Food Service - Hotel Restaurant Institutional

An Expert's View about Food Services in Peru

Posted on: 29 Dec 2012

The sales generated by full service restaurants and fast food outlets accounted for almost 40 and 35 percent of the total sales value respectively.

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: GAIN Report Number: Peru Food Service - Hotel Restaurant Institutional 2012 Approved By: Emiko Purdy Prepared By: Alvaro Loza Report Highlights: In 2011, food service sales in Peru reached $6.8 billion. The sales generated by full service restaurants and fast food outlets accounted for almost 40 and 35 percent of the total sales value respectively. The sales prospect for fast food is even brighter as it targets every economic level of consumers and has a wider consumer base. Post: Lima Executive Summary: Section I. Market Summary Peru is among the emerging markets whose economy has grown on average around 6 percent during the last decade. In addition Credit rating agencies such as Standard and Poor, Fitch and Moody’s have acknowledged Peru’s good fiscal and economic performances, placing the country among the economies that are certain to comply with their obligations. The Peruvian government has identified priorities that need to be developed rapidly in order to secure its economic growth and attract foreign investments. Promotion of tourism, active sector in 2011, is one of such endeavors. The tourist services grew 9.6 percent in 2011 compared with 2010 due to a high flow of local and foreign tourists.. The average growth rate of Peru’s tourism sector in the last 10 years was 6.4 percent, which shows a steady and growing trend of this sector boosted by Peruvian culinary explosion, promotion of arqueological sites, a better economic performance driven by higher incomes, to name a few. The Ministry of Foreign Trade and Tourism reported that the number of foreign tourists has increased by 13 percent in 2010 compared with a year ago level, reaching 2.6 million visitors. The evolution of incoming tourists was particularly important, mainly attracted by Peru’s most primary tourist attraction, Machu Picchu. The tourist destinations that showed largest increase in number of visitors were: Lake Titicaca (up 176 percent), Pachacamac (up 42 percent), and Kuelap (up 35 percent). Peru’s position as a world tourist destination continues to improve. The Country Brand Index (CBI) published by the international consulting firm, Future Brand, emphasizes that Peru is the one of the Latin American countries that has the ability to communicate its cultural assets fully and positively, which is part of its heritage and culture. The CBI ranks Peru at fourth position out of 113 countries with respect to this feature. Peru occupied the 44th position out of the general list last year. Consumer foodservice was positively affected by the continued growth of the economy in 2011. Consumers are enjoying higher disposable incomes and are eager to spend more money on luxury goods. Peruvian consumers enjoy eating, proved by the fact that they dine out whenever their income increases. Food is an essential part of Peruvian identity. “Through our cookery, we reveal our idiosyncratic features, where we came from and who we are,” says Alfredo Perret, head of the subcommittee of gastronomy of the Lima Chamber of Commerce (CCL). It also has a great economic significance: According to Arellano Marketing, gastronomy accounts for 13 percent of the country's GDP. According to The National Institute of Statistics (INEI), during 2011, the restaurant sector grew by 9.4 percent, based on rapid growth of different type of restaurants. There has been a dramatic increase in the recognition of Peruvian food in the country. This trend has positively affected the growth of restaurants that serve Peruvian cuisine, and many international food franchises also decided to include Peruvian food in their menus to satisfy the increased demand forPeruvian cuisine. The culinary culture is growing rapidly among young people. Culinary institutes have increased their capacity and there are about 80,000 students that should find a job quickly due to high demand from the sector. Costumers are increasingly demanding higher quality services and have forced to make changes and improvements in food preparation techniques and to foster awareness about the proper handling of ingredients. In general, Peru’s per capita gross domestic product (GDP) and average income have increased, although the benefits of growth are concentrated geographically in the coastal area where per capita GDP is already significantly higher than elsewhere. The increase in disposable incomehas led to increased consumption but reduced domestic savings, which are likely to have long-term implications for growth and consumption in the country. In 2011, food service sales in Peru reached $6.8 billion. The sales generated by full service restaurants and fast food outlets accounted for nearly 40 and 35 percent of the total sales value, respectively. The sales prospect for fast food is even brighter as it targets every economic level of consumer and has a wider consumer base. Food service sales in 2011 grew 15 percent compared to 2010. Total food service imports in 2011 were estimated at $1 billion, or 20 percent of Peru’s total food service sales. Estimated Consumer Food Service by Type (Current Value): 2007-2011 Sub Food Service (US$ Million) Sector 2007 2008 2009 2010 2011* Full-service restaurants 1,516 1,805 1,971 2,343 2,673 Cafes/Bars 157 173 191 234 