Food Service - Hotel Restaurant Institutional

An Expert's View about Food and Beverage Services in Peru

Posted on: 20 Jan 2012

In 2010, food service sales in Peru accounted for about $5.2 billion. Full service restaurants represented almost 65 percent, with almost 40 percent of the sales coming from high-end food service.

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: 12/22/2011 GAIN Report Number: Peru Food Service - Hotel Restaurant Institutional 2011 Approved By: Emiko Purdy Prepared By: Alvaro Loza Report Highlights: In 2010, food service sales in Peru accounted for about $5.2 billion. Full service restaurants represented almost 65 percent, with almost 40 percent of the sales coming from high-end food service. Growth increased by 8 percent in respect to 2009. Total food service imports were estimated at $1 billion, or 20 percent of total food service sales. Trade opportunities for U.S. food products increased after the implementation of the U.S.-Peru Trade Promotion Agreement (PTPA). Products for the food service sector that will benefit from PTTPA include food ingredients, fruits, cheeses, processed fruits and vegetables, and meats and specialties. Post: Lima Executive Summary: Peru has continued its policy of economic liberalization in the last 10 years. It is said that Peru has been one of the fastest-growing economies in the region, principally based on growth in services, followed by growth in textile manufacturing and extractive industries such as agriculture, fishing, and mining. This economic growth has been fueled by macroeconomic stability, improved terms of trade, rising investment, and increased consumption. The Peruvian government has identified priorities that need to be developed rapidly in order to secure its growth and increase attractiveness to foreign investments. In that sense Peru is looking to: Promote tourism Reduce the national poverty rate Continue Peru’s free-trade path Increase regional and international integration especially with the United States. Continue attracting foreign investment Enhance competitiveness Ensure a smooth democratic political transition According to the National Institute of Statistics and Data Processing (INEI), tourist services production rose 7 percent in 2010; this increase is mainly due to an increase reported in restaurant activities (8 percent). The Ministry of Foreign Trade and Tourism reported that number of foreign tourist increased by 12 percent in 2009, reaching 2.8 million visitors. The evolution of incoming tourism was particularly important, considering that Peru’s most primary tourist attraction, Machu Pichu, was closed for the first three months of 2009. The tourist destinations that showed largest increase in number of visitors were: Lake Titicaca (176 percent), Pachacamac (42 percent), and Kuelap (35 percent). Peru’s position as a world tourist destination continues to improve. The Country Brand Index published by the international consulting firm Future Brand, emphasizes that Peru is the only Latin American country recognized as a genuine destination and ranks it at seventh and ninth in the categories of authenticity and history, respectively, of a total of 110 countries. 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 the first half of 2011, the restaurant sector grew by 9.3 percent in year-on-year terms, with roast-chicken and fast-food chains performing particularly well. 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 of high quality services and have forced changes and improvements in food preparation techniques and fostering awareness about the proper handling of ingredients. The impact of the global downturn has so far been fairly modest in terms of consumer power, and the economy is likely to post a significantly higher growth rate in 2010. Overall, gross domestic product (GDP) per capita and average incomes have tended to increase, although the benefits of growth are concentrated geographically in the coastal area where GDP per capita is already significantly higher than elsewhere. The increase in disposable incomes has led to increased consumption but reduced domestic savings, which are likely to have long-term implications for growth and consumption in the country. In 2010, food service sales in Peru accounted for about $5.2 billion. Full service restaurants represented almost 65 percent, with almost 40 percent of the sales coming from