For purposes of this assessment, the Caribbean Basin refers to CBATO’s islands of coverage. The assessment on the former Netherlands Antilles and Aruba is now included in what is referred to as the “Dutch Caribbean” market, and Jamaica and the Dominican Republic are included in this assessment. The assessment covers only the CBATO markets where there is current information and based on overall strategic planning and market potential.
Post reports that according to the United Nations (UN) Economic Commission for Latin America and the Caribbean (ECLAC), real Gross Domestic Product (GDP) for the English and Dutch-speaking Caribbean (which makes up most of the CBATO’s region of coverage) grew by 1.1% in 2012, following 0.4% growth in 2011. The economic situation in the United States and Europe had dampened demand for goods and services from the Caribbean. This is especially troubling for the tourism sector, the economic engine of most Caribbean economies, which draws roughly 50% of its visitors from the United States and 20% from Europe. While tourist arrivals to the region continue to inch upward, Caribbean Tourism Organization data show aggregate spending by visitors is just now catching up to levels prior to the global crisis in 2008-09. This has kept the sector’s revenues (and thus economic growth) in check.
The Caribbean Development Bank (CDB) announced on February 11th, 2014 that regional countries experienced average economic growth of 1.5% in 2013, and is likely to record average economic growth by 2.3% in 2014. Led by Guyana, Haiti and Suriname, growth is expected for all 19 BMCs (Borrow Member Countries); with most again set to grow by 1% to 3%.
They added the recovery in regional tourism is expected to strengthen with the anticipated faster growth in the U.S. and a return to growth in the Euro Area as well as expectations of improved airlift and reduced fuel costs resulting from further declines in commodity prices. The CDB said that this recovery, together with global foreign direct investment (FDI) growth projected at around 10% in 2014 should have further spin-off benefits for construction and other real sector activity. It said the expansion in construction activity was linked to the combined effects of significant public investment in critical economic infrastructure, growth in private residential construction and significant FDI-driven tourism-related development.
It has long been known the Caribbean is an excellent market for U.S. suppliers, due in large part to the fact that demand for imported food products is largely inelastic. With an insufficient amount of arable land, scant water resources in some islands, no economies of scale, and a limited food-processing sector, the islands must import the majority of their food needs. There is also strong appeal among the 3.8 million local residents of U.S. products. Moreover, between six and seven million stop-over tourists visit the Caribbean annually and help fuel demand for U.S. products in Caribbean foodservice outlets. While sluggish economic conditions in most advanced economies are keeping tourism growth prospects in check, the sector is slowly inching forward.
Given these favorable conditions for U.S. exports, it is no surprise that the U.S. is the largest supplier of food products to the Caribbean. In 2013, the U.S. exported a record high US$925 million worth of consumer-oriented products to the CBATO region, another 6% increase from the previous year. Consumer-oriented products accounted for 73.5% of U.S. agricultural exports to the Caribbean, with poultry, dairy products, miscellaneous prepared foods, snack foods and beef products rounding out the top five export categories.
Competition from Europe, Canada, South and Central America is beginning to intensify in the Caribbean. While the U.S. enjoys several advantages in the region, suppliers should be mindful that they will have to work hard at capitalizing on opportunities in the Caribbean in the years to come.
Caribbean importers have a long history of doing business with the United States. Their strong interest in U.S. suppliers and products is mainly due to the following: close proximity, long-standing reputation of high quality products, and superior quality of service. As a testament to the reputation of U.S. products in the Caribbean, many local importers have noted that they are able to source a variety of products from other countries, but few match the reliability in quality of their U.S. counterparts.
Many of the orders that importers place are small but frequent, so they often do not order full containers from each supplier. Caribbean importers rely heavily on consolidators in South Florida for shipment of mixed container-loads to their local ports. As a result, a crucial part of doing business with Caribbean importers is building a relationship with a consolidator in North or South Florida and in some cases New Jersey.
Since some resorts and larger supermarkets often order larger shipments directly from suppliers, the main resource for medium to smaller sized retail and foodservice businesses are local importer/wholesalers, making them a good target for smaller U.S. exporters. These importer/wholesalers will work with prospective U.S. suppliers to find the best means of product delivery, and meeting local standards and regulations. Local importers will usually stay informed of changing regulations and duties on food and beverage products. The majority of Caribbean countries accept standard U.S. labeling including the standard U.S. nutritional fact panel. Enforcement of labeling and other product standards, which usually falls under the jurisdiction of a National Standards Institution, is carried out mostly at the port of entry but routine and random checks at the retail and wholesale levels are also conducted.
Retail Food Sector:
About 55% to 60% of consumer related agricultural imports in the Caribbean is destined for the retail sector. Most of the products stocked on the shelves of Caribbean retail stores are imported. In the Caribbean retail sector it is the difference that convenience and so called “mom and pop” stores has with supermarkets that affect the distribution of food and beverage imports. As in the hotel restaurant institutional (HRI) sector, smaller retailers such as neighborhood markets will buy most if not all of their products from local import wholesalers. These retailers have a slower turnaround on product sales and have limited space for storage, which both lead to wholesale as a preferred option for sourcing food and beverage products. In contrast, supermarket chains have both local and U.S. or foreign-based purchasing offices. They work closely with U.S. suppliers to find the best prices for products of interest. Again, use of a consolidator is still crucial to the import of products to these outlets.
International retail chains in the Caribbean include: PriceSmart (U.S.), Cost-U-Less (U.S.), Save-A-Lot (U.S.), Carrefour (France), and Albert Heijn Zeelandia (Holland). While these retail outlets do quite well, ‘mom and pop’ stores will continue to supply a large share of consumers’ needs for basic supplies. In addition, national and international convenience stores and gas marts play a small but growing role in consumer food purchases, contributing about 5% of total retail food sales. An interesting market niche in the retail sector is yacht provisioning. Yachters (or “yachtees”) as they are known in some islands) often phone or fax in their orders to harbor stores or may venture into town to visit the local supermarkets who cater to their specific needs. This is especially prevalent in the British Virgin Islands, Antigua and Barbuda, and in Trinidad and Tobago.