271 Fast Food 1,294 1,447 1,626 1,991 2,374 Home Delivery 43 51 57 70 81 Street stalls/kiosks 773 960 1,099 1,309 1,443 TOTAL 3,784 4,436 4,944 5,948 6,842 growth % 16% 17% 11% 20% 15% Source: Post estimations / *Preliminary The niche market for U.S. exporters in this sector includes high-end hotels and restaurants, family style restaurants, fast food chains, and coffee shops. At an average annual growth rate of 8% for the past 5 years, fast food chains had the fastest annual sales growth. Products for the food service industry that are benefitted from lower or free duty as a result of PTPA are fruits, cheeses, processed fruits and vegetables, and meats and specialty meat products. Having nearly one third of nation’s total population and more than 60 percent of the national income, Lima is the major market for consumer-oriented food products. High and middle-income consumers (approx. 1.8 million people), whose average monthly household income is $1,400, are the main purchasers of U.S. food products. The Engel coefficient for this income group is roughly 35 percent. Social factors that affect the food service market include tourism growth, urban expansion, an increase of women in workforce (38 percent), and an increasing percentage of the young population that demands fast food or food prepared outside the home. Advantages and Challenges of U.S. products to Peru’s Food Service Sector Advantages Challenges Peru is the fastest growing Peruvians prefer meals using economy in the region. fresh products. Appreciation for U.S. food quality Limited number of five star and culture. hotel chains in Peru makes it harder for U.S. products to penetrate into Food service products will benefit Peru’s market. from PTPA with lower or no tariffs. Peruvian food is tasty. U.S. Peru is opening its market for exporters need to incorporate food new competitors in the sector. ingredients in international and traditional menus. Fast food chains are expanding in Lima suburbs and in major cities Limited infrastructure and low (Arequipa, Trujillo, Chiclayo, and Piura). quality service discourage longer stays of international tourists. Peru has a government fund to promote tourism. Culinary culture is growing and demanding high quality food products. Increasing investment interest of international chains in association with local investors for new project developments. Section II. Road Map for Market Entry A. Entry Strategy U.S. exporters can approach the Peruvian food service market through large importers, wholesalers/distributors or specialized importers. Most food service companies buy imported goods from local intermediaries. Personal visits are highly recommended. The local partner should be well known by the U.S. company before any permanent contractual arrangement is made. The local company should be able to provide updated information on consumer trends, current market developments, trade, and business practices. In addition, it is recommended that U.S. exporters work with chefs and local importers to conduct innovative marketing activities in the high-end food service sector. More specifically, U.S. exporters are encouraged to incorporate U.S. food ingredients in local and international menus. emphasize the superior quality of U.S. food products. A. B. C. Market Structure Food service institutions mainly source food ingredients domestically. This is due to Peruvians’ strong preference for locally produced fresh food products at lower prices. Food service importers are also suppliers for the retail market, which represents, in most cases, more than 70 percent of their profits. Almost all food service businesses purchase through intermediaries (97 percent). International franchises (KFC, Pizza Hut, Burger King, Mc Donalds) and the local Bembos are able to import some of their food ingredients directly because of high volumes. A. Sub-sector Profiles Hotels Number of Hotels in Peru, By Category in 2011 Hotel Number of Number of Number of Outlet Location Category Outlets Rooms Beds Lima Provinces Five-stars 35 4,030 7,650 20 15 Four-stars 51 3,636 6,735 29 22 Three-stars 581 16,736 31,812 85 496 Two-stars 1,178 24,206 42,636 214 964 One-stars 379 6,548 11,282 99 280 Total 2,224 55,156 100,115 447 1,777 Source: Ministry of Foreign Commerce and Tourism (Mincetur) The Peruvian government has been actively promoting tourism. In September 2009, the first general tourism law was passed. The purpose of the law is to promote tourism and entrepreneurial development, particularly in areas outside of Lima. Visitors from other countries that are not residing within Peru are considered as receptive tourists by the Ministry of Foreign Trade and Tourism (Mincetur). It has been estimated that receptive tourism growth was 17 percent in 2011. Moreover, hotels expanded by 12 percent, due to increased local tourism, which offset the drop in hotel overnight stays by foreign tourists. The tourism boom, however, is reflected not only in the increase in the number of foreign visitors, but mainly in new investments in hotels and restaurants. Peru’s progress as a tourist destination is important—the country often appears in specialized documents and is awarded prizes of different kinds. This awakening of tourism has been accompanied by the rapid dissemination of Peruvian cuisine which definitely is starting to be part of the main attractions for different visitors from around the world. The number of visitors that arrived in Peru last year was around 2.6 million, which represented foreign currency earnings of $3.0 