high-end food service. Growth increased by 8 percent in respect to 2009. Total food service imports were estimated at $1 billion, or 20 percent of total food service sales. Estimated Consumer Food Service by Type (Current Value): 2006-2010 Sub Secto Food Service (US$ Million) r 2006 2007 2008 2009 2010* Full-service restaurants 2,112 2,409 2,983 3,126 3,385 Cafes/Bars 571 690 840 918 1,010 Fast Food 177 226 234 266 292 Home Delivery 62 75 94 98 105 Street stalls/kiosks 291 339 467 449 472 TOTAL 3,213 3,737 4,619 4,857 5,264 growth % 8% 16% 24% 5% 8% Source: Post estimations / *Preliminary The niche market for U.S. exporters in this sector include high-end hotels and restaurants, family style restaurants, fast food chains and coffee shops. Fast food chains present the fastest annual growth with approximately eight percent in the last five years. Products for the food service industry that will benefit from PTTPA with lower or duty free tariffs include food ingredients, fruits, cheeses, processed fruits and vegetables, and meats and specialties. Lima is the major market for consumer-oriented foods with almost one third of total population and more than 60 percent of the national income. High and middle-income consumers, currently the main market for U.S. food sales, reach around 1.8 million inhabitants that have a monthly family income on average of $1,400. Roughly 35 percent of this income is spent on food. Social factors that affect the food service market include tourism growth, (7 percent per year), urban expansion, an increase of women in the workforce (38 percent), and an increasing percentage of a 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 1. Peru is the fastest growing 1. Peruvians prefer meals using economy in the region. fresh products. 1. Appreciation for U.S. food quality 1. Low presence of five stars and culture. hotels chains in Peru makes harder U.S. products penetration through 1. Food service products will benefit this channel. from PTTPA with lower or no tariffs 1. Peruvian food is tasty. U.S. 1. Peru is opening its market for exporters need to incorporate food new competitors in the sector. ingredients in international and traditional menus. 1. Fast food chains are expanding in Lima suburbs and in major cities 1. Limited infrastructure and low (Arequipa, Trujillo, Chiclayo, and Piura). quality service discourage longer stays of international tourists. 1. Peru has a government fund to promote tourism. 1. Culinary culture is growing demanding high quality food products. 1. Increasing investment interest of international chains in association with local investors for new projects development. Section II. Road Map for Market Entry A. Entry Strategy U.S. exporters can approach the Peruvian food service market through a large importer, wholesaler/distributor or a specialized importer. 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 market consumer trends, current market developments, and trade business practices. In addition, it is recommended that U.S. exporters work with chefs and local importers in performing innovative marketing activities in the high-end food service sector to: Incorporate U.S. food ingredients in local and international menus. U.S. food products strength in this market is that they are considered to be of superior quality. A. Market Structure Food service sources are mainly domestic due to strong local preferences for 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 2010 Hotel Number of Number of Number of Outlet Location Category Outlets Rooms Beds Lima Provinces Five-stars 35 4,066 7,400 20 15 Four-stars 49 3,552 6,663 27 22 Three-stars 528 14,973 28,629 76 452 Two-stars 1,072 21,538 38,203 196 880 One-stars 357 6,236 10,808 93 264 Total 2,041 50,365 91,703 412 1,633 Source: Ministry of Foreign Commerce and Tourism (Mincetur) The Peruvian government has been actively promoting tourism. In September 2009, 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 considerate as receptive tourism by the Ministry of Foreign Trade and Tourism. It has been estimated that receptive tourism growth was 12.4 percent in 2010. Moreover, hotels expanded by 8 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 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 main attractions for different visitors around the world. Visits by foreign tourists rose 7.5 percent in 2010. The number of visitors that arrived to Peru last year was around 2.8 million, which represented foreign currency earnings of $2,7 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 2010, classified lodging establishments offered over 90,000 beds, 3.4 percent more than in 2009. In addition, five- star hotels and four-star hotels increased their lodging capacities by 8 and 7 percent respectively. 