For purposes of this assessment, the Caribbean Basin refers to the Caribbean Basin Agricultural Trade Office’s (CBATO) islands of coverage. The assessment on the Netherlands Antilles and Aruba is now included in what is referred to as the “Dutch Caribbean” market, and Jamaica and the Dominican Republic are included in this assessment. The assessment covers only the markets where there is current information and based on overall market potential.
CBATO reports the Caribbean is an excellent market for U.S. suppliers, due in large part to the fact that demand for imported food products is largely inelastic. With an insufficient amount of arable land, scant water resources in some islands, no economies of scale, and a limited food-processing sector, the islands must import the majority of their food needs. There is also strong appeal among the 3.9 million local residents of U.S. products. Moreover, between six and seven million stop-over tourists (over half of which are from the United States) visit the Caribbean annually and help fuel demand for U.S. products in Caribbean food service outlets. While sluggish economic conditions in most advanced economies are keeping tourism growth prospects in check, the sector is slowly inching forward.
Given these favorable conditions for U.S. exports, it is no surprise that the U.S. is the largest supplier of food products to the Caribbean. In 2012, the U.S. exported a record high US$874.3 million worth of consumer-oriented products to the region, a 6% increase from the previous year. Consumer-oriented products account for 72% of U.S. agricultural exports to the Caribbean, with poultry, red meats, snack foods, dairy products, and processed fruit and vegetables rounding out the top five export categories. In 2012 the United Stated also exported $35.9 million worth of fish products to the region, which was a decrease of 5% from 2011.
Competition from Europe, Canada, South and Central America is beginning to intensify in the Caribbean. While the U.S. enjoys several advantages in the region, suppliers should be mindful that they will have to work hard at capitalizing on opportunities in the Caribbean in the years to come. The Caribbean’s economy was forecast to grow 1.6% in 2012 according to data from the United Nations Economic Commission for Latin America and the Caribbean. Overall economic well-being in the Caribbean is intimately linked to the tourism sector. The vast majority of islands in the region rely heavily (some almost exclusively) on tourism as a source of income. Several indicators point to modest improvements in Caribbean tourism performance, but sluggish growth and high unemployment in the United States and Europe (the main sources of tourists for the Caribbean), are likely to result in a continuation of the slow growth trend for the sector.
This lackluster growth does not necessarily spell bad news for U.S. suppliers, however. In fact, demand for U.S. foods remains as strong as ever.
Caribbean importers have a long history of doing business with the United States. Their strong interest in U.S. suppliers and products is mainly due to the following: close proximity, long-standing reputation of high quality products, and superior quality of service. As a testament to the reputation of U.S. products in the Caribbean, many local importers have noted that they are able to source a variety of products from other countries, but few match the reliability in quality of their U.S. counterparts. Many of the orders that importers place are small but frequent, so they often do not order full containers from each supplier. Caribbean importers rely heavily on consolidators in South Florida for shipment of mixed container-loads to their local ports. As a result, a crucial part of doing business with Caribbean importers is building a relationship with a consolidator in North or South Florida and in some cases New Jersey.
Since some resorts and larger supermarkets often order larger shipments directly from suppliers, the main resource for medium to smaller sized retail and food service businesses are local importer/wholesalers, making them a good target for smaller U.S. exporters. These importer/wholesalers will work with prospective U.S. suppliers to find the best means of product delivery, and meeting local standards and regulations. Local importers will usually stay informed of changing regulations and duties on food and beverage products. The majority of Caribbean countries accept standard U.S. labeling including the standard U.S. nutritional fact panel. Enforcement of labeling and other product standards, which usually falls under the jurisdiction of a National Standards Institution, is carried out mostly at the port of entry but routine and random checks at the retail and wholesale levels are also conducted.