billion. There was a greater inflow of travelers from countries within the region mainly from Chile (26 percent), Brazil (29 percent), and Colombia (14 percent). Moreover, there was an increase in the flow of tourists from countries outside the region like Canada, United States, Spain, France and United Kingdom. In 2011, classified lodging establishments offered over 100 thousand beds, 11 percent more than in 2010. In addition, lodging capacity increased 9 percent in all the categories. The niche market for U.S. exporters in this sub-sector is high-end hotels, mainly four and five-stars that use higher proportions of imported food products. Food imports represent approximately 16 percent of food served in hotels. Marketing efforts in this sub-sector should target activities to introduce U.S. food ingredients and U.S. gourmet products in high-end hotel restaurants that offer local and international cuisine. Major high-end hotels are located in Lima (55 percent), the center of business activities. Many hotels are developing strategic alliances with international hotel chains or important local groups, with the purpose of having access to a hotel facility in every important tourist destination in Peru (Lima, Cuzco, Arequipa, and Puno). The opening of new hotels in Lima has made the market more competitive, which is why hotel chains such as Marriott are targeting specific markets which have not yet been fully explored. An example of this is the opening of a Marriott Courtyard that targets the executives and offers more services to clients during their stay. In May 2011, Westins Libertador started its operations. Its opening set a milestone in Peru's hotel sector. This was a $100 million investment and it is one of the seven hotels operated by the Intursa Company (part of Brescia Group). The modern infrastructure includes 50 stories and over 300 rooms. According to the Libertador’s general manager, the hotel expects to reach 50 percent of occupancy in its first year. Hotel construction projects have grown in recent years. More than 40 new hotel projects have been forecasted in 2011. These new constructions will represent almost $500 million in investments. The increase in hotels is one sign of Peru’s attractiveness to foreign investors that prefer to enter the market through franchises. While Lima is considered the main market for corporate hotel chains, the southern part of the country is the preferred region for more traditional hotels. Although the northern part of Peru has attracted investors’ interest, projects are not slated to begin until 2013. In the future there will be more corporate-oriented hotels located in shopping centers. Both the hotel and retail industries have the same needs which means that shopping center operators are looking to obtain as much income as possible by offering wider services, while hotel operators are looking for convenient locations, closer to commercial areas. The first two such hotel projects will take place in Plaza San Miguel and Jockey Plaza Shopping Center, both in Lima, which will each hold small 4-star hotels. Three U.S. hotel chains (The Hyatt, Intercontinental and Wyndham) have showed interest in initiating operations in Peru’s market. Source: Ministry of Foreign Commerce and Tourism (Mincetur) Source: Ministry of Foreign Commerce and Tourism (Mincetur) Foreign tourists spend around $89 daily. Food represents the third highest expense (18 percent), behind lodging and transportation (28 and 20 percent respectively). Foreign tourists consider lodging to be more important than domestic tourists. The principal destinations for foreign tourists are Lima (94 percent), Cusco (84 percent), Puno (58 percent), Arequipa (35 percent), and Ica (18 percent). Lima travelers often include corporate tourists. The high season for foreign tourists is during the months of July and August. Around 70 percent of tourists are between 25 and 54 years old with 32 percent of this group between 25 and 34 years old. Male visitors account for 66 percent of total tourists. Purpose of visit: vacations (61 percent), business (19 percent), visit family or friends (10 percent), attending seminars (4 percent). Types of tourism: urban (93 percent), cultural (70 percent), ecological (47 percent), adventure (36 percent, for example, trekking), experiential (32 percent), and thermal bathing (22 percent). Restaurant preferences: Peruvian style (79 percent), seafood (41 percent), and meat (37 percent). Accommodations: vacations: three star hotels (80 percent); business: five star hotels (44 percent), and four-star hotels (31 percent), seminar attendance: five-star hotels (30 percent), four-star hotels (29 percent), and three-star hotels (34 percent). Major Hotel Sales (2011) Company Total Estimated Sales ($ Million) Corporacion Turistica Peruana S.A.C. 44 Thunderbird Hoteles Las Americas S.A. 36 Condor Travel S.A. 31 Inversiones La Rioja S.A. 27 Inversiones Nacionales de Turismo S.A. 23 Nessus Hotel Peru S.A. – Casa Andina 23 Orient-Express Peru S.A. 20 Hotelera Costa del Pacifico S.A. 19 Corporacion el Golf S.A. / Los Delfines 14 Peru OEH S.A. 14 Hoteles Sheraton del Peru S.A. 11 Corporacion Hotelera Metor S.A. 10 Consorcio Hotelero Las Palmeras S.A.C. 10 Costa del Sol S.A. 8 Peru OEH Machu Picchu S.A. 8 Source: The 10,000 Major Companies in Peru 2. Restaurants Peruvian gastronomy has earned international recognition among renowned chefs. Proof of this is the rapid development of Peruvian restaurant franchises abroad and the growing number of publications about