El Salvador’s imports of U.S. consumer oriented products reached a record $105 million in 2011.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number: ES1208
Ana Elizabeth de Iglesias
El Salvador’s imports of U.S. consumer oriented products reached a record $105 million in
2011. Best prospects for U.S. food products include, breakfast cereals, red meats, poultry
meat, dairy products, fresh fruit, processed fruit and vegetables. There are 175
supermarkets located nationwide handling approximately 50% of the retail food market.
SECTION I. MARKET SUMMARY
El Salvador is located in Central America, shares borders with Guatemala and
Honduras. With a total area of 8,008 square miles (20,742 km²), and a population
of approximately 6.2 million people, El Salvador has one of the highest population
densities in the region. It is the smallest country in Central America. El Salvador is
divided into 14 states called “Departamentos”; the capital city is San Salvador.
The U.S. dollar is the official currency. El Salvador enjoys excellent
macroeconomic stability, low inflation, and one of the lowest interest rates in
The U.S. is the most important trading partner and 50% of exports and 40%
of imports are with this market.
Imports from neighboring countries (Guatemala, Mexico, Nicaragua, Honduras,
Costa Rica) include a large variety of products such as fresh fruit and vegetables,
meats, cereals and beans. Other major suppliers that seek increase their exports to
El Salvador include Canada, Chile and Panama.
The U.S.-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR
will enter its 6th year of implementation in El Salvador on March, 1, 2012. CAFTA
has created a more active, clear and efficient trade procedure in which consumers
are expected to receive all the benefits.
Like the rest of Central America, El Salvador offers an open market for U.S. goods
and services. Tariffs are relatively low, and were reduced further with the
implementation of CAFTA-DR. The value-added tax (VAT) rate is 13%. There are
few import restrictions in this market. Standards are based on ISO Standards, or
Colombian, Mexican, and U.S. standards are used as reference. Labeling and
testing are not major issues.
El Salvador has a stable economic system, but has not been excluded from the
global economic crisis. This economic environment has forced the country to
change import strategies, such as local supermarket chains joining forces with
other supermarkets in the region to streamline import volumes and get better
prices, thus improving their distribution systems.
El Salvador's tourism industry has grown dynamically over recent years as the
Salvadoran government focuses on developing this sector. Last year tourism
accounted for 4.6% of GDP.
Source: CIA World Fact book on-line, USDA-FAS, BICO Reports, The Heritage Foundation, Economic Commission for Latin America and the
Caribbean (CEPAL) and World Bank.
Advantages and Challenges Facing U.S. Products in El Salvador
Major retailers have expanded the number of The shift from essential to high-quality
stores and floor space during the last few food continuous. However, a good
years. The trend is to continue their number of consumers still opt to trade
geographical expansion. down to less expensive options of basic
products due to economic difficulties.
Information and technology have become Market leaders are investing in
strong tools for food marketing. Using construction of modern shopping centers
product bar codes and scanners at point of in which supermarkets and hypermarkets
sales have been fundamental to are the anchor points. Investment also
collaborative planning, forecasting and includes state of the art technology,
replenishment aimed at increasing logistics, remodeling and improving
profitability and stock control. service areas.
Exposure to US media as well as language, High marketing costs (advertising,
cultural, and commercial ties with the discounts, sampling, etc) are necessary
United States all contribute to consumers to promote new market products.
having a positive attitude toward U.S.
The tourism and restaurant sectors are Overall, Salvadoran economy remains
growing and dynamic sector for U.S. exports. very susceptible to any world event that
may disrupt tourism and investment (i.e.
the global economy)
The major retailers are developing Security is a major concern in El Salvador
increasingly sophisticated distribution and the local authorities still need to
systems, which will provide more space and improve their security programs.
better cold chain infrastructure for high
value frozen and refrigerated imports
Supermarket chains have gained greater Category management practices include
negotiation power with manufacturers, charging slotting fees for products, which
giving them access to continuous price are absorbed by the supplier.
promotions and marketing activities.
Most of the products stocked on the shelves The limited cold storage transportation
of local retail stores are imported. and distribution logistics network is still a
limiting factor for the future
development of the food sector.
CAFTA's entry into force opens a number of Central American harmonization of
good market opportunities including the use regulations could result in barriers to
of tariff rate quotas. trade for U.S. products. Problems
obtaining a Certificate of Free Sale make
it difficult to register U.S. food products.
II. ROAD MAP FOR MARKET ENTRY
A. SUPERMARKETS, SUPERSTORES, HYPERMARKETS, CLUB AND WAREHOUSE OUTLETS
U.S. exporters can approach Salvadoran buyers through a direct importer such as a
supermarket chain, a wholesaler/distributor or through a specialized importer.
Regardless of strategy, U.S. exporters need a local partner to educate and update
them about market consumer trends and development, product registration
procedures, and business practices.
