Bahamas Country Profile

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Market Overview:

Euromonitor reports that Bahamian Real Gross Domestic Product (GDP) grew by 0.3% in 2016, down from 1.2% in 2015. 1% growth is forecasted for 2017. Steady gains in the U.S. economy helped, but the delayed completion of the aforementioned major tourist facility known as Baha Mar, is a drag on growth. Unemployment was 13% in 2015 and youth unemployment is very high. Labor market rigidities constrain the supply of workers. A shortage of skilled labor is another problem. Small- and medium-sized enterprises (SMEs) are the backbone of the job market but face significant impediments to the growth. The real value of private consumption rose by 2.1% in 2015 and gains of 2.8% were expected in 2016. Domestic demand is also weighed down by household indebtedness.

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. Since the recession of 2008-2009 rates of growth have been positive but feeble, averaging less than 2% per year. 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.

CBATO reports that The Bahamas sources 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 infrastructural projects of recent years come on-line, should supply the average Bahamian with resources sufficient to continue pursuit those interests.

Total U.S. agricultural exports dropped 2% to US$247.4 million in 2016. That makes it the 2nd largest market in the CBATO region after Trinidad & Tobago and the 5th overall in the Caribbean. U.S. exports of consumer-oriented products to The Bahamas dropped 1% to US$218.8 million in 2016, over 88% of the agricultural total. Bahamas is the 4th largest market in the Caribbean for processed food as well. 2016 U.S. exports totaled US$169 million, also a decline of only 1%. Top 2016 U.S. exports of processed food products included non-alcoholic beverages, snack foods, food preparations, processed/prepared dairy, prepared/preserved meats, beer and wine, pasta and cereal products and condiments and sauces. 

Retail Sector:

Euromonitor has indicated that the market size of the packaged food retail business in The Bahamas was US$123.9 million in 2016, an increase of 9.5% from 2012, or US$10.7 million. They also forecast growth of 13.1% to 2021, or another US$16.7 million during the period for a total of US$143.8 million.  High growth categories in the forecast include savory snacks, sweet biscuits snack bars and fruit snacks, processed meat and seafood, confectionery, rice pasta and noodles, baked goods and dairy.

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. There are 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. Deli counters are present in most supermarkets, and a few supermarkets have bakeries and seafood departments.   According to Euromonitor data, in 2016 total retail sales (excluding sales tax) of the grocery retail industry were US$597.8 million, of which about 55% were channeled through supermarkets and the other half mostly through small independent grocers, forecourt retailers and gas marts.  

On January 1, 2015 a new 7.5% value added tax (VAT) was implemented, seen as a necessary step as part of its WTO accession process and also to broaden its tax base, which is largely dependent on import duties. Despite opposition from many business sectors, the government moved forward with its VAT implementation plan.  Price levels were expected to move upward as the economy adjusts.

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.

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.

Due to the limited storage space that convenience stores and gas marts have, these operations require frequent deliveries of small orders from local importers/distributors and local manufacturers/producers. Therefore, they will seldom import the products directly. In the rare case that there is a specialty item that is not carried by a local distributor, they will usually request that they seek to source the product for them. They choose instead to source all their food and beverage products from local distributors. Thus, the best point of entry is by making contact with the distributors that service these stores and market new goods to them.

Although large-chain supermarkets can be found in the populated areas, smaller independent grocers maintain a strong presence in the market. While these retail outlets carry a more limited inventory than the larger supermarkets, they are conveniently located throughout the main islands of The Bahamas and typically offer products at lower prices. Wholesale club stores and in Nassau, Freeport, and Abaco are usually located in major shopping centers. These outlets carry a full line of food products in club and institutional-sized packs, in addition to apparel, appliances, and home furnishings.

Generally, the Bahamian retail customer tends to follow American brand and product trends because of the traditional ties and frequent travel to the U.S., exposure to U.S. tourists, and access to U.S. television advertising. Items in high demand include processed chicken, hot dogs, salty snacks, and individually packaged cookies and sweets. The major internal drivers pushing the success of U.S. goods in the market are the availability and quality of the products. U.S. products in the retail market are also competitively priced when compared to local and other foreign goods.

