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Growing the success of Irish food & horticulture
AIDAN COTTER
CHIEF EXECUTIVE
BORD BIA
28 JANUARY 2009
Growing the success of Irish food & horticulture
Prepared by Bord Bia North America November 2014
US Food & Beverage Market Overview
Growing the success of Irish food & horticulture
North American Markets Irish F&B exports by market, €m 2013(e)
US
Canada
Mexico
Total =
€633m
506
79
48
0
100
200
300
400
500
600
Irish exports by market
USA
Canada
Mexico
Source: CSO 2014
Growing the success of Irish food & horticulture
Population: 317 million
GDP: $17.3 trillion (+2.5% growth 2013)
Exchange Rate $1 = €0.79 / €1 = $1.27
US Food Market est. $1.2 trillion; Retail 55% / Foodservice 45%
US Alcoholic Beverage Market est. $200bn
Top 5 Food Markets: North East; Florida; Mid West; California; Texas
5th largest export market for Irish food & drink: €506m / $673m in 2013
US Market Facts
Sources: Bureau of Economic Analysis
Growing the success of Irish food & horticulture
Beverages - 70%
Dairy - 24%
Prepared Food - 3%
Pigmeat - 2.8 %
Seafood <1%
Horticulture & Cereals <1%
Beverages €351m
Dairy €122m
Prepared Food
€15m
Pigmeat
€14m Seafood
€2.5m
Horticulture &
Cereals
€2m
• Irish F&B exports to US totaled €506m / US$673m in 2013, -0.6% on 2012
Irish F&B Exports to US 2013, €m
Growing the success of Irish food & horticulture
Irish F&B exports to US 2007-13, €m
428 438
356 397
462
509 506
0
100
200
300
400
500
600
2007 2008 2009 2010 2011 2012 2013
€m
€m
Growing the success of Irish food & horticulture
A Selection of Irish Food & Drink Exports to US
Growing the success of Irish food & horticulture
US Grocery Retail Structure
Discount
Hypers
Convenience
Drug Stores
Wholesale
Supers
Dollar Stores
US
Grocery
Channels
Growing the success of Irish food & horticulture
Source: IGD
US Grocery Retail Overview Channel Core Offer Retailer Examples
Hypermarket Large out-of-town stores with a sales area exceeding 120,000 sq.ft
with an extended area allocated to food and grocery goods.
Walmart Supercenter
SuperTarget
Discount Big box stores selling general merchandise goods, typically sized
between 80,000 sq.ft and 120,000 sq.ft
Walmart, Target, Kroger (Fred Myer
and Marketplace Stores)
Members
Club
Wholesale
Large warehouse cash and carry units stocking high volume grocery
lines in large pack sizes. Exclusive to members only.
Costco, Walmart (Sam’s Club),
BJ’s
Supermarket Traditional food & drug combo stores with a sales area 15,000 to
100,000 sq.ft. Trad. US supermarkets have strong fresh offer.
Kroger, Supervalu,Safeway, Ahold,
Publix, HEB, Wegmans, Schnuck’s
Convenience
& Forecourt
Stores less than 1,000 sq.ft that stock a limited selection of fresh
grocery goods.
7 Eleven, Kroger (Quick Stop, Tom
Thumb), Circle K
Dollar Stores Small neighbourhood stores. Low price points facilitated by efficient
operations, often centralised distribution and uniform stores.
Dollar General, Family Dollar,
Dollar Tree Stores and Fred’s
Natural &
Organics
Premium stores that stock a wide variety of organic, naturally
preserved and environmentally friendly goods.
Whole Foods Market , Sprouts,
Trader Joe’s
Limited Line Extreme value grocery stores stock a small number of products at a
very high volume, therefore giving the customer low prices.
Save-a-lot (Supervalu), Aldi Sud
Drug Stores Stores retail drugs and medicine, health and beauty products, and
increasingly a limited selection of food and beverage items (snacks.