Wholesalers/distributors and importers play an important role with Salvadoran’s
supermarket retailers. Although supermarkets import through consolidators, the bulk
of supplies come from local agent or importers. Large supermarket retailers are more
likely to import directly from U.S. suppliers.
Local importers are a must when selling U.S. food exports to El Salvador’s
convenience stores or traditional retail outlets.
To appoint a local distributor a U.S. firm has to make sure that the local distributor
has a good credit standing (the U.S. Department of Commerce/Foreign Commercial
Service (FCS) offers a Gold Key service that provides information on local importers),
sign a contract with a local lawyer.
To introduce a new product to the Salvadoran market, purchasing managers suggest
doing a promotion that includes not only product information, but sampling as well.
There have been experiences where even well known U.S. food brands have not sold
because customers were unfamiliar with the product. The same is true for frozen
products which are just beginning to appeal to the Salvadoran customer and are
viewed by some marketing experts as an area to be developed.
Attend food trade shows to meet Salvadoran buyers. Marketing managers attend U.S.
trade shows regularly and believe that this is the best way to find new products to
introduce to this market.
Point of Sale (POS) material is very important to promote food products in this
market. In addition, advertising through newspapers, radio and television is
Most large importers/distributors are members of the Salvadoran Distributors
Association (ADES; http://www.ades.org.sv). This association manages the
relationship of its members with local retailers, wholesalers and supermarkets and
can provide a good starting contact to enter the market.
Three distribution trends operate in the Salvadoran market:
1. U.S. Exporter => U.S. Broker => Local Distributor => Supermarket => Customer
2. U.S. Exporter => Local Salvadoran Distributor => Supermarket => Customer
3. U.S. Exporter => Supermarket => Customer
Supermarkets in El Salvador are reticent to release exact sales information. Although a
number did provide information, they requested that the information provided be kept
confidential. Therefore, sales have been categorized as follows:
A: Less than 10 million
B: $11 - $25 million
C: $26-$75 million
D: $76 - $100 million
E: $101 - $150 million
F: More than $150 million
Supermarkets, Hypermarkets and
Owner Group Club Outlets Current New Estimated
Stores Stores Sales
Calleja, S.A. Selectos 73 5 F
De Todo 1/ 2 0
Selectos Market 2/ 13 4
Wal-Mart Stores Walmart Supercenter 2 2 F
Despensa de Don Juan 25 0
Despensa Familiar 1/ 51 2
Maxi Despensa 2 1
Saca Group Supermercados Europa 2 1 C
Joint Venture Price Smart 2 0 E
Source: Information provided by supermarkets. For those who declined to release sales
information, an estimate was made by FAS, San Salvador.
1/ Smaller popular area stores
2/ Medium size stores located in middle lower class areas
The market expectations for retailing remain positive as it continues to be a key area of the
Salvadoran economy, supported by employment, financial stability and expansion of
Hypermarkets/supermarkets, convenience stores, coexist with the traditional corner grocery
stores and open-air markets.
There are three dominant supermarket chains in El Salvador: Supermercado Selectos,
Walmart El Salvador and Europa.
Selectos Supermarket is owned by the Calleja Group. This local supermarket chain is made
up by 88 stores, with its slogan “Nobody knows you better” (“Nadie te conoce tanto”) keeps
a fierce competition among other retailers. In 2008, Calleja, together with nine Central
American and Panama companies joined in a strategic alliance funding Supermercados de
Centroamerica y Panama - SUCAP (Panama and Central American Supermarkets) SUCAP
groups 16 different supermarket chains that combined add up 281 stores in the region, and
annual sales raises to more that $2,200 million dollars, said Carlos Lemus, SUCAP Executive
SUCAP plans to buy bulk all those product that the companies have in common, as a way to
get better prices, benefit the consumer and continue to be competitive. The members of
SUCAP are: El Rey, El Machetazo, Super 99 in Panama; Unisuper/La Torre in Guatemala;
Perimercados, Automercados in Costa Rica; La Colonia in Nicaragua; La Colonia in Honduras
and Super Selectos from El Salvador.
Wal-Mart Mexico - Central America, is the largest retailer in the region with more than 450
stores. In El Salvador there are 80 stores in three different formats: Despensa de Don Juan,
Despensa familiar and Hiper Paiz. In September 2005, Wal-Mart Stores Inc, acquired 33
percent interest in Central American Retail Holding Company (CARHCO) from Dutch retailer
Royal Ahold NV. In March 2006, Wal-Mart increased its interest to 51%, and CARHCO was
changed to Wal-Mart Central America. . In December 2009, Wal-Mart Mexico announced the
acquisition of Wal-Mart’s operations in Central American from Wal-Mart Stores. In early
2010, the transaction was completed and Wal-Mart Mexico became Wal-Mart Mexico -
In 2011, the Wal-Mart chain began implementing the strategy "Every Day Low Cost", seeking
deep discounts, especially from suppliers of high rotation products. Everyday Low Prices
(EDLP, for the acronym), involves offering consumers the lowest market prices for all
products. They also made changes to their store outlay to provide a better shopping
experience and lure new customers to their retail outlets.