As indicated, tourism is expected to remain sluggish for the foreseeable future. However, one positive development is the considerable investment in tourism infrastructure that has taken place in recent years, which certainly strengthens the long term potential of the hotel, restaurant, and institutional (HRI) food service sector. One such investment is the Baha Mar Project in The Bahamas, which is being billed as the largest resort development currently under construction in North America and the largest single-phase resort development in the history of the Caribbean. The US$2.6 billion, 1,000 acre development will be located 5 miles west of Nassau along a half mile stretch known as Cable Beach. Construction of the project is well underway and is expected to be completed in late 2014. When finished, Baha Mar will include six new resort hotels, the Caribbean’s largest casino, The Bahamas’ largest convention center, and at least 12 new restaurants among other attractions. Bahamian tourism and demand for U.S. foods are expected to increase accordingly.
Overall, the Caribbean HRI food service sector accounts for 40%-45% of consumer-related agricultural imports. The percentage of Caribbean hotels and restaurants that are independently owned varies from approximately 90% in Grenada to 25% in The Bahamas. This characteristic impacts the flow of imports to the island. The independently-owned restaurant or hotel is more likely to source its food and beverage products from local importers/wholesalers, while larger chain restaurants and hotels have both the connections and the economies of scale to also make direct imports from U.S. suppliers.
While corporate-owned resorts and hotels have boomed over recent years, independently- owned food service businesses are still strong on all Caribbean islands. Local independently-owned restaurants remain especially popular in countries such as Aruba, Barbados, Bermuda, and Sint Maarten/St. Martin. Some of the world’s most acclaimed chefs are working in the Caribbean. Using high quality ingredients, these chefs and their restaurants often are a valuable platform for U.S. food and beverage products. However, many chefs are European-trained and thus breaking their preference toward European products can be challenging. Heightened interest of chefs in the use of locally produced ingredients is a recent trend, similar to other parts of the world.
Food processing in the broad Caribbean Basin is highly concentrated in the larger countries such as the Dominican Republic and Jamaica. In the CBATO’s islands of coverage, which have very limited food production and practically no economies of scale, food processing is much less prevalent. In fact, bulk and intermediate agricultural products account for only a quarter of U.S. agricultural exports to the CBATO islands. Nonetheless, there is processing of wheat flour, pasta products, rice, bakery products, soy products, dairy products, and animal feeds in some countries, particularly in Trinidad and Tobago and Barbados. Food processors within the region buy roughly 20% of raw materials and food ingredients from local suppliers and import 80% from international suppliers.
Antigua and Barbuda has one of the highest per-capita incomes in the Caribbean region. The Gross Domestic Product (GDP) in 2012 was estimated at US$1.5 billion, on a purchasing power parity basis, (PPP) with a per capita GDP of US$17,500 (PPP). The real growth rate was 1%. This represented an increase from the negative 5.5% in growth from 2011. Tourism is the largest sector of the economy, employing about three-quarters of the work force. A construction boom in recent years has resulted in improvements in both quality and capacity. The real value of tourism receipts grew by 8.0% in 2011 and gains of 3.7% were expected in 2012. The relatively undeveloped island of Barbuda is home to some of the country's most exclusive resorts.
Consumer attitudes towards imported food products are known to be positive, and U.S. products are known for their quality. The volume and value of food imports are based on the number of tourists from the U.S and European Union, so as tourism declines so does the import business. The tourists also have preferences for products from their native countries, which essentially drives this business. Euromonitor has indicated that the market size of the packaged food retail business was US$38.3 million in 2012, an increase of 48.9% from 2008, or about US$12.6 million. They also forecast growth of 14.8% to 2017, or US$5.7 million for a total of US$44 million. High growth items in the forecast include meal replacement, confectionery, sweet and savory snacks, dried and chilled processed food and oils and fats.
U.S. exports of food and agricultural products were US$26.7 million in 2012, an increase of 5% from the prior year. Of that amount US$24.9 million or 93% were in the consumer oriented category. Top 2012 consumer food exports included products typical of the region overall, and include poultry meats, red meats, non-alcoholic beverages, pet food, bakery items, sauces, wine and sausages.
U.S. exports of consumer-oriented products to The Bahamas hit an all-time high of US$212.6 million in 2012 which makes it the largest market in the CBATO region. With the U.S. commanding a 95% share of the Bahamian import market for consumer-oriented products, opportunities are plentiful for U.S. suppliers in practically all product categories. The strong influence of American lifestyle and culture on Bahamians has led to U.S. food products and brands being the most preferred and commonly visible products in retail outlets. As disposable incomes continue to increase, the Bahamian consumer has a greater opportunity to purchase a wider variety of high-quality food products.
