Food Service - Hotel Restaurant - 2011

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

Last updated: 19 Mar 2011

At $3.2 billion, the sales of Peru?s full service restaurants accounted for 65 percent of those of total food service sector in 2009. Almost 40 percent of this is the sales made by high-end restaurants.

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: 12/27/2010 GAIN Report Number: Peru Food Service - Hotel Restaurant Institutional 2010 Approved By: Emiko Purdy Prepared By: Alvaro Loza Report Highlights: At $3.2 billion, the sales of Peru?s full service restaurants accounted for 65 percent of those of total food service sector in 2009. Almost 40 percent of this is the sales made by high-end restaurants. Importation of food products used by the food service sector was estimated at $1 billion, 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 (US-PTPA). Food products used by the food service sector that will be benefitted by the US- PTPA are food ingredients, fruits, cheeses, processed fruits and vegetables, meats, and specialty foods. Post: Lima Executive Summary: Section I. Market Summary Despite the international financial crisis, Peru?s economy has experienced one of the highest growth rates in Latin America in the last five years. This was stimulated by investments in mining, construction, gastronomy, and tourism sectors, all of which has had a positive impact on the food service sector. Peru has also proven its capacity to host international conferences, like the Asia-Pacific Economic Cooperation and the Organization of American States, which have further motivated investors. It is projected that by 2012, the private sector will invest almost $2 billion on tourism, including more hotels, restaurants and other services connected to the food service sector. The Peruvian consumers? purchasing power, and economy are likely to post significantly higher growth rates in 2010. Overall, apart from 2009, gross domestic product (GDP) per capita and average disposable incomes have shown a steady increase, although the benefits of growth have been concentrated in the coastal area where GDP per capita is already significantly higher than elsewhere in the country. 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 2009, food service sales accounted for nearly $4.9 billion of which full service restaurants represented almost 65 percent. From 2008 to 2009, Peru?s food service sales grew by 5 percent. During the same period, at $1 billion, Peruvian food service imports accounted for 20 percent of the country?s total food service sales. Estimated Consumer Food Service by Type (Current Value): 2005-2009 Food Service (US Million $) Sub Sector Growth (percent) 2005 2006 2007 2008 2009 08/09 Full-service restaurants 1,906 2,112 2,409 2,983 3,126 5 Cafes/Bars 565 571 690 840 918 9 Fast Food 169 177 226 234 266 14 Home Delivery 58 62 75 94 98 4 Street stalls/kiosks 279 291 339 467 449 -4 TOTAL 2,977 3,213 3,737 4,619 4,857 5 Source: INEI (Peruvian National Statistical Institute) Euromonitor International The niche market for U.S. exporters in the food service sector includes high-end hotels and restaurants, family style restaurants, fast food chains, and coffee shops. Fast food chains have demonstrated the fastest annual growth with approximately 8 percent in the last five years. Food service products that will benefit from the PTPA with lower or duty free tariffs include food ingredients, fruits, cheeses, processed fruits and vegetables, meats, and specialties. Lima is the major market for consumer-oriented foods with almost one third of Peru?s 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 with an average monthly family income of $1,200. These consumers spend roughly 32 percent of their income on food (12 percent of which is spent eating outside the home). Social factors that affect the food service market include the growth of tourism (7 percent per year), urban expansion, an increase of women in the workforce (38 percent) and a growing population of young people that demand fast food or meals prepared outside of the home. Advantages and Challenges of U.S. products to Peru?s Food Service Sector Advantages Challenges 1. Appreciation for U.S. food 1. Peruvians prefer meals quality and culture. based on ?fresh products.? 1. Food service products will 1. Low purchasing power; 78 benefit from the PTPA with lower percent of Lima?s population is or duty free rates. low-income consumers. Outside of Lima 87 percent of the 1. There are more population is low income. competitors in the sector, including international chains. 1. U.S. exporters need to incorporate U.S. food 1. Fast food chains are ingredients in international and expanding in Lima suburbs and Peru?s traditional menus. in major cities (Arequipa, Trujillo, Chiclayo and Piura). 