Among the best prospects for food ingredients are cereals (wheat, rice, yellow corn and soybean meal), and animal and vegetable fats (soybean oil, palm oil, bovine, sheep and goat fats).
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/21/2011 GAIN Report Number: Nicaragua Food Processing & Ingredients Report Approved By: Kelly Stange, Agricultural Attaché Prepared By: Jimmy Bolaños, Agricultural Specialist Report Highlights: In 2010, the food industry sales in Nicaragua accounted for 30 percent of the GDP. Most of the raw materials used in the industry are sourced locally from agriculture and fishery based companies. The food industry in Nicaragua is not as developed as other Central American countries, such as Guatemala, Salvador and Costa Rica. That is why most of the finished food products found in the supermarkets are imported from other Central American countries and the United States. Post: Commodities: Managua Executive Summary: In 2010, the food industry sales in Nicaragua accounted for 30 percent of the GDP. Most of the raw materials used in the industry are sourced locally from agriculture and fishery based companies. The food industry in Nicaragua is not as developed as other Central American countries, such as Guatemala, Salvador and Costa Rica. That is why most of the finished food products found in the supermarkets are imported from other Central American countries and the United States. Among the best prospects for food ingredients are cereals (wheat, rice, yellow corn and soybean meal), and animal and vegetable fats (soybean oil, palm oil, bovine, sheep and goat fats). SECTION I: Market Summary In 2010, the food industry sales in Nicaragua accounted for 30 percent of the Gross Domestic Product. Most of the raw materials used in the industry are sourced locally from agriculture and fishery based companies. In 2010, the Central Bank of Nicaragua reported a U$ 1,985 million in sales coming from the food industry. Please refer to table below. Manufacturing Sector Output for Selected Industries (In U.S. millions) Industries 2008 2009 2010 Meat and Fish 655.1 699.8 666.5 Sugar 186.4 196.7 187.3 Dairy Products 293.2 312 297.2 Other foods of Industrial Sources 594.6 564.9 538 Beverages 307.3 311.4 296.6 Total 2036.6 2084.8 1,985.6 Source: Central Bank. The food industry in Nicaragua is not as developed as other Central American Countries such as Guatemala, Salvador and Costa Rica. Most of the food industries only involved in primary processing activities. Most of the finished food products found in Nicaraguan supermarkets are imported from other Central American countries and the United States. In 2010, the Ministry of Trade and Commerce of Nicaragua (MIFIC) reported a U$ 534.8 million value on processed food imports. At the same time, Nicaragua imports a significant amount of bulk products from the United States, primarily wheat, yellow corn, soybean meal and soybean oil. Total U.S. Agricultural Exports to Nicaragua by Category Market Trends Since the signing of the Dominican Republic Central American Free Trade Agreement (DR-CAFTA), many new supermarkets have been opened in the country - especially with the entrance of Wal-Mart in the Central American Region. This has strengthened the formal market channel and offers great opportunities to farmers and local industries in establishing formal business relations with supermarket chains. The supermarket expansion has also brought new products to the market and changes in the consumer behavior. Many people who used to buy in local markets now buy in the supermarkets. The DR-CAFTA free trade agreement has also created a wide range opportunities for large food industries, especially in the export market. In 2010, Nicaraguan exports reached over 1.9 billion, a 33 percent increase compared to 2009. From all Nicaraguan exports, 57 percent represent agricultural products (APEN, 2011). In terms of the Nicaraguan market behavior, Nicaragua is still a price driven market. In this context, the food industry in Nicaragua strives for outsourcing good quality ingredients at the most competitive price. It is worth mentioning that Nicaragua is the poorest country in Central America and second poorest in the Western Hemisphere. Overall GDP reached $ 6.3 billion in 2010. Advantages Challenge Nicaragua Consumers trust Some U.S. food/ingredients are more expensive than Central America’s. the quality and The shipping costs of the United States are higher than most Central wholesomeness of U.S. food American countries. In addition to that, Nicaragua does not have a port in and ingredients. the Atlantic Coast which could significantly reduce these