Food Service Sector:
One positive development is the considerable investment in tourism infrastructure that has taken place in recent years, which certainly strengthens the long term potential of the hotel, restaurant, and institutional (HRI) food service sector. One such investment is the Baha Mar Project in The Bahamas, which is being billed as the largest resort development currently under construction in North America and the largest single-phase resort development in the history of the Caribbean. The US$3.5 billion, 1,000 acre development will be located 5 miles west of Nassau along a half mile stretch known as Cable Beach. Construction of the project is expected to be completed in late 2014. When finished, Baha Mar will include six new resort hotels, the Caribbean’s largest casino, The Bahamas’ largest convention center, and at least 12 new restaurants among other attractions. Bahamian tourism and demand for U.S. foods are expected to increase accordingly.
Overall, the Caribbean HRI foodservice sector accounts for 40%-45% of consumer-related agricultural imports. The percentage of Caribbean hotels and restaurants that are independently owned varies from approximately 90% in Grenada to 25% in The Bahamas. This characteristic impacts the flow of imports to the island. The independently-owned restaurant or hotel is more likely to source its food and beverage products from local importers/wholesalers, while larger chain restaurants and hotels have both the connections and the economies of scale to also make direct imports from U.S. suppliers.
While corporate-owned resorts and hotels have boomed over recent years, independently-owned foodservice businesses are still strong on all Caribbean islands. Local independently-owned restaurants remain especially popular in countries such as Aruba, Barbados, Bermuda, and Sint Maarten/St. Martin. Some of the world’s most acclaimed chefs are working in the Caribbean. Using high quality ingredients, these chefs and their restaurants often are a valuable platform for U.S. food and beverage products. However, many chefs are European-trained and thus breaking their preference toward European products can be challenging. Heightened interest of chefs in the use of locally produced ingredients is a recent trend, similar to other parts of the world.
Food Processing Sector:
Food processing in the broad Caribbean Basin is highly concentrated in the larger countries such as the Dominican Republic and Jamaica. In the CBATO’s islands of coverage, which have very limited food production and practically no economies of scale, food processing is much less prevalent. In fact, bulk and intermediate agricultural products account for only a quarter of U.S. agricultural exports to the CBATO islands. Nonetheless, there is processing of wheat flour, pasta products, rice, bakery products, soy products, dairy products, and animal feeds in some countries, particularly in Trinidad and Tobago and Barbados. Food processors within the region buy roughly 20% of raw materials and food ingredients from local suppliers and import 80% from international suppliers.
Antigua & Barbuda
Euromonitor reports that Antigua and Barbuda has one of the highest per-capita incomes in the Caribbean region. However, the economy has performed poorly in recent years. The real value of Gross Domestic Product (GDP) fell sharply in both 2010 and 2011. In 2012, the economy began a modest recovery and growth of 1.5% was expected in 2013 and in 2014. The construction sector will provide much of the growth impetus. Stronger rates of growth are expected in the medium term.
Tourism is the largest sector of the economy, employing about three-quarters of the work force. A construction boom in recent years has resulted in improvements in both quality and capacity. The real value of tourism receipts grew by 3.7% in 2012 and gains of 3.5% were expected in 2013. The relatively undeveloped island of Barbuda is home to some of the country’s most exclusive resorts.
Consumer attitudes towards imported food products are known to be positive, and U.S. products are known for their quality. The volume and value of food imports are based on the number of tourists from the U.S and European Union, so as tourism declines so does the import business. The tourists also have preferences for products from their native countries, which essentially drives this business.
Euromonitor has indicated that the market size of the packaged food retail business was US$38.8 million in 2013, an increase of 54.1 from 2008, or about US$13.6 million. They also forecast growth of 11.6% to 2018, or US$4.5 million for a total of US$43.3 million. High growth items in the forecast include snack bars, chilled processed food, oils and fats, meal replacement, ready meals, pasta and ice cream.
U.S. exports of food and agricultural products were US$26.5 million in 2013, and virtually the same as 2012. Of that amount US$24.3 million or 92% were in the consumer oriented category. Top 2013 processed food exports included products typical of the region overall, and include bottled drinks, baked snack foods, other processed foods, ingredients and beverage bases, wine, fruit juice, pet food, and table condiments.
The Bahamas
The Bahamas has one of the highest per capita incomes in the western hemisphere. Aside from tourism, construction (much of it related to tourism) has been the main economic driver. The economy entered a recession in 2008 that continued through 2009. Since then, rates of growth have been positive but feeble. Several ongoing investment projects, including the large US$3.5 billion private Baha Mar project, have provided most of the growth impetus in recent years. The project is funded by the Chinese Export-Import Bank.
According to Euromonitor the Bahamas’ economy is growing at a modest pace. Real Gross Domestic Product (GDP) should grow by 1.9% in 2013 and GDP growth of 2.1% is expected in 2014. In the medium term, the economy should grow roughly in line with the U.S. economy. Gains in tourism and construction are the main drivers. At present, the tourist sector relies too heavily on cruise-ship visitors. This is because hotel visitors whose numbers have been stagnant, account for 30% of tourists but generate 90% of tourism spending.
U.S. exports of consumer-oriented products to The Bahamas fell 2% to US$206.2 million in 2013 which now makes it the 2nd largest market in the CBATO region after Trinidad and Tobago. Top 2013 U.S. exports of processed food products included baked snack foods, other processed foods, ingredients and beverage bases, bottled drinks, fruit juices, table condiments and wine.
With an estimated U.S. commanding a 95% share of the Bahamian import market for consumer-oriented products, opportunities are plentiful for U.S. suppliers in practically all product categories. The strong influence of American lifestyle and culture on Bahamians has led to U.S. food products and brands being the most preferred and commonly visible products in retail outlets. As the economy slowly recovers disposable incomes continue to increase, the Bahamian consumer has a greater opportunity to purchase a wider variety of high-quality food products.