1. Limited infrastructure and low quality service discourage 1. Peru?s government fund to longer stays of international promote tourism. tourists. 1. High-end hotels are associated with international chains and foreign operators to expand and assure high occupancy levels. 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 development, 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. Break down local preference for European specialties. The strength for U.S. food products in this market is that they are considered to be of superior quality, taste and presentation. 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 accounts for more than 70 percent of their profits in most cases. Almost all food service businesses purchase through intermediaries (97 percent). However, high-end restaurants and hotels import equipment directly. International franchises (KFC, Pizza Hut, Burger King, Mc Donalds), and the local chain Bembos, reach enough volumes to import some of their food ingredients directly. A. Sub-sector Profiles 1. Hotels Number of Hotels in Peru, Classify by Categories in 2009 Hotel Number of Number of Number of Outlet Location Category Outlets Rooms Beds Lima Provinces Five-stars 31 3,926 7,257 20 11 Four-stars 44 3,170 5,854 25 19 Three-stars 500 14,041 26,792 73 303 Two-stars 1,050 21,434 37,840 200 850 One-stars 362 6,340 10,902 97 265 Total 1,987 48,911 88,645 415 1,448 Source: Ministry of Foreign Commerce and Tourism (Mincetur) Growth in the tourism sector, according to the National Institute of Statistics (INEI) was 2.3 percent in 2009. Hotels expanded 2.5 percent, due to increased local tourism (6 percent), which offset the drop in hotel overnight stays by foreign tourists. The tourism boom, however, is not only caused by the increase in number of foreign visitors, but also by new investments in hotels and restaurants. The country often is featured in international tourism magazines as one of the most desirable tourist destinations in the world. At 2.1 million, the number of foreign visitors to Peru rose 3.6 percent in 2009 compared with the previous year. Tourism is one of the major industries in Peru, representing foreign currency earnings of $2.25 million. While tourists from Japan and the United Kingdom declined, there was a greater inflow of Argentinean (26 percent), Brazilian (29 percent), and Colombian (14 percent) travelers. Despite the international financial crisis, there were also increases of tourists from countries such as Canada (5 percent), United States (1 percent), Spain (7 percent), China (15 percent), and Australia (8 percent). In 2009, classified and unclassified (unclassified lodging are all not included in the chart above) lodging establishments offered almost 340 thousand beds, a 4.4 percent increase from 2008. Accommodations offered by classified and categorized hotel establishments rose by 2.4 percent in 2009. The niche market for U.S. exporters in this sub-sector is high-end hotels, mainly four and five-star, that use higher proportions of imported food products. Among all foods served in hotels, imported food items represented approximately 16 percent. 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 (75 percent), the center of business activities. Many hotels are developing strategic alliances with international hotel chains or key local groups, with the intent of having a hotel in every important tourist destination in Peru (Lima, Cuzco, Arequipa and Puno). The hotel sector experienced 10 percent growth in 2009 over a year ago level, however, the growth is expected to be more marginal level of 6 percent in 2010 due to global financial slowdown. According to the president of the Peruvian Hotel Society, a $1.5 billion dollar investment is expected over the next three years. Source: Ministry of Foreign Commerce and Tourism (Mincetur) International Visitor Profile (According to Mincetur): Source: MINCETUR Foreign tourists spend around $89 daily. Food represents the third largest expense (18 percent), with lodging and transportation topping the list (28 percent and 20 percent, respectively). Local tourists spend around $103 daily. Transportation is their highest expense at 41 percent followed by food at 16 percent. The top five destinations for foreign tourists are Lima, Cusco, Puno, Arequipa, and Ica. The high season for foreign tourists is July and August. Around 70 percent of foreign tourists are between 25 and 54 years of age. Male visitors constitute 66 percent of the total. Purpose of visits: vacations (61 percent), business (19 percent), visit family or friends (10 percent), attending seminars (4 percent), others (6 percent). Types of tourism: urban, cultural, ecological, adventure, live cultures, and sun bathing. Restaurant preferences: Peruvian style, seafood, and meat. Accommodations: for vacations, three