U.S. suppliers will find that the $500 million food service market of Jamaica continues to present excellent export potential.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number:
HRI Food Service Sector Report
HRI Food Service Sector
U.S. suppliers will find that the $500 million food service market of Jamaica continues to present
excellent export potential. However, U.S. exporters will face challenges in an increasing competitive
environment and trade barriers. Fruits and vegetables, lamb, beef, cheeses and other dairy products,
snack products and sauces are some of the products with the largest potential for the HRI sector.
Jamaica & Dep
HRI Food Service Sector
Hotels, Restaurants, and Institutions Report
A. The Economic Situation
Currently the Jamaican economy is operating in a challenging global and macroeconomic environment. The economy recorded a contraction in real Gross
Domestic Product (GDP) of 2.7 percent in 2009. The Hotels and Restaurants sector was one of the few sectors of the economy that grew in 2009, recording
a 1.4 percent increase over 2008 and contributed 5.8 percent to overall GDP.
The main economic factors that are impacting negatively on the economy are the world recession, low GDP growth over several years, 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 International Monetary
Fund (IMF) agreement to stabilize the economy, the reduction of the domestic debt and an increase in the growth of the tourism and agriculture sectors.
Jamaica has registered the best performance for the tourism sector in the Caribbean. The Jamaican tourism sector has shown tremendous resilience over the
last five years, increasing at an average annual rate of 5.5 percent. In 2009, 1.83 million stop-over tourists visited Jamaica earning revenues of US$1.94
billion. The Jamaican tourism outlook for 2010 and beyond is for continued growth of the sector with the building of large resort hotels in Kingston to cater
to business travelers.
Source: Planning Institute of Jamaica (PIOJ) Annual Report 2009
B Overview of the HRI Food Service Market
Jamaica is one of the main tourist destinations in the Caribbean region, with just under two million visitor arrivals in 2009. Only Dominican Republic and
Cuba receive more tourist than Jamaica (Caribbean Tourism Organization, 2010). The hotel sub-sector makes up approximately 70 percent of the total HRI
market, followed by the restaurant sub-sector at 28 percent and the institutional subsector at 2 percent. Jamaica has an estimated 2,080 tourist
accommodation establishments, including 227 hotels. It should be noted that over one million of these tourists were from the United States. U.S. tourists
demand the same high quality food products that they have at home. In addition, numerous restaurants are located throughout Jamaica that caters for both
locals and tourists. While no data is available on the value and growth of the individual HRI sub-sectors, in 2009, Jamaica?s total consumer food service
sector was valued at US$500 million, 10 percent higher than in 2008. Independent foodservice establishments constituted about 60 percent of the total value
of food sales, while chained establishments contributed 40 percent.
In 2009, Jamaica imported US$802 million in food and beverages. Of the total amount of food products imported approximately 60 percent is directed
towards the hotel, restaurant, and institutional (HRI) sector, while the remaining 40 percent is channeled to the household consumer via retail outlets such as
supermarkets and small moms & pops.
Source: Jamaica Tourist Board ? Annual Travel Statistics 2009
ADVANTAGES AND CHALLENGES FACING U.S. PRODUCTS
IN THE HRI SECTOR IN JAMAICA
The United States accounts for approximately 65 percent of Certain products, particularly pork, poultry, and fresh vegetables are restricted
Jamaica?s annual tourist arrivals, hence creating a demand for U.S. by strong government support in protecting/favoring domestic agriculture.
food and beverage.
The proximity of Jamaica to the United States and the exposure to There are overly strict sanitary/phytosanitary requirements, burdensome
the U.S. culture create a distinct preference for U.S. foods and other labeling and other standards by regulatory agencies.
goods by the Jamaican consumer.
The growth of the tourism industry and services sector have The signing of a trade agreement with the European Union in 2009 and other
increased the demand for imported products agreements with Canada will increase market competition.
Proximity and ease of shipment work to the advantage of U.S. Higher prices for U.S. products (e.g. wines, beers and frozen French fries)
suppliers have resulted in U.S. products losing market share to cheaper products from
EU , Canada and Latin America.
The seasonality of domestic food production and also the With a population of approximately 3 million people imports orders tend to be
inconsistent quantity and quality of local food products creates relatively small and favor mixed rather than full container load for some
opportunity for imports to fill these gaps. products.
U.S. fast food franchises dominates Jamaica?s restaurant segment The lack of a vibrant economy limits the disposable income of the Jamaican
and continue to expand consumer and hence the demands for U.S. products
II Road Map for Market Entry
A. Entry Strategy
The importer/distributor serves as the principal intermediary between suppliers and buyers. Therefore, U.S. suppliers wishing to enter the HRI food service
market in Jamaica should start by contacting local importers/distributors. The local importers/distributors have wide access to the food and beverage
markets, possess large warehouse facilitates and carry a relatively large inventory of products.
Most independent hotels either do not import or import smaller quantities of specialty products and it would be uneconomical to do business with them
directly. However, direct sales to local hotel chains can be successful, since in some cases the local purchasing department acts on behalf of branches in
other parts of the Caribbean.