costs. U.S. grains are very Yellow corn and soy beans in the United States are Genetically Modified competitive in terms of price (GM). According to Nicaraguan regulations, it is forbidden to import GM and quality. products for human consumption. Yellow corn and soybean meal imports are only used for animal feeds. This limits the usage of grains by Nicaraguan industries. U.S. food products have Food product labels are printed in English. In Nicaragua most of the excellent marketing population just speaks Spanish. presentation. Section II: Road Map for Market Entry Entry Strategy The Nicaraguan market is price driven, so the food ingredients offered must be competitive in price and quality. The best distribution channel to enter the food industry market in Nicaragua depends on the product to be supplied. Food ingredients consumed by large industries are generally imported directly from U.S. suppliers. For food ingredients utlized by small industries, e.g., bakeries and restaurants, those are distributed through existing wholesalers. Please see below key distribution channels. Market Structure In Nicaragua there are mainly two distribution channels for the food ingredient sector: In the first one, the product comes from the exporter directly to the food industry. In the second one, the product comes from exporters to wholesalers, and then to food industries. The second one is very common in the food service businesses. Regarding domestic suppliers, most of them are small and in most of the cases they try to reach the final retailers without passing through wholesalers. Please refer to Key Channels. Key Channels Section III: Competition Overall, U.S. food products are very competitive as the economies of scale for food processing in the United States are larger than Central American Countries. However, due to the distance, U.S. shipping costs are higher than most of the countries in the region. And in the case of Nicaragua, the lack of port in the Atlantic Coast contributes to the higher shipping costs of U.S. products. The United States has a leading market share in supplying the following products to the Nicaraguan market: cereals (wheat, rice, yellow corn and soybean meal), animal, vegetable fats and oils (soybean oil), residues, wastes of food industry, animal fodder (Soybean oil and Cake and animal feed preparations), edible fruits (apples and grapes), cocoa and cocoa preparations and meat and edible meat offal. Products supplied to Nicaragua that the United States has low market shares include: sauces and mixed condiments, bread and biscuits, malt extracts, breakfast cereals, beverages and seafood products. The Central American countries have the highest market share in supplying these products except seafood, which comes from Vietnam and China. Please refer to tables A and B to see a detailed list of the Nicaraguan food imports, import growth and market shares of the supplying countries. Food Sector Growth Among the industries which have experience substantial growths in the last years are: Oil Refining Industry In 2010, Nicaraguan soy bean oil imports reached 38,405 tons, a 75 percent increased compared to 2006. Palm oil imports have also increased during the last years, in 2010 Nicaraguan imports reached 30,421 tons, compared to 2,283 tons in 2006. Beverage Sector Beverage imports have increased dramatically during the last years. In 2010, non-alcoholic beverages (excluding water, fruit and vegetable juices) reached 110,874 tons, compared to 9,005 tons in 2006. Most of the Nicaraguan beverage imports come from the Central American region. Grain processing Sector Nicaragua is a net importer of rice, wheat, yellow corn and soybean meal from the U.S. market. In 2010, rice imports reached 124,754 tons, a 36 percent increase compared to 2006. Wheat, yellow corn and soybean meal imports have also experience a moderate growth. Please refer to tables below to see Nicaraguan food imports growth by product label and market shares of the main supplying countries. Table A: Nicaraguan Food Imports by Product Label by Value in U.S. Dollars Percentage Increase (2006- Product Label 2006 2007 2008 2009 2010 2010) Animal, vegetable fats and oils, cleavage products, etc 41,548 89,485 113,328 86,107 113,779 174% Cereals 68,767 121,705 153,129 113,856 113,016 64% Cereal, flour, starch, milk preparations and products 29,975 71,619 73,311 75,327 82,015 174% Miscellaneous Edible preparations 35,342 64,592 70,582 76,984 77,834 120% Residues, wastes of food industry, animal fodder 20,942 33,302 44,557 42,121 48,628 132% Beverages, spirits and vinegar 12,264 31,178 38,075 43,125 47,715 289% Milling