese-language movie, is not a
restaurant sales, U.S. franchises tract in good condition or take-off of an American comic
operating in Korea are considering preventing tooth plaque. Popular book hero battling super-villains in
temporarily deferring, reducing, or products include beef sticks, the streets of New York. Recently
forgiving the royalty payments of “munching rolls” of natural buffalo screened by ATO Japan’s
their Korean locations until the skin, and cheese snacks. Many Executive Director, it is a
economic situation improves, ATO sales are impulsive and competition whimsical tale about a
Seoul reports. According to food is brisk in the category, so point-of- “Supermarket Girl” caught in an
industry sources, fast food sales in purchase marketing is important. on-going retail struggle: fresh-
December were down 20 to 30 oriented products versus price-
percent compared to the previous Trendy Products in Kansal.ATO oriented products. And as fate
December. Family restaurant Osaka reports that bagel shops, would have it, fresh products win
business was off 50 to 60 percent common in metro Tokyo for years, the day.
in December compared to are now turning up in other parts of
December 1996. Japan. In fact, Osaka is the base Tougher Times Ahead for Hong
for the Japanese Bagel Lovers’ Kong RESTAURANTS...The Federation
Japanese Traders to Increase Society, which is devoted to the of Hong Kong Restaurant Owners
Organic Food !mports...ATO Tokyo history of the bagel and famous says that approximately 800
reports that Nissho Iwai, one of bagel shops in the United States, restaurants may close over the next
Japan’s largest trading companies, complete with a home page. nine months, according to ATO
has obtained exclusive import Consumers are enjoying bagels Hong Kong. Hong Kong has more
rights for 80 items from Kroger and produced domestically and from the “licensed” restaurants than any
nine other North American United States. Another popular other city in the world with 10,000,
companies. Products include juice, product these days is freshly-made although the actual number is
jam, pasta, ketchup, and salad Belgian waffles. The waffles are estimated at more than 50,000. The
dressing. Nissho Iwai plans to sold from kiosk-type stands in areas Asian currency crisis, a significant
double its sales of organic products with high foot traffic, such as malls drop in tourism, and the impact of
to $78 million in fiscal 1998. The and train stations, and are all the higher interest rates on stocks and
company is looking to import rage with teenagers throughout property have contributed to the
organically grown vegetables from Japan. decline. Fast food outlets are the
Asia and Latin America. one bright spot because the meals
are inexpensive, drawing the lower-
FIDO Snacks IN BELGiUM...Snacks are The Year of ExPANSiON...More end, lunch-time crowd. Sales
the fastest growing segment of the Mexican consumers will have the increased 11.3 percent during the
Belgian dog food market, making opportunity to eat fast food in 1998 first three quarters of 1997, which
up 10 percent of sales, according to as U.S. chains look to expand their were the largest gains in the food
a recent report from Ag the Hague. presence, according to Ag Mexico service sector.
While overall dog food sales are City. Domino’s plans to open 90
growing at 3 percent a year, dog pizza outlets during 1998, adding to U.S. Sauce is Boss in the UAE
snack sales have expanded 6 the 200 stores already in operation. ...Thanks to traditional tastes,
percent over the last year. The McDonald’s International plans to changing eating habits, and a
snack segment is broken into open 100 new restaurant proliferation of sauce brands, ATO
biscuits, which are used as rewards, throughout Mexico, more than Dubai reports that U.S. sauces
and treats, meant for spoiling pets. doubling the current number of dominate the market. In 1996, U.S.