Euromonitor reports positive 2012 growth of 2.5% in Gross Domestic Product, GDP as tourism and sector investment began to return. Growth for 2013 is estimated at 2.7%.
The Bahamas has one of the highest per capita incomes in the western hemisphere. Aside from tourism, construction (much of it related to tourism) has been the main economic driver. After an impressive performance in 2006 and 2007, the economy entered a recession in 2008 that continued through 2009. Since then, rates of growth have been feeble.
The country has serious imbalances in the distribution of wealth, most of which is concentrated in the main commercial and tourist centers. The economy remains vulnerable to developments in the U.S. as well as growing competition from other tourist destinations and offshore financial centers. Overall growth prospects in the future rest on the fortunes of the tourism sector. The Bahamas reportedly has the third highest number of stopover visitors in the Caribbean.
Most Bahamians buy their basic food necessities from the well-established retail food industry with outlets ranging from small “mom and pop” shops, gas marts, and independent grocers, to large supermarket chains, hypermarket chains, and wholesale club stores. There are approximately 200 retail stores specializing in the sale of food and beverage located on New Providence Island, and roughly 70 located on Grand Bahama Island.
Euromonitor has indicated that the market size of the packaged food retail business was US$125.6 million in 2012, an increase of just 6.3% from 2008, or about US$7.4 million. They also forecast growth of 5.5% to 2017, or US$7 million during the period for a total of US$132.6 million. High growth categories in the forecast include snack bars, meal replacement, sweet and savory snacks, spreads, noodles and confectionery.
At last report, the hotel sub-sector made up roughly 65% of the total Hotel Restaurant Institutional, (HRI), market, followed by the restaurant sub-sector at 32% and the institutional sub-sector at 3%. There were 280 hotels, and over 15,000 hotel rooms in the Bahamas. Moreover, there is a wide array of restaurants located on the larger islands of the Bahamas. New Providence and Grand Bahama alone, boast more than 430 restaurants. In addition, there are over 20 companies that provide institutional catering services in the Bahamas. HRI Sales are evenly distributed between independent and chained food service establishments.
Top 2012 U.S. exports of consumer food products included meats of beef, poultry, pork, bakery items, snack foods, sauces, breakfast cereal, non-alcoholic beverages, wine, non-alcoholic beverages and sausages.
Euromonitor reports the Barbadian economy has grown feebly in recent years though slightly stronger rates of growth are expected in the medium term. Per capita income is one of the highest in the Caribbean region but the economy is too small to realize significant diversification and is vulnerable to external shocks. The country faces tough challenges as it seeks to fulfill its liberalization obligations under the agreement governing the Caricom Single Market and Economy. 2012 Gross Domestic Product (GDP) growth was less than 1%. After little or no growth in recent years, Barbados’ economy is expected to expand by a modest 1.0% in 2013. The economy is supported by gains in tourism and financial services.
Barbados is one of the most promising markets for U.S. exporters in the Caribbean. It has a relatively affluent population and a large tourism sector that have generated an increased demand for consumer food products. With little local agricultural production outside of sugar, poultry and pork, Barbados must import most of its food needs.
U.S. exports of consumer oriented food products were US$51.4 million in 2012, an increase of 2% and a new record high. Total U.S. exports of agricultural products decreased 2% to $86.7 million from 2011. Top consumer oriented food products with potential for U.S. exporters include snack foods, processed fruits and vegetables, red meats, dairy products, breakfast cereals and poultry meat.
Euromonitor has indicated that the market size of the packaged food retail business was US$72.6 million in 2012, an increase of 2.5% from 2008, or about US$1.7 million. They also forecast market growth to US$73.3 million by 2017, just less than 1% and US$700,000. High growth categories in the forecast include snack bars, meal replacement, sweet and savory snacks, spreads, noodles and confectionery.