Supermercados Europa, the smallest supermarket chain is also designing strategies to
compete with the larger retailers. They procure most of their products directly from
suppliers in the U.S. and South America to avoid local importers, assuring lower prices and
gaining a competitive edge over large supermarkets. They are planning to open two more
stores in 2012.
B. CONVENIENCE STORES, GAS MARTS
There are four chains of convenience stores: Flashmart from UNO gas company, Starmart-
Food Marts from Texaco, Puma, and El Camino, which belongs to Alba Petroleos gas
Distribution is mainly through local distributors, direct imports are minimal.
New products have to be presented to the purchase manager of each chain and a
local distributor must be appointed.
Purchasing managers should be invited to the U.S. Fairs and food product exhibitions.
Customers need to be familiar with products; therefore, new products have to be
introduced with a promotional campaign that includes sampling.
Gas Mart stores are readjusting their line of products. Besides snack foods, candy,
soft drinks, ready-to-heat and ready-to-eat products, dairy products and cereals, they
are focusing on fast food sales. The gas marts are potential markets for new products.
As in the case with supermarkets, sales have been categorized as follows:
A: Less than 10 million
B: $11 - $25 million
C: $26-$75 million
D: $76 - $100 million
E: $101 - $150 million
F: More than $150 million
Retail Name and Ownership No. of Locations Estimated
Outlet Type Outlets (city/region) Sales ($Mil)
FlashMart UNO Petrol /1 75 Nationwide B
Puma Puma /2 103 Nationwide A
Starmart, Food Texaco 36 Nationwide B
El Camino Alba Petroleos de El
Salvador/PDV Caribe, 32 Nationwide B
Source: Information provided by gas distributors.
/1 Shell sold all the gas stations to the Honduran UNO Petrol a division of Grupo Terra.
/2 ESSO Standard Oil S. A. Limited - El Salvador sold all the gas station Puma Energy.
/3 Alba Petroleos is owned by the mix economy society made of ENEPASA a Government of El Salvador
Entity and Petroleos de Venezuela Caribe, S. A.
Products also come from Canada, Central America, Colombia, Argentina, Chile
Uruguay and Europe.
85% of beer sales are domestic product, 5% from the U.S., 8% from Mexico and the
rest from Europe.
Most convenience stores located in the metropolitan area have additional services and
products such as phone cards, bank tellers, and car wash and tune-up services.
Store sizes vary; the largest is approximately 1400 square feet and, the smallest 430
C. TRADITIONAL MARKETS, “MOM AND POP” SMALL INDEPENDENT GROCERY STORES AND
Traditionally, the public markets have been the main suppliers of fruits, red meat,
vegetables, poultry, eggs, pork and fish.
There are seven public markets in San Salvador and at least one in each town.
Security has become an important issue when determining where to make their food
purchases. Supermarkets offer a more secure environment for shopping than public
The trend is to purchase in supermarkets, especially for the upper and middle classes.
Lately, there has been a substantial increase of supermarket customers from the
working class and supermarket are opening in lower income areas.
Only a few U.S. foods products are sold in these markets. U.S. fruits are very popular.
The majority of food products sold are locally produced or come from other Central
The number of small independent grocery stores in each neighborhood varies from 10
to 100 depending on the size of the neighborhood. These are not designed for the
customer to easily see the product and select what they need. Sales are made mostly
by product name or category, therefore, it is not recommended to develop a strategy
to enter this market. The same applies to the rest of the markets reviewed in this
III. COMPETITION, CONSUMER-READY PRODUCTS
The Central American Countries, Mexico and Chile are the main competitors for the
U.S. in this market.
El Salvador is a signatory to the Agreement on Central American Tariff and Duties and
a member of the Northern Triangle (commercial agreement with Honduras and
Guatemala) and the Central American Common Market. In addition, El Salvador has
signed a free trade agreement with Mexico, Chile, Dominican Republic, Canada, the
United States, Panama and recently with the European Union (EU).
In 2011, the U.S. share of the consumer-ready market reached 16.78%. Guatemala
accounts for 25.49%, Mexico 8.85%, Nicaragua 14.86%, Honduras 6.74% and Costa Rica
Powdered milk is mostly imported from New Zealand, the Netherlands and Australia.
In addition the New Zealand Dairy Board has built a local distribution and packaging
facility at a cost of approximately $5.0 million. Fluid milk is locally produced and also
imported from Costa Rica, Honduras and Mexico in UHT long-life packaging. There are
also donations of powdered milk for the poor which mainly come from the EU.
