Posted: Thursday, March 29, 2012 1:00 AM
Growing population, wealth hunger for U.S. products
By STEVE BROWN
SEATTLE -- Randall Waugh knows he has a good product, and he has already tapped into the export market in a small way. Now he wants to grow that market.
A daylong seminar on exports gave him ideas, information and encouragement to put global wheels on his chile sauce.
"Nobody's doing anything like this," he said. "Now I'm learning about the scope of resources available to help me weave my way through the export process."
His Chicaoji sauce is named for three of its main ingredients: chipotle, cacao and goji berries. A friend visiting from Finland "fell in love with it while he was here," and when he got home, he started sharing it with friends and asking for more as the sauce's popularity soared. The informal supply line got Waugh interested in the possibilities for export to go along with his current sales to 27 stores and two restaurants in Washington, Idaho and Oregon.
He and other producers of both raw and processed agricultural products learned the wheres, whats and hows of export marketing in presentations sponsored by the Washington State Department of Agriculture, the Export Finance Assistance Center and WUSATA, the Western U.S. Agricultural Trade Association.
Matt Tripodi, trade relations manager with Euromonitor International, described the "staggering" demand in other countries. "It's not just a growing middle class. It's the growth of populations along with rising disposable income," he said. "People need food. These are not very complicated issues."
Organic food demand continues to grow, but when people are hungry, they're not concerned about genetically modified products, they just want to feed their children, he said.
Producers on the West Coast are in a prime position to export to the Pacific Rim, but they shouldn't stop there. Other developing regions include Latin America, the Middle East and Africa.
East Asia will likely add 350 million more mouths between 2010 and 2020; the Mideast and Africa will add 275 million more. Most of the population growth will be in urban areas, where the U.S. already has established many trade beachheads.
The U.S. and Europe are "cash cow markets," Tripodi said, but he advised agricultural producers to diversify their portfolio.
The global market for processed food was nearly $3.4 trillion in 2011. The global market for consumer food service measured $2.3 trillion. "Consumption rises with population, income and a desire for health and convenience," he said.
The largest sectors are bakery products, dairy products, beer, chilled processed foods and confectionery. "On down the list, there's nothing but growth."
The volume of packaged foods grew by 72 million metric tons between 2011 and 2015. About 60 million metric tons of that growth was in the Asia-Pacific, Latin America, the Mideast and Africa. Only 3 million metric tons of the increases was in the U.S.
By 2015, China and India are expected to account for 50 percent of fresh food consumption by 2015. North America's share: 2.4 percent. The biggest growth in consumption in Asia Pacific countries will be in apples, oranges, limes and lemons, potatoes, onions, tomatoes, poultry, and pork.
"You're witnessing a growing pie in value and volume," Tripodi said. "Everyone here is at the tip of the iceberg."
As foreign demand for U.S. products grows, that will likely mean higher prices for domestic consumers, "but that's not a bad thing for producers."