Euromonitor reports Bermuda is one of the world’s richest countries in terms of per capita income but the pace of growth is modest. The tourist sector made a strong rebound in 2011 after suffering through several years of decline during the Great Recession. Approximately three-quarters of Bermuda’s air visitors come from the U.S. The island accounts for a significant portion of the capital invested in the global reinsurance industry. The world headquarters of many high profile companies are located on the island. The Gross Domestic Product, GDP, was estimated at US$6.1 billion in 2012, with a real growth rate of 1.8%. Growth of 2.1% is forecast for 2013.
Consumer tastes have gradually matured over the years, moving from canned foods to specialty items produced by specific brand names. Current American trends, such as the movement towards healthy, organic foods and home meal replacement, are slowly making an impact on the tastes and lifestyle preferences of the Bermudans. More and more women are working and Bermudans can afford to pay higher prices for convenience. Consumers are demanding more expensive, exquisite foods. Bermudans are familiar with U.S. brands from television and most of the major brands are available in the market. Consumers are very brand loyal and difficult to sway.
In 2012, U.S. exports of consumer oriented food products were US$82.4 million, a decrease of 8% from 2011. Total U.S. exports of agricultural products decreased 8% to US$89.2 million. Top U.S. exports of consumer ready foods included fresh fruit and vegetables, baked goods, red meats and poultry, non-alcoholic beverages and beer and wine.
Euromonitor has reported that the 2012 value of the retail packaged food market to be US$59.7 million, an increase of 1.6% or US$1 million from 2008. They also forecast the packaged food retail market to grow slightly to US$60.4 million by 2017, an increase of 1% or US$600,000. Top growth categories in the forecast include snack bars, meal replacement, sweet and savory snacks, spreads, noodles and chilled processed foods.
Bermudian’s high GDP per capita is reflected in their purchasing of very high-end, premium quality, and name brand products. Locals are very brand loyal and thus, difficult to sway. Major U.S. brands present in the market include: Del Monte, Nestle, Heinz, Kraft, Kellogg’s, and many others. Lack of shelf space continues to be a problem, making competition for the little space available quite fierce. As a result, only the products with the most demand are awarded prime shelf space. For many stores, if a new product is brought in, another is bumped out.
The United States maintains a dominant presence in the market as Bermuda’s primary trading partner. The major drivers pushing the success of U.S. goods are the availability, abundance and quality of the products imported. Most U.S. products are shipped out of New Jersey and to a lesser extent out of Jacksonville, Florida. U.S. food imports destined to the food service sector account for approximately 35%-45% of total U.S. food imports while the retail sector is estimated to account for 55%-65% of the total.
Large supermarkets purchase their goods from local wholesalers because they offer convenience and reliability of the items being supplied. However, some supermarkets have significant purchasing power and import directly from U.S. manufacturers. For example, The Market Place and Lindo’s Market import from the United States on a regular basis. In addition, most supermarkets and grocery stores will order mixed container loads to their New Jersey consolidators if they can offer better prices than the local wholesalers. It is important to emphasize that although direct imports due take place, it is not the norm in the nation’s retail sector. Bermuda has a well-established distribution network that channels most food imports through local importer/distributors.
Euromonitor reports that the Cayman Islands Gross Domestic Product, GDP, continues to rise at a moderate pace. Tourism is the main source of income but is believed to have reached its saturation point. Financial and insurance services accounts for more than half of Gross Domestic Product, (GDP). A majority of tourist arrivals (close to 90%) are passenger visitors from cruise ships. The population of the Cayman Islands is declining, sparking worries about how a diminishing work force will affect the islands' economic future. Real growth of 2.6% was expected in 2012 with similar rates in the medium term.
Still, the Caymanians enjoy one of the highest outputs per capita and one of the highest standards of living in the world. The tourist industry is aimed at the luxury market and caters mainly to visitors from North America. About 90% of the islands' food and consumer goods must be imported. The U.S. dominates the agricultural market in the Caymans, where nearly 85% of food imports are sourced from. One of the key contributors to this substantial market share is the sizeable number of American tourists. In recent years, upwards of 70% of Cayman’s tourists were Americans.