Peruvian Cuisine. Locally, the gastronomic offering is highly diversified and new eating places are always opening, due to the growing numbers of foreign visitors eager to sample typical fare. In 2011, full service restaurants reached $2.7 billion which represents a 11 percent growth. The number of outlets in shopping centers, particularly outside of Lima, has fostered growth of international and local fast food chains. Since 2009, Peruvian gastronomy has initiated a meteoric growth that has turned Peru into an important global point of reference due to its promising culinary development. In that sense, the Peruvian Gastronomy Association (APEGA) decided to bring together every piece of a long list of Peruvian cuisine representatives in one place. This is how the Mistura Food Festival was born in 2008 to showcase Peruvian ingredients, traditional dishes and culinary trends, and it has consolidated as the most important annual culinary fair in Latin America so far. Last year in September Mistura, held its fourth show and over 10 days more than 400 thousand visitors tasted different styles of cooking from different regions of Peru. Famous personalities from the gastronomy scene, including Massimo Bottura, Álex Atala, René Redzepi, Michel Bras, Dan Barber, Yukio Hattori, Heston Blumenthal and Gastón Acurio, led by Ferrán Adrià, discussed a range of topics related to the role of the chef in today's modern world. Initiatives like Mistura and other promotional activities oriented towards development of local tourism have resulted in more visits to provincial restaurants. For example, Promperu organized the First Gastronomic Tourism Fair under the title of “Peru Mucho Gusto” (Peru, pleased to meet you) in northern Peru, while in the southern part of the country it organized “Tincuy 2009”. With the increase in the reputation of Peruvian cuisine around the world, the demand for formal instruction of chefs increased considerably. According to APEGA only 30 institutes and universities offering formal instruction in gastronomy existed in Lima back in 2009. This number has increased greatly since then thanks to the culinary boom in the country. The growth of educated chefs positively affected the industry, since they are being educated not only about how to cook, but also about the food safety requirements and the formal ways to conduct a business, among others. The increasing demand for modern and convenient commercial shopping centers in Lima and other cities has made franchises popular with local investors and consumers. At present, most of the franchise outlets are located in Lima; however, franchisers have started to establish outlets in other cities such as Chiclayo, Trujillo, Piura, Arequipa, and Cusco. The Fast Food channel has grown 16 percent in 2011 reaching almost $2.4 billion which represents 35 percent of food service market share. The number of outlets grew by 14 percent and reached almost 30 thousand during the same period. Chicken fast food continued to be the most popular type of fast food in Peru. According to a 2009 study by APEGA, the Peruvian association of Gastronomy, 56% of Peruvians preferred to eat roast chicken when dining out. This trend continued in 2011 with the expansion of chicken fast food across the country. In low income areas it was possible to find at least one chicken fast food restaurant per block, so consumers had a wide offer to choose from. In 2011, Delosi SA led sales with a 3% value share. The company has long-standing presence in the market with worldwide recognised brands such as KFC, Burger King, and Pinkberry, among others. The company is the leader because it expanded rapidly, not only in Lima, but also in other regions of the country, attracting consumers looking for international options. Delosi SA had the biggest increase in value sales in 2011, since the company increased its penetration in Lima and in other regions of the country. It opened 13 new KFC outlets, and five more Pinkberry outlets, expansion that positively affected its value growth. There are three main hamburger fast food chains in the country: Bembos, McDonald's, and Burger King. The Peruvian chain Bembos leads the market with a share of 50 percent. The company is the leader of burger fast food in the country since it developed a proprietary concept of Peruvian burgers based on Peruvian cuisine as well as recognition of the high quality of its products. In 2011, the company was bought by one of the biggest holdings of the country, the Interbank Group, interested in expanding its culinary offering. Last year sales grew in 15 percent due to the opening of more restaurants in the country, increased purchasing power, and increased employment of women (who have less time to cook). These three chains target young people (up to 35 years old) and socioeconomic levels A, B and C. Bembos owns 38 of the 74 fast food restaurants while McDonald's and Burger King own 21 and 15 restaurants respectively. These restaurants are located in seven cities: Lima, Huancayo, Trujillo, Arequipa, Piura, Cusco, and Chiclayo. The estimated consumption per person in the fast food industry ranges from S/. 3 to S /. 