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

Grocery Retail Landscape Changing

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 – karen.coyle@bordbia.ie

Anna Power – anna.power@bordbia.ie

Tel + 1 (212) 935 4505

Additional Resources:

• 4 BB fellows – 3 NYC; 1 Toronto

• 1 Origin Green Ambassador – NYC