Euromonitor has indicated that the market size of the packaged food retail business in The Bahamas was US$115.7 million in 2013, an increase of 8.7% from 2008, or about US$9.3 million. They also forecast growth of 8% to 2018, or another US$8 million during the period for a total of US$125 million. High growth categories in the forecast include sweet and savory snacks, snack bars, spreads, chilled and frozen processed food, meal replacement and ready meals.
At last report, the hotel sub-sector made up roughly 65% of the total hotel restaurant institutional, (HRI), market, followed by the restaurant sub-sector at 32% and the institutional sub-sector at 3%. There were 280 hotels, and over 15,000 hotel rooms in the Bahamas. Moreover, there is a wide array of restaurants located on the larger islands of the Bahamas. New Providence and Grand Bahama alone, boast more than 430 restaurants. In addition, there are over 20 companies that provide institutional catering services in the Bahamas. HRI Sales are evenly distributed between independent and chained foodservice establishments.
Barbados
According to Euromonitor, the Barbadian economy has grown feebly in recent years and it will see its second consecutive year of decline in 2014. Barbados’ economy is expected to contract by 1.1% in 2014 after declining by 0.8% in 2013. However, a number of large scale private investment and public works projects are expected to come on stream in the next several years. Per capita income is one of the highest in the Caribbean region but the economy is too small to realize significant diversification and is vulnerable to external shocks. The country faces tough challenges as it seeks to fulfill its liberalization obligations under the agreement governing the Caricom Single Market and Economy.
In normal economic times, Barbados is one of the most promising markets for U.S. exporters in the Caribbean. It has a relatively affluent population and a tourism sector that have generated an increased demand for consumer food products. With little local agricultural production outside of sugar, poultry and pork, Barbados must import most of its food needs.
U.S. exports of consumer oriented food products were US$54.8 million in 2013, an increase of 6% and a new record high. Total U.S. exports of agricultural products also rose 5% to $91.6 million from 2012. Top processed products with potential for U.S. exporters include other processed foods, ingredients and beverage bases, bottled drinks, baked snack foods, pet food, breakfast cereals & other breakfast products, canned vegetables, cheese and chocolate.
Euromonitor has indicated that the market size of the packaged food retail business was US$68.6 million in 2013, an increase of 4.4% from 2008, or about US$2.9 million. They also forecast market growth to US$71.3 million by 2018, growth of 3.6% and US$2.4 million. High growth categories in the forecast include sweet and savory snacks, snack bars, spreads, meal replacement, chilled and frozen processed food, ready meals and confectionery.
Bermuda
Euromonitor reports Bermuda is one of the world’s richest countries in terms of per capita income but the pace of growth is modest. Bermuda boasts a Gross Domestic Product (GDP) per capita of US$75,000. By this measure, it is one of the world’s richest countries. The economy is heavily dependent on international business and tourism. The tourist sector made a strong rebound in 2011 after suffering through several years of decline during the Great Recession. Approximately three-quarters of Bermuda’s air visitors come from the U.S. GDP growth declined -0.8% in 2013 but is expected to rebound to growth of 1.8% in 2014.
Consumer tastes have gradually matured over the years, moving from canned foods to specialty items produced by specific brand names. Current American trends, such as the movement towards healthy, organic foods and home meal replacement, are slowly making an impact on the tastes and lifestyle preferences of the Bermudans. More and more women are working and Bermudans can afford to pay higher prices for convenience. Consumers are demanding more expensive, exquisite foods. Bermudans are familiar with U.S. brands from television and most of the major brands are available in the market.
In 2013, U.S. exports of consumer oriented food products were US$84.3 million, an increase of 3% from 2012. Total U.S. exports of agricultural products increased 1% to US$90.5 million. Top U.S. exports of processed foods included baked snack foods, bottled drinks, other processed foods, ingredients and beverage bases, baking inputs, cheese, wine and prepared/preserved meats (sausages).
Euromonitor has reported that the 2013 value of the retail packaged food market in Bermuda to be US$50.1 million, an increase of 2.2% or US$1.1 million from 2008. They also forecast the packaged food retail market to grow to US$51.4 million by 2018, an increase of 2.6% or US$1.3 million. Top growth categories in the forecast include sweet and savory snacks, snack bars, meal replacement, chilled and frozen processed foods, spreads, ready meals and confectionery.
Bermudian’s high GDP per capita is reflected in their purchasing of very high-end, premium quality, and name brand products. Locals are very brand loyal and thus, difficult to sway. Major U.S. brands present in the market include: Del Monte, Nestle, Heinz, Kraft, Kellogg’s, and many others. Lack of shelf space continues to be a problem, making competition for the little space available quite fierce. As a result, only the products with the most demand are awarded prime shelf space. For many stores, if a new product is brought in, another is bumped out.
The U.S. maintains a dominant presence in the market as Bermuda’s primary trading partner. The major drivers pushing the success of U.S. goods are the availability, abundance and quality of the products imported. Most U.S. products are shipped out of New Jersey and to a lesser extent out of Jacksonville, Florida. At last report, U.S. food imports destined to the foodservice sector account for approximately 35%-45% of total U.S. food imports while the retail sector is estimated to account for 55%-65% of the total.
Large supermarkets purchase their goods from local wholesalers because they offer convenience and reliability of the items being supplied. However, some supermarkets have significant purchasing power and import directly from U.S. manufacturers. For example, The Market Place and Lindo’s Market import from the United States on a regular basis. In addition, most supermarkets and grocery stores will order mixed container loads to their New Jersey consolidators if they can offer better prices than the local wholesalers. It is important to emphasize that although direct imports due take place, it is not the norm in the nation’s retail sector. Bermuda has a well-established distribution network that channels most food imports through local importer/distributors
Cayman Islands
CBATO reports that despite its small size, the Cayman Islands is one of the most stable and prosperous places in the Western Hemisphere. With a per capita Gross Domestic Product (GDP) of US$43,000, Caymanians enjoy a standard of living comparable to that of Switzerland. The economy is largely dependent on tourism, which accounts for roughly 70% of GDP and 75% of foreign exchange earnings.