CVS, Walgreens, Duane Reade,
Rite Aid
Growing the success of Irish food & horticulture
US Grocery Retail Overview Top Grocery Chains
Chain No. Stores Grocery Sales $ Bn Market Share
Walmart 3,275 $147 26%
Kroger 3,427 $ 99 10%
Costco 648 $ 67 7%
Safeway 1,406 $ 37 4%
Sam’s Club 632 $ 36 4%
Publix 1,080 $ 28 3%
Ahold USA 774 $ 26 2.5%
Albertson’s 1,059 $ 22 2%
Source: CSG 2014
Growing the success of Irish food & horticulture
US Grocery Retail Overview Specialty/
Natural Hybrid Retailers
Conventional Supermarkets
50+ stores
Natural Product Retailers
Growing the success of Irish food & horticulture
US Grocery Retail Overview
Key Trends
Private label growing, now 22% of sales (47% in Europe)
Discount sector benefiting from price conscious consumers
Convenience sector growing due to long-term demographic changes
Urban shopping trend creates opps for specialist retailers & local stores
Online grocery growing - traditional grocers, general e-tailers, premium
Health, wellness & functional foods show significant sales potential
Natural, organic, speciality & ‘free from’ foods still growing
Imported foods benefit from Americans’ exposure to many food cultures
Growing the success of Irish food & horticulture
Alcoholic Beverage: Open and Control States (Control States in Blue)
Alcoholic beverage
control states (19),
have state monopoly
over the wholesaling
and/or retailing of
some or all
categories of
alcoholic beverages
such as beer, wine,
and distilled spirits.
Approx 25% of US
population lives in a
control state.
Growing the success of Irish food & horticulture
US Route to Market / Margins
Note: Margins are
general. Categories
will differ.
Source: Bob Burke
Growing the success of Irish food & horticulture
US Natural / Specialty Food Distributors
Regional Distributors
15+%
Local Market Distributors
5%
National Distributors
70+%
Customer Exclusive
Distributors 10%
Source, NS Sales, Acosta, Inc.
Associated Buyers
Black River Produce
Chex Finer Foods
Arizona Select
Cavallaro
Davidson
European Imports
JC Wright
MDI
Lomar (Hy Vee)
Peyton (Kroger)
Valu
Merchandisers
(AWG KC)
SWD/Kiwi WFM
Vitamin Cottage
Henry’s
Sunflower
Growing the success of Irish food & horticulture
Attitudes to Sustainability
US Food & Beverage Consumers
77% prioritise
Sustainability
69% concerned
with sustainable packaging
Attitudes to Sustainability –
What’s Important?
69% Animal Welfare
93% Health Nutrition
67% Non GMO
65% protect & renew natural
resources
(Source: Cone Communications 2014)
Growing the success of Irish food & horticulture
Opportunities for Ireland
Ireland - excellent credentials with trade buyers as source of quality supply
Alcoholic Beverages: US is world’s largest market.
Irish whiskey is fastest growing spirits category +17.5% 2013.
Dairy: Butter & Cheese. Kerrygold is #1 imported butter into US.
Irish cheese also benefiting from grass-fed attributes.
Meat: Market access for Irish beef by end 2014.
US has world’s highest per capita beef consumption.
Trend toward healthier grass-fed & ‘free from’ offerings.
Gourmet / Artisan products offering particularly strong, distinctive
USPs not already on offer.
High-quality private label.
Source: Bord Bia
Growing the success of Irish food & horticulture
Doing Business: Market Challenges
Food Importation becoming increasingly strict due to Bioterrorism
threat & the Food Safety Modernisation Act (FSMA)
US Compliant Labelling & UPC Bar Codes
Complex Route to Market
Listing Fees / Marketing Support
Currency fluctuations
Distance from Ireland
Takes long time to gain traction (3-7 years), but once established,
it is typically a long-term and rewarding market
Growing the success of Irish food & horticulture
‘Must Haves’ for the US Market
Knowledge of Competitive Set & Your Points of Difference
Route to Market & Pricing in place
US Food Compliance – Registration / certification (USDA,
FDA, TTB), import prior notification, US labelling, etc.
Reasonable shelf life
Previous Export Experience
Long-term Commitment – time, people, focus & money
Growing the success of Irish food & horticulture
Buyers Targeted for Marketplace 2015
Alcoholic Beverages – 8 Buyers
Meat – 8 Buyers
Seafood –3 Buyers
Grocery – 5 Buyers
Growing the success of Irish food & horticulture
Bord Bia North America Office
Remit: USA, Canada, Mexico
Client services: customised market research; store audits; retail
store itineraries; importation advice; FDA regulation guides; market
information; trade meeting facilitation; market readiness
programme
Karen Coyle – [email protected]
Anna Power – [email protected]
Tel + 1 (212) 935 4505
Additional Resources:
• 4 BB fellows – 3 NYC; 1 Toronto
• 1 Origin Green Ambassador – NYC