of all Consumer-oriented food & ag products imported come from the U.S.
largest export market for consumer food products in South America
value of imports from the U.S. in 2020
According to Euromonitor Colombia was hit hard by the COVID-19 pandemic in 2020, which sent the country’s economy into recession. The pandemic, coupled with a sharp decline in oil prices, will have a long-term
impact on the country’s economic, financial and social environment. Under the baseline scenario, Colombia’s economy will rebound in 2021, yet the country will have to spend significantly on the Economic Reactivation Plan and seek
structural reforms to ensure sustainable development in the foreseeable future. Gross Domestic Product (GDP) is forecast to reach 4.8% in 2021.
Real annual GDP in Colombia contracted by 6.8% in 2020, due to the COVID-19 pandemic and plummeting oil prices.
Inflation decelerated to 2.5% in 2020, due to lower spending, falling fuel prices, and rising savings.
Colombia’s exports in USD terms declined year-on-year in 2020, as key export destinations suffered from lockdowns and deteriorated demand amid the COVID-19 pandemic.
Investment intensity slumped in 2020, yet the state program is expected to facilitate foreign direct investment (FDI) growth in 2021.
Colombia’s public debt increased to 68.6% of GDP in 2020 from 52.3% in 2019, as the government’s Economic Reactivation Plan and other support measures weighed heavily on the country’s finances.
Investment in the non-oil sector will be crucial in order to attain sustainable rates of growth. Diversification away from oil should benefit from improvements in infrastructure. However, diversification will also require higher rates of growth
in productivity. Part of the solution is an ambitious plan to develop transport infrastructure with help from the private sector. Between 2015 and 2023 the program, known as the Fourth Generation or 4G, is expected to modernize 6,000 kilometers
of roadway at a cost of US$10.7 billion. Colombia depends on its road network for more than 80% of internal transport. Additional investments by privately owned groups (valued at US$3.3 billion) are also planned.
Colombia’s population was 50.3 million in 2021, (CIA World Factbook Est.) up from 40.4 million in 2000. Total population will reach 53.1 million by 2030. The share of those of 0-14 years was 40.6% of the total in 1980 but had fallen
to 23.2% by 2020 (still high by regional standards). The share of those over 65 years represented 8.3% of total population in 2018 and it will rise to 12.8% by 2030.
The U.S Colombian Trade Promotion Agreement (CTPA) entered into force in May 2012. This comprehensive trade agreement eliminated tariffs and other barriers to goods and services. Although over 80% of U.S. exports of consumer and industrial
products to Colombia have become duty-free, the CTPA provided a duty free tariff-rate-quota (TRQ) on certain goods that operate under a first come/first serve basis, except for rice and poultry, which are subject to auctions managed by Export Trading
Colombia is eager for access to other markets and has signed Free Trade Agreements (FTAs) with various countries and trade blocs, such as Canada, the South American Common Market (MERCOSUR), the European Union, Israel, Panama, South Korea, Costa Rica
and a larger trade bloc, the Pacific Alliance, which includes Mexico, Peru and Chile.
USDA’s Office of Agricultural Affairs (OAA) in Bogota, hereinafter referred to as “Post” reports that Colombia is the leading destination for U.S. agricultural exports in South America, followed by Brazil and Chile. In 2020, U.S.
agricultural exports to Colombia were valued at $2.9 billion
American exporters face new market conditions in Colombia, as well as new opportunities, as the country emerges from the novel coronavirus (COVID-19) pandemic. Private-label product market share, especially for more affordable rice, beans, and canned
tuna, is increasing. Companies providing large discounts increased their market presence, benefiting from the economic downturn. COVID-19 influenced consumer habits and preferences. These are altering the landscape for retailers,
food industry, and food service.
In 2020, Colombia’s imports of consumer-oriented products from all suppliers declined 8.5% to $1.9 billion, due to the pandemic and changing consumer habits. In 2020, Colombian imports from the United States fell 21% to US$632 million, followed by Chile (US$241 million) and Mexico (US$196 million). Consumer-oriented products account for 23% of U.S. food and agricultural exports to Colombia. This now makes Colombia the 2nd largest export market for consumer food products in South America, after that of Chile.
Colombia is now the largest U.S. South American market (and 11th overall) for the export of U.S. agricultural products, which grew 3% and totaled over US$2.7 billion in 2020. That is also more than US$1.7 billion more than Chile which is the 2nd largest market for U.S. agricultural exports. Colombia remains the largest importer of processed food in South America, US$496.3 million in 2020, and a decrease of 14%. Top processed food exports to Colombia in 2020 included:
Processed/Prepared Dairy Products
Food Preparations & Ingredients
Fats & Oils
Dog & Cat Food
Chocolate & Confectionery
Advantages and Challenges for U.S. Food Exporters in Colombia
The U.S. enjoys some competitive advantages in the Colombian food market:
The U.S.-Colombia Trade Promotion Agreement (CTPA) expands opportunities and market potential for many food and agricultural products.