products, malt, starches, inulin, wheat gluten 18,008 24,414 28,358 34,639 31,871 77% Dairy products, eggs, honey, edible animal product nes 17,604 24,252 26,425 26,363 31,504 79% Vegetable, fruit, nut, etc food preparations 15,053 20,428 22,573 24,692 28,865 92% Sugars and Sugar confectionery 8,930 15,741 18,594 16,903 19,857 122% Edible vegetables and certain roots and tubers 8,613 11,427 12,726 10,987 17,842 107% Meat, fish and seafood food preparations nes 15,371 14,668 15,797 16,406 17,675 15% Edible fruit, nuts, peel of citrus fruit, melons 4,550 5,410 4,273 6,525 6,671 47% Cocoa and cocoa 4,718 5,665 5,764 5,479 6,577 39% preparations Albuminoids, modified starches, glues, enzymes 3,849 4,384 5,299 4,965 6,246 62% Meat and edible meat offal 2,779 2,882 3,788 4,776 5,583 101% Coffee, tea, mate and spices 4,851 4,712 3,023 4,679 4,238 -13% Oil seed, oleagic fruits, grain, seed, fruit, etc, nes 4,048 4,060 5,182 3,694 4,199 4% Fish, crustaceans, molluscs, aquatic invertebrates nes 279 574 1070 701 790 183% Source: International Trade Center. Table B: Supplying markets for food products imported by Nicaragua Imported Value In Code Product Label 2010 Supplying market United States 46% Animal, vegetable fats and oils, cleavage products, Costa Rica 19% 15 etc 113,779 Others 35% United States 98% 10 Cereals 113,016 others 2% Mexico 26% Cereal, flour, starch, milk preparations and Costa Rica 20% 19 products 82,015 Others 29% Costa Rica 45% United States 16% 21 Miscellaneous Edible preparations 77,834 Others 39% United States 63% Costa Rica 25% 94 Residues, wastes of food industry, animal fodder 48,628 Others 12% Costa Rica 42% Guatemala 23% 22 Beverages, spirits and vinegar 47,715 Others 65% Costa Rica 38% Milling products, malt, starches, inulin, wheat El Salvador 19% 11 gluten 31,871 Others 43% Costa Rica 34% United States 29 % 4 Dairy products, eggs, honey, edible animal product 31,504 Others 63% Honduras 27% United States 24% 20 Vegetable, fruit, nut, etc food preparations 28,865 Others 49% Guatemala 26% El Salvador 25% 17 Sugars and Sugar confectionery 19,857 Others 49% 7 Edible vegetables and certain roots and tubers 17,842 Netherlands 24% United States 23% Others 53% Costa Rica 58% Guatemala 14% 16 Meat, fish and seafood food preparations 17,675 Others 28% United States 51% Chile 20% 8 Edible fruit, nuts, peel of citrus fruit, melons 6,671 Others 29 % United States 27% Costa Rica 24% 18 Cocoa and cocoa preparations 6,577 Others 49% Guatemala 22 % Costa Rica 20% 35 Albuminoids, modified starches, glues, enzymes 6,246 Others 58% United States 86% Honduras 9% 2 Meat and edible meat offal 5,583 Others 95 % Vietnam 49% Sri Lanka 17% 9 Coffee, tea, mate and spices 4,238 Others 66% Brazil 36% United States 28% 12 Oil seed, oleagic fruits, grain, seed, fruit, etc, 4,199 Others 64% Vietnam 28% China 22% 3 Fish, crustaceans, mollusks, aquatic invertebrates 790 Others 50% Source: International Trade Center. Food Ingredients Best Prospects The best prospects for Nicaragua were based on the growth of food imports growth during the last years. Cereals (Wheat, Rice, Yellow Corn and Soybean Meal.) Imported value in 2010 reached U$ 113.01 million. The United States is the leading supplier. Animal and vegetable fats (Soya beans, palm oil and bovine, sheep and goat fats.) Imported value in 2010 reached U$ 113, 01 million. The United States is the leading supplier. Miscellaneous edible preparations (Food preparations; sauces, mixed condiments, mixed seasonings.) Imported value in 2010 reached to U$ 77.8 million. Central American countries have the largest market share in supplying these products. Residues, wastes of food industry, animal fodder (Soybean oil and Cake and animal feed preparations.) Imported value in 2010 reached U$ 48.8 million. The United States is the leading supplier. Beverages (non-alcoholic beverages, excluding water, fruit or vegetable juices). In 2010, beverage imports reached U$ 47.7 million. Central American Countries have the largest market share in supplying these products. Wide range of ready to eat food products. (Bread, biscuits, wafers, cakes, and pastries, breakfast cereals, snacks, soups and confectionery products.) Just the imported value of bread, biscuits, wafers, cakes and pastries reached U$ 37.1 million in 2010. Central American Countries have the largest market share in supplying these products. Please refer to Appendix A to see a list of company profiles according to the different food industries in Nicaragua. Appendix A: Company Profiles Read Meat and Poultry Meat List of Companies Types of Products Processed Industria Comercial San Martin S.A. Beef, bait, bone meal Matadero Central