Tourism is largely geared toward the high-end luxury market, attracting 320,000 stop-over visitors (2012) primarily from North America and Europe. Approximately 1.5 million cruise ship passengers visit the Cayman Islands annually as well. Another important sector of the economy is offshore financial services.
Euromonitor reports that the Cayman Islands GDP continues to rise at a moderate pace. GDP growth in 2013 was estimated at 1.8% and an increase to 2.3% growth is predicted for 2014. They add that the population of the Cayman Islands is declining, sparking worries about how a diminishing work force will affect the islands’ economic future.
Still, the Caymanians enjoy one of the highest outputs per capita and one of the highest standards of living in the world. About 90% of the islands’ food and consumer goods must be imported. The U.S. dominates the agricultural market in the Caymans, where it had been estimated nearly 85% of food imports are sourced from. One of the key contributors to this substantial market share is the sizeable number of American tourists. In recent years, upwards of 70% of Cayman’s tourists were Americans.
U.S. exports of consumer oriented food products in 2013 were US$51.3 million, an increase of 8% from 2012. In 2013 total food and agricultural imports from the U.S. was US$61.6 million, an increase of 13%. This means 83% of their imports were of the consumer oriented variety. In 2013, top U.S. exports of processed food products included bottled drinks, other processed food, ingredients and beverage bases, wine, baking inputs, baked snack foods, juices, cheese and beer.
Retail Sector:
Euromonitor has reported that the 2013 value of the retail packaged food market in the Caymans to be US$26.7 million, an increase of 7.3% or US$1.8 million from 2008. They also forecast the packaged food retail market to grow to US$28.1 million by 2018, an increase of 5.5% or about US$1.5 million. Top growth categories in the forecast include sweet and savory snacks, snack bars, meal replacement, spreads, chilled and frozen processed food, ready meals and confectionery.
CBATO reports that an estimated 60% of imported foods and beverages are channeled through the retail sector. According to Euromonitor the Cayman Islands grocery retail sector is composed of 6 supermarkets, 10 gas marts, and 26 traditional grocery retailers (independent small grocers, food/drink/tobacco specialists, and other grocery retailers). Total retail sector sales (excluding sales tax) are estimated at US$256 million in 2013, with supermarkets accounting for the largest share
The 6 major supermarkets in Grand Cayman have an estimated 12,900 sq. m. (139,000 sq. ft.) of selling space. Fosters’ Food Fair-IGA is the only chain supermarket, operating four stores. Foster’s also operates a warehouse club store (Priced Right) in Georgetown with limited food and beverage selection, a small grocery store (Foster’s Express) on East End and a gourmet specialty store (The Bay Market) in Camana Bay. The other two supermarkets (Hurley’s and Kirk Market) are single store operations. U.S.-based Cost-U-Less also operates a non-membership warehouse club store in Grand Cayman. Practically all of the larger retailers import distribute and wholesale both retail and foodservice products. The total value of supermarket sales (excluding sales tax) is estimated at US$136 million in 2013 and is expected to grow by about 2.5% annually over the next five years.
There are about ten Texaco (Star Mart) and Esso (Tiger Mart) gas marts strategically located throughout Grand Cayman. Although practically all the snacks and beverages sold at these stores are imported, they will seldom import the products directly. They choose instead to source all their food and beverage products from local distributors. Therefore, the best point of entry is by making contact with the distributors that service these stores and market new goods to them. Very little differentiates these stores. They sell ready-made products such as pizza and hot dogs, and attract locals and tourists alike. The current estimated size of this market segment was US$45 million in 2013. There has been a small contraction in this segment over the past five years, but it is expected to rebound as the overall economy improves.
“Mom and pop” shops, independent grocery stores, and wet markets also source their products through local importers/distributors. Because of the small nature of their operations, traditional market storeowners like to buy from local importers/distributors that can provide them with reasonable prices and regular delivery and service. Most small independent grocery stores operate their stores out of small neighborhood outlets. These operations typically cater to the micro-community
Country-by country market share statistics for food and beverage products are unavailable. According to the Cayman Islands Foreign Trade Statistics Report for 2012, 89% of all goods imported into the country came from the United States. However, the report also notes that this percentage may be overstated due to the fact that the overwhelming amount of goods exported to the Cayman Islands from third countries are transshipped through the U.S. Tropical Shipping’s twice-a-week service to Grand Cayman from Miami represents the main import avenue for most goods, even for European products. Competition exists in the processed products category (canned goods, biscuits, snacks, sauces, specialty items, etc.) primarily from Europe, Canada, and Jamaica. New Zealand is also present in the market with dairy products and lamb.
Foodservice Sector:
CBATO reports that with tourists flocking to the Cayman Islands in greater numbers than prior to the recession of 2008-2009, and the islands relying heavily on imports of food and beverage products from the United States, the opportunities for U.S. foodservice suppliers are looking up in The Caymans. The Cayman Islands hotel, restaurant and institutional (HRI) foodservice sector is expected to grow by 3-4% over the next five years to 2018.
Although a significant portion of these imports are channeled through the HRI foodservice sector, the exact size of the HRI market is not entirely clear. Euromonitor estimates the value of the overall HRI foodservice sales at US$10.5 million in 2012. However, this estimate may be understated. Given the amount of food and beverages imported into the country, the number of tourists visiting the island, the number of restaurants (estimated at 200), and the relative size of the retail market, the CBATO estimates that HRI foodservice sales may be at least 5 times as much.