U.S. agricultural products have a reputation for high quality.
The success of American style restaurants provides an avenue for introducing U.S. recipes and food ingredients into the Colombian diet.
The growth of tourism and the hotel and restaurant sectors will require a greater array of raw materials and ingredients to make final products more appealing to foreigners and fast changing domestic consumer tastes and preferences.
The growing lower and middle-income population, especially youth and working women are stimulating new consumer trends and a growth in processed foods.
Market opportunities for health foods and organic products are expanding given growing obesity trends and GOC support for healthy living campaigns.
U.S. food suppliers and manufacturers have a positive reputation for food safety, availability, quality, and delivery.
Challenges for U.S. exports of food products to Colombia include:
Colombia has trade agreements with many other countries increasing competition with U.S. products.
Colombian per capita consumption for processed and semi- processed products are low; for example bread consumption is only 24kg/year, still low compared to other Latin American markets.
Depreciation of Colombian peso might affect U.S. export competitiveness.
There is a cultural misperception that frozen products are unhealthy and lack quality.
Internal transportation costs from ports of entry are costly due to extremely poor infrastructure.
Cold chain is deficient and increases logistical costs.
Increasing consumer preference for local products, especially dairy, fruits, vegetables and meat, due to government policies in reaction to Covid-19.
“All of Food Export's programs were a tremendous help getting us export ready, understanding the challenges that come with international business, and learning how to navigate them.
retail sales value of the packaged food market in Colombia in 2020
the estimated increase in value of retail sales in packaged food by 2025
Euromonitor has reported that retail sales value of the packaged food market in Colombia reached US$11 billion in 2020. That ranks Colombia as the 5th largest packaged food market in Latin America. The 2020 figure also represents an increase of 23.5% from the 2016 value, or US$2.1 billion. They also forecast the value of retail sales in packaged food to increase to US$13.5 billion by 2025, an increase of nearly 18.4% or nearly US$2.1 billion. High growth products in the forecast include:
Sweet Biscuits, Snack Bars and Fruit Snacks
Processed Fruit and Vegetables
Ice Cream & Frozen Desserts
Post reports that Western style; large supermarkets are part of a noteworthy retail transformation in the last decade with major, domestic and international grocery chains opening new stores. Discount stores have increased market share and continue opening outlets throughout the country, offering private label portfolios.
But since 2020, the retail sector in Colombia is undergoing a transformation due to the Covid-19 economic slowdown and quarantine measures. Consumer habits have changed for the near term and may remain different even after the Covid-19 crisis is over. The quarantine isolation period in Colombia has become one of the longest in the world, affecting consumer preferences since they are seeking stay-at-home products.
New generations’ consumption is more conscious and consumers are looking for products that suit their demands in terms of quality and sustainability. A recent retail survey concluded that 59% of Colombian consumers would change their purchase habits in order to reduce product environmental impact, even if it means changes in packaging, brand or product design. The biggest retail player (Grupo Exito) has innovated through new retail formats and transformed a few Exito hypermarkets into Exito WOW and some Carulla supermarkets into Carulla Fresh Market in order to respond consumers’ demands.
Euromonitor reports that Olímpica from Supertiendas & Droguerías Olímpica remained the largest player in supermarkets in terms of both value sales and number of outlets in 2020. The company has worked to strengthen its economy private label portfolio to compete with other supermarket chains and discounters, with good results. The Olímpica chain originated in the north of Colombia and is well-known for selling specific products from this region. This is very much appreciated by immigrants from this area, who shop in the chain due to their common area of origin. However, the arrival of new and aggressive players such as discounters was leading such leading supermarkets to moderate their expansion plans even before the constraining effect of the COVID-19 crisis. Supermarkets operators were, instead, deciding to renovate their existing locations throughout the country.
Delivery services and online commerce have become the best option for consumers to buy main food and sanitary staples. Most retailers have websites available for shopping online and all kind of smartphone applications ease the grocery shopping experience. According to Euromonitor, food and beverages are among the products preferred by Colombian consumers when buying online. Most demanded food products during the isolation period were frozen vegetables, chickpeas, corn flour, dietary supplements, pasta, and lentils.
