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May/June 2004 INsight excerpts
Global Market Trends: What You Need to Know
Global Market Trends: What You Need to Know Chinese officials determined to see a boost in children's height charts direct schools to issue milk to students, and a new market for U.S. dairy products opens. An Italian company files for bankruptcy, and Brazilian dairy farmers scramble to replace a prime customer. "In the global market for food, a single local event can create great opportunity - or cause serious repercussions - half a world away," says Mike Fusillo, economist and director of Maritime Research for PIERS, leading provider of import-export trade data. Recent alarms about food safety provide stark examples. One confirmed case of BSE - bovine spongiform encephalopathy - in Washington - was enough to shut down 90% of the market for U.S. beef exports within a matter of days. Ripple effects continue to roil markets for beef, livestock, and feed ... to say nothing of rendered products and bovine byproducts used by the cosmetics, medical, and pharmaceutical sectors. Other market shifts occur more gradually, for reasons more benign. "As the world's economies have prospered, world demand for meat and poultry has increased," notes Fusillo. "World exports of poultry now account for about 10% of world consumption. Of all U.S. animal and crop exports, red meat exports increased the most over the last two decades." Red meat leads the list of high-value processed products (which include dairy items, packaged foods, dried and canned fruits and vegetables, and beverages) accounting for most of the gains in U.S. agricultural exports. In fact, says Fusillo, U.S. agricultural commodity exports have fallen while value-added agricultural exports have risen over 6% since the mid-'90s. As more developing economies bring their commodities to the global market, U.S. agricultural opportunities move up the value chain, Fusillo explains. "And so, where American agricultural R&D was once devoted to increasing productivity, there's a shift in focus to creating new uses for existing commodities and new high-value products such as bio-plastics and bio-energy." Fusillo continues: "The U.S. invests more capital in the business of agriculture than any other country. Ours is a highly competitive, innovative industry, quick to adopt new technologies, very sophisticated about marketing." It is also an industry well positioned to ride out the inevitable disruptions in the global food market, Fusillo says, noting that many agricultural producers use PIERS trade intelligence to plot their countermoves to market shifts. "So, for instance, when one market for U.S. beef shuts down you can use PIERS import-export information to find other buyers overseas ... or in the States." He adds that PIERS can offer more detailed data about second and third-tier buyers than ever before: "U.S. Customs requires more disclosure about cargoes, including for the first time the cargoes handled by ocean transport intermediaries known as NVOCCs [non-vessel-operating common carriers] that dominate the less-than-full-container-load shipping business." Close attention to the ebb and flow of trade data is critical when farm returns depend on overseas markets. "According to USDA analyses," says Fusillo, "earnings from U.S. exports account for an estimated 20% to 30% of total farm income. The U.S. agricultural sector overall is two-and-a-half times more dependent on exports than is the American economy on average." Increasingly, that means a dependence on markets in Asia and South America. PIERS data indicates that approximately 60% of containerized agricultural exports go to Asia, with the biggest share going to Japan, followed by South Korea, China, Taiwan, Hong Kong, and Indonesia. "A generation ago, our export markets were in Europe. Now our top markets for agricultural exports are the Pacific Rim countries," says Fusillo, "starting with Japan and, of course, our NAFTA partners." Citing the USDA forecast for 2004 of 6% growth in U.S. agricultural exports to a near-record high of $59.5 billion, Fusillo remarks, "while export growth seemed to plateau at the start of the millennium, constraints on growth now appear to be loosening helped in no small part by the falling dollar. Agriculture will no doubt remain what it has been, one of America's export success stories." ~Article by Lisa Wallerstein,
