Jamaica Country Profile

Market Overview:

Euromonitor reports that Jamaica’s economy is growing at a sluggish pace. Real Gross Domestic Product (GDP) grew by 1.5% in 2016 after gains of 1.1% in 2015. A gain of 2% growth is forecast for 2017. A continuing process of fiscal consolidation slows the economy. Growth is driven mainly by the service sector, including tourism, and a modest recovery in agriculture and manufacturing. Business confidence is also strong and private credit growth is recovering.  

After years of meager economic growth, consumer spending has weakened significantly. The real value of private final consumption rose by 1.6% in 2015 and growth of 3.5% was expected in 2016. Public debt is expected to be cut to around 96% of GDP by 2020. The budget for 2016/2017 calls for a primary surplus (before interest payments) equal to about 7% of GDP. Growth rates should increase modestly in the medium term as the government continues its program of fiscal consolidation and reforms are implemented. Real GDP will reach 2.7% per year by 2020.

USDA’s Office of Agricultural Affairs, OAA, in Kingston, referred to as “Post” reports that Jamaica has a long history of doing business with the U.S. This strong interest in U.S. suppliers and products are mainly due to close proximity, long-standing reputation of high quality products, and superior quality of service. Despite the modest economic growth prospect for the Jamaican economy, there are good opportunities for U.S. suppliers. Given an insufficient amount of arable land, an underdeveloped food-processing sector and a growing tourism sector, Jamaica has to import much of its food needs.

The U.S. products with good sales potential include: fruits and vegetables, fruit and vegetable juices, special cut of beef and veal, cheeses and other dairy products, snack products, and wines. It is recommended that a U.S. exporter who would like to enter the Jamaican market perform in-depth market research to identify potential niches and develop an effective marketing plan. As a part of the plan, the U.S. exporter should make contact with local importers/distributors who serve as the principal intermediary between exporters (suppliers) and local consumers (buyers).

Jamaica is the 2nd largest market for U.S. agricultural exports in the greater Caribbean after the Dominican Republic. U.S. exports of agricultural products totaled US$371.5 million in 2016, a decrease of 2%. U.S. exports of consumer ready food products in 2016 increased 3% to US$173.5 million, nearly 47% of the agricultural total. Jamaica also imported US$169.8 million of processed foods in 2016, an increase of 16% from 2015. That represents nearly 46% of the agricultural total. Top U.S. exports of processed food products in 2016 included food preparations, fats and oils, non-alcoholic beverages, processed egg products, snack foods, processed/prepared dairy products and condiments and sauces. 

Retail Sector:

Euromonitor has estimated the value of retail food sales to be US$591.6 million in 2016, an increase of 25.9% from 2012, or US$121.5 million. That makes Jamaica the 3rd largest packaged food market in the Caribbean, excluding Puerto Rico. They also forecast the Jamaican retail food market to expand to US$857 million by 2021, an increase of nearly 35% or US$222 million. High growth categories in the forecast include savory snacks, processed meat and seafood, sauces dressings and condiments, ready meals, processed fruit and vegetables, dairy, sweet biscuits snacks bars and fruit snacks and baby food.  

Euromonitor reports that grocery retail sales reached just over US$987 million in 2016. That represents growth of 21.4% or US$173.7 million from 2012.  Modern grocery retailers totaled US$385.5 million or 39% of the total and independent grocers totaled US$597.6 million or 60.5% of the total.

The smaller retailers such as neighborhood ‘mom and pop’ stores and convenience stores will buy most if not all of their products from local wholesalers/distributors. These retailers have a slower turnaround on product sales and have limited space for storage. In contrast, supermarket chains often have both local and U.S. or foreign-based purchasing offices. They work closely with U.S. suppliers to find the best prices for the products of interest. PriceSmart (U.S.) is the only international chain in the Jamaican market; however, there are four major local chains which dominate the retail sector. Progressive Grocers of Jamaica are country wide and have 25 outlets, Hi-Lo (Grace Kennedy) is also country wide with 14 stores, Super Plus covers mostly rural Jamaica and has 8 stores and Mega Mart (superstore) covers Kingston, Portmore, Mandeville and Montego Bay with 4 stores. 

Food Service Sector:

Post reports that Jamaica is one of the main tourist destinations in the Caribbean region, with over two million tourist arrivals in 2015.  Approximately 1.3 million of these tourists were from the U.S. Total food consumption in the Hotel Restaurant Institutional (HRI) sector is estimated at US$600 million. In the Jamaican hotel and restaurant subsectors, fruits and vegetables, lamb, specialty cuts of beef and veal, cheeses and other dairy products, French fries, snacks products, sauces, and wines are high in demand.

The potential lies in the fact that visitors to Jamaica tend to demand the same high quality food products that they have at home. Only Dominican Republic and Cuba receive more tourists than Jamaica (Caribbean Tourism Organization, 2015). The hotel sub-sector makes up approximately 70% of the total HRI market, followed by the restaurant sub-sector at 28% and the Institutional subsector at 2%. Jamaica has an estimated 2,352 tourist accommodation establishments, including 190 hotels. In addition, numerous restaurants are located throughout Jamaica that caters to both locals and tourists.