11 and fast food chains serve between 100,000 to 300,000 guests per day. The U.S. niche market is constituted by high-end restaurants, some family style restaurants, coffee shops, and fast food chains. These restaurants commonly purchase between 10 to 20 percent of imported food products, usually in food ingredients (sauces, meats, processed fruit and vegetables, cheeses), specialties (pork products), wine and liquors. Broiled chicken restaurants, locally called “pollerías” reach around 1,100 points of sale. Annual growth is 10 to 15 percent. Major “pollerías” account for seven food chains (120 outlets). These chains compete directly with supermarkets (30 percent market share). Delivery accounts for 35 percent of pollerias sales. Their target market is families and office employees. Purchases of chicken and French fries, the two most important ingredients, are mainly local but are good prospects for future U.S. exports. Fast Food Chain profiles (2010) Name o of Food Sales f Restauran No.t Ou City tlets ($million) Kentucky Fried Chicken 75 Pinkberry 7 ayo, Ch 60 Lima, Trujillo, Arequipa,Chicl illis 10 Huancayo, Cuzco, Ica, Piura Delosi S.A. Burger King 19 Pizza Hut 44 41 Lima, Trujillo, Arequipa Sigdelo S.A. Mc Donalds Operaciones Arcos Dorados 46 26 Lima, Trujillo, Cuzco, Arequipa de Peru S.A. Bembos Burger Grill , Arequipa, Trujillo, Juliaca, Bembos S 2 35 Lima .A.C 5. Cuzco, Chiclayo, Piura Domino’s Pizza Comercializadora de 25 5 Lima, Callao, Arequipa Alimentos Latinos S.A.C. Papa Johns Corporacion Peruana de 16 9 Lima, Trujillo Restaurantes S.A. Note: Estimated values for 2010 Source: The 10,000 Major Companies in Peru (2010) 3. Institutional Contractors This sub-sector accounts for approximately 16 percent of total food service sales with an estimated growth of 13 percent in 2011. The potential market for U.S. products includes large caterers that supply airports and mining companies. These companies mainly use local products in their menus. Vending machines and stores in mining camps require imported goods such as snacks, canned goods, and sweets that are supplied through local importers, wholesalers, distributors, or major caterers. Major Peruvian Suppliers for the Food Service Sector (2011) Company Total Sales Type of Name p mported Food ly I ($Million) Company Food Sup Products Pasta, wheat flour, Pro margarine, food cessor, Wheat, wheat flour, Alicorp S.A. 1 ingredients, mayonnaise, ,315 importer, edible oils, soy cake, d breakfast cereals, istributor sauces. cookies, jelly, ice cream, sauces, pet food. Processor, Gl Dairy and pork products, Dairy ingredients, juices, oria S.A. 712 importer, d juices, canned seafood. lactose and other sugars. istributor Corporacion Jose R. Lindley 472 Processor, Sodas, juices. Canned fruit, gelatin. S.A. importer. Qu Sweeteners, fishmeal, Canned food, food ímica Suiza S.A. 393 Importer, chocolate, wine, ingredients, sweeteners, distributor processed fruit. animal feed. Deprodeca S.A.C 389 Di Dairy Products, jellys, stributor canned food, Dai Dairy ingredients, ry products, soups and chocolate, infant Nest Processo broths, infant formula, r, le Peru instan formula, food t coffee and S.A. 377 importer, preparations, baked d chocolate, breakfast istributor goods, chicory extract, cereal, cookies, sauces, soup chocolates, bakery goods. preparations. Canned Food, Food A Importer, xur S.A. 158 Di preparations, Bakery Canned fruit, bakery stributor goods, Liquors G.W.Yi Ch Canned fruits, canned Canned fruits, canned ang & mporter, C seafood, chocolate, wine seafood, chocolate, wine ia S 114 I .A. distributor and spirits. and spirits. essor, Cheese, butter and pork Laive S.A. 102 Proc y and pork products, imp Dairorter products. Kraf Processor, Cheese, sauces, bakery t Foods Peru importer, Cookies, juices, cheeses. and dairy ingredients, S.A 90. distributor chocolates. Unilever Andina Processor, Peru S.A 75 . impo Sauces, soups. Sauces, soups. rter Peru mporter, Chocolate, confectionary, Chocolate, confectionary, farma S.A. 71 I distributor wine and liquors. wine and liquors. De ast food losi S.A. 50 F mbu ench fries, bakery rgers, salads. Fr franch Haise goods, sauces, cheese. Sociedad Suizo oultry, Peruana de 44 Processor, S Pork products, pausages, cheese. Embu orter edible offals, cheese tidos S.A imp. Peas and lentils, Ma ils, popcorn, yorsa S.A esaler, Peas and lent. 40 Whol popcorn, canned fruit, importer canned fruit, starch. starch. Cheese, meat S Fast food igdelo S.A. 38 urgers, pizza preparations, sauces, chain Hamb French fries, condiments Processor, Pork products, cheese, Braedt S.A. 33 importer, Pork products, cheese. dairy ingredients, distributor. condiments. Arcor del Peru 30 Processor, Chocolate, confectionary, Chocolate, confectionary, S.A. importer, bakery goods, canned canned fruit, bakery distributor fruit. goods, bakery ingredients. B ood h fries, meat, embos S.A.C. 26 Fast f bu Frencrgers chain Ham cheeses Diageo Peru mporter, S.A. 22 I d quors. istributo Liquors. Lir Drokasa Peru S.A. 17 Importer, liquors. d Wine and liquors. Wine andistributor H Processor, Processed meats, meats alema S.A. 15 e offals. importer and edib ats and ediblle offal Mes. Agro C Processed meats, meats orporacion Processor, 15 ats and edible offals. S importer and edib Me le offals. .A.C. Oregon Processed meats, meats Foods ter, ts and edible offals, S offals, fresh Mea .A 5 Impor .C 1. di and edible stributor fresh fruits. fruits. S Processor, ervicios 10 Processed meats, meats importer, Frigorificos S.A. d and ed Meats and edible offals. ible offals. istributor French fries preserved, French fries preserved, L.S. Andina Importer, chocolates, sweeteners, chocolates, sweeteners, S.A. 7 distributor confectionary, olive oil, confectionary, olive oil, baked goods baked goods KMC Importer, Microwave popcorn, Microwave popcorn, International 4 S distributor soups, baked goods soups, baked goods. .A.C. Destileria