star hotels; for business, five star hotels, and four-star hotels; for seminar attendance, five-star hotels, four-star hotels, and three-star hotels. Major Hotel Profiles (2009) Total Sales Name o of f Hote No. l Outle Est. (million City ts $) J.W. Marriott Inversiones La Rioja 1 26 Lima S.A. Country Club Lima Hotel 3 18 Lima, Piura, Tarma Los Portales Hotels Los Portales S.A. Libertador Hotels Inversiones Lima, Trujillo, Cuzco, Nacionales de Turismo 11 7 Puno S.A. Sonesta Posadas del Inca 6 15 Lima, Arequipa, Cuzco Inmobiliaria de Turismo S.A. Swissotel Hotelera Costa del 1 17 Lima Pacífico S.A. Miraflores Park Orient-Express Peru S.A. 3 22 Lima, Cuzco Inversiones Malecon de la Reserva S.A. Sheraton Lima Hotel & Casino Hoteles Sheraton d 1 12 Lima el Peru S.A. Hotel Monasterio Peru OEH S 17 Cuzco .A 1. Melia Hotel Corporacion Hotelera 1 10 Lima Metor S.A. Apart Hotel El Golf Los Incas Su 1 4 Lima ites El Golf Los Incas S.A. Doubletree El Pardo Hotel Inversiones B 1 8 Lima rade S.A. Inka Terra Hotels Inka Terra Peru 3 8 Cuzco, Tambopata S.A.C. Las Dunas Sun Resort Inversiones en 1 4 Ica Turismo S.A. Hotel & Suites Las Amer 4 3 Lima icas La Caja, Servicio de Hoteles S.A.C. Hotel Jose Antonio Car ima, Cuzco tir Peru 3 5 L S.R.L. Novotel Corporacion Hotelera 1 3 Cuzco del Cuzco S.A. Costa del Sol Hotel Costa del Sol S.A. Tu 9 Tumbes, Piura, Lima, rismo Costa d 5 el Sol Cajamarca, Chiclayo S.A. Plaza del Bosque Apart Hotel Hoteler 1 1 Lima a del Pilar S.A.C. Los Tallanes Hotel & Suites Tu 1 3 Lima rismo Los Algarrobos S.A. El Condado Suites Turismo Costa Sur 2 3 Lima S.A. Hotel Radisson Consorcio Hotelero 2 9 Las Palmeras S.A. Casa Andina Ne Lima, Cuzco, Ica, ssus Hoteles Peru 17 25 S.A Puno, Arequipa Business Tower Prince Hotel ima Figtu 1 4 Lr S.A. Hotel Las Americas Thunderbird Hoteles 1 23 Las Americas S.A. Source: The 10,000 Major Companies in Peru 2. Restaurants Peruvian gastronomy has earned international recognition. 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 eateries are always opening, due to growing numbers of foreign visitors eager to sample new food. The number of restaurants has increased to 70,000 throughout the country with 48 percent in Lima. Shopping centers, particularly those of outside of Lima, have many fast food chains as their tenants. The Peruvian government has been actively promoting tourism. In September 2009, the first general tourism law was enacted to promote tourism and entrepreneurial development, particularly in ?alternative zones,? the areas that have been adjusted recently to lodge tourists. State and private institutions help strengthen the sector: Promperu organized the First Gastronomic Tourism Fair, ?Peru Mucho Gusto? (Peru, pleased to meet you) in northern Peru, while in the south ?Tincuy 2009? was the regional fair. In Lima, The Peruvian Gastronomy Association successfully sponsored the ?Second Mixed Gastronomy Fair 2009,? with the participation of Peru?s renowned chefs. The Ministry of Foreign Trade and Tourism (MINCETUR), launched the national campaign entitled ?The Seven Gastronomical Wonders of Peru.? Increasing demands for modern and convenient commercial shopping centers in Lima and other cities have made franchising popular among 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. Based on industry estimates, about 100 franchises are operating over 1,000 outlets. The franchise market has focused mainly on restaurants, representing 64 percent of the sector. Foreign-owned franchises dominate the Peruvian market (around 70 percent). The United States introduced the concept of franchising in the 80`s, and it still enjoys the highest market share at almost 50 percent. Other key players in the Peruvian franchising market are Spain, Mexico, Argentina, Canada, Brazil and Colombia. The niche market for U.S. products 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), and wine and liquors. High-end restaurants purchase imported products from wholesalers, distributors or retailers. There is a growing trend to offer tourists a variety of dishes made from Andean products called ?Novoandina? cuisine. Bembos, a local fast food franchise, has grown 10 percent annually in the last five years. Bembos is viewed as the local hamburger of high quality. This franchise uses imported food ingredients to standardize products. With 36 outlets, Bembos reaches $19 million people. Major food franchises are expanding to middle and low-income areas in the suburbs of Lima and capitals of provinces. The total sales of these international and domestic franchises have reached $500 million in 2008. The fast food chains typically source its chicken and bread locally. However, they import meat, French fries and sauces from the United States, Argentina, and Chile. Broiled chicken restaurants, known as ?pollerías,? reach around 