Jamaica’s total consumer food service sector generated an estimated US$680 million in 2015 sales, 5% higher than 2014. Independent food service establishments constituted about 60% of those sales, while chain establishments contributed the remaining 40%. In 2015, Jamaica imported a total of US$841 million worth of food and beverages, of which approximately 60% was destined for the hotel, restaurant, and institutional (HRI) sector, while the remaining 40% was channeled to household consumers via retail stores such as supermarkets and smaller outlets.

Accommodations in Jamaica include all-inclusive resorts, luxury hotels, affordable family hotels, self-catering apartments and villas, and intimate guest houses. Overall, Jamaica boasts over 2,000 accommodation establishments and approximately 33,000 rooms. According to the Jamaica Tourist Board Annual Report 2015, the total hotel rooms during 2015 were 21,454 with all-inclusive and non-all-inclusive accounting for 76% and 24% respectively. The major hotels account for 35% of total room count, but over 70% of all-inclusive accommodations. Total room capacity is expected to expand significantly during 2016 and beyond with several new hotel chains entering/expanding, namely, Playa Resorts, Palace Resorts, Melia International, AMResorts and Royalton Blue Diamond. In addition, a local entrepreneur is planning on opening a new business hotel in Montego Bay. In both areas, total capacity should increase by more than 10%.

Most accommodation establishments have at least one restaurant on property, frequently offering a fine dining restaurant, a casual beach grill, and /or a family style/buffet breakfast or lunch eatery. It is not unusual for the large-scale all-inclusive hotels and resorts to have as many as seven or more restaurants. In general, large-scale hotels and resorts possess their own warehouses and typically import and receive weekly shipments of food and beverage products from US suppliers. However, it should be noted these establishments rely on local importers/distributors for most of their food and beverage needs. In addition, local farmers and to some extent local processors/agro processors also supply the hotel sub-sector.

Jamaica has a relatively large number of independent restaurants compared to chain establishments. These restaurants cater to both local and tourist populations. At these restaurants, all types of cuisines are available and they mainly use local food products. However, they also procure imported food and beverage products from the importer/distributor channel. These restaurants do not import products directly from overseas suppliers due to their small size. U.S. products are believed to represent between 30% and 40% of the total food and beverage purchases made by the independent restaurants in Jamaica.

Chain food service outlets present in Jamaica include restaurants such as T.G.I Friday’s, and several US fast food chains such as Burger King, Kentucky Fried Chicken, Domino’s Pizza, Pizza Hut, Wendy’s and Subway. Major Jamaican fast food chains include Juici Patties, Tastee Limited and Island Grill. The fast food restaurants are the fastest growing segment of the restaurant sub-sector and provide excellent opportunities for US exports. Most U.S. franchisees have modified their menu to meet Jamaican consumers’ taste preferences.  

The amount of U.S products used by the fast food franchises varies between 20% -50%. The major local products that are used by local/independent fast food franchises include: beef, chicken, fruit juices, vegetables, eggs and pork products. The major imported products are potatoes, French fries, vegetable oils, ketchup, sauces, bakery products, chicken fillet and cheeses. High duties and questionable application of sanitary/phytosanitary regulations have made it more favorable for local meats, dairy products, fruits and vegetables and eggs in the restaurants sub-sector.

In general, the primary competition to U.S. products in the HRI food service sector is from local production. Most hotels and fast food franchises source beef, chicken, pork, fruits and vegetables from the domestic market. The government restricts the import of these products and local producers would likely lose market share—due to inconsistency quality and availability - if imports were allowed, even if sold at a higher price. 

Best Product Prospects:

Products present in the market with good sales potential include fruits and vegetables, lamb, special beef and veal cuts, cheeses and other dairy products, French fries, potatoes, snack products, sauces, and wines are high in demand. Products not present in significant quantity but which have good sales potential include specialty cheeses and seafood.

Food-Processing Sector:

At last report from Post, Jamaica’s food processing sector is relatively under-developed and most of the ingredients used in the food industry are imported directly by the food processors, which have close relationships with suppliers from the United States. Some processors have vertically integrated their operations, producing the inputs to be processed while others source their inputs from local producers, directly from international suppliers, and from importer/distributors. Approximately 30% of the raw materials and food ingredients used by local food processors are obtained from local suppliers and 70% from imports.

The main products imported by Jamaica included wheat, corn, rice, soybean meal, soybean oil, vegetable oils (excluding soybean), refined sugar. In some cases, food processors have agreements with local producers that supply their inputs. It should be noted that these agreements between producers and processors usually entails the provision of financial and technical assistance to the producers by the processors. Food processors distribute their products primarily through the retailer and wholesaler who in turn supply small supermarkets and mom and pop stores known as “corner shop”. However, the larger food processors supply directly the HRI sector and supermarket chains. There are processors that supply supermarkets, corner shops, restaurants and small hotels directly.   

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