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 market which have not yet been fully explored. An example of this is the opening of Marriott’s 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 projects constructions 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- 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 hotel projects will take place in Plaza San Miguel and Jockey Plaza Shopping Center, which will both 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 $89 daily. Food represents the third highest expense (18 percent), behind lodging and transportation (28 and 20 percent respectively). Foreign tourist considers lodging to be more important than domestic tourists. The principal destinations for foreign tourists are Lima (94 percent), Cusco (84 percent), Puno (58 percent), Arequipa (35 percent), and Ica (18 percent). Lima travelers often include corporate tourists. The high season for foreign tourists is during the months of July and August. Around 70 percent of tourists are between 25 and 54 years old with 32 percent of this group between 25 and 34 years old. Male visitors account for 66 percent of total tourists. Purpose of visit: vacations (61 percent), business (19 percent), visit family or friends (10 percent), attending seminars (4 percent). Types of tourism: urban (93 percent), cultural (70 percent), ecological (47 percent), adventure (36 percent, for example, trekking), experiential (32 percent), and thermal bathing (22 percent). Restaurant preferences: Peruvian style (79 percent), seafood (41 percent), and meat (37 percent). Accommodations: vacations: three star hotels (80 percent); business: five star hotels (44 percent), and four-star hotels (31 percent), seminar attendance: five-star hotels (30 percent), four-star hotels (29 percent), and three-star hotels (34 percent). Major Hotels Sales (2010) Company Total Estimated Sales ($ Million) Corporacion Turistica Peruana S.A.C. 44 Condor Travel S.A. 31 Lima Tours S.A. 26 Inversiones La Rioja S.A. 25 Nessus Hotel Peru S.A. – Casa Andina 25 Thunderbird Hoteles Las Americas S.A. 19 Orient-Express Peru S.A. 17 Inversiones Nacionales de Turismo S.A. 16 Hotelera Costa del Pacifico S.A. 16 Peru OEH S.A. 16 Lasino S.A. 13 Inmobiliaria de Turismo S.A. / Sonesta Posada del Inca 12 Corporacion el Golf S.A. / Los Delfines 11 Peru OEH Machu Picchu S.A. 10 Hoteles Sheraton del Peru S.A. 9 Corporacion Hotelera Metor S.A. 9 Consorcio Hotelero Las Palmeras S.A.C. 8 Inka Terra Peru S.A.C. 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. The number of restaurants has increased up to 70 thousand within the country, 48 percent of the restaurants are in Lima. Shopping centers, particularly outside of Lima, have 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 promissory 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 Mistura Food Festival was born in 2008 to showcase Peruvian ingredients, traditional dishes and culinary trends, and it has consolidated as the most important culinary fair in Latin America so far. In September this year Mistura set its fourth version and was a great success. 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. As for instance, 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‖. In Lima, APEGA successfully sponsored the ―Second Mixed Gastronomy Fair for 2009‖ with the participation of Peru’s most important chefs. Mincetur promoted the national campaign ―The Seven Gastronomical Wonders of Peru.‖, which as an online contest to choose the seven best culinary dishes in Peru. 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. Consumers’ behavior in cities outside of Lima has changed and is now very similar to the behavior of modern Lima consumers. The frequency of visits to fast food outlets in the provinces has increased from 1-2 to 2-3 times per month and sales are expected to increase by in 20 percent in 2011. Sales levels are similar to modern Lima districts of lower-income areas that are located in the southern, northern, and eastern outskirts of Lima. The average purchase amount for high- income consumers is about S/. 