Nearly 95% of the world’s population resides outside of the United States, which means the additional sales growth is very likely from exporting.
Economies of Scale:
By producing at capacity, fixed costs are lowered per unit, especially if little or no adaptation is required.
Exporting diversifies risk and helps protect business in the event of a domestic slow-down.
Exports of consumer food products are growing 3x faster than sales here in the U.S. They have soared in recent years in response to consumers’ growing purchasing power and lower trade barriers. Exports of consumer-ready food products still suggest a long-term upward trend, having grown 10% between 2016 and 2019. An increase of $6.3 billion, or nearly $1.6 billion a year in growth of consumer food exports on an annual basis.
Small Companies Can Be Successful Exporters
It’s a popular misconception that only large companies can succeed overseas. Indeed, many small companies have found that their competitive advantage lies in some form of technological or creative advantage. Many have “unique” or “niche-type” products that are always in demand overseas!
International Markets More Accessible
As of 2020, 15+ Free Trade agreements with over 20 different countries have been created to help decrease America’s trade deficit. These trade agreements have lowered many trade restrictions for U.S. products, giving U.S. exporters an unprecedented level of access to many international markets. These reductions have helped all U.S agricultural exporters, but in many instances have been particularly advantageous for exporters of value-added food and agricultural products.
View a list of trade agreements currently in force on the USDA’s Foreign Agricultural Service website.
Export Assistance Is Available
Many companies shy away from exporting because they don’t know how or where to get started. Fortunately, help is available! Food Export-Midwest, Food Export-Northeast, your local state agricultural promotion agency and other export providers can provide your company with a wide range of export assistance to help introduce you to the world of exporting.
To read about some of the successes our participants have had using our programs, visit our Success Story page.
Consumer preferences, shaped primarily by incomes, changing lifestyles, and evolving cultural preferences, largely determine the items available in grocery stores in different markets. In developing-country markets, higher incomes result in diet upgrades, with increased demand for meats, dairy products, and other higher value food products. These include packaged cereals, pasta, oils, and other items used in meal preparations.
U.S. Competitive Advantage
Another contributor to the growth in value-added food exports is U.S. food exporters’ competitive advantage in food processing. U.S. and Western Europe are considered to have the largest amounts of food and manufacturing centers. Many U.S. firms lead the way in adopting new technologies and in meeting the ever-changing consumer demand and trends, making them better able to customize their products for foreign consumers. Many are thus able to supply the types of foods products that are most in demand, including convenience foods like home meal replacement items, private label products, and niche-type products such as organic and functional products.
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