U.S. exports of consumer oriented food products in 2012 were US$49.3 million, an increase of 6% from 2011. In 2012 total food and agricultural imports from the U.S. were US$54.2 million, also an increase of 8%. This means 91% of their imports were of the consumer oriented variety. In 2012, top U.S. exports of consumer oriented food products included red meats, dairy products, poultry meats, wine and beer, snack foods fresh fruit and breakfast cereal.
Euromonitor has reported that the 2012 value of the retail packaged food market to be US$31 million, an increase of 5.8% or US$1.7 million from 2008. They also forecast the packaged food retail market to grow to US$32.1 million by 2017, an increase of 3.7% or about US$1.2 million. Top growth categories in the forecast include noodles, snack bars, sweet and savory snacks, spreads, noodles and frozen processed food.
Euromonitor reports that the Dominican Republic is on pace to record its sixth straight year of economic growth. One of the largest economies in the Caribbean, the Dominican Republic should be one of the fastest-growing countries in the western hemisphere in 2013 with real Gross Domestic Product (GDP) expected to grow by 4%. The economy is performing better than most other countries in the region but the pace is still slower than expected due to delays in structural reforms. However, the country should soon reach its potential rate of GDP growth of 5% by 2014. Export diversification and the ability to stimulate domestic demand provide the basis for this success.
The Dominican Republic is the fourth largest market for U.S. food and agricultural products in the Western Hemisphere, behind Canada, Mexico and Venezuela. Exports from the United States in 2012 were just over US$1 billion but a decrease of 11%. Most of the growth in U.S. exports of agricultural products to the Dominican Republic in recent years has been in consumer-oriented products. Exports of these products from the United States in 2012 were a record high of $392.2 million, an increase of 26% from that of 2011. Top consumer oriented exports included breakfast cereals, red meat, concentrated milk, fresh fruits, baked goods and fresh fruits.
Euromonitor has reported that the retail sales value in the packaged food market was US$1.9 billion in 2012. That represents a 38.9% period growth rate from 2008, or US$553 million. The forecast growth rate is estimated at US$2.2 billion by 2017, and 12.7% or US$250.8 million in 2017. Top growth categories in the forecast include snack bars, noodles, ready meals, meal replacements, soups and dairy products.
Dominicans have adopted much of the U.S. culture, such as music, sports, and fashion. The food consumption trend in the Dominican is similar to the trend in the United States, although we can estimate a lag of some time. It is clear that what is demanded in the United States will be demanded in the Dominican Republic in the future. Because of the globalization of the world economy, the lag is eventually shortening. Dominican consumers have the idea that products made in more developed countries, such as the U.S., are more reliable in terms of quality and safety. There is also a tendency, mainly among middle and high-income classes, to consume natural and healthy products. These consumers are demanding food with less saturated fat, cholesterol, and sugar.
The sector with the most opportunities for U.S. products in the Dominican Republic is the retail sector. Post estimates that about 80% of imported high value food products are distributed through the retail sector. In the Dominican Republic seven major supermarket chains import products directly from the U.S. and also buy from other local importers. Supermarkets are increasing their number of product lines. They are also developing the market for their own private brands and are the exclusive representatives of some name brand products.
Major supermarket chains continue to expand. They are increasing the number of stores in Santo Domingo, the capital city, and opening new ones in major cities. For example, Centro Cuesta Nacional, the parent company for Supermercados Nacional and JUMBO, recently opened a new JUMBO store, which is the largest store in the country. Grupo Ramos, the second largest supermarket chain, has opened three new stores: one in Santo Domingo, one in Puerto Plata, and one in La Vega.
U.S. exporters may enter this sector through importers or the major chains. Major chains prefer to do business directly with the foreign supplier, but for some products, it is easier to buy them from a specialized importer. Over thirty small and medium-sized supermarkets are members of the Small Supermarket Association (UNASE), which has developed a purchasing structure and has built a warehouse to supply its members. Other independent supermarkets buy from local importers, which are also distributors and wholesalers.
Accounting for roughly 20% of U.S. imports of high value food products, the HRI sector provides good opportunities for U.S. exporters. In spite of the negative effects of the global economic crisis, the sector continues to grow, and the Dominican Republic continues to be one of the major tourist destinations in the Caribbean. The implementation of the U.S. Central America-Dominican Republic (CAFTA-DR) Free Trade Agreement has helped import of some products, such as meat, poultry, and cheese that were facing some restrictions. In addition to lower tariffs, importers are taking advantage of the Tariff Rate Quotas under the CAFTA-DR to supply the HRI sector.