20 and S/.10-15 for lower-income consumers. Based on industry estimates, about 100 franchise companies are thought to be operating over 1,000 outlets. The franchise market has focused mainly on the gastronomy sector (restaurants), accounting for 64 percent of the sector. Foreign-owned franchises account for about 70 percent of the Peruvian market. U.S. franchises are the most prominent and entered Peru in 1980’s. KFC, for example, still enjoys a market share of about 50 percent. Other major players include Spain, Mexico, Argentina, Canada, Brazil and Colombia. Sales of hamburger fast food restaurants were estimated at $70 million in 2011. There are three main hamburger fast food chains in the country: Bembos, McDonald's, and Burger King. The Peruvian chain Bembos leads the market with a share of 50 percent. This year, sales are projected to grow by 15 percent due to the opening of more restaurants in the country, increased purchasing power, and increased employment of women (who have less time to cook). These three chains target young people (up to 35 years old) and socioeconomic levels A, B and C. Bembos owns 38 of the 74 fast food restaurants while McDonald's and Burger King own 21 and 15 restaurants respectively. These restaurants are located in seven cities: Lima, Huancayo, Trujillo, Arequipa, Piura, Cusco, and Chiclayo. The estimated consumption per person in the fast food industry ranges from S/. 3 to S /. 11 and fast food chains serve between 100,000 to 300,000 guests per day. The U.S. niche market is constituted by high-end restaurants, some family style restaurants, coffee shops, and fast food chains. These restaurants commonly purchase between 10 to 20 percent of imported food products, usually in food ingredients (sauces, meats, processed fruit and vegetables, cheeses), specialties (pork products), wine and liquors. Broiled chicken restaurants, locally called ―pollerías‖ reach around 1,100 points of sale. Annual growth is 10 to 15 percent. Major ―pollerías‖ account for seven food chains (120 outlets). These chains compete directly with supermarkets (30 percent market share). Delivery accounts for 35 percent of pollerias sales. Their target market is families and office employees. Purchases of chicken and French fries, the two most important ingredients, are mainly local but are good prospects for future U.S. exports. Fast Food Chain profiles (2010) Name o Food Sales f Restauran No. of t Ou ity tlets ($million C) Kentucky Fried Chicken ayo, De 50 Lima, Trujillo, Arequipa,Chicl losi S.A 58 . Huancayo, Cuzco, Ica, Piura Burger King 15 Pizza Hut 38 Lima, Trujillo, Arequipa Sigdelo S.A 24 . Mc Donalds Operaciones Arcos Dorados 46 22 Lima, Trujillo, Cuzco, Arequipa de Peru S.A. Bembos Burger Grill Lima, Arequipa, Trujillo, Juliaca, B embos S.A 52 26.C. Cuzco, Chiclayo, Piura Domino’s Pizza Comercializadora de 25 5 Lima, Callao, Arequipa Alimentos Latinos S.A.C. Papa Johns Corporacion Peruana de 14 9 Lima, Trujillo Restaurantes S.A. Note: Estimated values for 2010 Source: The 10,000 Major Companies in Peru (2010) 3. Institutional Contractors 1. This sub-sector accounts for approximately 16 percent of total food service sales with an estimated growth of 13 percent in 2010. 1. 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. 1. 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 (2010) Company Total Sales Type of ported Food Name ($Million) Company Food Supply Im Products Pasta, wheat flour, margarine, food Processor, Wheat, wheat flour, A ingredients, mayonnaise, licorp S.A. 1,315 importer, , soy cake, d b edible oils reakfast cereals, istributor sauces. cookies, jelly, ice cream, sauces, pet food. Processor, Glo Dairy and pork products, Dairy ingredients, juices, ria S.A. 712 importer, d juices, canned seafood. lactose and other sugars. istributor Corporacion 472 Processor, Sodas, juices. Canned fruit, gelatin. Jose R. Lindley importer. S.A. Qu Sweeteners, fishmeal, Canned food, food ímica Suiza Importer, S.A. 393 late, wine, ingredients, sweeteners, d chocoistributor processed fruit. animal feed. Deprodeca S.A.C 389 Distributo Dairy Products, jellys, r canned food, Dai Dairy ingredients, ry products, soups and b chocolate, infant roths, infant formula, Nest Processor, formula, food le Peru instant 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 mporter, xur S.A. 