Best Product Prospects:
Post reports that Colombia is a fast-growing market for value-added food products. Surveyed retailers and food importers feel there is significant potential for new products in all food categories. Healthy and ethnic food categories are especially new and fast growing. Wines and gourmet products are penetrating the market with excellent results. Organic food products are a new trend and retailers are searching for the best suppliers.
Food Service Sector
estimated number of food service outlets in Colombia
estimated number of employees in the restaurant and hotel sectors in Colombia
of HRI sales are from fresh, premium meat cuts
Upon recovery from the Covid-19 pandemic, the Colombian restaurant and food service sector is expected to expand as a consequence of growing incomes and higher participation of women in the labor force, resulting in a stronger incentive to dine out and/or utilize delivery food services; roasted chicken, hamburgers, and pizza are a few of the preferred products that Colombians order using delivery service.
Post reports that the hotel, restaurant and institutional (HRI) food service sector is undergoing a dramatic transformation due to the Covid-19 economic slowdown. The Colombian government extended the Covid-19 lockdown several times, making it one of the longest in the world, and international flights are only now re-starting after several months, resulting in significant impact to Colombia's tourism industry. Consumer habits and preferences have changed, altering the landscape of the HRI sector for the foreseeable future.
Prior to Covid-19, Colombia had a growing food service sector. According to Euromonitor, the sector consists of 115,000 outlets, including cafés, bars, restaurants, cafeterias and kiosks. The restaurant and hotel industries employ approximately 650,000 people. The Colombian National Department of Administrative Statistics (DANE) estimates that the HRI sector is highly informal, with 98% of establishments not officially registered with national or local governments and only 2% complying with commercial food regulations.
Increasing urbanization, a growing number of shopping malls and food courts, increasing dual income households, higher participation of women in the labor force, resulting in a stronger incentive to dine out or use home delivery food services, and a growing tourism sector were major factors driving food service expansion.
Online commerce continues to be popular, especially throughout the Covid-19 outbreak, as most retailers use websites and smartphone applications to improve the dining and shopping experience. In the last 10 years, Colombian consumers’ tastes and preferences have changed as they seek to try new products and demand higher quality and product innovation. According to surveys from a local food service organization, fresh, premium meat cuts represent 48% of HRI purchases, followed by non-alcoholic drinks (17%), fruits and pulses (15%), other foods and beverages (16%) and other inputs (4%). Although Colombians like eating at home, and have been forced to as a result of Covid-19, they are inclined to eat in fast food restaurants out of convenience and affordability. While chain restaurants are growing, strong competition from local, informal restaurants remains.
Best Product Prospects:
Colombia is a fast growing market for value-added food products. Industry surveyed retailers and food importers feel there is significant potential for new products in all food categories and among them pork meat and products, processed turkey and duck, bone-in beef cuts, processed fruits and vegetables, beer, tree nuts and dairy products.
total of 2020 U.S. exports of intermediate products reached
growth in U.S. exports of intermediate products in 2020
Colombia remains a net importer of many agricultural products and cannot domestically source the necessary raw materials and ingredients to meet the growing demand of the food and beverage processing industry. U.S. exporters face new market conditions in Colombia, as well as new opportunities, resulting from changes to consumer habits and preferences during the COVID-19 pandemic, which has altered the landscape for the retail, food industry, and food service sectors.
There is a growing domestic demand for higher quality confectionary products. The Colombian fats and oils sector imports unrefined soybean oil and other oil seeds to meet industrial demand. The milling, bakery, and starches sectors have benefited from innovation in flavors and healthier ingredients.
In recent years, the Colombian food industry has undergone unprecedented consolidation and structural change through mergers, acquisitions, divestitures and new foreign competitors entering the market. This widespread consolidation in the retail, HRI and food processing industries was driven by expected efficiency gains from economies of scale, resulting in significant impacts on market share and food prices. It is also important to note that distribution channels have become more efficient with the increased presence of foreign competitors.
Opportunities for U.S. agricultural products abound in Colombia abound after implementation of the CTPA. Colombia cannot sufficiently source domestically the raw materials and ingredients to meet the growing demand of the food and beverage processing industry. Colombia is a net importer of many food ingredients and trade opportunities abound.
Best Product Prospects:
Colombia is the largest U.S. export market in South America for intermediate products which is where most food ingredients are aggregated. In 2020 U.S. exports of intermediate products reached US$807.2 million, growth of 10%. That figure is also over 36% of the regions total, as well as over 29% of the Colombian agricultural total. Top U.S. exports of intermediate products to Colombia in 2020 included soybean meal and oil, vegetable oils, sugar, sweetener and beverage bases, distillers grains, protein concentrates and textured substances, food flavorings, enzymes, corn starch, dextrins and protein isolates.
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