S.A Beef, bait, bone meal Nuevo Carnic S.A. Beef, bait, bone meal Novaterra S.A. Beef cuts Tip Top Industrial S.A. Poultry meat Avicola La Estrella S.A. Poultry meat Industrias Delmor, S.A. Chicken and pork sausages Carnes Industrializadas S.A. Chicken and pork sausages Delicarnes S.A. Sausages and hams Empresa de Alimentos Bavaria S.A Sausages and hams Industrias Cárnicas Integradas De Nicaragua, S.A. Vacuum packed boneless beef Fish and Seafood Products List of Companies Types of Products Processed SHALMAN SEAFOODS Frozen Shrimp Camaronera de Nicaragua (CAMANICA) Frozen Shrimp Nica-Fish Frozen Fish, Shrimp and Lobster Expomar S.A Frozen Fish, Shrimp and Lobster Camarones del Pacifico (CAMPSA) Frozen Shrimp Central American Fisheries Fish, lobster and shrimp Corea de Nicaragua Camaronera S.A Frozen Shrimp Gulf King Seafoods Frozen Shrimp INTERNICA, S.A Shrimp and Lobster PAN PACIFIC FISHERIES DE NICARAGUA Frozen Shrimp PACIFIC SEAFOODS DE NICARAGUA Frozen Shrimp Dairy Products List of Companies Types of Products Processed Compañia Centroamericana de Productos Lacteos (PROLACASA) Pasteurized milk, cheese Lacteos Centroamericanos S.A (CENTROLAC) High temperature short time milk Parmalat Centroamerica S.A. Pasteurized Milk, cheese, orange juice. COOPERATIVA SAN FRANCISCO DE ASIS (CAMOAPAN) Cheese, pasteurized milk COOPROLECHE Pasteurized milk and cheese Oilseed Products List of Companies Types of Products Processed Aceitera Real Peanut Oil, Soybean Oil & peanut flour. Fraccionadora de Occidente S.A. (Fracocsa) Soybean Oil Agroindustrial de Oleaginosas (Agrosa) Soybean Oil E. Chamorro IND Soybean Oil Baked Goods List of Companies Types of Products Processed Academia Nicaragüense de la Industria de la Panificación S.A. (ANIPASA) Bread & Pastry Aromas y Sabores SMAVI S.A. Bread Flavorings Bimabel de Nicragua S.A. (BIMBO) Bread & Pastry Cooperativa de Panificadores Marcos García Escobar Bread & Pastry Delikatessen la Granja Bread & Pastry Industrial Don Pan S.A. Bread Panaderia Corzon de Oro Bread & Pastry Panaderia El Aguila Bread Panaderia el Esfuerzo Bread Panaderia La Baguete Bread Panaderia la Fuente Bread Panaderia Leon Dorado Bread Panaderia Miriam Bread Panaderia y Pasteleria La Suisse Bread and Pastry Panaderia El Trigo Dorado Bread Pasteleria y Terraza Margarita Bread & Pastry Pasteleria Sampson Pastry Reposteria y Panaderia Norma Bread and Pastry Reposteria y Queques Duya MAGICA Pastry TonallI Bread & Pastry Krafts food/Nabisco de Nicaragua Cookies Industrial Carphil S.A. Cookies and Chocolates rolls Confectionary Products List of Companies Types of Products Processed Dulceria el buen gusto Candies Dulceria el Carmen Candies Dulceria el Encanto Candies Dulceria Karol Candies Dulceria Marina Candies Dulceria La Miel Candies Snack Foods List of Companies Types of Products Processed Dinant Nicaragua Snacks Distribuidora America Snacks-Frito Lay Distribuidora Unimar Mr. Snack *Most of the snack products available in Nicaragua are imported from Central America and the United States. Beverages List of Companies Types of Products Processed Aguardiente Extrafino Mombacho Alcoholic beverages Compañia Licorera de Nicaragua (Flor de Caña) Alcoholic beverages; Rum Compania Cervecera de Nicaragua Beer, purified waters, juices, milk and energy drinks Embotelladora de Occidente Mineral water Embotelladora Nacional (ENSA) Mineral water Industrias Nacional de Refrescos S.A. Rum Khola Shaler Industrial Sodas, mineral water, wine Industria Innovadora S.A. Purified water, mineral water Hielera la Pinolera Purified water and mineral water Eskimo S.A. Orange juice Parmalat S.A. Orange juice Industrias Kojak S.A. juice Panamco- Nicaragua Coca Cola Sodas, juices, water, mineral water Distribuidora EDT Nicaragua Sodas and juices Condiments List of Companies Types of Products Processed Commercial MSW Spices and Condiments Procacsa Spices and Condiments Specialized food ingredients List of Companies Types of Products Processed Brentrag Additives, preservatives, sweeteners, thickeners Industrias Quimicas Termoking Additives, preservatives, sweeteners, thickeners Food Service Distributors List of Companies Types of Products Offered ADIM & CIA Ltda. Juice, tea, granola, honey MAGNA, S.A Tea, cereals imported meat OCAL,S.A. Cereals, Juices, Tomato Sauce, evaporated milk Café Soluble Coffee, Soups, Pasta, Tomato Sauce, Soya drinks Comercializadora America S.A. Frozen Vegetables Dicegsa Soups, juice, sauces, snacks, soybean oil Distribuidora Nacional DINSA Margarine, soups, juice, Snacks, etc Post Contact and Further Information E-mail address: email@example.com Phone: (505) 2252-7100 Ext. 7621 Fax: (505) 2252-7276