In March 2011, the Calleja group announced its plan to build a processing facility and
storage center as well as open 12 new stores with a cost of $40 million. The
construction work for the meat and poultry processing facility, which will also have
capacity for fruit and vegetable packaging, has already begun near the capital city,
Livsmart a health drink company, founded under the name of Bon Appetit in 1981,
was acquired in 2009 by the group Cabcorp (The Central America Beverage
Corporation). Today, Livsmart is the anchor bottler of PepsiCo for Central America
and part of the Caribbean making more than 130 million in annual revenue from
drinks made without preservatives.
On February 2009, Mexican juices and nectars company Jumex invested $20 million in
its processing plant in El Salvador, which has been operating since the beginning of
last year as a distribution center for the region. This plant, which will also
manufacture its own packaging, is surrounded by 42,000 square meters of land.
Jumex Centroamericana, the regional division of Grupo Jumex, has a portfolio of
more than 12 different beverage brands as well as a presence in Central America,
Panama, Dominican Republic and 12 other Caribbean countries.
CAFTA-DR has also attracted foreign investment to El Salvador including companies
such as CALVO tuna processor from Spain.
Another important industry in this sector is meat processing. There are approximately
10 companies which are members of the Salvadoran Meat Processors Association
(ASICARNE). Imports of U.S. pork meat by this sector have grown tremendously over
the last five years, due to the fact that the Salvadoran population is a large consumer
of sausage products.
Sigma Alimentos a large Mexican company meat processor and deli company has
invested in a pork processing plant to cover local demand and export to other Central
The Salvadoran market may be significantly larger than portrayed by U.S. export
data. A high percentage of El Salvador’s imports of consumer-oriented products are
actually registered as imported by Guatemala. The main reason is that many
containers come through Guatemala’s Santo Tomas port and even though they are in-
transit to El Salvador, local customs officials tally them as Guatemalan imports.
Particularly close links with the United States are evident by the strong commercial
relationship between both countries.
IV. BEST PRODUCT PROSPECTS
Top 10 best product prospects imports from the United States
(Millions of U.S. Dollars)
% Change 2010/2011
Product Description 2010 2011
Snack foods 8,380 11,987 43
Breakfast Cereals 3,179 4,384 37.9
Poultry Meat 4,971 7,838 57.7
Fresh Fruit 15,572 14,909 -4.26
Soybean meal 57,300 58,184 1.54
Processed Fruit and Vegetables 14,454 14,772 2.2
cotton 59,934 89,336 49.1
Coarse Grains 82,755 169,139 104.4
Rice 28,832 34,642 20.2
Dairy Products 7,718 10,465 35.6
Source: USDA/FAS BICO REPORT
A. Products not present in significant quantities, but which have good sales
Frozen food are growing in demand, and are expected to continue an upward trend
Low fat, low cholesterol
Pork Cuts for Hotel/Restaurant/Institutional (HRI) and Retail
Certain processed foods continue to see strong growth as more people join the work
force and eat out of home. Especially promising products are convenience and fast
foods, out-of-home foods (snacks, ramen style soups, etc., which are consumed more
by lower-income households and young consumers), healthy and light foods.
V. POST CONTACT AND FURTHER INFORMATION
Office of Agricultural Affairs
U.S. Embassy El Salvador
Blvd. Santa Elena Sur y Calle Conchagua
Antiguo Cuscatlán, La Libertad, El Salvador
Phones: (503) 2501-2999 exts. 3414/3412
Fax: (503) 2278-3351
(Calleja, S. A. de C. V.)
Prolongación 59 Ave. Sur ente Avenida
Olímpica y Calle El Progreso
San Salvador, El Salvador
Contact: Jose Alberto Corpeño, Import manager
Tel.: (503) 2267-3628/ 2267-3600
e-mail : email@example.com
HIPER EUROPA, S.A.
Paseo General Escalón y 75 Avenida Norte,
Frente a Fuentes Beethoven,
San Salvador, El Salvador
Tel.: (503) 2263-3000
Fax.: (503) 2263-5587
Contact: Lic. Jaime Saca
E-mail : firstname.lastname@example.org
Boulevard Sur, Calle Cortez Blanco Antiguo Cuscatlán, El Salvador
Tel.: (503) 2246-7400 ext. 202 E-mail : email@example.com
Avenida El Pepeto, Urb. Madre Selva,
WAL-MART MEXICO - CENTRAL AMERICA
Alameda Roosevelt y 65 Ave. Sur
Centro Financiero Gigante
Torre E, Nivel 8, San Salvador, El Salvador
Contact: Sr. Roberto Vásquez Tel: (503) 2523-6800 E-Mail: firstname.lastname@example.org