Peru’s economy is one of the most successful and stable in Latin America. In 2010, the trade of Peruvian agricultural products from Peru in domestic markets and abroad experienced tremendous growth. Peru’s continuing expansion to other markets in Asia, the European Union, and the United States solidified its position as a worldwide supplier of food and other manufactured agricultural goods. The purchase of new technology and machinery used in the Peruvian food industry is influenced by the demand of consumers in various domestic and international markets.
Exports of agricultural products play an important role in the development of the Peruvian packaging sector. There is a potential market for food processing and packaging (FPP) machinery among SMEs (small and medium enterprises) given their need to become more modern and efficient in order to be competitive and to improve the demand of their products.
The majority of the machinery used in the food processing and packaging industry in Peru is purchased from abroad. U.S. equipment dominated the food processing and packing industry in 2010.
During the global financial crisis of 2009, Peruvian exports fell to US$ 27.0 billion in comparison to 2008, when exports reached US$ 31.0 billion. Imports declined as well to a total of US$ 21.0 billion versus 2008, when imports reached US$ 28.4 billion. In spite of these declines, Peru was one of the few Latin American countries with a GDP that experienced growth—in this case, 0.9%.
The year 2010 was however a year of recovery and currently, Peru’s economy is one of the most successful and stable in Latin America. Peruvian exports in general totaled US$ 35.6 billion, 31.1% growth—higher than the world’s average of 12.4%—in relation to 2009. The most important export industry was mining, which represented 78% of the market share of traditional exports and 61% of total exports. Exports of traditional agricultural products (cotton, sugar, coffee) also grew about 53% in comparison to 2009, expanding their markets in the United States, Asia and Europe. Sales in the traditional fishing industry (fishmeal and fish oil) also increased by 11.9%.
With respect to non-traditional exports, non-metallic mineral products and the iron and steel industries were the most important in 2010. Non-traditional agriculture exports also increased about 19% and the non-traditional fishing sector by 23%.
All import sectors recovered in 2010 by growing more than 30% when compared to the same period in 2009. Consumer goods had the highest recovery at 40.8% followed by raw materials and intermediate products at 38%, and capital goods and construction materials at 33.6%.
According to the World Bank, Peru is expected to continue its economic development with an average growth rate of 6.5% in upcoming years. The Ministry of Economy and Finance (Ministerio de Economía y Finanzas-MEF) declared that Peru’s economy would reach 7.0% growth by the end of 2011 and exports would surpass US$ 39.6 billion.
The fast recovery of the Peruvian economy after 2009 was influenced by the continuing development of Peru’s food and beverage industry. In 2010, the trade of Peruvian agricultural products in domestic markets and abroad experienced tremendous growth. Peru’s continuing expansion to other markets in Asia, the European Union, and the United States solidified its position as a worldwide supplier of food and other manufactured agricultural goods. The further sophistication of local consumers’ demands encouraged companies in the food and beverage sectors to purchase new technology and machinery to improve the quality of their products.
During the financial crisis of 2009, domestic demand fell by about 2.8% according to the MEF and the Central Reserve Bank of Peru (Banco Central de Reserva del Perú-BCRP). While the consumption of non-essential goods declined, the consumption of basic necessity products remained stable or had slightly increased. For example, the consumption of beer fell by 5% in 2009, as declared by the Unión de Cervecerías Backus y Johnston (Backus). Grupo Gloria—known for the manufacturing of dairy goods—, on the other hand, experienced profit losses of 2.53%, but domestic sales volume of evaporated milk increased by 14.3%, UHT (ultra-high temperature processing or ultra heat treatment) milk by 15.4%, yogurt by 12.5% and cheese by 6.8%.
In 2010 the international demand of fresh, frozen, canned and dried products for human consumption from Peru increased. While exports of asparagus remained stable (Peru is the world’s second largest producer according to the Food and Agriculture Organization of the United Nations, FAO), exports of grapes, avocados, paprika, and canned olives reported high growth. Other products like mangos also found potential markets in Europe. Similarly, the fishing sector offered international and domestic consumers an expanded product line. In addition to the traditional products of fishmeal and fish oil, producers discovered potential large markets for fresh, frozen, and canned anchovies—referred to as sardines in the corresponding export codes—, giant squid, scallops, and other seafood products.
Exports of agricultural products—especially fresh—are expected to grow even more due to the free trade agreements with the United States, Canada, China, the European Union, and South Korea. This anticipated growth has increased the pressure on exporters to deliver goods that follow strict sanitary regulations in order to meet international consumers’ demands.
Changes and new trends in domestic consumption also affected the Peruvian food industry. Consumers began to develop more specialized tastes. The increase of their purchase power also pushed food producers and manufacturers to be more innovative, create new strategies, and improve their brands to compete successfully in the market. For example, consumers became more attracted to products with additional properties or that could offer certain health benefits. In the non-alcoholic drinks and dairy sectors, experts observed higher demand of “low” or “zero calories” soft drinks, flavored bottled water, as well as “light” yogurts and/or fortified milk. Another example is the introduction of products adapted to local tastes like ají and rocoto (Peruvian chilis) sauces and mayonnaise which has a subtle lemon taste. These products are manufactured by Alicorp S.A.A., Peru’s largest food and beverage producer.
Food producers and exporters must therefore provide superior production and packaging processes to assure consumers of the high quality and freshness of their products. This demand for quality and freshness necessitates the development and/or purchase of new technology to satisfy domestic and international consumers.
During the first semester of 2010, profits in the overall packaging industry increased 111% in relation to the same period in 2009. Particularly in the food sector, experts observed that there was a higher demand for flexible packages and bags for sauces, snacks, etc. as well as for better sealing mechanisms for bottles and cans. Beverage corporations such as Backus made investments towards the expansion of beer plants and the improvement of their services.