Biscuits represent 98 percent of the facilities. The company will invest sales accounted for 45 percent of
volume, but higher-priced treats US $100 million in the new stores. total sauce imports valued at $13.6
Trade Highlights - 2 February 1998 CMP/FAS [phone]
Bites & Bits
Global Consumer Market Information for the U.S. Food and Agribusiness Community
million. Demand is bolstered by a Wellcome Integrating Distribution to local tastes. The Big Mac has
new interest in fiery, western-style IN Hong Kong...Wellcome super¬ been replaced by the “Maharaja
foods, such as Tex-Mex products, markets plans to open its Fresh Mac,” and beef patties have been
among the large Asian and Arab Food Processing Center (FFPC) in replaced with lamb patties out of
population, complementing their July of this year, reports ATO respect for the local Hindu
traditional taste for spicy foods. Hong Kong. The FFPC, as it is population. Two color-coded menu
Red chili pepper sauce is most called by Wellcome, will integrate boards are displayed in each
popular; but it is commonly found all fresh food processing and restaurant, purple for non¬
on pizzas and other items not distribution in one single and vegetarians and green for
typically associated with hot sauces capital intensive location. vegetarian. Even the kitchens are
in the United States. Currently, this function is spread separated, meat and non-meat
across four different locations in products have dedicated
European Processor Labels GMO the Special Administrative Region. preparation areas and the crews
FOODS...Unilever plans to indicate Wellcome is positioning itself to wear different uniforms.
on the labels of its food products remain the largest and perhaps
sold in Europe if they contain most profitable food retailer in -Compiled by Carmi Lyon
genetically-altered soy or com as Hong Kong.
ingredients, According to press
reports sent in from Ag The Hague, Two All-Lamb Patties? India’s first This information is intended for
the foods and detergents group said McDonald’s restaurants opened U.S. companies looking at overseas
it decided to go ahead with the step during 1996 in Delhi and Mumbai, markets and does not carry the
“in the interest of consumers.” So and the company has ambitious endorsement of USDA, nor does it
far, the European Commission has plans for 1998. The company represent the official view of
failed to gain the support of the EU plans to add at least 13 restaurants USDA.
member states for uniform EU rules to its existing chain of seven stores.
on the labeling of genetically- McDonald’s, known around the For more information of
modified products. world for its Big Mac, has taken information on the reports
special steps to assure Indian mentioned in this column, e-mail:
customers that its products are [email protected], or visit the
wholesome and prepared according FAS homepage: www.fas.usda.gov.
Note: ATO refers to 'Agrwultura1 Trade Office. ' Offices designated as "Ag " refer to the Agricultural Affairs Office of the U.S. embassy of the listed city.
CMP/FAS [phone] February 1998 Trade Highlights - 3
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Trade Highlights - 4 February 1998 CMP/FAS [phone]
Consumer Food Trade Trends
Coming In the Next Issue:
“Spotlight on the 1998 U.S. Food Export Showcase”
The US Food Export Showcase is a cost-effective avenue to help you succeed in the international marketplace. This
year’s show will take place May 3 through 5 at McCormick Place in Chicago. At the show, which is held in conjunction
with the FMI International Supermarket Industry Convention and Educational Exposition, exporters can accomplish in
three days what would normally require many months and thousands of dollars.
FAS staff from overseas trade offices will be leading buyer delegations and will also be available at the Showcase to
assist with issues regarding exporting to their areas of the world. The National Association of State Departments of
Agriculture will sponsor workshops at the show on important export-related topics, including federal programs to assist
exporters, the best target countries or regions for your product, and how to do credit checks on international prospects.
For information on exhibiting, call the Convention Management Group at [phone].
BBrreeaakkffaasstt FFoooodd Eggs & Products
nC an^ada %
Mexico
Japan
ELM 5
Hong Kong
0 20 40 60 80 100 120 140
Mllion Dollars
VWne&Beer Tree Nuts
Mllion Dollars
CMP/FAS [phone] February 1998 Trade Highlights 5
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Regional Spotlight: Brazil’s Northeast
The Brazilian market has come into its own in the 1990's,
and the Northeastern regional economy shines as one of
its major success stories. Incomes in the region are
growing due to investments, newly enacted pro-business
regulations, and a surge in tourism. Infrastructure
improvements currently underway will improve access for
imported consumer foods. U.S. exporters should consider
the lucrative potential this market holds: it is
geographically closer to the United States than the
established consumer food markets of Sao Paulo and Rio
Brazil
de Janeiro, and it has traditionally been a food-deficit
region.