PIERS Marketing Director Success Story Update: Promotion of Pecans in Denmark In the summer of 2003, SUSTA's annual chef training program at the John Folse Culinary Institute at Nicholls State University in Thibodaux, Louisiana, included a group of nine chefs from the UK and three chefs from Denmark. With the advent of SUSTA's Scandinavian pecan promotion activity, the three Danish chefs were recruited to help promote southern U.S. products in their home country. The Danish chefs included Helle Brønnum Carlsen, a prominent Danish cookbook author and contributing writer to Denmark's premier women's magazine, Familie Journalen; Jeff Scott Foster, a top manager at the famous Meyer's Madhaus; and Keld Johnsen, one of Denmark's finest chefs and owner of The Diplomat Restaurant at the American Embassy. In their SUSTA-sponsored culinary training, the professional chefs gained exposure to southern U.S. ingredients, culinary techniques, and recipes. Perhaps more importantly, they also learned first-hand to cook delicious southern dishes with pecans. This knowledge and skill base enabled them to work with southern pecans and to tailor dishes to the tastes of Denmark's population. Chef Helle Brønnum Carlsen prepared pecan recipes for readers of Familie Journalen and various other magazines including pecan pie, rhubarb cake, and pecan salad. Chef Jeff Scott Foster has organized a Cajun/Creole-week featuring pecans in 20 restaurants. Many of the recipes were introduced to the chefs during their SUSTA training. In July 2004, Jeff will host a chef competition during the Copenhagen Jazz Festival. Keld Johnsen has also actively promoted pecans by organizing various dinners with menus featuring pecans. One dinner prepared for 90 guests featured an entire Southern States menu that included pomfret with glazed pecans. At another dinner, he prepared a Louisiana Creole menu of seafood gumbo, pecan glazed fish, American undercut of sirloin with Cajun seasoning, and white chocolate cake. Keld continues to feature Cajun dinners on the menu of his restaurant. Keld's website www.restaurantdiplomat.dk features many of his southern dishes. Additionally, Jeff and Keld produced a 5 page article in Smag & Behag, a professional magazine, with Cajun/Creole recipes. The public relations agency hired for SUSTA's Scandinavian pecan promotion, Jøp, Ove & Myrthu, has arranged with the Association of Canteenleaders to contribute an article in their magazine about food from the southern states, including pecans. Canteens are self service restaurants within a building where a company operates. The company's employees are the canteen's only patrons. The magazine has a circulation of 5,336 issues around Denmark. -Article by Troy Rosamond,
One of SUSTA's major performance measures is the number of foreign buyer/U.S. seller introductions each year. These introductions translate into sales of U.S. products abroad, figures provided by the companies we assist. Throughout the year SUSTA hosts activities that are aimed at getting our southern companies in contact with foreign buyers. These activities are part of a comprehensive program that effectively provides a continued presence in foreign markets. Among these 55 to 60 activities are reverse trade missions, trade missions, trade shows, training courses, culinary theatres, market development and research, and promotions. SUSTA has made extensive use of the Emerging Markets Programs (EMP) funded through the USDA Foreign Agriculture Service (FAS). During the past 4 years we have conducted eight (8) EMP that have included activities, workshops, buyers missions, product sourcing for foreign buyers, and export readiness training (for over 130 southern companies). The strategy is to establish relationships and accumulate information for our southern companies to enter and prosper in the emerging markets of the world. The future of growing foreign sales lies not in the mature markets of Europe, but in the expanding emerging markets in South and Central America, Mexico, Asia and the Indian sub-continent. This year we have seven EMP in progress including initiatives in Central & South America, India and Thailand & Malaysia. We have recently applied for additional funding for additional export readiness training, and another retail and food service initiative into Sri Lanka. An excellent article on emerging markets is contained in this issue of Insight. Research, awareness, relationships, and taking advantages of opportunities (like SUSTA's programs) all play an important role in a successful venue into these markets. SUSTA offers diverse programs and efforts in our drive to provide varied and effective avenues to enable southern companies to enter and prosper in foreign markets. We hope that you will let SUSTA help your company meet face-to-face and form successful business relationships with serious importers. Your success in exporting U.S. products translates into success for your company, SUSTA, and the entire U.S.