1,100 outlets in 2009. Annual growth is averaged at 10 to 15 percent. ?Pollerías? owns seven food chains (120 outlets). These chains compete directly with supermarkets (30 percent of market share) and delivery accounts for 35 percent of their sales. Their target market is families and office employees. Purchases of chicken and French fries, the two most important ingredients, are mainly local but are good prospects for future U.S. exports. Coffee shops use mainly local products in their menus but have strong potential to increase supplies of U.S. liqueurs. Major Restaurant Profile (2009) Name of Caterer No. of Outlets Food Sales ($million) La Rosa Nautica La Rosa Nautica S.A 1 5 . La Carreta Inversiones La Carreta S 2 3 .A. La Huaca Restaurant Huaca Pucllana S.A 1 3 .C. Astrid y Gaston Astrid & Gaston S.R 1 1.09 .L. Restaurant Jose Antonio Jose Anton 2 1.06 io S.R.L. Chifa Lung Fung R 1 1.03 estaurant Chifa Lung Fung S.A. Restaurant La Gloria 1 1.00 Chifa Royal Restaurante Royal S.A 1 0.76 . Restaurant Rafael B 1 0.71 ridget S.A.C. Restaurant La Costa Verde La Costa Verde 1 0.98 S.A.C. Source: The 10,000 Major Companies in Peru Many years ago the café culture in Peru was still in its infancy. Although coffee shops and salons de té (tea shops) were common decades ago, they became largely associated with the elderly and were no longer seen as fashionable. This has changed significantly with the spread of the international chain Starbucks, which can now be found in most malls in Lima, and elsewhere. This began a trend that has led to the updating of coffee houses, especially in richer neighborhoods and the business areas. The increasing popularity of these cafes can be attributed in part to increased access to U.S. sitcoms through cable and satellite TV. Their popularity with students and business people has also helped them thrive. For most Peruvians going to coffee shops is not a regular occurrence. However, those in the habit of visiting them are likely to go once a day during the working/studying week. As in other parts of the region, coffee shops have become very popular with a broader range of customers and they will continue to expand. As they become a way of life for more and more people, the variety of coffee shops will also increase, thereby reducing the market power of large international firms. The demand for coffee, milk and milk substitutes, flavorings will increase as a result. Peruvian coffee shops are beginning to emulate their U.S. counterparts by offering free Wi-Fi internet access. In a consumer market where most people do not have personal access to the internet, this could be usefully combined with internet café culture. Family Style Restaurants and Coffee Shops Profiles (2009) Name o o. of Food Sales f Restaurant N Outlets ($million) City Bohemia Café y Mas Boh o emia Corp S.A. 1/ 2 3 Lima, Cuzc Mangos 1/ 1 2 Lima Quattro D Quat 3 Lima tro D S.A 7 . Pasteleria San Antonio Pasteleria San Antonio 4 3 Lima S.A. Pardo?s Chicken Servicios de Franquicia 20 3 Lima Pardo?s S.A.C. Chili?s Cind 9 Lima el S.A 7. Tony Roma?s Inversiones La Floresta 3 1 Lima S.A. Starbucks ma, Arequipa, Delosi 29 54 Li S.A. Trujillo, Chiclayo Note: 1/ Estimated values for 2009 Source: The 10,000 Major Companies in Peru Fast Food Chain profiles (2009) Direct No. Food Food Purchas Name o ing f of Sales Import Re City Agent staurant Outle ($milli s for ts on) ($milli on) imports Kentucky Lima, Trujillo, Fried Chi 48 54 1.0 Arequipa,Chiclayo,Hu Direct cken Delosi S.A ancayo. Burger King Pizza Hu 12 t 80 Lima, Trujillo, S A Direct requipa igdelo S.A 24 38 0. . Mc Donalds Operaciones Arcos 30 22 1.50 Lima, Cuzco Direct Dorados de Peru S.A. Bembos Bu Lima, Trujillo, rger Grill B 47 26 0.75 A Direct, requipa, Cuzco, embos S Chi importer clayo, Piura .A.C. Domino?s Pizza Comercializa dora de 24 ima, Callao, 4.45 Non Le A A ter requipa Impor limentos Latinos S.A.C. Papa Johns Corporacion Peruana de 14 7 0.55 Lima Importer Restaurantes S.A. Note: Estimated values for 2009 Source: The 10,000 Major Companies in Peru (2010) 3. Institutional Contractors 1. This sub-sector represents approximately 14 percent of total food service sales, with an estimated growth of 10 percent in 2009. 1. U.S. marketing potential includes large caterers that supply airports and mining companies. Currently, these companies use mostly local products in their menus. 