SUSTA ~ September/October 2009

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INsight
SUSTA's INsight newsletter is published every two months.

September/October 2009 INsight excerpts

Brazil Expands Retail Sector
Canadian Buyers "Go South!" for Fresh Produce
Has SUSTA Helped You Go International?
Cut Costs in 2010 with SUSTA
MAP Branded Helps North Carolina Company Take on Europe
Growing Pet Ownership in Japan Spurs Increase in Pet Food Sales

July/August 2009 INsight excerpts

May/June 2009 INsight excerpts

Brazil Expands Retail Sector

Although Brazil is one of the major producers of agricultural products in the world market, the nation that occupies well over half of the South American continent has a growing consumer interest in imported products. The country, which boasts the largest population in Latin America, imported a total of $173 billion worth of goods and services in 2008, according to Euromonitor International. With a population of 192 million people, the buying trends of the nation are undergoing vast changes. The median age of the population continues to rise, and demand for foreign products continues to increase.

Because of higher disposable incomes among the consumer population, spending habits in the Brazilian market are becoming more sophisticated, with an increased interest in U.S. products. Convenience foods and functional foods are two sectors that stand to benefit from this trend, and growth in suburban and urban supermarkets is expected as a result. Euromonitor International estimates that spending on food and non-alcoholic beverages comprised nearly 25% of Brazil's consumer expenditures in 2007, and high demand for convenience foods has been continually growing since that time. In recent years, spending on soft drinks, snacks and other convenient ready-to-eat items has steadily increased. According to the USDA's Foreign Agricultural Service, in 2007, revenues in the retail sector totaled $69.9 billion, with retail growing at a higher rate than the GDP.

Currently, Brazil's top 300 retailers are increasing the size of their grocery outlets. Because supermarket retailers are seeking a diverse selection of imported food and beverage products, Brazilian importers are interested in importing a variety of specialty products, ranging from perishable items to gourmet items carrying a shelf life of up to six months. Since buyers prefer to test small quantities of a new product on the market before purchasing mass quantities, U.S suppliers can accommodate importers by shipping containers filled with a mix of products. This offers a particularly attractive opportunity for companies that manufacture a wide range of items, such as nuts, processed fruits and vegetables, dairy products, marinades, sauces, breakfast cereals and other value-added foods.

Visit www.susta.org/events to learn about upcoming SUSTA activities in Brazil and elsewhere in South America. More information on the Brazilian market can be found on the Foreign Agricultural Service site at www.fas.usda.gov under Market and Trade Data.

~By Lia Threat, SUSTA Intern

Canadian Buyers "Go South!" for Fresh Produce

In March 2009, a reverse trade mission brought Canadian importers to Florida as part of SUSTA's Go South! initiative and provided an eye-opening experience for both buyers and growers. The mission allowed Canadian buyers (who otherwise may be hesitant to purchase products from an unknown source) the chance to meet the suppliers face-to-face, to see how operations are run and to see how much the growers are able to produce.

One major Canadian retailer, Sobeys, met with at least 10 Florida producers and directly following the reverse trade mission procured a total of $55,000 worth of celery and green beans from two of the companies visited during the tour. He expects to procure an additional $90,000 in fresh produce from Florida in the next 12 months.

Similarly, one of the participating Canadian wholesalers, Tomato King, expressed interest in purchasing green beans, celery, zucchini, yellow squash and bell peppers from five of the growers. Tomato King has purchased $5,000 worth of produce to date as a result of the reverse trade mission, and a company representative forecasts they will purchase another $1.5 million over the next year. "The trade mission actually exceeded my expectations," he remarked. "I was able to make a better connection with existing customers, as well as growers that we look forward doing business with."

Learn more about the Go South! program at www.gosouthfresh.com, or contact your state's Department of Agriculture to find out how you can start promoting fresh fruits and vegetables in Canada with SUSTA's help.

Has SUSTA Helped You Go International?

If your company has made sales, found distributors, or introduced products to a new market with our help, let us know! We are always looking for success stories from Generic event participants and companies in the MAP Branded program. These stories are regularly shared with the Foreign Agricultural Service in Washington to gain support for our programs. We also publish stories on our website and in our INsight newsletter with company approval. Email marybeth@susta.org with your company's story, or to request a copy of our success story information form. We look forward to helping your company find more success globally in the future!