It should be noted that the fast food segment offers opportunities for direct sales while traditional restaurants procure a wide array of imported products from
local intermediaries. In addition to appropriate pricing strategies and product support on the part of the US exporter, the success of imported products in the
HRI sector is largely dependent on the importer/distributor selected. The intermediary?s knowledge of the local market and distributional networks are
B. Market Structure
The market structure of Jamaica?s HRI food service sector has remained unchanged over the past five year and is relatively straight forward. The
importer/distributor is the main link between the US Exporter and the Jamaican HRI sector, however, a small amount of products are supplied directly or
through wholesalers to the HRI sector. In general, importers/distributors who supply products to the HRI sector specialize by fresh fruits and vegetables,
meats, seafood, fruit and vegetables juices, or alcoholic beverages. However, a few large importers/distributors carry a much wider range of the product
The local importers/distributors bring in supplies and serve the various HRI outlets directly. They also sell to the wholesale trade which supplies the local
restaurants and institutions. The HRI sector buys approximately 65 percent of their food and beverage products from the local importer/distributor (imported
products), while local farmers and processors supply 20 percent of their food and beverage needs, 10 percent is obtained from local wholesale/retail outlets,
and the remaining 5 percent of their needs are imported directly from overseas suppliers.
STRUCTURE OF THE HRI SECTOR IN JAMAICA
C. Sub Sector Profiles
Hotels and Resorts
Accommodations in Jamaica include all-inclusive resorts, luxurious hotels, affordable family hotels, self-catering apartments and villas, and intimate guest
houses. Overall, Jamaica boasts over 2,000 accommodation establishments and approximately 31,000 rooms. Most accommodation establishments have at
least one restaurant on property, usually 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 hotels and resorts to have as many as seven or more restaurants on their properties. In general, large-scale hotels and resorts possess their
own warehouses and typically import and receive weekly shipments of some food and beverage products from US suppliers. However, it should be noted
these establishments rely on local importers/distributors for most of their food and beverage needs. In addition, local farmers and to some extent local
processors/agro processors also supply the hotel sub-sector.
The majority of the other accommodation establishments, which include small hotels, plantation inns, guest houses, and bed & breakfasts, purchase a
substantial amount of their food and beverage needs from local farmers and processors. They also use a fair amount of products from foreign suppliers
which they obtained through the local importer/distributor.
US products represent the majority of the total food and beverage purchases made by the accommodation sector. The hotel subsector obtained between 60 -
70 percent of the total food and beverage purchases from the US while the other accommodation entities 40 to 50 percent.
Tourist Accommodation Continue To Rise
Year Total Number of Rooms % Change Occupancy Rate % of Rooms in Hotel/Resort
2005 26,039 - 61.9 72.3
2006 26,675 2.4 62.8 73.3
2007 27,711 3.9 63.2 73.0
2008 29,794 7.5 60.4 75.0
2009 30,347 1.9 59.0 75.2
Source: Jamaica Tourist Board - Annual Travel Statistics 2009
Source: Jamaica Tourist Board - Annual Report 2009
Total hotel rooms during 2009 were 30,347 with all-inclusive, non all-inclusive and other accommodation accounting for 52%, 18% and 30%, respectively.
Total room capacity is expected to expand significantly during 2010 and beyond. The Spanish Groups RIU and Iberostar are planning new all-inclusive
resorts on Jamaica?s North Coast. In addition, local entrepreneurs are planning on opening new business hotels in Kingston.
MAJOR HOTELS IN JAMAICA
Name of Hotel/Resort Location Number Total Rooms Purchasing Agents
Sunset Beach Resorts Ocho Rios/Montego Bay/Negril 3 1158 Importer
Breezes Resorts Montego Bay/Runaway Bay/Negril 4 982 Direct/Importer
Sandals Resorts Ocho Rios/Montego Bay/Negril 7 2315 Direct/Importer
Beaches Resorts Ocho Rios/Negril 3 460 Direct/Importer
Couples Resorts Ocho Rios/Negril 4 577 Direct Importer
Riu Hotels & Resorts Negril/Montego Bay/Ocho Rios 4 2393 Importer
Iberostar Montego Bay 3 978 Importer
Hedonism Negril/Runaway Bay 2 490 Importer
Holiday Inn Montego Bay 1 524 Importer
Half Moon Hotel Montego Bay 1 398 Direct/Importer
Franklyn D. Resorts (FDR) Runaway Bay/Trelawny 2 172 Importer
In general, Jamaica has a relatively large number of independent restaurants compared to chain establishments. These restaurants are located in the urban
towns outside of guest accommodations and they 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. It should be noted
that they do not import products directly from overseas suppliers due to their relatively small size (lack economies of scale - economic reasons). US
products represent between 35 to 40 percent of the total food and beverage purchases made by the independent restaurants in Jamaica.
Chained food service outlets present in Jamaica include restaurants such as T.G.I Friday?s, and several US fast food chains such as Burger King, Kentucky
Fried Chicken, Domino?s Pizza, Pizza Hut, Wendy?s and Subway. The fast food restaurants are the fastest growing segment of the restaurant sub-sector and
provide excellent opportunities for US exports. Most U.S. franchisees have modified their menu to meet Jamaican consumers? taste preferences. Fast food
franchises use between 20-50% U.S. products. The major local products that are used by local independent fast food franchises are: 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 sanitary/phytosanitary regulations have forced for local meats, dairy products, fruits and vegetables and eggs
in the restaurants sub-sector.