1. Vending machines and stores in mining camps require imported goods such as snacks, canned goods and confectionary that are supplied through local importers, wholesalers, distributors, or caterers. Major Peruvian Suppliers for the Food Service Sector (2009) Total Total Company food Sale Imported s Type of Food Name Imports ($Million Company Supply Food ($Million Products ) ) Pasta, wheat flour, margarine, food ingredients, Wheat, Processor, mayonnaise, wheat flour, Alicorp S.A. 22 1,283 importer, breakfast edible oils, distributor cereals, soy cake, cookies, sauces. jelly, ice cream, sauces, pet food. Dairy and Dairy pork ingredients, Processor, G products, juices, loria S.A. 18 881 importer, d juices, lactose and istributor canned other seafood. sugars. Dairy Dairy Nestle Peru Processor, products, ingredients, S.A. 6 352 importer, d soups and chocolate, istributor broths, infant infant formula, formula, food instant preparations coffee and , baked chocolate, goods, breakfast chicory cereal, extract, cookies, sauces, soup chocolates, preparations bakery . goods. Cheese, sauces, Kraft Food Processor, Cookies, s bakery and P importer, juices, eru S 4 94.A. d dairy istributor cheeses. ingredients, chocolates. Canned Canned fruits, fruits, G.W.Yi canned canned Chang Importer, & 3 59 seafood, seafood, Cia distributor S.A. chocolate, chocolate, wine and wine and spirits. spirits. S Processed ervicios Processor, meats, Meats and Frigorificos 2 10 importer, S.A. ats and edible offals. d meistributor edible offals. Sweeteners, Canned fishmeal, Quími food, food ca Su 3 Importer, chocolate, 225 iza S.A. distributor win ingredients, e, p sweeteners, rocessed animal feed. fruit. Diageo 22 Importer, Liquors. Peru S.A 3 . d Liquors.istributor Unilever And es, Sauces, ina 4 Processor, Sauc 86 importer soups. soups. Peru S.A. Processed Halema ssor, meats, Meats and S.A. 1 15 Proce importer meats and edible offals. edible offals. Dai Cheese, ry and rocessor, ter and Laive S.A. 1 108 P p butork importer p pork roducts, products. Ag Processed ro Co meats, Meats and rporacio 1 cessor, 15 Pro n importer meats and edible offals. S.A.C. edible offals. Chocolate, Chocolate, Perufarma er, confectionar confectionar S.A. 14 71 Import distributor y, wine and y, wine and liquors. liquors. Chocolate, Chocolate, confectionar A ocessor, confectionar y, canned rcor del Pr P importer, y, bakery fruit, bakery eru S.A 4 30 . distributor goods, goods, canned fruit. bakery ingredients. Drokasa orter, Wine and Wine and Peru S.A 1 17 Imp . distributor liquors. liquors. Peas and Peas and M Wholesale lentils, lentils, ayorsa S.A. 3 31 r, popcorn, popcorn, importer canned fruit, canned fruit, starch. starch. Processed Oregon mp meats, Meats and orter, Foods 3 15 I s and edible offals, S d meat istributor .A.C. edible offals, fresh fruits. fresh fruits. Corporacio n Canned Jose R. 3 Processor, Sodas, 472 fruit, Lindley importer. juices. S.A. gelatin. Pork Processor, products, Pork B importer, raedt S.A. 2 32 d p cheese, roducts, istributor dairy cheese. . ingredients, condiments. Industrias , Chocolates, M 2 Processor 4 olitalia importer, p Wheat. asta, S.A. distributor confectionar . y, sauces. French fries, Delosi Hambu bakery rgers S.A. 1 Fast food 54 goods, franchise , salads. sauces, cheese. Destileria Wholesalers, Peruana 1 rocessor, 6 P retailers, Liquors. S.A. importer food service French fries French fries preserved, preserved, chocolates, chocolates, L.S. Andina S.A. 1 Importer, 7 sweeteners, sweeteners, distributor confectionar confectionar y, olive oil, y, olive oil, baked goods baked goods Sociedad Pork Suizo products, r, Sausages, Peruana de 1 Processo 44 poultry, Embu importer cheese. tidos edible offals, S.A. cheese Cheese, meat Sigdelo Hamburgers preparations S.A. 1 38 Fast food chain , pizza , sauces, French fries, condiments KMC M Microwave icrowave popcorn, Importer, popcorn, Internation 1 4 d soups, istributor soups, al S.A.C. b baked aked goods goods. L C e Hijos mporter, Wine and Wine and S.A. 1 6 I distributor liquors liquors B French fries, embos food S 1 26 Fast amburgers meat, .A.C. chain H cheeses 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 (2009) 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 consumer-oriented food imports were $552 million in 2009, down 10 percent, compared to the previous year. The U.S. was the third largest supplier ($62.5 million), with 11 percent of the market share, facing stiff competition from Chile and Colombia (28, and 12 percent, respectively). Peru?s trade policy is oriented to open markets. Peru has signed an Economic Complementation Agreement (ECA) with MERCOSUR, a major U.S. competitor in bulk commodities and meats. Dairy products were exempted from the negotiations. Peru recently expanded its ECA with Chile, Peru?s major supplier of food and agricultural goods, and is negotiating the extension of its ECA with Mexico. Peru finished negotiating a free trade agreement with Thailand and is currently negotiating a free trade agreement with Singapore, South Korea, and Japan. Peru is also seeking a free trade agreement with the E.U and China. The PTPA will reinforce U.S. competitiveness within the Peruvian market. The quality of U.S. products is already appreciated