cessor, Wholesalers, retailers, Peruana S Liquors. .A 6 Pro . importer food service L C e Hijos S Importer, .A. 6 d Wine and liquors Wine and liquors istributor Processor, Industrias M 4 Chocolates, pasta, importer, olitalia S.A. d confection Wheat. ary, sauces. istributor. Note: Total food imports are distributed between the three food sectors: HRI, Retail and Food Processing. Source: The 10,000 Major Companies in Peru 2010 and Peru’s Customs (Sunat) III. Competition Source: World Trade Atlas (2010) Peru gives tariff preferences to the Andean Community of Nations (CAN - Bolivia, Colombia and Ecuador), and to Mexico, Paraguay, Argentina, Brazil, Uruguay and Cuba. According to Peru’s customs data, total agricultural imports to Peru from the United States grew to $875 million in 2011, up 11 percent from the 2010 level. Moreover, consumer oriented products reached $129 million in 2011 growing 21 percent in respect 2010. The United States became the second largest supplier of consumer oriented products, accounting the 15 percent of the market share which has certainly decreased the reach of Chile and has left Colombia as the third largest supplier of this category. Peru’s trade policy is oriented towards open markets. Peru has signed different commercial and trade agreements, while others have not entered into force yet and just a few still in negotiations: Country Type Status Andean Community (Bolivia, Ecuador Trade Agreement In force and Co Freelombia) MERCOSUR (Argentina, Brasil, Uruguay, Economic Complementation Paraguay) Agreement In force Cub Economic Complementation a Ag In force reement Chile Free Trade Agreement In force Mexico Trade Integration Agreement In force United States Free Trade Agreement In force Canada Free Trade Agreement In force Singapore Free Trade Agreement In force China Free Trade Agreement In force South Korea Free Trade Agreement In force European Free Trade Association (EFTA) Free Trade Agreement In force European Union Free Trade Agreement In force Th o ailand Third Proto To come intcol force To come into Japan Economic Partnership Agreement force Co o come into sta Rica Free Trade Agreement T force e into Panama Free Trade Agreement To com force Guatemala Free Trade Agreemnent Negotiating El Salvador Free Trade Agreemnent Negotiating Honduras Free Trade Agreemnent Negotiating The PTPA reinforces U.S. competitiveness within the Peruvian market. The quality of U.S. products is already appreciated amongst high-end consumers. For a complete list of products that have benefited from PTPA, please check Competitive Situation facing U.S. Suppliers in the HRI Food Service Market in 2011 Product Advantages and C Major Supply ategory/ trengths of Key Supply Countries Disadvantages of Local Ne Sources S t Imports Suppliers New Zealand: 31 percent U.S.: 21 Dairy Products percent - Only two companies are (Excl. Cheese) Chile: 12 - New Zealand is a major supplier of dairy major producers of 040210 milk ($127.85 p ingredients, especially HSercent evaporated milk and mi accounting 36 percent of total imports. llion) Bolivia: 12 yogurt. percent Argentina: 6 percent U.S: 38 percent Argentina: 15 Che percent Local homemade cheeses ese 2,431 tons Uruguay: 15 Argentina and Uruguay are part of are commonly sold. percent MERCOSUR and have tariff preferences Gourmet cheeses are not ($11.59 million) Netherlands: 7 made locally. percent New Zealand: 7 percent Colombia: 52 percent Ecuador: 10 Snack Foods p - Local producers are major ercent 19,505 tons Chi - Tariff preferences are applied to food processors. They le: 7 ($54.1 million) p neighboring countries. import food ingredients for ercent U.S snacks and snacks in bulk. .: 7 percent Argentina: 6 percent Chile: 60 percent U.S.: 12 percent Chile sells at cheaper Processed Fruits Argentina: 6 prices due to proximity - Local processors are and Vegetables percent and tariff preferences. major exporters, but their 47,885 tons Netherlands: 4 - EU products are viewed as good quality. local supply is limited. ($65.93million) perce - Argentina has increased its potatoe Italy: 3 exports and fruit jellies percent China: 3 percent Chi - There is an open window le: 93 from November to Fresh Fruits p - Chile is the main supplier because of ercent 69 February for that will ,174 tons A proximity, price and duty free entrance. rgentina: 5 - Argentina has a window for pears and benefit the United Stated ($49.83 million) percent U.S apples. - Local fruit sold in retail .: 2 percent markets is of lower quality. U.S.: 31 percent Fruit and Brazil: 23 - Chile has tariff and proximity - Local brands are well vegetable juices percent advantages. 1,422,272 L positioned in the market at Chile: 13 - Brazil has increased its exports of ($ 2.5 million) percent competitive prices. pineapple juice Argentina: 11 percent Argentina: 41percent Chile: 22pe - Major local breweries are rcent Spa well positioned, price in: 11 W percent competitive, and belong to - Proximity and recognized quality of ine and Beer B l companies, razil: 8 Chilean and Argentinean wine internationas. 17.42 Million pe representing 95 percent of rcent - Brazil is the major supplier of imported liters the market. Italy: 7percent beer. ($29.5 million) - Local wine is well France: 3 pe positioned and price rcent Ecuador competitive, but does not : 3 pe satisfy demand. rcent U.S.: 2 percent Brazil: 29 percent U.S - Peru’s market for U.S. .: 22 meats reopened in October R percent ed Meats - Major imports come from nearby 2006. (fresh, Chile: 14 chilled or countries. p - U.S. meats are of ercent frozen) Colombia has grown very rapidly due to superior quality. 