158 I Di preparations, Bakery Canned fruit, bakery stributor goods, Liquors G.W.Yi Canned fruits, canned Canned fruits, canned Chang & C seafood, chocolate, wine seafood, chocolate, wine ia S 14 Importer, .A 1. distributor and spirits. and spirits. Processor, Laive S.A. 102 Dai ese, butter and pork ry and pork produ Chects, importer products. Kraf Processor, Cheese, sauces, bakery t Foods importer, Cookies, juices, cheeses. and dairy ingredients, Peru S 90 .A. distributor chocolates. Unilever Andina rocessor, Peru S 75 P Sauces, soups. Sauces, soups. .A. importer mporter, Chocolate, confectionary, Chocolate, confectionary, Perufarma S.A. 71 I distributor wine and liquors. wine and liquors. De French fries, bakery losi S ast food .A. 50 F amburgers, salads. franch Hise goods, sauces, cheese. Sociedad Suizo Processor, ry, Peruana de 44 S Pork products, poultausages, cheese. Embu importer edible offals, cheese tidos S.A. Peas and lentils, M s, popcorn, ayorsa S.A. 40 Wholesaler, Peas and lentil popcorn, canned fruit, importer canned fruit, starch. starch. Cheese, meat Sigdelo S.A. 38 Fast food amburgers, pizza preparations, sauces, chain H French fries, condiments Processor, Pork products, cheese, Braedt S.A. 33 importer, Pork products, cheese. dairy ingredients, distributor. condiments. A Processor, Chocolate, con Chocolate, confectionary, fectionary, rcor del Peru it, bakery S.A. 30 importer, b canned fru akery goods, canned d goods, bakery istributor fruit. ingredients. B st food embos S.A.C. 26 Fa g French fries, meat, ers ch amburain H cheeses Diageo Peru Importer, S.A. 22 uors. Liquors. d Liqistributor Drokasa Peru porter, S.A. 17 Im ine and liquors. d Wine and liquors. Wistributor Hal or, Processed meats, meats ema S.A. 15 Process importer and Meats and edible offals. edible offals. Agro Co , Processed meats, meats rporacion Processor 15 S importer and ed Meats and edible offals. ible offals. .A.C. Oregon Processed meats, meats Foods Importer, Meats and edible offals, S and edible offals, fresh .A.C 15. distributor fresh fruits. fruits. S Processor, ervicios 0 Processed meats, meats importer, Frigorificos S.A 1. d and ts and edible offals. edible offal Meas. istributor French fries preserved, French fries preserved, L.S. Andina rter, chocolates, sweeteners, chocolates, sweeteners, S.A. 7 Impo distributor confectionary, olive oil, confectionary, olive oil, baked goods baked goods KMC opcorn, Microwave popcorn, International Microwave p 4 Importer, S distributor soups, baked goods soups, baked goods. .A.C. Destileria Processor, Wholesalers, retailers, Liquors. Peruana S.A 6. importer food service ter, L C e Hijos S.A. 6 Impor d and liquors Wine and liquors istribu Wine tor Processor, Industrias Chocolates, pasta, M importer, Wheat. olitalia S.A 4. d confectionary, 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, Peruvian imports of consumer-oriented foods grew to $745 million in 2010, up 36 percent from the 2009 level. The United States became the second largest supplier of this category, accounting the 14 percent of the market share. Although Chile is still leading the list, U.S. exports grew by 80 percent ($107 million) in respect to 2009 which has certainly decreased the reach of Chile and has left Colombia as the third largest supplier of consumer-oriented goods. 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 reement In force and Colomb Free Trade Agia) MERCOSUR (Argentina, Brasil, Uruguay, Economic Complementation In force Paraguay) Agreement 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 Th To come into ailand Third Protocol force o come into Japan Economic Partnership Agreement T force Eu me into ropean Union Free Trade Agreement To co force Co ome into sta Rica Free Trade Agreement To c force Panama Free Trade Ag e into reement 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 2010 Product Advantages and C Major Supply ategory/ y Supply Countries Disadvantages of Local Ne Sources Strengths of Ke t Imports Suppliers New Zealand: 31 percent U.S.: 21 Dairy Products percent New Z - Only two companies are ealand is a major supplier of dairy (Excl. Cheese) Chi - le: 12 major producers of ingredients, especially HS 040210 milk ($127.85 percent 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. MERCOSUR and have tariff preferences Gourmet cheeses are not ($11.59 million) percent Netherlands: 7 made locally. percent