among the high-end consumers. Imported food products have tariff rates that range between 0 and 17 percent. Peru is looking forward the implementation of PTPA agreement which will allow lower or duty free tariffs for many food and agricultural products. For a complete list of products that will be benefited from the PTPA, please check http://www.ustr.gov/Trade_Agreements/Bilateral/Peru_TPA/Section_Index.html. . Competitive Situation facing U.S. Suppliers in the HRI Food Service Market in 2009 Advantages Product Major and Category/ Supply Strengths of Key Net Supply Coun Disadvantages tries Imports Sources of Local Suppliers Mexico: 21 p - Only two ercent Chi companies are le: 18 major producers Dai percent - Mexico is major supplier ry Products New of dairy ing of evaporated redients, 28,945 tons Z milk and yogurt. ealand: 11 especially preparation of ($72.96 - Local mi percent cereals and infant milk. llion) Colombia: Bo homemade th are duty free. 11 cheeses are percent commonly sold. Ireland: 10 p ercent Colombia: 44 percent A - Local producers rgentina: are major food Sn 15 percent ack Foods processors. They 26 Ecuad - Tariff preferences or: 13 ,930 tons p applied to neighbor import food ercent ($54.5 million) U.S countries. ingredients for .: 8 p snacks and also ercent Chi snacks in bulk. le: 5 percent Processed Chile: 46 Chile sells at - Local Fruits and percent cheaper prices V processors are egetables U.S.: 11 due to 52,761 tons percent proximity and major exporters, ($56.58 Ne but their local therlands: tariff million) 10 percent p supply is limited references. China: 5 - E.U. products are percent positioned as being of Argentina: 5 good quality. percent - China has increased its tomatoes prepared exports - There is an Chi open window le: 93 - Chile is the main from November Fresh Fruits percent supplier because of 58 to February for ,050 tons Argentina: 4 proximity, price and duty the U.S. ($46.60 percent free entrance. mi - Local fruit sold llion) U.S.: 3 - Argentina has a window p at retail market ercent for pears and apples is of lower quality. U.S.: 32 percent - Local brands Fruit and Brazil: 27 - Chile has advantages of are well vegetable p tariffs and proximity. ercent positioned in the juices 1 Chi - Brasil has increased its le: 21 market at ,255,740 L p frozen orange exports ercent competitive ($ 2.1 million) Co lombia: 4 prices. percent Argentina: - Major local 41 percent breweries are Chile: 25 well positioned, percent price competitive Spain: 9 and belong to p - Proximity and ercent international Win recognized quality of e and Beer Italy: 7 companies, 11 Chilean and Argentinean .9 Million percent win representing 95 es. liters Brazil: 6 percent of the - Brazil is the major ($23.68million) percent market. supplier of imported beer. France: 4 - Local wine is p ercent well positioned U.S.: 3 and price percent competitive, but Germany: 1 does not satisfy percent demand. Red Meats Argentina: - Peru?s market r imports come (fresh, chilled 26 - Majo percent for the U.S. from nearby countries. or frozen) Brazil: 25 reopened in 24 ,691 tons percent October 2006. ($39.40 Paraguay: - U.S. meats are million) 21 percent of superior U.S.: 16 quality. percent - Peru imports Chile: 7 three times more percent offals than Uruguay: 3 meats. percent - Local meat does not satisfy the demand. Chile: 31 percent Argentina: 16 percent Bolivia: 10 - There pork R percent products industry ed Meats - Chile has the Italia: 10 that also imports (prepared, p p advantages of tariff ercent reserved) 1 Denm p prepared meats. references and ark: ,126 tons 10 p - U.S. product roximity. percent tariffs will go ($4.56 million) Sp ain: 8 down from 5 to 7 percent years linear. U.S.: 6 percent Brazil: 6 percent Chile: 31 percent B - Local poultry razil: 23 producers are Pou percent - U.S. poultry product ltry Meat major suppliers 17 Italy: 20 imports reopened in ,852 tons p with good ercent October 2006. ($21.57 distribution mi Argentina: - Brazil and Chile are llion) 12 channels. percent major suppliers of poultry U.S - Imports are .: 10 cuts. p mainly chicken ercent Bo and turkey parts. livia: 5 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 (2009) A. Products Present in the Market Which Have Good Sales Potential: Average Key Mark Product/ et Impo Annual Impor Constraint Market r Product Import t s Over Attractiven Size ts Category 2009 2009 Growth Tariff Market ess for the e (2004- Rate Developm U.S. st. 09) ent 04061 - U.S. - U.S. 0, 20 competitor cheeses are and 40 s are: mainly used 2,005 0 Uruguay in the food Chee 18 tons en (16percent processing ,48 8 perc.2 se 0 t ) and sector, but percent (HS 0406) MT ($8.35 04063 Netherland have million 0 s potential in ) 04069 (16percent the HRI and 0 ). Retail Food 0 - Strong Sectors. percen preference - In 2009, t for EU