An interesting characteristic of the Cayman Islands is that only half of all visitors arriving by air stay at hotels or guest houses. The other half stay at apartments, condominiums, time share units, and other accommodations which often have kitchens. This contributes to a large share of tourists buying foods from the retail sector and cooking on their own rather than eating all their meals at restaurants and other outlets. Hence, the size of the
HRI foodservice market relative to the number of stop-over tourists may not be as large as in other Caribbean islands where the vast majority of tourists consume their meals at foodservice establishments.
U.S. suppliers (mainly South Florida exporters) ship product to importers and distributors in Grand Cayman, who in turn sell to hotels, restaurants, and other eateries throughout the islands. The overwhelming volume of food and beverages sold in the Cayman Islands HRI sector is channeled through importers/distributors. Some of the larger restaurant chains and occasionally some hotels will import specialty items directly.
Best Product Prospects:
U.S. export market opportunities exist for virtually all high-value, consumer-oriented foods/beverages and seafood products. They include fresh, chilled and frozen red meats, poultry carcasses and parts, fish and preparations, vegetables and fruit and breakfast cereals. Healthy food products (e.g. organic products) and gourmet items also have potential but are not present in significant quantities.
Dominican Republic
Euromonitor reports that the Dominican Republic economy will improve significantly in 2014. Real Gross Domestic Product (GDP) is expected to grow by 5.1% in 2014, up from 4.0% in 2013. That is slightly higher than the potential rate of growth for the country, so it is not only one of the largest economies in the Caribbean, the Dominican Republic should be one of the fastest-growing countries in the western hemisphere.
Dominicans have adopted much of the U.S. culture, such as music, sports, and fashion. The food consumption trend in the Dominican is similar to the trend in the United States, although one can estimate a lag of some time. It is clear that what is demanded in the United States will be demanded in the Dominican Republic in the future. Dominican consumers have the idea that products made in more developed countries, such as the U.S., are more reliable in terms of quality and safety. There is also a tendency, mainly among middle and high-income classes, to consume natural and healthy products. These consumers are demanding food with less saturated fat, cholesterol, and sugar.
The Dominican Republic is the 6th largest market for U.S. food and agricultural products in the Western Hemisphere. Exports from the United States in 2013 were just over US$1.1billion and an increase of 5%. Most of the growth in U.S. exports of agricultural products to the Dominican Republic in recent years has been in consumer-oriented products. Exports of these products from the United States in 2013 were a record high of $489.3 million, an increase of 25% from that of 2012. Top processed product exports included breakfast cereals and other breakfast products, other processed foods, ingredients and beverage bases, soybean oil, baked snack foods, baking inputs, concentrated milk and cheese.
Retail Sector:
Euromonitor has reported that the retail sales value in the packaged food market in the Dominican Republic was US$2.3 billion in 2013. That represents a 34.2% period growth rate from 2008, or US$591.2 million. The forecast growth rate is estimated at US$2.6 billion by 2018, and 12.4% or US$287.6 million. Top growth categories in the forecast include snack bars, noodles, ready meals, meal replacements, dairy products, soup and pasta.
Post reports that the sector with the most opportunities for U.S. products in the Dominican Republic is the retail sector. Estimates are that about 80% of imported high value food products are distributed through the retail sector. In the Dominican Republic seven major supermarket chains import products directly from the U.S. and also buy from other local importers. Supermarkets are increasing their number of product lines. They are also developing the market for their own private brands and are the exclusive representatives of some name brand products.
Euromonitor reports that there were just over 500 modern grocery retailers in 2012. This included 7 convenience stores, 182 forecourt retailers, 49 hypermarkets and 265 supermarkets. The performance of the grocery retailing channel was very strong in 2012, with current value sales increasing by 13%, a slightly higher level than non-grocery retailing. Expansion strategies from the major players as well as a diversification of the offer are some of the factors behind this trend. The fastest-growing channel in sales terms is hypermarkets. These outlets have adapted fast to the change in consumer habits by diversifying and offering a wider range of products. They are also diversifying their locations as they are opened outlets in all the new shopping centers being opened in Santo Domingo starting in 2012.
The Ramos Business Group (Grupo Ramos) opened seven discounters under the brand Aprezio in Santo Domingo during 2012. This seems to have been a successful diversification strategy and it is expected to continue both in Santo Domingo and in other cities. This type of store is successfully competing against traditional retailers in lower-income areas. Centro Cuesta Nacional has opened several new outlets of its convenience store brand, Jumbo Express. The trend is likely to continue as convenience stores are covering a new market niche.
Grupo Ramos also slightly surpassed Centro Cuesta Nacional as the leading grocery retailer in 2012. Both companies had value shares nearing 9%. In terms of brands, the leader in 2012 in terms of value share, Multicentro La Sirena from Ramos Business Group was the leader with 8%, followed closely by Jumbo from Centro Cuesta Nacional with almost 7%. Both companies are capitalizing on the opening of shopping centers where they are investors (Ramos Business Group with Galeria 360 and Centro Cuesta Nacional with Ágora Mall).
The biggest decrease in value sales in 2012 was again by Carrefour SA. The company experienced negative growth in the 2010-2012 period, and is likely to continue this trend in the forecast period. The international company has been affected by its results in other countries and is failing to adapt to the Dominican consumers’ tastes.
U.S. exporters may enter this sector through importers or the major chains. Major chains prefer to do business directly with the foreign supplier, but for some products, it is easier to buy them from a specialized importer. Over thirty small and medium-sized supermarkets are members of the Small Supermarket Association (UNASE), which has developed a purchasing structure and has built a warehouse to supply its members. Other independent supermarkets buy from local importers, which are also distributors and wholesalers.
