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The Bahamas HRI Food Service Sector Report

Market Overview:

Euromonitor reports that the Bahamian economy grew modestly in 2017. Steady gains in the U.S. economy are a major driver. Modest increases in private consumption also provide limited support. But small businesses suffer from a lack of credit and a continuing process of fiscal consolidation is a drag on the economy. The economy is narrowly based and diversification is a problem due to the high cost of infrastructure.

  • The economy is vulnerable to external shocks as well as growing competition from other tourist destinations and offshore financial centers
  • Real Gross Domestic Product (GDP) grew by 1.8% in 2017, up from -0.3% in 2016
  • The real value of private consumption fell by 1% in 2016 and a fall of 0.1% is expected in 2017
  • Domestic demand is weighed down by household indebtedness and high levels of unemployment
  • The current account deficit was 11.4% of GDP in 2016 and it will narrow to 10.7% in 2016
  • A large increase in imports – mostly associated with development of the hotel industry – is the main reason for the significant imbalance
  • Growth of real GDP will accelerate in the next two years but then slip to around 1.3% per year in the medium term

Post reports that The Bahamas source 90% of its consumer-ready products from the U.S. creating an environment of opportunity for U.S. suppliers of retail products in practically all product categories. Bahamians high demand for U.S. products and brands is driven by their close observation of the American lifestyle and culture. The country’s tourism sector, starting to pick-up as new infrastructure projects of recent years come on-line, should supply the average Bahamian with resources sufficient to continue pursuit those interests.

The Bahamas is the 2nd largest U.S. export market for consumer ready food products in the Caribbean after the Dominican Republic. Exports of these products grew 6% to US$232.4 million in 2017. Bahamas is the 3rd largest market in the Caribbean for processed food as well. 2017 U.S. exports totaled US$171.1 million, an increase of 1%. Top 2017 U.S. exports of processed food products included:

  • Non-alcoholic beverages
  • Snack foods
  • Processed/prepared dairy products
  • Food preparations
  • Beer and wine
  • Pasta and cereal products
  • Condiments and sauces
  • Prepared/preserved meat products 

Retail Sector:

Euromonitor has indicated that the market size of the packaged food retail business in The Bahamas was US$320.5 million in 2017, an increase of 8.1% from 2013, or US$24 million. They also forecast growth of 12.4% to 2022, or another US$41 million during the period for a total of US$371.5 million. High growth categories in the forecast include:

  • Dairy products
  • Baby food
  • Processed fruit and vegetables
  • Sauces dressings and condiments
  • Rice pasta and noodles
  • Savory snacks
  • Processed meat and seafood

Post reported that 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 and wholesale club stores. At last count, there were an estimated 146 grocery retailers in The Bahamas, with the majority concentrated in the main islands of New Providence and Grand Bahama. The other inhabited islands have mostly small independent grocers. According to Euromonitor data, in 2017 total retail sales (excluding sales tax) of the grocery retail industry were US$575.6 million, of which about 65% were channeled through modern grocery stores and the balance mostly through small independent grocers and food, drink tobacco specialists.

Of the total grocery retail food sales in The Bahamas, the lion’s share of products are imported from the U.S., with the majority of these imports being channeled through local importers, which also typically serve as both wholesalers & distributors. There are approximately 30 importers of food and beverage products located on the islands of New Providence and Grand Bahama. Large retailers with sufficient sales volume and storage space will often buy some of their product mix from U.S. suppliers. However, for U.S. suppliers using a local Bahamian importer will ensure maximized brand distribution and effective product management.

The health-food trend has recently been on the rise in the Bahamian food market. Some of the more affluent areas of The Bahamas, like Cable Beach, on New Providence Island, have witnessed a small surge in health and gourmet food stores openings. The building of Solomon’s Fresh Market stores in recent years, which rival any organic /gourmet style store in the U.S. in terms of overall quality and selection is a prime example. One factor in particular that has contributed to the increasingly health-conscious Bahamian consumer is the high incidence of obesity and diabetes among the population. This, among other factors, has resulted in a growing interest in healthy foods.

Post advises that breaking into The Bahamas retail market can be somewhat challenging because of the extensive establishment of many well-known U.S. brands already in the market. The best way for a U.S. supplier to successfully enter the market is to first search the market for potential niches and then to develop a customized marketing plan. Researching the market structure and competition is a key to assessing current market conditions and making sound decisions. Travel to The Bahamas is recommended for a first-hand view of the market.

Best Product Prospects:

Post reports it is known that market opportunities exist for practically all high-value, consumer-oriented foods/beverages and seafood products in The Bahamas. Some of the most prominent growth categories include:

•           Dairy products including cheese
•           Fish products, especially deep water fish not found in Bahamian waters
•           Prepared/preserved red meats, as well as fresh chilled and frozen red meat, poultry meats;
•           Processed fruits and vegetables

There are products not present in significant quantities but have good sales potential. They include:

•           Gourmet foods
•           Asian products
•           Tofu
•           Products that contain no trans-fats
•           Sugar-free products
•           Fat-free products
•           Organic products

Food Service Sector:

Post reports that with a well-developed tourism infrastructure, proximity to the United States the Bahamas is the perfect Caribbean playground for U.S. tourists. Nearly 1.5 million stop-over tourists (with nearly 80% coming from the United States) and over 4.5 million cruise passengers visit The Bahamas annually. For U.S. food service suppliers, this translates into excellent opportunities in the HRI food service sector, especially since The Bahamas has very little domestic food production of its own. Recent large scale hotel and resort investments are adding over 2,000 rooms and other attractions to The Bahamas, promising to continue to fuel the growth in the Hotel, Restaurant, Institutional (HRI) food service sector, which is valued at an estimated US$196 million in 2017.