Restaurant Profiles (2009)
Name of Restaurant Type Locations Number of Outlets Purchasing Agents
Burger King Fast Food Country wide 26
Kentucky Fried Chicken Fast Food Country wide 33 Direct/Importer
Domino?s Pizza Fast Food Kingston and Montego Bay 9 Direct/Importer
Pizza Hut Fast Food Kingston and Montego Bay 5 Direct/Importer
Wendy?s Fast Food Kingston and Montego Bay 3 Importer
Subway Fast food Kingston 2 Direct/Importer
Island Grill Fast Food Country Wide 13
Rib Kage Steak House Kingston 2
Norma?s Traditional Family Type Kingston 2 Importer
TGI Friday?s Chained Family Type Kingston 1 Direct/Importer
The institutional food service sub-sector does not present substantial opportunities for U.S. exports. This subsector is dominated by public institutions.
Foods consumed in public institutions, that is, hospitals, infirmaries, schools and prisons are mainly supplied through government contracts with domestic
producer groups, including the Jamaica Dairy Farmers Federation, the Beef Farmers Association, Jamaica Agricultural Society Farmers Groups, and Rural
Agricultural Development Authority Farmers Group. However, bulk, unbranded commodity-type products and nutritionally enhanced lower-value products
can find opportunities in this segment.
Generally, local farmers and food processors supply this sub-sector with most of its food and beverages needs. In addition, these institutions are also
supplied by local importers/distributors channel.
In general, the primary competition to U.S. products in the HRI food service sector is from local production. Most hotels and fast food franchises source
beef, chicken, pork, fruits and vegetables from the domestic market. The government restricts the import of these products. However, local products could
easily lose market share to imports due to inconsistent quantity and quality, if imports were allowed and even if prices were slightly higher. High-priced
U.S. wines have captured only a very small share of the estimated US$25 million market for wines and other alcoholic beverages in the hotels sub-sector.
The major competitors to U.S. wines are very low cost wines from Chile, Italy, France and Spain.
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 price-competitive products from
Canada and the Netherlands. Most sauces, salad dressings, some fruits, vegetables,
bakery products and nuts are imported from the United States. As U.S. products become more expensive comparatively, their overall share of the Jamaican
HRI food service market could decrease in the medium term. Price and quality are the main determinants of the source of a particular product.
Imported food and beverages in the hotels sub-sector varies between 40 and 60 percent of total food and beverage consumption, with the U.S. presently
accounting for approximately 55 percent of total imported products. The relative size of the restaurants sub-sector and its high consumption of local
products have drastically reduced the position of U.S. products in the overall HRI food service sector.
IV Best Product Prospects
(a) Products present in the market with good sales potential
In the Jamaican hotel and restaurant sub-sectors, fruits and vegetables, lamb, special cut of beef and veal, cheeses and other dairy products, French fries,
potatoes, snack products, sauces, and wines are high in demand.
(b) Products not present in significant quantity but which have good sales potential
Specialty cheeses are not available in sufficient quantities to hotels and restaurants. Seafood has good sales potential in the hotel sub-sector.
(c) Products not present because they face significant barriers
Significant barriers restrict sales of the following products: poultry (whole, leg quarters, etc), pork and pork products, meat, dairy, eggs, and processed food
products. The poultry market is protected by high tariff rates while pork and pork products are restricted due to the presence of Pseudo-rabies in the U.S. as
claimed by the local veterinary authorities. The other products are partially restricted in the market due to the difficulties and arbitrary requirements as
demanded by the Jamaican veterinary authorities.
U.S. Products with Good Sales Potential
Product 2009 5-Yr. Avg. Import Key Constraints Over Market Market Attractions for
Category Imports Annual Tariff Rate Development USA
($ value) Growth (Average)
Fresh fruits and 9,772, 086 126 Government of Jamaica promotion of High quality, consistent
vegetables local production (import substitution supplies and good valve
Processed fruit & 35,647,058 6.7 Increased competition from Canada, EU A wide range of high
V egetables and Caricom quality products
Snack Foods 16,062,057 5.5 20% A wider variety of
Competition from Trinidad & Tobago due
to Caricom?s CET and relatively cheap
Dairy Products 39,087,165 2.1 50% High duties on selected products and SPS High quality of products
Fruit and 21,970,567 8.0 40% Dependent on the continued expansion of A wide variety of
Vegetable Juices the tourism sector products at competitive
Meats (excluding 37,743,868 44.0 86% High duties and SPS trade restrictions Consistent supplies of
poultry) high quality products
Wine and Beer 7,076,900 15.0 30% Small market size and relatively cheap High quality of products
wines from South America
V. Post Contact and Further Information
Foreign Agricultural Service
U.S. Embassy Kingston
142 Old Hope Road
Telephone: (876) 702 - 6142
Fax: (876) 702 - 6397
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