Foodservice Sector:
At last report from Post, accounting for roughly 20% of U.S. imports of high value food products, the hotel restaurant institutional (HRI) sector provides good opportunities for U.S. exporters. The Dominican Republic continues to be one of the major tourist destinations in the Caribbean. The implementation of the U.S. Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) has helped import of some products, such as meat, poultry, and cheese that were facing some restrictions. In addition to lower tariffs, importers are taking advantage of the tariff rate quotas under the CAFTA-DR to supply the HRI sector.
All-inclusive resorts, which usually focus on sourcing local products to lower their costs, have good potential for U.S. select beef, which competes in price with the best local beef. U.S. choice grade also have some potential for the most exclusive resorts and high end restaurants. Although major restaurants and all-inclusive resorts import some products directly and have developed a purchasing structure, most of them source their products from local importers. Therefore, the best way to enter the sector is to work with local importers. Providing training to this sector on food safety and how to use specific imported products, such as beef, poultry meat, and dairy products has been an effective tool used by some suppliers and trade groups.
Food Processing Sector:
The U.S. has always been one of the most reliable suppliers of food ingredients for the Dominican food processing sector. After the implementation of the CAFTA-DR the potential of the sector has increased, as food processors have focused on increasing their quality to compete in the international market. Although the U.S. faces strong competition from Central and South America, food processors in the Dominican Republic see U.S. suppliers as a reliable source, in terms of volume, standards, and quality. The pasta, meat and dairy products, edible oil, beer, juice, and soft drink sectors continue to show strong potential. Dominican food processors import food ingredients either individually or through their specialized associations. Post advises the best way to enter the market is to contact the food processor directly, instead of going through a local importer.
Best Product Prospects:
Best prospects in the Dominican Republic food markets include trimmings (Beef, Pork, and Turkey), yogurt, processed cheese, ice cream, tree nuts, fresh fruits, raisins, frozen potatoes, chocolate, mixes and dough’s, and salmon. Low carbohydrate and light foods are also of particular interest and s strong growth category in the country.
Dutch Caribbean
The term “Dutch Caribbean” refers to the five islands of the Netherlands Antilles (Curaçao, Bonaire, St. Maarten, Saba, and St. Eustatius) and Aruba. Geographically the islands are divided into two separate groups. Aruba, Bonaire and Curacao (also known as the “ABC Islands”) are located just off the coast of Venezuela. St. Maarten, Saba, and St. Eustatius (also known as Statia) are located in the northeastern Caribbean.
With nearly 4 million tourists visiting the islands annually and no significant domestic food production, the islands rely heavily on food imports. The retail food market is estimated at approximately US$300 million. U.S. exports were expected to be adversely affected by the regional economy to some extent, but the islands’ dependence on imports to satisfy their food needs helped minimize any contraction in demand.
U.S. exports of agricultural products grew to just over US$190.2 million in 2013, an increase of 4% from that of 2012. Of this amount, nearly 88% or US$166.7 million were of the consumer oriented variety, with growth of 7% over 2012. Top processed food exports from the U.S. included other processed foods, ingredients and beverage bases, bottled drinks, pet food, baked snack foods, wine, cheese, baking inputs, juices and table condiments.
At last report an estimated 50%-60% of imported foods are channeled through the retail sector, which is composed of estimated 300-350 retail outlets, and the remaining 40%-50% through the foodservice sector. In the larger markets of Aruba, St. Maarten, and Curaçao approximately 70% of the retail food business moves through the major stores (supermarkets, super centers, club warehouses, etc.), 25% through small independent grocers, and about 5% through convenience stores, gas marts and kiosks. In the smaller islands of Bonaire, St. Eustatius, and Saba where there are less large stores, the majority of the retail food business is handled by small independent grocers. The larger retailers usually buy direct from foreign supplies and source products from local importers/distributors as well.
The islands of Aruba, St. Maarten and Curaçao have fairly developed retail sectors with large, modern stores. Seattle-based Cost-U-Less operates a warehouse club store in both St. Maarten and Curaçao. Similarly, San Diego-based PriceSmart operates a warehouse club in Aruba. A Dutch supermarket chain, Albert Heijn, has a store in Curaçao. In addition, there are several locally-owned supermarkets in each of the three islands which rival stores in the U.S. in terms of infrastructure and assortment. Interestingly, the four major stores in Aruba are located next door to each other just outside the capital city of Oranjestad
Given the large amount of influence from the U.S. through tourism, media, and business, most of the Dutch Caribbean markets tend to follow U.S. retail trends to some degree, albeit with a certain lag time and within the limitations of local income levels. The most obvious of these trends is the movement toward healthy products.
Best Product Prospects:
Products with good export market potential for U.S. suppliers in the Dutch Caribbean market include red meats and poultry, beer and wine and dairy products, processed fruits and vegetables, fruit juices, snack foods, and pet food.
Jamaica
Euromonitor reports that during the past decade, real Gross Domestic Product, (GDP), growth averaged just 1% per year. Despite its poor economic record, Jamaica is still the second-largest economy in the Caribbean. A pickup in mining and tourism has helped to lift the economy out of recession in 2011 when real GDP rose by 1.3%. But Jamaica’s economy turned in another unimpressive performance in 2013 with growth of 0.4%. There is some optimism in the International Monetary Fund (IMF) forecast however of GDP growth of 1.3% in 2014 and an average of over 2% in the medium term.
Post reports that the main dynamics depressing economic growth include the slow recovery of the world economy, slow growth over several years by the Jamaican economy, and the country’s high debt burden. However, there have been some positive developments over the last year or so. These include the signing of an IMF agreement to stabilize the economy, the reduction of the national debt and continued growth of the tourism and agriculture sectors.
Growth should gradually pick up over the longer term if bauxite prices do not fall and there is no further hurricane damage. In 2008, the Caribbean Community approved the goal of establishing a common market and intends to create a single economic bloc by 2015. The move could provide spillover effects which will help to boost the Jamaican economy.