22 Colombia: 11 ,995 tons low prices. p - Peru imports three times ercent ($45.67 million) A more offals than meats. rgentina: 11 p - Local meat does not ercent Paragua satisfy the demand. y: 8 percent Chile: 29 Red percent - The pork products Meats Bolivia: 15 industry also imports (prepared, - Chile has tariff and proximity p percent reserved) advantage prepared meats. s. 1,238 tons Argentina: 11 - U.S. product tariffs will pe rcent decrease throughout 5 to 7 ($5.00 million) Spain: 11 years. percent Italia: 10percent U.S.: 8 percent Denmark: 8 percent Brazil: 32 percent Chi - TRQ for U.S. chicken leg le: 25 Poul quarters try Meat percent - Imports of U.S. poultry products 24 - Local poultry producers ,410 tons U.S.: 20 reopened in October 2006. are major suppliers with ($29.32 million) percent - Brazil and Chile are major suppliers of good distribution channels. Argentina: 16 poultry cuts. p - Imports are mainly ercent Bol chicken and turkey parts. ivia: 8 percent Note: Net imports correspond to the three food sectors: Food Service, Retail and Food Processing. Source: World Trade Atlas IV. Best Products Prospects Source: World Trade Atlas (2010) A. Products Present in the Market Which Have Good Sales Potential: Product/ Market Imports Average Import Key Constraints Market Product Size 2011 Annual Tariff Over Market Attractiveness for Category 2011 Import Rate Development the U.S. est. Growth (2005- 10) - U.S. cheeses are mainly used in the food processing 040610 , sector, but have 20 and - U.S. competitors potential in the HRI 40 are: Uruguay and Retail Food 2,341 0 (16percent) and Sectors. tons 14.4 percent Netherlands Che - In 2011, the United ese 18,480 pe (16percent). rcent 040630 States was the first (HS 0406) MT ($11.59 040690 - Strong supplier with a mi 0 preference for EU llion) market share of 38 percent cheese at high- percent. end HRI and R - TPA*: 17 years etail Sectors. linear, 2,500 MT quota with 12 percent increase per year. - Major suppliers are - United States Colombia($26 represents 2 percent 14,492 rts, Confectionary 0 million) and of total impo tons however, U.S. – non 16 r ($4 .1 percent Ecuado imports grew 14% in chocol N/A million). a te percent ($37.4 - Local industry is 2011. (HS 1704) mi . llion) strong. Major owners are foreign companies. - The U.S. is the - Chile is the second major 3,663 0 major supplier supplier with 17 Confectionary tons 12.2 pe (24 percent of rcent percent. The U.S. – chocolate N/A percent MS). strength is in (HS 1806) ($13.6 - Local industry is chocolate for the mi llion) competitive. retail sector. Imports grew 46 percent in 2011. - United States is the 14,229 - Local Production second largest Food tons 16.4 is strong supplier and holds Preparations N/A percent 0 p - Chile is the 17 percent of market ercent (HS 210690) ($120 major importer share. million) (33 percent). - In 2011 imports grew 28 percent. - Due to an increment of income Total - Competes with levels, local beef and 1,435 0 quality meats consumers are Prime and offals tons 7.9 percent from Colombia, demanding high choice beef market: ($5.73 percent Argentina, quality products, (HS 020230) 274,425 million) Uruguay, Brazil such as beef. MT and Bolivia. - U.S. imports have grown 75 percent respect 2009 in this category - United States became the second largest beef supplier in 2011 and holds 25 percent of import market share Edible Beef 3,911 Offa The United States ls (liver) 10,000 tons 16.4 0 Local production -holds 95 percent of (HS, MT ($5.4 p covers most of ercent percent 020622) the market size. import market. million) U.S. imports grew 15 Frui - Brazil is the t and 14,222 percent in 2011 and Vegetable hl 30 0 second largest United States supplier and holds juices N/A percent percent 23 remains as the percent of (HS 2009) ($2.5 ma largest importer rket share in million) 2010. holding 31 percent of market share. - Growing local pet industry. - There is an 12,250 informal industry - The United States MT holds 22 percent of Pet foods 45,000 17 arising. .6 0 the market, with an (HS 230910) MT p - Colombia 42 ercent percent ($13.84 percent), and 21 percent increase million) Argentina (31 from 2009. percent) are major competitors. - Peruvians are major consumers of - Major exporters turkey during are Brazil (52 Christmas and New 4,598 percent) and Chile Year’s. tons Tur (34 percent) - The food retail key 13,000 27.2 6 followed by the sector is becoming (HS 020727) MT percent percent (7.6 United States with more popular not million) 14 percent. only in Lima, but also - Local poultry in the provinces. industry is strong. - USAPEEC has initiated a market penetration plan. 10 - Peruvians are ,050 TRQ: - Strong local major consumers of Poultry meat tons 56.2 13,997 industry. ultry. cuts $23,000 mi p po ercent tons - Frozen llion - TRQ: 6 percent (HS 020714) ($8.53 0 presentation is mi increase per year. llion) percent not common - Colombia is the major import B 4,449 read, pastry, supplier and holds United States holds tons 21.1 0 cookies N/A 22 percent of 14 percent of import ($10.2 percent percent (HS 1905) mi market share. market share. llion) Local companies are very strong. 