SUSTA Activities Working for You In addition to the events usually listed in this section of INsight and the events posted online at www.susta.org/events_2005.html, SUSTA works to promote U.S. products overseas through a variety of initiatives. This year, the initiatives are focused on the areas listed below. Under the initiatives, we are producing market research, exploring regulation issues, and discovering the best way to promote U.S. products. SUSTA's goal is to identify the best opportunities for all the southern U.S. products. As we discover opportunities, we will pass this information on to you via Email Updates, trade leads, and event announcements. You will soon notice important changes to SUSTA's website. U.S. suppliers, as well as foreign buyers, will be able to create and update their online company profile. By gathering information about your products and markets, we can customize the information we provide you with regarding events and trade leads. If you would like additional information about any of these initiatives, please contact Generic Program Director Dinorah Cobos at dinorah@susta.org. We will continue to provide information about these and other initiatives on our website, in future issues of our newsletter, and in our Email Updates. Please register for SUSTA's Email Updates at by visiting the homepage of our website and clicking on the link that says, "Sign-up For E-News." India Independence Day SUSTA will continue to work with the Nilgiris supermarket chain in southern India to identify Indian consumer preferences and to further develop SUSTA's strategy to enter the Indian retail market with U.S. products. Nilgiris is compromised of 8 family owned outlets and more than 20 franchisee stores. The retailer is a pioneer in organized grocery stores in India. SUSTA will host a follow-up event to the in-store promotion with Nilgiris that was held last October. This activity will take place during the U.S. Independence Day, July 4, and last until India's Independence Day, August 30. The promotion will target 26 stores across four southern states in India. The target audience for the promotion is middle- to upper-middle-class consumers in Bangalore, Chennai, Hyderabad, and Coimbatore. We will promote the following products: snack foods, pet food, sandwich spreads, baby food, juices, peanut butter, tomato sauces, canned tomatoes, canned vegetables, cake mixes, canister snacks, etc. European Seafood/Aquaculture Initiative The European Seafood/Aquaculture Initiative will be a multi-year, multi-faceted promotion. Under this initiative, we have utilized an in-country consultant to research, structure and implement the multi-year initiative based on their knowledge of the market and of methods to enter and sell within the market. Under this initiative, SUSTA assisted companies that exhibited at ESE seafood show by matching them with European buyers and distributors. SUSTA has plans to bring a seafood buyers mission from Europe to New Orleans for the LA Restaurant Show this summer. We are also planning a mission to the Rimini Seafood show in Italy in February 2005. Currently, we are identifying viable seafood companies with species in demand in Italy to match with buyers. SUSTA also has future plans to utilize advertising, in-store promotions, in-store food tastings, cooking demonstrations, television appearances, trade show participation, seminars, training in food preparation, POS materials, visits to key retailers/wholesalers/importers, product education, logo development, etc. to further the acceptance of U.S. seafood into new markets. The initiative also includes U.S.-based assistance for SUSTA to match U.S. suppliers with foreign retailers to combat the biggest shortcoming of past activities, the follow-through with the U.S. suppliers. This effort will ensure that connections are made between foreign contacts from our promotions and the U.S. suppliers. European Regional Foods Initiative Under this initiative, SUSTA will utilize research to determine the best overseas opportunities for southern U.S. agricultural products. In addition, we will identify the most effective marketing strategies to reach foreign buyers and consumers that may include advertising, in-store promotions and tastings, cooking demonstrations, television appearances, trade show participation, seminars, training in food preparation, POS materials, visits to key retailers, product education, logo development, etc. Marketing activities will occur throughout our fiscal year, and each year will build on the efforts of the previous years. For the European Regional Foods Initiative, SUSTA will also utilize our databases to match U.S. suppliers with European buyers based on the product of interest. Central America Initiative The first stage of this initiative is to produce feasibility studies in 5 Central American markets. General research of this region already exists through SUSTA's Emerging Markets program. However, feasibility studies will identify specific information on the competitive position of U.S. products in the market, tariff structures, transportation costs, and the viability of market entry. Initially, we will work Central American buyers to determine their product interests and match them with appropriate U.S. suppliers. Following this, we will develop a comprehensive marketing program