The Jamaican tourism sector has shown tremendous resilience over the last five years, growing at an average annual rate of 2% percent. In 2012, nearly 2 million stop-over tourists visited Jamaica generating revenues of US$1.9 billion. The Jamaican tourism outlook for 2013 and beyond was for continued growth of the sector with the expansion of rooms in the resort areas by Spanish investors.
Because of the service-oriented economy, Jamaica is a net importer of food and beverages. The U.S. is the major food exporting country to Jamaica, accounting for an estimated 50% of annual imports. The expansions in the tourism sector and changing consumer lifestyles had generated increasing demand for imported value-added consumer food products.
U.S. exports of agricultural products totaled US$428.4 million in 2013, a decrease of 1%. U.S. exports of consumer ready food products also dropped 2 % to US$166 million during the same period. Top U.S. exports of processed food products in 2013 included other processed foods, ingredients and beverage bases, soybean oil, bottled drinks, baking inputs, soup, baked snack foods, edible fats and oils, cheese, chocolate and table condiments.
Euromonitor has estimated the value of retail food sales to be US$713.6 million in 2013, an increase of 51.4% from 2008, or US$242 million. That makes Jamaica the 4thlargest packaged food market in the Caribbean, excluding Puerto Rico. They also forecast the Jamaican retail food market to expand to US$770.6 million by 2018, an increase of 8% or US$57 million. High growth categories in the forecast include snack bars, chilled and frozen processed food, spreads, oils and fats, sweet and savory snacks, pasta, sauces, dressings and condiments and ice cream.
Post reports that in 2012, Jamaica imported a total of US$959 million worth of food and beverages, of which approximately 60% was destined for the hotel, restaurant, and institutional (HRI) sector, while the remaining 40% was channeled to household consumers via retail outlets such as supermarkets and small moms & pops.
Foodservice Sector:
Accommodations in Jamaica include all-inclusive resorts, luxury hotels, affordable family hotels, self-catering apartments and villas, and intimate guest houses. Overall, Jamaica boasts over 2,000 accommodation establishments and approximately 32,000 rooms. Most accommodation establishments have at least one restaurant on property, frequently offering a fine dining restaurant, a casual beach grill, and /or a family style/buffet breakfast or lunch eatery. It is not unusual for the large-scale all-inclusive hotels and resorts to have as many as seven or more restaurants. In general, large-scale hotels and resorts possess their own warehouses and typically import and receive weekly shipments of food and beverage products from U.S. suppliers. However, it should be noted these establishments rely on local importers/distributors for most of their food and beverage needs.
In general, Jamaica has a relatively large number of independent restaurants compared to chain establishments. These restaurants cater to both local and tourist populations. At these restaurants, all types of cuisines are available and they mainly use local food products. However, they also procure imported food and beverage products from the importer/distributor channel. These restaurants do not import products directly from overseas suppliers due to their small size. U.S. products are believed to represent between 30% – 40% of the total food and beverage purchases made by the independent restaurants in Jamaica.
Chain foodservice outlets present in Jamaica include restaurants such as T.G.I Friday’s, and several U.S. fast food chains such as Burger King, Kentucky Fried Chicken, Domino’s Pizza, Pizza Hut, Wendy’s and Subway. Major Jamaican fast food chains include Juici Patties, Tastee Limited and Island Grill. The fast food restaurants are the fastest growing segment of the restaurant sub-sector and provide excellent opportunities for U.S. exports. Most U.S. franchisees have modified their menu to meet Jamaican consumers’ taste preferences.
The amount of U.S products used by the fast food franchises varies between 20%-50% percent. The major local products that are used by local/independent fast food franchises include beef, chicken, fruit juices, vegetables, eggs, and pork products. The major imported products are potatoes, french fries, vegetable oils, ketchup, sauces, bakery products, chicken fillet and cheeses. High duties and questionable application of sanitary/phytosanitary regulations have made it more favorable for local meats, dairy products, fruits and vegetables and eggs in the restaurants sub-sector.
In addition to local production, high-end U.S. beef, lamb and specialty dairy products face competition from Australia and New Zealand. Guyana is the major competitor for U.S. seafood. French fries and whole potatoes from the U.S. have lost substantial market share to lower cost products from Canada and the Netherlands. Most sauces, salad dressings, some fruits, vegetables, bakery products and nuts are imported from the U.S. Imported food and beverages in the hotel sub-sector varies between 40% and 60% of total food and beverage consumption, with the U.S. presently accounting for approximately 55% of all imports. Post adds that the relative size of the restaurant sub-sector and its high consumption of local products have reduced the position of U.S. products in the overall HRI foodservice sector.
Best Product Prospects:
U.S. consumer food products with the best potential in the Jamaican retail market include beverages, especially fruit juices, vegetable oils, dairy products, processed fruits and vegetables, wines, confectionery and snack foods. In the hotel and restaurant sub-sector, there is also demand for lamb, seafood, veal, pork products, pasta, nuts, cheese, bakery products, sauces, vegetables, and fruits.
Trinidad and Tobago
Euromonitor reports that modest growth was expected in 2013 after a few two consecutive years of contraction or weak growth. The Gross Domestic Product (GDP) growth was reported at 1.6% for 2013. The GDP forecast for 2014 is 2.3% and then moving towards 2.4% by 2015. Weighed down by household debt and continued uncertainty, consumer spending remains relatively weak. High levels of capital intensity, coupled with skill mismatches and labor market rigidities, mean that an insufficient number of jobs are generated. Annual growth of the non-energy sector is projected to stabilize at about 4%-4.5% over the medium term.
In 2013, U.S. exports of consumer oriented food products reached another new record high at US$213.1 million, an increase of 18% from that of 2012. Total U.S. agricultural exports also reached a new high of US$387 million, an increase of 13%. The share of consumer oriented exports represented over 55% of the total. Top 2013 U.S. exports of processed food products to Trinidad and Tobago (T&T) as it is known, included other processed foods, ingredients and beverage bases, soybean oil, bottled drinks, baking inputs, baked snack foods, edible fats and oils, cheese, chocolate, table condiments, and baby food.