1,152 - United States grew Soup 38 percent in 2011 s & tons B 20.6 0 - Local companies and is the major roths N/A p are very ercent percent import supplier in (HS 2104) ($2.63 competitive mi this category.holding llion) 33 percent of import market share - United States grew 5,557 16 percent in 2010 tons S and is the major auces 15 0 - Local companies are very import supplier in (HS 2103 N/A ) percent, percent ($9.87 competitive. this category. million) Holding 32 percent of import market share - U.S. imports have grown 161 percent in respect to 2009. The United States is the Nuts and 452 tons - Chile (37 major supplier with a percent of the 61 percent of the lmonds N/A 40 0 market) is the import market. (HS 0802) ($2.7 percent percent second largest - Importers million) supplier. recognize that U.S. quality of nuts and almonds is better than competitors. - Argentina (53 - There is a niche percent), Chile market for quality (32 percent), and wines for which the 8.1 United States can be 15 Spain (7 percent) .7 0 W 21 million appreciated and price ine mi pe are major rcent percent llion liters exporters. competitive. (HS 2204) liters ($24.87 - Only regular - Peru’s wine mi llion) wine consumers consumption is recognize U.S. growing. Right now is wine quality. above 1.3 liters. Note: TRQ = Tariff Rate Quota, on a first-come first-serve basis. Sources: World Trade Atlas, USTR, Ministry of Agriculture (Minag), Gestion and El Comercio Newspapers B. Products not Present in Significant Quantities, but which have good sales Potential: Average Annual Produ ct/ Produ Imp Key Constraints Over o Import r Import ts ct Market Developmen Market Attractiveness t Ca 2011 Growth Tariff for the U.S. tegory (2006- Rate 2011) - Importers are Peaches, 2,968 - Chile is major supplier interested in U.S. cherries and tons Ne percent of the peaches and nectarines. ctarines ($2 13.6 p 0 ercent with 99 .3 percent market. - Duty free access for (HS 0809) million) this category. - Chile is the major - There is a window of 61,859 0 supplier with 92 percent opportunity for the Apples and Tons percent of the market. United States between Pears 20.2 percent - The United States is November and February. (HS 0808) $44 the third largest supplier Local consumers mi llion with 2 percent of the recognize U.S. apples market. and pears quality. Grapes, 6,633 22 percent 0 - Chile holds almost 88 - U.S. window: raisins tons percent percent of the market. September to December. (HS 080620) In 2011 U.S. imports ($14.3 reached $1.1 million due million) to a less Chilean production. - United States holds 60 percent of import market 2.4 35 - Recognized quality of tons Citrus percent - Chile is the second -23 percent major U.S. oranges and supplier with 40 (HS 0805) $30,546 p tangerines. ercent of the market. - Export window for the United States is from January to March. - Peruvians are not used to eating pork. - Local industry produces more than 3,005 - Pork imports are 100,000 MT growing. tons - The industry is the Pork Meat - U.S. pork benefit from 63 percent 2.4 (HS 0203) p same as the poultry ercent TPA implementation. ($6.9 industry. mi - llion) - Chile is the major supplier with 79 percent of the market and second is Canada with 15 percent - There is a high-end segment for gourmet sausages, in which the United States can compete. S 547 tons ausages - Major exporter is Chile United States holds 19 (HS 1601) 28 p 2.4 ercent with 44 percent of the percent of import ($1.6 percent mi market market. Imports has llion) grown 142 percent in 2011. Fast food restaurants are main channel for this category. - The United States has quality products to H 74 tons - Major suppliers are am, introduce to the gourmet p Italy (43 percent of the rocessed 32 .42 percent 3 HS ($0.84 percent ma market rket) and Spain (39 160241 million) p - TPA: 7 years ercent). U.S. imports grew 95 percent in 2011. - Local breweries are very strong and owned 8.9 b - Niche market for y international premium beers. mi companies. llion - Growing consumption B - Local breweries eer liters p of beer (over 40 lts per roduce and import new (HS 2203 5.6 percent 0 ) percent b capita) rands for introduction ($4.5 - Duty free entrance. mi in the market. llion) B Lack of U.S. brands razil is the major within the market. supplier (53 percent of the market). Note: TRQ = Tariff Rate Quota, on a first-come first-serve basis. Sources: World Trade Atlas, USTR, Ministry of Agriculture (Minag), Gestion and El Comercio Newspapers C. Products not Present Because They Face Significant Barriers None Section V. Key Contacts and Further Information If you have any question or comments regarding this report or need assistance exporting to Peru, please contact the Foreign Agricultural Service in Lima at the following address: U.S. Embassy Lima, Foreign Agricultural Service (FAS) Mailing Address: Office of Agricultural Affairs, Unit 3785, APO AA 34031 Address: Av. La Encalada cdra. 17, Monterrico, Lima 33 Phone: (511) 434-3042 Fax: (511) 434-3043 E-mail: For further information, check the FAS web site or our web site Please, also refer to our other current food market related reports: Exporter Guide, Food and Agricultural Import Regulations and Standards (FAIRS), FAIRS Export Certificate and Retail Food Sector. Ministry of Foreign Trade and Tourism (MINCETUR) Minister: Jose Silva Martinot Address: Calle Uno Oeste 050, Urb. Corpac, San Isidro, Lima 27 Phone: (511) 513-6100 Fax: (511) 224-3362 Web site: Hotel and Restaurant Association (AHORA) President: Fredy Gamarra Address: Av. Benavides 881, Miraflores, Lima 18 Phone: (511) 444-4303 Fax: (511) 444-7825 E-mail: Web site: American Chamber of Commerce (AmCham Peru) Executive Director: Aldo Defilippi Address: Av. Ricardo Palma 836, Miraflores, Lima 18 Phone: (511) 705-8000 Fax: (511) 241-0709 E-mail: Web site:
Posted: 29 December 2012