All-inclusive resorts, which usually focus on sourcing local products to lower their costs, have good potential for U.S. select beef, which compete in price with the best local beef. U.S. choice grade also have some potential for the most exclusive resorts and high end restaurants. Although major restaurants and all-inclusive resorts import some products directly and have developed a purchasing structure, most of them source their products from local importers. Therefore, the best way to enter the sector is to work with local importers. Providing training to this sector on food safety and how to use specific imported products, such as beef, poultry meat, and dairy products has been an effective tool used by some suppliers and trade groups.
Best prospects in the Dominican Republic food markets include trimmings (Beef, Pork, and Turkey), yogurt, processed cheese, ice cream, tree nuts, fresh fruits, raisins, frozen potatoes, chocolate, mixes and dough’s, and salmon. Low carbohydrate and light foods are also of particular interest and s strong growth category in the country.
The term “Dutch Caribbean” refers to the five islands of the Netherlands Antilles (Curaçao, Bonaire, St. Maarten, Saba, and St. Eustatius) and Aruba. Geographically the islands are divided into two separate groups. Aruba, Bonaire and Curacao (also known as the “ABC Islands”) are located just off the coast of Venezuela. St. Maarten, Saba, and St. Eustatius (also known as Statia) are located in the northeastern Caribbean.
Aruba seceded from the Netherlands Antilles in 1986 and now in an important new development, the Netherlands Antilles are in the process of further political change. Bonaire, Saba, and St. Eustatius have become public entities (municipalities) of the Kingdom of Netherlands, while Curaçao and St. Maarten have been granted autonomy within the Kingdom, similar to the current status of Aruba. This change took place in October 2010. Despite these changes, all the islands of the Dutch Caribbean retain close ties with the Netherlands. These small islands offer considerable opportunities for U.S. suppliers.
With nearly 4 million tourists visiting the islands annually and no significant domestic food production, the islands rely heavily on food imports. The retail food market is estimated at approximately US$300 million. U.S. exports were expected to be adversely affected by the regional economy to some extent, but the islands’ dependence on imports to satisfy their food needs helped minimize any contraction in demand. U.S. exports of consumer-oriented products grew to nearly US$155.4 million in 2012, an increase of 6% from that of 2011. Aruba accounted for US$60.5 million, an increase of 14% or about 39% of the total.
An estimated 50%-60% of imported foods are channeled through the retail sector, which is composed of estimated 300-350 retail outlets, and the remaining 40%-50% through the food service sector. In the larger markets of Aruba, St. Maarten, and Curaçao approximately 70% of the retail food business moves through the major stores (supermarkets, super centers, club warehouses, etc.), 25% through small independent grocers, and about 5% through convenience stores, gas marts and kiosks. In the smaller islands of Bonaire, St. Eustatius, and Saba where there are less large stores, the majority of the retail food business is handled by small independent grocers. The larger retailers usually buy direct from foreign supplies and source products from local importers/distributors as well.
The islands of Aruba, St. Maarten and Curaçao have fairly developed retail sectors with large, modern stores. Seattle-based Cost-U-Less operates a warehouse club store in both St. Maarten and Curaçao. Similarly, San Diego-based PriceSmart operates a warehouse club in Aruba. A Dutch supermarket chain, Albert Heijn, has also opened a store in Curaçao. In addition, there are several locally-owned supermarkets in each of the three islands which rival stores in the United States in terms of infrastructure and assortment. Interestingly, the four major stores in Aruba are located next door to each other just outside the capital city of Oranjestad
Given the large amount of influence from the United States through tourism, media, and business, most of the Dutch Caribbean markets tend to follow U.S. retail trends to some degree, albeit with a certain lag time and within the limitations of local income levels. The most obvious of these trends is the movement toward healthy products.
Best product prospects in the Dutch Caribbean market include red meats and poultry, beer and wine and dairy products, processed fruits and vegetables, fruit juices, snack foods, and pet food.