the United cheese at States was high-end the first HRI and supplier Retail with a Sectors. market share of 42 percent. - TPA*: 17 years linear, 2,500 MT quota with 12 percent increase per year. - United States represents 2 - Major percent of suppliers total are imports, 12 Colombia ,729 however, Con 0 and fection tons Ecuado U.S. imports r. ary ? non N/A 14 percen .7 remained at t - Local chocolate ($30.9 percent the same industry is (HS 1704) mi llion level in strong. ) M 2009. ajor - TPA*: owners are Duty free on foreign entry into companies. force. - The U.S. is - Chile is the third the major 3 major ,239 Con 0 supplier supplier fection tons 12.5 (23percent percen with ary ? p ). ercent t 15percent. cho N/A colate ($10.9 - Local The U.S. (HS 1806) million industry is strength is ) competitive in chocolate . for the retail sector. - TPA*: Duty free on entry into force. - Chile is the major - There is a supplier with window of 93 p opportunity ercent of for the the App United les 51,211 0p market. erce States and Pears 168 tons - The ,0 16.5perc nt between (HS 0808) 00 (35 United MT ent November million States is and ) the third February. largest - TPA*: supplier with Duty free on 3 p entry into ercent of force. the market. - Local p - U.S. roduction 3 window: ,611 G September rape 0 is strong. s, tons 62p - Chile is a ercen percen to fresh 207,0 major t t December. (HS 00 MT ($2.8 importer 080610 - TPA*: ) million (96 ) p Duty free on ercent). entry into - Low force. imports. - Currently Total the market b - Competes eef 1,253 is Prime and 0 with quality and tons choice percen meat experiencing s from b offals 8.9perceeef ma A a shortage rgentina, rke ($4.78 nt t (HS Urugu of supplies. ay, 020230 t: mi llion ) 268 B - TPA*: razil and ,9 ) 24 B Duty free on olivia. MT entry into force. Edible 180,0 4,529 HS 0 - Major - The United Beef Offals 00 MT tons 020621 percen supplier for States holds (HS ($4.7 31percen t HS 020621 87 percent 020621, million t is Brazil of the liver 020622) ) HS with 68 import 020622 percent of (020622) 16.5perc the market. ent market. - TPA*: 10 years linear, 800 MT quota with 6 percent increase. - Major suppliers - TPA*: 12 are the ,557 Duty free on Fruit and V h 9 United l egetable 22 p entry into ercen States juices N/A force, 5 and percent t (32percent (HS 2009 ($2.1 10 years ) mi ), Brazil llion linearly (27percent ) depending ), and Chile on the (21percent product. ). - Growing - The United local pet States holds industry. 27 percent - There is of the an informal market, with 10 industry an 18 ,035 MT arising. percent Pet foods 38 - Colombia increase ,80 17 0 .6 (HS percen 42 from 2008. 230910 0 MT ($11.4 percent ) mi t percent), - TPA*: duty llion and free on ) Argentina entry into (27 force, or 5 percent) years are major linearly for competitor canned pet s. food. 300 1,251 0 - Major - U.S. holds ,0 Pasta 00 MT 3.14 percen competitor 23 percent (HS 1902) percent t s are Italy of the tons ($1.4 (25percent market and million ), Chile is the ) (15percent second ), largest supplier. Imports increased by 38 percent in 2009. - TPA*: duty free on entry into force or within 5 years. - Peruvians are major - Major consumers HS exporters of turkey 020725 are Brazil during 37 (44percent Christmas .8 and New Tu 4,171 p ) and Chile ercent, rkey HS 9 (31percent Year?s. (HS tons - The food 020725 21,20 020726 percen ) followed , retail sector 020726 0 MT (5.45 0 t by the .5 , United is becoming 020727 million percent, ) States with more ) HS 020727 26 percent. popular not 25 - Local only in p poultry Lima, but ercent industry is also in the strong. province. - TPA*: 5 years. - Strong local Pou 7 industry. - Peruvians ,242 ltry 9 - Argentina are major meat tons cuts $1,23 40.5 percen (35 percent consumers (HS 0 percent t of the of poultry. 020711, mi ($7.5 llion 020712 mi market), - TPA*: 10 llion ) Brazil (34 years. ) percent), Chile (20 percent) and Bolivia (12 percent) are major exporters. - Major suppliers are the United States (21 percent market B 3,644 0 share), - TPA*: duty read, p tons Colombia free on astry, N/A 20 percen ($7.9 t (20 entry into cookies mi percent llion percent), force, 3 or 5 (HS 1905) ) Ecuador years. (20 percent), Brazil (10 percent) and Argentina (8 percent) - Major suppliers are the United States (33 5,752 - TPA*: duty S HS percent 2103 free on auces, tons 6 9 market .8 entry into soups & b p percen share), ercent, force except roths N/A ($10.9 Chile (14 (HS 2103, 7 HS t 2104 p for soy ercent) 2104) mi 17 .8 sauce and llion p Colombia ercent mustard (5 ) (13 p years). ercent). China (11 percent) and Mexico (9 percent) 12.4 - Argentina Wine 21 7.3 percent 9 (47 percent - There is a (HS 2204) million million percen market niche liters liters t share), market for ($20.5 Chile (29 quality million percent), wines for ) and Spain which the (11 United percent) States can are major be exporters. appreciated - Strong and price promotions competitive. . - Peru?s - Only wine regular consumption wine is growing. consumers - TPA*: 3 to recognize 5 years U.S. wine linear. quality. 