to service these buyers. In the second stage of this initiative, we will work with an in-country marketing firm with offices in the targeted countries to implement our marketing strategy for the region, assist foreign buyers in locating U.S. suppliers, and oversee the increase in U.S. export sales to the region. Foodservice Promotion The Florida Department of Agriculture in conjunction with SUSTA will conduct the first activity in this series for Central America. The team will host foodservice buyers, importers and distributors at a centrally located facility in the capital city of each respective country. The Department will arrange meeting space, where southern U.S. products will be displayed. Discussion will address import regulations and terms of sales. Local FAS personnel will provide information regarding tariffs, shipping routes, and regulations. Companies from the SUSTA region are invited to provide products for display and preparation by a chef hired for the promotion. This activity addresses constraints associated with current buying trends and high costs associated with the tariffs on U.S. products. Taiwan Fish and Seafood Promotion The Southern United States Trade Association (SUSTA) invites you to participate in a U.S. Seafood Mission to Taipei and Kaohsiung, Taiwan. The event will take place in September and will feature a tabletop showcase of U.S. seafood products, one-on-one buyer meetings, and tours of local seafood processing facilities. As part of the activity, the Taipei Agricultural Trade Office (ATO) will sponsor a menu promotion in three five-star hotels in Taipei, Kaohsiung, and Taichung featuring a SUSTA chef that will do cooking demonstrations and create a menu using U.S. products. U.S. seafood companies are encouraged to send products to be featured in the promotion. The demand for seafood to Taiwan continues to be a unique and growing niche. The United States supplied nearly US$30 million of seafood products to Taiwan last year. The import of fish alone was US$137 million. Seafood continues to be an important part of the diet in Taiwan, with the demand for quality seafood growing due to increasing income and dietary trends. This mission offers a unique opportunity to jump aboard and increase your export sales of seafood. To participate, contact Dinorah Cobos at dinorah@susta.org. If your products are not promoted in any of the projects listed above, visit www.susta.org/events_2005.html to find out what other SUSTA promotions are coming up.
Generic Activity Success: Boston Seafood Show Reverse Trade Mission March 14 - 16, 2004, was the International Boston Seafood Show (IBSS), featuring three floors of over 700 exhibiting companies, crowded aisles, educational conferences, and special events. Steady business was conducted on the show floor and in the Key Buyer Lounge. Seafood products, equipment, services and packaging suppliers were all part of the exhibition. Annual seafood purchases per company attending were roughly over $2 million from this show. The IBSS is one of the most efficient ways to make contact with existing customers, launch new products, meet new buyers, evaluate trends, and discover what is new in seafood technology. This show also proved to be a success for the SUSTA reverse trade mission (RTM) that attended the show. Seven Korean buyers were part of the RTM, and their biggest catch was reeling in $5.85 million worth of seafood. One million three hundred thousand dollars worth of sales are anticipated from the stop in Virginia that took place before the delegation headed to the show. This RTM is a follow-up to SUSTA's participation with a pavilion at the Busan Seafood Expo held in Korea on November 27-30, 2003, that was also successful in attracting interest from Korean buyers. SUSTA is indeed throwing the net out and catching big sales by promoting southern seafood.
Generic Activity Update: Continued Success in Indian Market The numbers are in for the Nilgiris American Food Festival, held October 17 until November 30, 2003, in four states throughout Southern India, including Karnataka, Tamil Nadu, Andhra Pradesh and Maharashtra. A total of 21 franchise operations and 6 individually owned branches of Nilgiris grocery stores were decorated red, white and blue for the promotion. Four container load shipments with over 217 U.S. products were shipped to India for the promotion. Over $195,000 in sales were generated during the month- long festival. During the month of October, customers could find Kettle Chips and a host of other American products not previously seen in India. Other favorites included Skippy Peanut Butter, Ocean Spray Cranberry Juice, and Seneca Vegetables. The success of the promotion is the catalyst for a follow-up activity that will take place in July, celebrating U.S. Independence Day and India's Independence Day. If the October in-store celebration is an indication of what's to come, the upcoming Fourth of July in-store event should also produce sales. SUSTA will also further the efforts of U.S. companies trying to break into India by participating in AmFest, a festival promoting America. AmFest will take place in the cosmopolitan city of Mumbai (Bombay) this summer. Additionally, SUSTA has proposed to hire an ingredient/label consultant to assist companies in navigating through India's regulations on U.S. products.