By Robert Hoff, Agricultural Trade Officer in Sao Paulo
The Northeast in Perspective prosperous Center-South. Prospects increasing. Tourists contribute
for continued expansion, stimulated significantly to economic growth in
The Brazilian Northeast, situated in by low labor costs and infrastructure cities such as Fortaleza, Salvador,
the comer of Brazil which juts out improvements, are bright. Natal, and Maceio, which all have
into the Atlantic Ocean, is made up beautiful beaches.
of nine states, all of which share Incomes in Northeast Growing Faster
Brazil's longest regional coastline. Than National Average The Northeast is a food-deficit
The population of the Northeast is region which until recently had
estimated at about 45 million people; In terms of purchasing power, the largely been taken for granted by the
if the Northeast were a separate per capita gross domestic product Brazilian food industry, concentrated
country, it would be the third largest (GDP) in the Northeast was USD in the Center-South. However,
in Latin America, after Brazil and $2,564 in 1996, about half that of because of the growth rates in
Mexico. The region has three cities the Center-South. The Northeast consumption of consumer food over
with populations well over a million, grew 4.1 percent in 1996 compared the last few years, many of these
and eight of the nine regional with 2.9 percent for the overall enterprises have either installed or
capitals exceed 500,000 inhabitants. Brazilian economy. are contemplating the installation of
processing units in the Northeast.
Historically considered the economic Incomes in the Northeast will most
backwater of Brazil, the region likely grow faster than in the Bompreco Dominant Retailer in NE
began changing in the 1980s due to Center-South because of increasing
the effects of public and private domestic and foreign investment; in The largest supermarkets in the
investment. During the 1990s, the the future, economic differences Northeast have stores comparable in
pace of regional growth has between the two regions will lessen. quality to those in the wealthier
accelerated in response to the Center-South. The availability of
success of the Brazilian The growing tourist industry has a imported food in major supermarkets
Government's economic stabilization significant effect on spending is a recent phenomenon, and the
plan and the liberalization of the patterns in the Northeast. Most variety is narrower that found in
Brazilian economy. visitors come from the Center-South, major cities of the Center-South.
Argentina, and the European Union.
At present, the growth rate of the The number of hotels and restaurants Imported products make up only a
Northeast outstrips that of Brazil's catering to tourists is rapidly small proportion of total supermarket
Trade Highlights 6 February 1998 CMP/FAS [phone]
-
Regional Spotlight: Brazil’s Northeast
sales (between 1 and 3 percent) and
are usually much more expensive The Brazilian Northeast: Demographic and Economic Data
than their local counterparts due to
shipping costs. Currently, most
Per Capita 1996 GDP Population
products are imported through State (Capital)
GDP Growth (in millions)
agents in Sao Paulo or Rio de
Janeiro and trucked up to the
Rio Grande do Norte
Northeast. As the Northeast $2,955 8.2% 2.6
(Natal)
develops its own network of
importers and as the infrastructure Bahia (Salvador) $2,802 3.4% 12.6
improves, these problems may be
alleviated. Ceara (Fortaleza) $2,796 6.8% 6.7
In major supermarkets of the Pernambuco (Recife) $2,667 3.3% 7.4
Northeast's principal cities, available
Sergipe (Aracaju) $2,573 4.6% 1.6
products include imported fresh and
dried fruits, nuts, meat and fish,
Pariaba (Joao Pessoa) $2,385 5.6% 3.3
wines and liquor, and a few
processed food products.
Alagoas (Maceio) $2,282 3.0% 2.7
Buyers in the region have indicated Maranhao (Sao Luis) $1,990 7.3% 5.2
that consumption patterns are
shifting, posing opportunities for Piaui (Teresina) $1,857 5.0% 2.7
U.S. exporters. One example is
consumption of apples and pears, NE Average $2,564 4.1% 44.8
once consumed solely during the
traditional Christmas holiday season,
they are now considered a year- Recife and sold to steak houses there U.S. products from being more
round treat. and in other Northeastern cities. competitive in the Northeast. As an
Other products with potential in the example, one buyer imports directly
The dominant supermarket chain in HRI sector include wines, fruits, into Recife but still faces the high
the region is Bompreco, the fourth beer, canned and frozen products. costs of shipping product across the
largest chain in all of Brazil. United States to Miami, where it is
Bompreco has 94 stores in the Modest U.S. Presence Despite loaded into containers. If product
Northeast and is planning to open Relative Geographic Proximity could be shipped by vessel directly
new stores in Sao Luis, Maranhao. from the U.S. West Coast, freight
U.S. items at Bompreco’s newest In general, competition among costs might be reduced enough to
store in Recife include baby carrots foreign food and beverage exporters sell the product at a more
selling at $2.90 for 28 grams, in Northeastern Brazil is competitive price relative to its Latin
Washington State pears for $.82 a significantly less than in the American competitors.