New Zealand: 7 percent Colombia: 52 percent Ecuador: 10 Sna - Local producers are major ck Foods percent 19 - Tariff preferences are applied to food processors. They ,505 tons Chile: 7 neighboring countries. import food ingredients for ($54.1 million) percent 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 - Chile is the main supplier because of from November to Fresh Fruits percent 69 proximity, price and duty free entrance. February for that will ,174 tons Argentina: 5 - Argentina has a window for pears and benefit the United Stated ($49.83 million) percent U.S apples. - Local fruit sold in retail .: 2 percent markets is of lower quality. U.S.: 31 percent Fruit and Brazil: 23 - Chile has tariff and proximity vegetable juices p - Local brands are well ercent advantages. 1,422,272 L Chi positioned in the market at le: 13 - Brazil has increased its exports of ($ 2.5 million) p competitive prices. ercent pineapple juice Argentina: 11 percent Argentina: - Major local breweries are W - Proximity and recognized quality of ine and Beer 41percent well positioned, price 17.42 Million C Chilean and Argentinean wines. hile: - Brazil is the major supplier of imported competitive, and belong to liters 22percent ($29.5 million) S bee international companies, r. pain: 11 representing 95 percent of pe rcent the market. Brazil: 8 - Local wine is well percent positioned and price Italy: 7percent competitive, but does not France: 3 satisfy demand. percent Ecuador: 3 percent 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, chilled or Chile: 14 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 satisfy the demand. Paraguay: 8 percent Chile: 29 percent Bolivia: 15 percent R - The pork products ed Meats Argentina: 11 industry also imports (prepared, percent - Chile has tariff and proximity preserved) Spain: 11 advantage prepared meats. s. 1,238 tons - U.S. product tariffs will percent decrease throughout 5 to 7 ($5.00 million) Italia: 10p years. ercent 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 24,410 tons U.S.: 20 reopened in October 2006 - Local poultry producers . are major suppliers with ($29.32 million) percent - Brazil and Chile are major suppliers of Argentina: 16 poul good distribution channels. try 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: Average Produ Market Annual ct/ Import Key Constraints Market Produ Size Imports Import ct Tariff Over Market Attractiveness for Ca 2010 Growth tego 2010 ry es Rate Development the U.S. t. (2005- 10) - U.S. cheeses are mainly used in the 040610, food processing 20 - U.S. competitors sector, but have and are: Uruguay potential in the HRI 40 2,341 0 (16percent) and and Retail Food Netherlands Sectors. tons 14.4 percent Cheese 18,480 (16percent). - In 2010, the United percent 040630 (HS 0406) MT ($11.59 040690 - Strong States was the first mi 0 preference for EU supplier with a llion) percent cheese at high- market share of 38 end HRI and percent. Retail Sectors. - TPA*: 17 years linear, 2,500 MT quota with 12 percent increase per year. - Major suppliers are - United States Colombia($26 represents 2 percent 14,492 of total imports, Confe million) and ctionary 0 tons however, U.S. – Ecuador ($4 non N/A 16.1 percent million). imports grew 14% in chocolate percent ($37.4 - Local industry is 2010. (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 2010. - United States is the 14,229 - Local Production second largest Food tons 16.4 is strong supplier and holds Preparations N/A pe 0 rcent p 17 percent of market ercent - Chile is the (HS 210690) ($120 major importer share. million) (33 percent). - In 2010 imports grew 28 percent. - Due to an increment of income levels, local consumers are demanding high Tota quality products, l - Competes with b such as beef. eef and 1,435 0 quality meats Prime and - U.S. imports have from Colombia, choi offals tons 7.9 percent ce beef market: ($5.73 percent A grown 75 percent rgentina, (HS 020230) 274,425 million) Uruguay, respect 2009 in this Brazil MT category and Bolivia. - United States became the second largest beef supplier in 2010 and holds 25 percent of import market share Edible Beef 3,911 Offals (liver) 10,000 tons 16 Local production - The United States .4 0 (HS, MT ($5.4 p covers most of holds 95 percent of ercent percent 020622) mi the market size. import market. llion) U.S. imports grew 15 Frui - Brazil is the t and 14,222 percent in 2010 and Vegetable hl 30 0 second largest d hold United States s juices N/A pe supplier anrcent percent 23 remains as the percent of (HS 2009) ($2.5 m largest importer arket share in million) 2010. holding 31 percent of market share. 