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 reports that Bahamian supermarkets look very similar to U.S. markets. Very little competition exists for the U.S. manufacturer from local or other foreign countries. The only reason a U.S. manufacturer may find it difficult to export a product into The Bahamas is if there already is an established competing product in the market. Most major brands are already licensed and distributed. Non-U.S. items consistently seen in local stores include lamb from Australia and New Zealand, bottled and canned beverages from Canada and Trinidad, flour from Canada, wine from Italy and France, certain jams and cookies from the United Kingdom, and jams, pepper sauces, and other specialty items from the Caribbean. Little competition for dry goods exists; however at times importers have found lower prices for other products such as beef and pork products from Canada, dairy products from New Zealand, and produce from the Caribbean and Latin America.

Food Service Sector:

Post reports that the strengthening Bahama’s tourism sector bodes good news for U.S. food exports to CBATO’s top market in the Caribbean. With nearly 80% of tourists to the Bahamas originate from the U.S. and with location within the U.S. telecommunications umbrella, Bahamian food service outlets and consumers readily identify with U.S. branded products.

Tourism, which constitutes over 60% of the national GDP, is a main driver of the food service market in the Bahamas. The Bahamas’ proximity to the U.S. and other Caribbean islands offers tourists a bargain in air/sea fare and provides a very popular fishing ground for Florida boaters. While the high season of most Caribbean islands is from Thanksgiving to Easter, the popularity of the resorts and fishing in the Bahamas extends the tourist season from Thanksgiving to the end of August. Stopover visitors (air arrivals) are the most profitable customers. While sea arrivals (cruise lines and private craft) bring triple the number of visitors to the islands, stopover visitors are much more important to the islands’ economy as they spend five times as much as other types of tourists.

Stop-over tourist visits from January through July 2015 show a healthy 5% expansion over the same period 2014. Furthermore, there has been a significant investment in increasing the hotel stock of New Providence. The number of rooms was set to increase by 33% by the end of 2016. Clearly, the Bahamians are betting on the recovery to continue and for the number of stopover visitors to continue its steady climb.

The lack of arable land for farming to support the food consumption of the local population and tourists has led to the importation of over 80% of the Bahamas’ agricultural needs. In 2015, the United States agricultural and related products exports to the Bahamas were valued at a record US$324 million. Of the total amount of consumer-oriented food products imported into the Bahamas, approximately half is directed toward the hotel, restaurant, and institutional (HRI) food service sector, while the remaining half is channeled toward the retail sector.

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 316 hotels, and over 15,300 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, over 20 companies provide institutional catering services in the Bahamas. While 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 was valued at US$188 million dollars in 2016, growth of nearly 19% growth from 2012. Independent food service establishments contributed approximately 37% of the total value of sales, while chained establishments contributed around 63%.

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. Shopping center developments near resorts like Atlantis and Our Lucaya also provide prime locations for independently owned restaurants. These restaurants have about 70% tourist clientele and rely heavily on local importers to provide their food and beverage supplies.

The institutional sector involves distribution to the prisons, hospitals, nursing homes, schools, and entertainment facilities such as arenas and stadiums. It accounts for less than 3%-4% of the HRI trade and is supplied by the local importers and to a lesser extent, one wholesale club outlet in Nassau. Many of the local importers are involved in supplying the local banks, hospitals, and other institutions with a coffee program. In addition, over twenty companies provide catering services in the Bahamas. These businesses mainly buy food products from local wholesalers and seafood from local fisheries. However, airline caterers that service carriers with flights to both Nassau and Freeport airports directly import food and beverage products from the U.S.

Post also advises that U.S. exporters interested in entering the HRI food service market in the Bahamas should begin by contacting local importers (which again also typically serve as wholesalers/distributors). Local importers have wide market access for imported food products, have relatively large warehouse facilities which are computerized and mechanized, and possess their own fleets of trucks and vans for distribution. Most importers carry a full line of fresh, frozen, and dry products, while a few of the importers specialize in providing fresh produce, seafood, and alcoholic beverages.

The Bahamas’ food and beverage importers are primarily located on the islands of New Providence and Grand Bahama. While there are approximately 30 importers of food and beverage products on these two islands, a handful of major importers dominate the distribution chain in the Bahamas’ HRI sector.

Due to the geographic proximity of the United States, U.S. food products represent the majority of the foreign food products imported into the Bahamas. Bahamian importers have considerable experience dealing with U.S. companies and have extensive knowledge of the U.S. food export system. Importers hold U.S. products in high regard with respect to quality, price, and packaging.

Best Product Prospects:
Post reports that U.S. products with the greatest potential for The Bahamas HRI sector include poultry meat, red meats, snack foods, fruit and vegetable juices, wine and beer, fish products, non-alcoholic beverages, tree nuts and processed fruit. 

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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