pound, shelled almonds at $.60 for principal cities of the Center-South.
400 grams, and one brand of beer at The major suppliers of imported Transportation Upgrades Coming to
$.50 per can (all prices quoted in products are Argentina, Chile, and Region
U.S. dollar equivalents). the European Union. While the
United States is relatively close to One of the major disadvantages that
The growth in tourism presents the Brazilian Northeast, very few the Northeast faces is a lack of
many opportunities in the hotel and U.S. products are currently available. infrastructure to receive international
restaurant industry (HRI). Importers shipments. Goods are usually
are looking for consistent quality and The current arrangements for imported by the established and
good value. Currently, U.S. prime shipping products from the U.S. dominant importers in the markets of
meat is being imported directly into West Coast have precluded some the Center-South and trucked to the
CMP/FAS [phone] February 1998 Trade Highlights 7
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Regional Spotlight: Brazil’s Northeast
Ports in Center-South Region Import Most U.S.
Container Shipments
Northeast Port Improvements May Present New Opportunities
Rio de Janeiro
13.6%
Santos (Sao Paulo) Northeast
63 1% 6 4%
Other Center-South
16.9%
U.S. Exports to Brazil by Port of Entry
Source: Based on twenty-foot equivalent containers. Port Import/Export Recording Service data. 1997
Northeast. Freight costs for this investments in the construction of EXPONOR 97 held in Salvador.
service are high, and are reflected in the port of Pecem, which will serve
the higher prices that Northeastern Fortaleza. The first phase of For more information on EXPONOR
consumers pay for their food. construction of this port will be 98, contact:
completed later this year.
With incomes in the Northeast Ms. Vera Loureiro
growing and regional ports Making Contacts: EXPONOR 98 Supermarket Association of
undergoing privatization and Pernambuco
modernization, more vessels are U.S. exporters interested in Rua Amauri de Medeiros, 186
beginning to call on the Northeast's exploring this region further may 52010-120 Recife, PE BRAZIL
principal ports of Salvador, Recife, want to consider the regional
and Fortaleza. There is, for supermarket exposition, EXPONOR. Phone: [phone]
example, a direct shipping service EXPONOR 98 will be held June 14 Fax: [phone]
between Salvador and Buenos Aires, through 17 in Olinda, near Recife.
a trip which takes six to eight days FAS has not yet visited or evaluated
and covers 3,500 miles. the merits of this show, but ATO For more information on selling
Sao Paulo plans to make a consumer food products in
In the near future, the relative recommendation following a visit to Northeastern Brazil, contact:
economic isolation caused by a the upcoming show in Olinda.
minimal transportation infra¬ Robert Hoff, Ag Trade Officer
structure, will lessen considerably. Agents throughout the Northeast Ag Trade Office, Sao Paulo
Later this year, one shipping firm have noted that EXPONOR is the Rua Padre Joa Manoel, 933
operating along the East Coast of the best way for U.S. exporters to 01411-001 Sao Paulo, SP-BRAZIL
United States may begin to call on acquaint themselves with
Salvador and Recife, depending on Northeastern buyers. EXPONOR is Phone: [phone]
the results of negotiations between it held every year and rotates among Fax: [phone]
and the authorities of these two the Northeast’s three principal cities
ports. In addition, the public and of Salvador, Recife, and Fortaleza.
private sectors are making major Last year 7,000 people attended
Trade Highlights - 8 February 1998 CMP/FAS [phone]