Cut Costs in 2010 with SUSTA

Sure, budgets are still tight right now, but before you decide to cut back on your international marketing efforts, remember that SUSTA programs and services are available to help your company's economic recovery. Our Generic events offer low-cost, low-risk options to bring your company's products to overseas markets, and MAP Branded matching funds allow you to cut the costs of your own international promotions with reimbursement for booth fees, travel to trade shows, freight for samples, and more!

Request your copy of our 2010 Events calendar at www.susta.org/2010events.html, or view the calendar online at www.susta.org/services/gip.html. And don't forget, MAP Branded funds for 2010 are available - submit a Pre-Qualification Form for your company now, and rest assured that you can do more marketing (and still save money) in 2010!

MAP Branded Helps North Carolina Company Take on Europe

Before applying for Branded funds, Ford's Gourmet Foods of North Carolina was already exporting to the United Kingdom and New Zealand. However, the company knew that with MAP Branded funds, they could introduce their products to an even broader international audience.

Ford's used the Branded funds to supplement their budget for advertising and exhibiting at overseas trade shows. Combined with SUSTA Generic promotions at shows like IFE London, SIAL Paris, ANUGA, and Horecava, Ford's was able to use MAP Branded funds to extend their reach into markets where they were not selling and establish new distributors in Germany, Iceland, Sweden, Denmark, the Netherlands, and Norway.

"We truly believe that the financial support to attend shows and expand our advertising efforts from MAP Branded played an important role in our growth overseas," says Patrick Ford, Vice President of International Marketing for Ford's Gourmet Foods. "In a short period of time, our Bone Suckin' Sauces, Wine Nuts and other products went from fairly well known to internationally acclaimed in more than 42 countries around the world."

Ford's has also used advertising to increase sales to the United Kingdom, Denmark and Germany. Print ads in foreign newspapers and magazines, as well as an advertisement on a U.K. soccer field, has grown the Ford's brand in Europe. In 2006, the company's sales to Germany were $14,264. The next year, sales grew to $24,284, and in 2008, that amount nearly doubled to $42,824.

Adds Mr. Ford, "People need to understand that this resource is out there and available to them, and that SUSTA and the MAP Branded program are critical to being successful abroad. Their partnership to us is invaluable."

Growing Pet Ownership in Japan Spurs Increase in Pet Food Sales

Pet ownership in Japan is on the rise, with small dogs being the pet of choice. The growth in pet purchases is directly linked with declining birthrates, an aging population, and an increasing number of single-person households. In 2008, the number of dogs and cats kept as pets in the country reached a record high of 26.8 million. For U.S. exporters of pet products, this trend signals that it may be the perfect time to enter the Japanese pet food market, which was valued at $2.15 billion in the year 2007.

Because a large percentage of these animals are kept as indoor pets, food that caters to an indoor pet population is likely to be received well in the market. According to the Pet Food Association Japan, 70% of dogs and over 78% of cats are kept indoors, so pets are less likely to become ill or injured, and consequently live longer lives. This factor alone makes the pet food market in Japan more attractive for exporters, since it indicates the demand for pet products will remain stable.

The United States is currently one of the top exporters of pet food to Japan, and along with Australia and Thailand provides more than 80% of the country's total pet food import volume. The Japanese consumer has become more likely to prefer domestic products over imports as a result of the Chinese pet food melamine contamination in 2007, but imports remain an important part of the pet food industry, comprising more than half of the market. In spite of imported pet food health scares, the U.S. is still one of the top exporters to Japan due to the fact that consumers regard U.S. products as being of higher quality and grade. Premium pet food accounts for 20% to 30% of the market, and pet owners' food of choice for both dogs and cats is dry food.

To learn more about Japan's pet food market and regulations, visit the Foreign Agricultural Service website at www.fas.usda.gov and search Attaché Reports under Market and Trade Data. Look for events in Japan and other markets on our 2010 Events Calendar and at www.susta.org/events.

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