Food producers from Latin America and the Caribbean (LAC) have an opportunity to start exporting the healthy, organic foods and beverages that currently in fashion all over the world. Gluten-free or kosher snacks are another attractive new niche. But producers wanting to conquer these export markets need to be prepared. Global experts gave us tips and pointers during the LAC Flavors Argentina 2017 event.
In just a day and a half, more than 560 LAC food-exporting firms met with 120 international buyers from five continents at LAC Flavors Argentina 2017, where they agreed on business deals worth a projected US$150 million.
The event included 3000 meetings between suppliers and buyers, who had half an hour to see and taste products, review export quantities and prices, and make headway on negotiations or future partnerships.
Just 30 minutes to make an impression and create empathy and trust. An Argentinian pasta manufacturer, for example, took its own chef to the event so that the buyers it met with would be able to try a steaming plate of its products cooked al dente.
During a strategic roundtable that took place during the event, “Understanding buyers: what indispensable characteristics are they looking for in a supplier?”, we asked three experts what they look for in our region, what the current trends are, and what niches are worth exploring.
The three food market experts that took part in the roundtable were Alejandro Amadei, sales manager for fresh and perishable products at Walmart Argentina; Guilebaldo Elizondo, global sourcing manager at HEB Grocery Company (US); and Jorge Brenes, general manager of the export and import division at El Ángel, S.A. (Costa Rica).
Trends and advice
According to Guilebaldo Elizondo, who sources products for 350 supermarkets in Mexico and the United States, “looking at consumer trends in the United States, organic products are growing at a much faster rate than conventional ones. Another area that is really growing are products with the ‘GMO-free’ label. Sales are also on the rise for gluten-free and vegan products, those that contain probiotics, foods with social responsibility certification, and pasture-fed meat or dairy products.”
Elizondo also said that more and more people are consuming snack foods, be they traditional ones or new types based on animal proteins, dehydrated vegetables, mixes of vegetables and meats, ethnic flavors, frozen or refrigerated snacks, and dehydrated fruit. “In other words, highly nutritious foods with low sugar content and more protein and fiber.”
Jorge Brenes, from Grupo El Ángel, said that “our standards of beauty are changing — we’ve come a long way from the idea of skinny women and muscular men. Today, everyone wants to eat healthily,” said the manager of the Costa Rican company, which has more than 32 years’ experience in the market.
One of Brenes’s recommendations was for suppliers to adjust their price lists because organic or healthy products tend to be more expensive than conventional ones. Kosher products are another example: you have to take the cost of paying a rabbi to certify them into account. “Consumers pay more for healthy products and both the importer and the supermarket should be able make money off them. You need to set money aside to promote products, too — in other words, you have to guarantee that the entire supply chain is working properly.” El Ángel exports to 32 countries and has two production plants.
Like Brenes, Walmart’s Alejandro Amadei says “price is always a must. Our slogan is ‘Save money. Live better.’ So we need to think about customers and what they are going to buy. It’s not just about profitability, but about an integrated solution: the product, supply, production capacity, packaging, and display boxes at the point of sale,” said Amadei, who also advised producers to offer products for supermarkets’ own brands.
Getting ready to sell
Jorge Brenes was grateful for having been invited to LAC Flavors Argentina, where he got to know a lot of new products in a short time. “Personally, during business meetings, I’m looking to expand our sales portfolio. It’s useful if suppliers tell me if they have looked at competitor brands and the currency in each country, that way we know if they’ve done their homework. When we find a potentially profitable product made by someone who knows what they’re talking about, there’s a synergy that can help us compete. It’s also a plus if the supplier can help us train our sales force about their products,” explained the specialist from Costa Rica.
In Guilebaldo Elizondo’s experience, difficulties arise at meetings when detailed knowledge of the target market is missing. “For example, if the product label isn’t in English. The packaging design needs to comply with FDA rules for it to be imported into the United States. That’s pretty basic. It’s also essential for producers to have looked at how many units can go in each packet. They need to know if there are import tariffs and what the value added is to be able to sell the product on to the end consumer,” he said.
Elizondo also commented on the changes that have come about since the US Food and Drug Administration (FDA) issued its new rules on Food Safety and Modernization. “The approach has gone from being reactive to preventive. The FDA holds us responsible for ensuring that our products are safe and don’t represent a threat to people’s health and well-being. Based on this new ruling, we are asking all exporters to be certified by organizations like the Global Food Safety Initiative to standards such as FSC22000, SQF, BRC, IFF, and GlobalGAP. The standards give us the confidence that we are dealing with a company with a preventive attitude toward food safety.”
Amadei says that it’s not just about the meeting. “It’s essential for us to be able to visit the production plant. One key factor is anticipating what lies ahead. We’re experiencing a digital transformation and we need to be prepared for it. Not long ago, Amazon bought Whole Foods Market. That’s not something to worry about — it’s an opportunity.”
Looking to 2020, we need to think about e-commerce, delivery, and social networks. Online retailing is really going to explode, and we need to be prepared.
LAC Flavors has been held in different countries every year for the last nine years. In 2018, the host country for the tenth-anniversary event will be Chile. Until then, SMEs from Latin America and the Caribbean can take advantage of all the tools provided by ConnectAmericas.com, the Inter-American Development Bank’s free online platform for exporting products and selling them to big businesses like the ones that took part in this roundtable.