|Volume No. 1 Issue No. 44 - Wednesday June 11, 2003
|Dominica Foods in North America and Beyond |
by: Neal Nixon
On Thursday May 29th, 2003, a group of Caribbean trade ministers convened in Guyana to discuss strategies that could be employed to disentangle the Caribbean economies from turmoil. Bert Wilkinson of the Associated Press reported that one Caribbean community official stated that the Caribbean imported too much food from the United States, Canada and Europe whilst allowing its own production to decline.
"Currently, the region is importing $2.7 billion in food products, a sharp increase from 1975 when it spent $370,000 on imports", said Secretary General Byron Blake. In the early 1980’s, when the Caribbean was used as a buffer zone for cold war foes, the Caribbean enjoyed a trade surplus with the U.S. of $3billion.
Today it is a mirror image of the 1980’s. Clearly, blame cannot be placed at the feet of Dominican or other Caribbean farmers. Culpability lies squarely elsewhere – take your pick. The farmers do not deviate from their daily task and common round. They ceaselessly cultivate the land, fully aware that the guarantee of a market has dwindled dramatically.
It is conspicuous that our most formidable competition does not lie with producers within the American market or low cost producers from Latin America. To the contrary, it is simply a question of the status quo: that we have been doing things invariably for a long time and that there is no need to change.
It is important that we break out of the existing framework. We need to think of ways to get into the minds and wallets of customers. This is challenging, but together we can champion the changes. We must make a bold statement that Dominica and the rest of the Caribbean is not only a place to party or to have a good time, but also a place where the people are industrious and equally progressive.
It is noteworthy to point out that a majority of the growth in food sales in North America is in specialty foods (gourmet foods, natural foods, sustainable foods, Kosher foods, organic, without preservatives etc.).
Most foods produced in Dominica are substantially organic by default, and has been so for decades, even though we were unaware of the true value of the food we cultivated. Most farmers lacked the means to purchase fertilizers or pesticides, and so depended instead on animal waste and burnt shrubs.
Somehow the fact that organic food was not only a niche market but a steadily increasing mass market was missed by our planners. Unfortunately we have been slow to take advantage of our prime position. The question, which needs to be posed, is: When and how shall we break into this market.
The Nutrition Business Journal estimated total organic foods sales in the United States at about $8.5 billion in 2002 with 50% of the population classified as either heavy or frequent purchasers of organic foods. In addition this is expected to increase to over $11 billion in 2003.
Interestingly, while the overall food sales increased 3.2% from 2001 to 2002, organic sales grew 20% over the same period, and currently makes up 2.4% of the over $520 billion U.S. food market. Furthermore, "The Organic Consumer Profile," a 2002 study conducted by the Hartman Group of Belleview, Washington, found that 62% of natural foods consumers purchase their groceries in supermarkets, up from 56% the previous year.
Further, an even greater increase was experienced in hypermarkets such as Wal-Mart, the world’s largest retailer and the largest U.S. grocer. A point of supreme importance is that, organic foods are priced 20% to 30% higher than non-organic foods. Thus, Caribbean farmers cannot use shipping cost as an excuse for lack of market penetration.
Coupled with the natural food craze is the increasing exploration of ethnic or specialty foods. With peoples love for the Caribbean, grand opportunity awaits processors who can capture the color, tastes and excitement of this multi-faceted cuisine. This is where Dominican farmers should distinctively take advantage.
In fact, “retail sales of Caribbean-inspired foods already are climbing and are estimated at over $400 million”, says Mike Pehanich, contributing editor for the Food Institute. Ethnic foods will capture one out of every seven new food dollars in the decade ahead, according to a report by PROMAR International, an Alexandria,Va. (USA) -based firm specializing in food industry research and consulting.
From reports of the Commerce Department, Dominica exports to the U.S. are placed in the region of $5 million annually. Food makes up only a small portion of that figure. In essence, we control a minute portion of the Caribbean food exported to the U.S. There is much room for improvement, and if marketing intelligence can be recognized as a vital piece of strategic advantage we can move our country steadily up-market.
We must begin to understand customers and the markets to institute practical plans to meet customers’ needs. Avonelle Christian James, CEO of Caribbean Supplies Inc., a Caribbean American food wholesaler, points out that the American consumer prefers to see, feel and smell before they purchase a product.
Those habits noted, it is essential that Caribbean manufacturers understand the need for samples, brochures and vital information regarding nutritional and health attributes. To buttress this import, in a Mintel report published by Just Food, a web based information center for the food industry, 4 out of every 10 respondents look for foods that assist or prevent heart disease, high blood pressure and other common disease.
Furthermore, the report indicated that foods bearing printed health claims saw a six-year sales increase of 29%. Still more, and of no less importance, is the need to attain organic certification, as certain well established natural food stores will not carry foods without organic certification.
We should also develop paradigms by which we can benchmark successful approaches employed by Goya Foods (Secaucus, N.J.), specialists in Caribbean-type prepared foods, or Grace Kennedy, the powerhouse from Jamaica who recently merged with Ochio Rios and distributes extensively in the South through Publix, the nation’s ninth largest grocer.
We must move now! We must strike a preemptive blow at home and abroad. We must move in this steadily growing market and claim our station. With intense skirmishes over shelf space and with a greater part of the food market being captured by hypermarkets like US chain stores Super Wal-mart, Super Target, Cotsco and the like, time is of the essence for the small farmer.
Eustus Fagan, Marketing Director of Bello USA, contends that shelf space poses dreadful difficulties for small wholesalers. With all these challenges, come new opportunities in our own territory. For the past ten years the Caribbean has seen an increase in tourism on the average of 4% per year.
With that increase comes, in my view, an unwarranted increase in food imports. It is absolutely essential that Caribbean tourism departments nurture an atmosphere of progressive bonding with our several agriculture departments across the Caribbean with the express purpose of filling a tourism-based food need.
An increase in tourism should be viewed as resulting in an increase in agriculture production. St. Martin is a $125 million food market and St. Lucia is now importing more than $80 million worth of food each year, with 35% percent going to the food service industry.
An estimated 40% of food imported from the island comes from the United States, reported U.S. Foreign Agriculture Service. Most of these foods are fresh fruits and vegetables – many of which Dominica is more than capable of producing.
I am a strong advocate of building the continuous cooperative effort to create strategic value. I wait with anxious anticipation upon that day when companies in Dominica and the Caribbean will engage each other fully – not partially – in a series of cooperative ventures, particularly in the area of market intelligence gathering.
Without competitive intelligence and marketing research we can never provide superior service. To be at the vanguard of the market we must understand customers’ needs and we ought to be able to respond punctually to competitors’ activities and the dynamics of the market.
What would be extremely pleasing is to have an industry cluster of interdependent firms including the Dominica Export Import Agency (DEXIA), the National development Foundation (NDC), the Dominica Coconut Products (DCP), Bello, Benja Shoe, Caribbean Supplies, Benjo Seamoss and the like that can come together with a shared purpose of projects, people and ideas. For instance, these Dominican companies could attain degrees of synergy by sharing shipping and distribution channels to maximize output.
Neal Nixon, MBA (marketing), is the sales and marketing director for Caribbean Supplies Inc., a strong advocate of the Buy Dominica program and a staunch proponent of an improved trade relationship between Dominica and the U.S. E-mail: [email protected]