12,250 - Growing local - The United States MT ustry. holds 22 percent of Pet foods 45,000 17.6 0 pet ind - There is an the market, with an (HS 230910) MT percent percent ($13.84 informal industry 21 percent increase million) arising. from 2009. - Colombia 42 percent), and Argentina (31 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 - The food retail key 13,000 27 (34 percent) .2 6 sector is becoming (HS 020727) MT p followed by the ercent percent (7.6 United States with more popular not million) 14 percent. only in Lima, but also - Local poultry in the province. 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 $23,000 13,997 industry. poultry. cuts percent tons - Frozen llion - TRQ: 6 percent (HS 020714 mi) ($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 cookies N/A tons 21.1 0 22 percent of 14 percent of import (HS 1905 ($10.2 percent percent ) mi market share. market share. llion) Local companies are very strong. - United States grew 1,152 38 percent in 2010 Soups & tons cal companies and is the major Broths N/A 20.6 0 - Lo p are very import supplier in ercent percent (HS 2104) ($2.63 competitive this category.holding million) 33 percent of import market share - United States grew 5,557 16 percent in 2010 tons S mpanies and is the major auces 15 0 - Local co 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 61 percent of the a percent of the lmonds 40 0 market) is the import market. (HS 0802 N/A ) ($2.7 percent percent second largest - Importers million) supplier. recognize that U.S. quality of nuts and almonds is better than competitors. 15.7 - Argentina (53 Wine 21 8.1 percent 0 percent), Chile - There is a niche (HS 2204) million million percent (32 percent), and market for quality liters liters Spain (7 percent) wines for which the ($24.87 United States can be mi are major llion) exporters. appreciated and price - Only regular competitive. wine consumers - Peru’s wine recognize U.S. consumption is wine quality. growing. Right now is 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 Produ c Annual t/ Import Key Constraints Over Produ Imports ket Attractiveness c Import t iff Market Developmen Mart Catego 2010 ry G Tar rowth Ra for the U.S. te (2005-10) - Importers are Peaches, 2,968 cherries and tons 13 hile is major supplier interested in U.S. .6 0 - C Nectarines ($2.3 p with 99 percent of the peaches and nectarines. ercent percent (HS 0809) mi market. - Duty free access for llion) this category. - Chile is the major - There is a window of 61,859 0 supplier with 92 percent opportunity for the Apples and Tons 20 of the market. United States between .2 percent Pears p - The United States is November and February. ercent (HS 0808) $44 the third largest supplier Local consumers mi llion with 2 percent of the recognize U.S. apples market. and pears quality. 6,633 - U.S. window: 0 Gr September to December. apes, tons percent - Chile holds almost 88 In 2010 U.S. imports raisins 22 percent percent of the market. reached $1.1 million due (HS 080620) ($14.3 mi to a less Chilean llion) production. - United States holds 60 percent of import market 2.4 35 - Recognized quality of tons C s the second itrus percent - Chile i -23 percent ma U.S. oranges and jor 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 3,005 - Pork imports are produces more than growing. tons 100,000 MT Pork Meat - U.S. pork benefit from 63 percent 2.4 (HS 0203) p - The industry is the ercent TPA implementation. ($6.9 same as the poultry mi - llion) industry. - 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 2.4 percent with 44 percent of the percent of import ($1.6 percent mi market market. Imports has llion) grown 142 percent in 2010. 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 3.42 Italy (43 percent of the rocessed 32 percent market HS ($0.84 percent market) and Spain (39 160241 million) p - TPA: 7 years ercent). U.S. imports grew 95 percent in 2010. - 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 5.6 percent 0 p of beer (over 40 lts per roduce and import new (HS 2203) 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: 20 January 2012

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