Euromonitor has estimated the value of packaged food retail food sales to be US$930 million in 2013, an increase of 936.8% (not a typo) from 2008, or about US$840.3 million. That makes “T&T” the 3rd largest packaged food market in the Caribbean, excluding Puerto Rico. Naturally such incredible growth needs to peak at some point. They also forecast the retail food market to expand to over US$1 billion by 2018, an increase of 8% or about US$74.3 million. High growth categories in the forecast include sweet and savory snacks, snack bars, spreads, chilled and frozen processed foods, meal replacement, ready meals and confectionery.
Retail Sector:
CBATO recently reported that of the food products imported into T&T, an estimated 70% move through retail channels and 30% through the hotel, restaurant, and institutional (HRI) foodservice sector. T&T’s retail food sector is heterogeneous and dynamic. In 2011, according to Euromonitor, the sector was composed of approximately 84 modern grocery outlets (hypermarkets, supermarkets, discounters, gas marts and convenience stores), and over 2,800 mostly small, traditional retail operations. Total sales of the retail sector are estimated at US$2.3 billion in 2013, with an approximate 60%-40% split between modern outlets and traditional ones.
There have been a number of recent developments in the retail sector which have created numerous opportunities for U.S. exporters. Over the past five years many of the larger retailers have been refurbishing and expanding their existing stores. Modern facilities with wide aisles and checkout counters and in-house bakeries and delis are quite common. Some new players are also entering the retail the market. A large number of Chinese workers brought into T&T during a construction boom a few years back have stayed in T&T, and have ventured into the retail business. Many small Chinese retail outlets have sprung up in the past year, particularly in the central and southern regions of T&T.
Over the past several years there has been a shift toward offering a broader range of imported products, particularly from the U.S. The quality, convenience, and competitive pricing of U.S. products are just some reasons why this trend has taken place. There is also a trend toward low fat and health foods, and to a lesser extent toward organic products. Many supermarkets are catering to health-minded customers by dedicating entire aisles to display healthy foods and drinks.
More and more women are also entering the workforce. This growth in female employment is translating into greater demand for easily-prepared foods, ready-to-eat meals, and convenience foods. Modern pharmacies are beginning to carry food and beverage products as part of their product mix. Companies such as SuperPharm (nine stores), Kappa Drugs Ltd. (two stores), and Starlite Pharmacy (one store) are becoming a significant outlet for many consumer-oriented foods.
Foodservice Sector:
Post reports that Trinidad and Tobago’s foodservice sector has grown exponentially over the past 5-10 years. The historical strong economy, a growing middle class, more women entering the workforce, and large investments in the sector have all led to rapid growth in the number and variety of eateries and in the sector’s sales volumes. This in turn has helped the U.S. achieve record levels of consumer-oriented and seafood exports to Trinidad and Tobago in recent years. As in the retail sector the sustainability of such strong growth can be held in check but for now opportunities for U.S. food service suppliers remain positive.
Euromonitor reports that over the past five years T&T’s foodservice sales grew at an average annual rate of 14.2% in real terms, reaching an estimated US$659.6 million in 2012. There are an estimated 3,800 foodservice outlets in T&T, of which approximately three quarters are street stalls and kiosks. The remainder is made up mostly of full service restaurants, cafés & bars, and fast-food eateries.
More and more foodservice establishments are also entering the market. Over the past few years, the number of foodservice outlets has increased by 9%. The variety of foodservice outlets has also increased over the past several years. Independent restaurants featuring cuisine from different corners of the globe are quite common. There has also been an explosion in the number of fast food outlets, particularly of U.S. chain restaurants. Many of the orientations toward health and wellness as well as convenience are also noted as developments in the HRI sector. Most fine dining is found in the capital city of Port of Spain, Trinidad, and on the island of Tobago. Within the fine dining establishments, most chefs are international, while in the casual eateries most chefs tend to be local. T&T culinary professionals have a superb reputation within the region.
Kentucky Fried Chicken is the largest restaurant chain, followed by Subway and the locally-owned Royal Castle. The majority of restaurants rely on importers/distributors for most of their food supplies and to a lesser extent on local manufacturers and growers. Although percentages may vary depending on several factors, on average restaurants buy approximately 75%-80% of their food and beverage products from local importers and the remaining 20%-25% from local producers. In cases where foodservice operators need specialty items not carried by local suppliers, they may import those items directly. Popular cuisines include the following: Chinese, Caribbean and Creole, Indian, French, Italian, Japanese, Thai, and American.
In addition to the hotel and restaurant market, institutional catering is an attractive market niche in Trinidad and Tobago. This market segment consists of catering to the petrochemical industry, airlines, yachts, hospitals, schools and prisons. Oil and natural gas operations demand a steady supply of a variety of food products. Local catering businesses in Trinidad provide a full range of services for both land-based and offshore oil and natural gas operations, which include supplying food products and cooking and preparing meals. Allied Caterers Ltd., which is part of a large regional import, distribution, and catering conglomerate (Goddard Enterprises), is T&T‟s sole airline caterer. Allied provides in-flight meals to T&T–based Caribbean Airlines, as well as to several other U.S. and international carriers. The company enjoys using U.S. products because of their consistency and quality. Allied buys U.S. products from local importers and wholesalers and also imports products from U.S. suppliers.
Best Product Prospects:
All high value U.S. products have potential in the T&T market. Post notes there are some products not present in significant quantities but that have good sales potential include healthy food products, (i.e. low-fat foods, granola bars, organic products), herbal products, (i.e. tea) non-Caribbean & specialty produce, (i.e. raspberries, strawberries, Brussels sprouts, asparagus, artichokes), pickled products, ethnic food products and ingredients, particularly Halal products, and sauces/condiments for Indian cuisine.
Source: https://www.foodexport.org/Resources/CountryProfileDetail.cfm?ItemNumber=1005