News for Branded Participants: Sixty-Day Expense
Claim Deadline Did you recently attend an event or complete an activity for which you'd like Branded Reimbursement? Remember to start gathering your documentation now. SUSTA is implementing a sixty-day deadline for Branded Expense Claims. Expense claims received after sixty days will not be reviewed or reimbursed. According to the FY-2003 contract, reimbursement claims must be submitted within 60 calendar days of when the activity took place. Regardless of your choice of marketing activity, SUSTA must receive a copy of your: 1) Invoice, 2) Proof of Payment, and 3) Proof of Performance within 60 days. (Visit www.susta.org/services/map_reimbursement.html to find out what qualifies as each of the elements listed above.) Ensure that you'll be reimbursed by submitting your claims as soon as possible. There are several benefits to this policy: 1. Improved Cash Flow: You'll receive reimbursement for your marketing expenses sooner. 2. Easier Claim Documentation Compilation: By gathering supporting documents soon after your activity, the event and its corresponding expenses will be fresh in your mind. It is often easier to obtain further documentation, if necessary, within weeks rather than months after the activity occurred. 3. Quicker Turnaround: When the Branded Program Coordinators, Deneen and Nicole, receive claims throughout the fiscal year rather than all at one time, turnaround time is reduced and your performance assessment is more detailed. In case further documentation is necessary, the Branded Department can spend more time clarifying program requirements. 4. More Efficient Reallocation: With timely claims, SUSTA can determine which companies are not utilizing their allocation. Some companies may elect to use a small portion of their allocation while other companies may exceed their allocation. The sooner SUSTA becomes aware of the actual reimbursement needs of our companies, the sooner we can help companies figure out additional ways to utilize their allocated money. We can also reallocate funds to other companies that can use the additional resources. Remember: Expense claims will not be honored if they are submitted after 60 calendar days from the conclusion of the activity. ~By Nicole L. Schauer
MAP Branded Success: Overseas Demand for Pet Products In the past 3 years, Nutri-Vet has developed a network of 10 international distributors with the assistance of K&K Pet Products Export, an export management company, and SUSTA. SUSTA's Branded Funding has allowed Nutri-Vet to access opportunities like exhibiting at APPMA's (American Pet Products Manufacture's Association) annual trade show. Nutri-Vet exhibited at APPMA for a second year in a row during March; last year Nutri-Vet established 2 international distributors as a result of the show. This year's show, held in New Orleans on March 17-19, 2004, brought more than 600 exhibitors and professional pet product buyers from more than 40 countries. K&K and Nutri-Vet were able to complement the show this year by participating in SUSTA's reverse trade mission for pet food buyers. K&K Pet Products Export and Nutri-Vet are well aware that over 90% of the world market is outside of the U.S., and plan to continue pursuing these markets with the assistance of SUSTA's Branded program. Learn more about SUSTA's export assistance and 50% reimbursement programs online at www.susta.org. Program.Be incorporated in the United States
-Have a branded product sourced from the region or an entity within the region Applications for fiscal year 2003 will be available online in May 2004. Sign up for SUSTA's email update to receive a reminder.
This May be Your Last Issue of INsight... Unless you create a company profile in SUSTA's new online database, you will no longer receive important event information or trade leads from foreign buyers via SUSTA's resources. Renew your INsight subscription and sign up for INsight Online and continue to receive global news, perspectives & updates for the international agribusiness trade. To create a company profile and to renew your subscription, visit www.susta.org after May 31, 2004 to access our new online database. If you do not create a profile, you will be removed from our database. MAP Branded participants will be retained but will be asked to update their profile after they receive a password sent via email from the SUSTA office. Benefits of an Online Profile:
-Manage Your Listing in SUSTA's Online Directory of Exporters If you would like more information about these new tools, contact SUSTA's Marketing Director Shana Relle at (504) 568-5986.
Apply For SUSTA's MAP Branded Program... Receive up to 50% reimbursement for your eligible international marketing expenses by utilizing SUSTA's Branded program. ACCEPTING APPLICATIONS We advise that you have the following materials set aside to help you complete the application: D&B report, NAICS code, commodity aggregate codes, & a list of countries for your marketing plan (and a list of approved domestic trade shows, if applicable).
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