Euromonitor reports that during the past decade, real Gross Domestic Product, (GDP), growth averaged just 1% per year. Despite its poor economic record, Jamaica is still the second-largest economy in the Caribbean. A pickup in mining and tourism has helped to lift the economy out of recession in 2011 when real GDP rose by 1.3%. But Jamaica's economy will turn in another unimpressive performance in 2012 with growth of 0.9%. The island is expected to be one of the world's slowest-growing economies in 2010-2015, and not expected to reach 1.5% GDP growth until 2017. Nearly two-thirds of government revenue goes to debt service and recurrent expenditures.
Growth should gradually pick up over the longer term if bauxite prices do not fall and there is no further hurricane damage. In 2008, the Caribbean Community approved the goal of establishing a common market and intends to create a single economic bloc by 2015. The move could provide spillover effects which will help to boost the Jamaican economy.
The service sector, which contributes 70% of GDP and about 60% of employment, is dominated by Jamaica's most important industry, tourism. The industry struggled in 2009 but rebounded strongly in 2010 despite outbreaks of violence in Kingston, the capital. Tourism, however, was the only part of the service sector to enjoy positive growth in 2011. The real value of tourist receipts fell by 4.5% in 2011 but gains of 9.5% are expected in 2012.
Because of the service-oriented economy, Jamaica is a net importer of food and beverages. The U.S. is the major food exporting country to Jamaica, accounting for an estimated 50% of annual imports. The expansions in the tourism sector and changing consumer lifestyles had generated increasing demand for imported value-added consumer food products. U.S. exports of agricultural products totaled US$431.3 million in 2012, an increase of 8%. U.S. exports of consumer ready food products grew 10 % to US$171 million during the same period. Top U.S. exports of consumer ready products in 2012 included poultry and red meats, dairy products, eggs and products, snack foods, processed fruits and vegetables and breakfast cereals.
Euromonitor has estimated the value of retail food sales to be US$677.4 million in 2012, an increase of 47.2% from 2008, or US$217.3 million. That makes Jamaica the 4th largest packaged food market in the Caribbean. They also forecast the Jamaican retail food market to expand to US$761.5 million by 2017, an increase of 12.4% or US$84.1 million. High growth categories in the forecast include sweet and savory snacks, confectionery, dried and chilled processed food, sauces, dressings and condiments, ice cream and oils and fats.
U.S. consumer food products with the best potential in the Jamaican retail market include beverages, especially fruit juices, vegetable oils, dairy products, processed fruits and vegetables, wines, confectionery and snack foods. In the hotel and restaurant sub-sector, there is also demand for lamb, seafood, veal, pork products, pasta, nuts, cheese, bakery products, sauces, vegetables and fruits.
Euromonitor reports that modest growth was expected in 2012 after two consecutive years of contraction. The Gross Domestic Product (GDP) growth was reported at 0.7% for 2012. The possible depletion of energy resources has forced the government to aggressively promote various forms of economic diversification. High levels of capital intensity, coupled with skill mismatches and labor market rigidities, mean that an insufficient number of jobs are generated. Annual growth of the non-energy sector is projected to stabilize at about 4-4.5% over the medium term. The GDP forecast for 2013 is 2.2% and then moving slowly towards 3% by 2017.
In 2012, U.S. exports of consumer oriented food products reached a new record high at US$180.4 million, an increase of 12% from that of 2011. Total U.S. agricultural exports also reached a new high of US$343.7 million, an increase of 9%. The share of consumer oriented exports represented over 52% of the total. Top consumer oriented exports to “T&T” as it is known, included red meat and poultry, dairy products, snack foods, eggs and products, processed fruits and vegetables and breakfast cereals.
Euromonitor has estimated the value of packaged food retail food sales to be just over US$1 billion in 2012, an increase of 581.4% from 2008, or about US$932.5 million. That makes “T&T” the 3rd largest packaged food market in the Caribbean. They also forecast the retail food market to expand to over US$1.1 billion by 2017, an increase of over 7% or about US$79 million. High growth categories in the forecast include soup, ice cream, sweet and savory snacks, frozen processed food, sauces, dressings and condiments and oils and fats.