Euromonitor reports that Bermuda is one of the world’s richest countries but the economy has not performed well. After several years of contraction, real Gross Domestic Product (GDP) rose 1.8% in 2016, and gains of 1.7% are expected in 2017. Annual
rates of growth will be similar in the medium term. Bermuda’s tourist sector is struggling, with vacationers preferring rival destinations. Sophisticated telecommunications and laws designed to strengthen confidence have helped to stabilize
the financial sector, but unemployment is on the rise.
Bermuda realizes about a quarter of its GDP from international business. Roughly one-third of the workforce is non-Bermudian although that percentage has been gradually falling during
the present decade. Bermuda's lack of economic diversification and excessive reliance on mature industries limits its growth prospects. It is feared the secular decline in the tourist sector will leave Bermuda even more dependent on financial services
and thus increasingly vulnerable to external shocks. Analysts point to the steady drop in the current account surplus, for which the decline in tourism is at least partly responsible. Unemployment has been steadily rising for several years. In 2015,
the jobless rate stood at 9% and is predicted to rise to 9.6% in 2016.
Post reported that 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 the 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.
In 2016, total U.S. exports of agricultural
products dropped 3% US$90 million. U.S. consumer-oriented food products were US$84.9 million, a decrease of 2% from 2015. That amount was 94% of the agricultural total. U.S. exports of processed foods dropped 1% to US$61.7 million or nearly 69% of
the agricultural total. Top U.S. exports of processed foods in 2016 included snack foods, non-alcoholic beverages, food preparations, processed/prepared dairy products, beer, and wine, processed/prepared vegetables and pulses, prepared/preserved meats
and condiments and sauces.
Euromonitor has reported that the 2016 value of the retail packaged food market in Bermuda to be US$50.6 million, an increase of 3.5% or US$1.7 million from 2012. They also forecast the packaged food retail market to increase slightly
to US$55.8 million by 2021, a growth of 8.3% or US$4.3 million. Top growth categories in the forecast include savory snacks, sweet biscuits snack bars and fruit snacks, processed meat and seafood, confectionery, dairy, baked goods, and sauces dressings
According to Euromonitor data, in 2016 total retail sales (excluding sales tax) of the Bermudian grocery retail industry were US$282.9 million, of which about 53% were channeled through modern grocery
retailers and just over 28% through small independent grocers. The industry is estimated to have declined by 0.8% in 2016 and is expected to decline by 5.3% or US$14.8 million over the next five years.
Post has reported that 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 U.S. 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. In the last report, U.S. food imports destined to the foodservice 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, Market Place and Lindo’s Market import from the U.S. 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 do 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.
Food Service Sector
While there is no data available on the value and growth of the individual Hotel Restaurant and Institutional (HRI) subs-sectors, according to Euromonitor, Bermuda’s total consumer food service sector was valued at US$82.8 million
dollars in 2016 and is expected to expand by an average growth rate of 9.3% through 2020. Chained foodservice establishments account for 60% of the market and independents for the remaining 40%.
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