  • The hotel sub-sector makes up roughly 65% of the total HRI market, followed by the restaurant sub-sector at 32% and the institutional sub-sector at 3%.
  • There are 315 hotels, and approximately 17,000 hotel rooms in the Bahamas
  • Moreover, there is a wide array of restaurants located on the larger islands, such as New Providence and Grand Bahama, which have more than 430 restaurants
  • In addition, over 20 companies provide institutional catering services in the Bahamas
  • There is no data available on the value and growth of the individual HRI subs-sectors
  • According to Euromonitor, The Bahamas’ total consumer food service sector is valued at $196.3 million dollars in 2017, 4.9% higher than in 2016
  • Chained establishments contributed approximately 63% of the total value of sales, while independent food service establishments accounted for the remaining 37%.

The distribution network in the HRI sector of the Bahamas is comprised of the local importer and direct purchasing from the island or purchasing organization established in the United States. Smaller restaurants and hotels rely heavily on local importers for almost all of their supply. Through local importers, these establishments can source smaller quantities of a variety of items. Most often, importers in the Bahamas will use suppliers located in south Florida to consolidate shipments that amount to less than a container load of products.

The larger hotels and resorts purchase roughly 40% of their food and beverage needs through local importers, while 60% is purchased directly from U.S. suppliers. Some hotels have even positioned offices in south Florida to facilitate shipment to the seaports of the Bahamas. Moreover, the chained food service establishments located in the Bahamas typically import directly from U.S. buying offices.

Most restaurants turn to local importers, which also serve as wholesalers/distributors, to source their imported food and beverage supply, while the majority of the seafood, bottled beverages, and seasonal fruits and vegetables tend to be bought directly from vendors on the island. For the most part, customers do not inquire about the brands used in their dishes; nevertheless, they expect the quality of products to be on the same level as those offered in U.S. restaurants. Nassau and Freeport offer a wide variety of restaurants, ranging from upscale to fast food, and cuisine that reflects American, Bahamian, and international cultures.

Local chains of restaurants mainly consist of Chinese and Bahamian cuisine and seafood. The independent restaurants in Nassau, which are located outside hotels, do not experience much decline in clientele in the low season (which lasts from April to August) because local residents also frequent these establishments. Even centrally located restaurants have only around 60% tourist clientele. The increase in per capita GDP and employment of women in the workforce has facilitated the spread of fast food eateries across urbanized areas.

Kentucky Fried Chicken, McDonald’s, Burger King, Wendy’s Domino’s Pizza, Carl’s Jr., Dunkin Donuts, and Subway, typically import directly from U.S. buying offices. In 2017 fast food restaurants accounted for the largest percentage of consumer food service sales in the Bahamas with 56% of the market, followed by full-service restaurants with 30%, cafes and bars with 7%, home delivery/takeaway with 4%, and street stalls/kiosks with 3% of the market.

Although the United States has traditionally been the main supplier of food and beverage products to The Bahamas, the competition with other nations varies between product categories. It is also worth noting that many products from other countries are transshipped through the United States, meaning the market share of other countries may be understated. The close proximity of the United States to The Bahamas allows for quicker and less expensive means of transport of U.S., as well as other foreign products. Nevertheless, it is assumed that the United States dominates in all major food categories. 

Food-Processing Sector:

Post had previously reported that in regards to local competition, there are approximately 20 food and beverage processors of notable size located in The Bahamas. Approximately 50% of these processors are manufacturers of soft drinks and producers of mineral water. The remaining 10 processors specialize in the production of fish and fish products, poultry, fruit and vegetable products, dairy products, and sugar products.

No beef or pork is produced locally, and only one major poultry producer remains. Two local seafood companies meet most of the demand for some types of seafood like grouper, lobster, and shrimp. In regards to the supply of local produce, the fruit and vegetable crop is seasonal and inconsistent in quality and quantity. However, “protected” production of vegetables has had some success in recent years. In terms of beverages, local water and soft drink manufacturers in Nassau and Grand Bahama supply most of the demand for these products in their respective markets. All in all, local competition is minimal.

Best Product Prospects:

Post reports it is known that market opportunities exist for practically all high-value, consumer-oriented foods/beverages and seafood products in The Bahamas. Some of the most prominent growth categories include dairy products including cheese, fish products, especially deep water fish not found in Bahamian waters, prepared/preserved red meats, as well as fresh chilled and frozen red meat, poultry meats and processed fruits and vegetables. There are products not present in significant quantities but have good sales potential. They include gourmet foods, Asian products, tofu, products that contain no trans-fats, sugar-free products, fat-free products and organic products. 


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