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 Key Product/ Import Annual Import Constraints Market Product s Import Tariff Over Market Attractivenes Category 2009 Growth Rate Developmen s for the U.S. (2004- t 09) - TPA*: 17 years, 12,000 MT quota with 8 percent increase; for mechanically deboned meat - Strong (MDM), 3 Poultry years. Chicken 5 industry in - The sausage ,575 leg 9 Peru. industry qu tons arters - The United demands the 41 percen percent t (HS States? major product as a 020713 ($4.3 , competitor is lower cost 020714 mi llion) ) Chile (81 ingredient. percent of the - Open market market), for the United States since April 2006. In 2009, the United States held 20 percent of the market. Peaches, - Importers are cherries - Chile is interested in and 1,798 9 major U.S. peaches Ne tons 1.2 percent ctarine supplier with and nectarines. ($1.4 percent s mi 98 percent of - TPA*: Duty llion) (HS the market. free on entry 0809) into force. - U.S. imports Nut - Chile (47 have grown s and 277 9percen percent of the 783 percent in almonds tons et) is respect to (HS 25 t mark percent 0802 the second 2008. The ) ($1 .2 largest United States mi llion) supplier. is the major supplier with 51percent of the market. - Importers recognize that U.S. quality of nuts and almonds is better than competitors. - TPA*: Duty free on entry into force except for chestnut (5 years). - There are no significant - U.S. window: G 6,322 imports from September to rapes, 9 tons the United December. raisins 14 percent percent States. - TPA*: Duty (HS 080620 ($7.6 - Chile holds free on entry ) mi llion) almost 100 into force. percent of the market. - Recognized quality of U.S. - Chile is the oranges and second major tangerines. supplier with - Export Citrus 56 tons 9 44 percent of window for the -15 percent (HS the market. United States 0805 ($0.04 percent ) mi - The United is from January llion) States holds to March. 49 percent of - TPA*: Duty the market. free on entry into force or 5 years. - The TPA will Oth 925 er 9 - Chile is open tons practically the fresh fruit ercent opportunities 34 p percent only supplier. (HS for the United 0810 ($1 - Imports are ) mi llion) ma States not only inly kiwi. to export kiwis, but also cranberries (very well accepted in juice), strawberries, etc. - TPA*: Duty free or 5 years - Peruvians are not used to eating pork. - Local industry produces mor - Pork imports e than 100 are growing. ,000 MT 1 - U.S. pork will ,251 9 - The industry benefit from Pork Meat tons p is the same ercent TPA (HS 52 percent as the poultry 0203 implementation) ($2.2 industry. mi . llion) - Chile is the ma - TPA*: 5 jor years supplier with 93 percent of the market. Canada has begun to export (7 percent of the market). - Major exporters are - There is a Chile (50 high-end percent of the segment for Sau 394 sages 9 market), gourmet tons (HS 8.1 percent Spain (13 sausages, in 1601 ) percent percent), which the ($1 mi United States United States llion) (13 percent), can compete. Italy (9 - TPA*: 5 percent), and years Argentina (9 percent). - The United Ham HS 160241 - Major States has , p 62 tons 27 suppliers are rocessed l quality y (54 HS p 9 Ita ercent, p products to ercent of the 160241 ($0.71 HAS16024 percent , ma introduce to rket) and 160242 million) 2 6 p Sp the gourmet ain (33 ercent p market ercent). - TPA: 7 years - Local breweries are very strong and owned by international - Niche market companies. for premium 4 - Local .4 beers. B mi breweries llion - Growing eer produce and liters 127 9 consumption of (HS import new 2203 percent percent beer (43 lts per ) brands for ($2.8 capita) mi introduction llion) - TPA: Duty in the ma free on entry rket. B into force razil is the major supplier (52 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: Aglima@usda.gov For further information, check the FAS web site www.fas.usda.gov or our web site www.usdaperu.org.pe. 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: Eduardo Ferreyros Kuppers Address: Calle Uno Oeste 050, Urb. Corpac, San Isidro, Lima 27 Phone: (511) 513-6100 Fax: (511) 224-3362 Web site: www.mincetur.gob.pe Hotel and Restaurant Association (AHORA) President: Fernando Puga Address: Av. Benavides 881, Miraflores, Lima 18 Phone: (511) 444-4303 Fax: (511) 444-7825 E-mail: ahora@ahora-peru.com Web site: www.ahora-peru.com 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: amcham@amcham.org.pe Web site: www.amcham.org.pe Author Defined:
Posted: 18 March 2011, last updated 19 March 2011

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