Changing Global Markets for
High-Value Foods
Anita Regmi
ERS/USDA
“Global Markets for High-Value Food” Workshop
Waugh Auditorium, ERS/USDA, February 14, 2003
Global Food Market is Changing
• Income Growth
• Urbanization
• Improved Transportation
• Trade Liberalization
Food Share of Consumer Expenditure
Declines With Income
Percent
50
45%
40
17%
37%
Share of retail packaged food
30%
30
24%
20
46%
14%
50%
10
0
Low-income
Low-middle-income
Source: Euromonitor, 2002.
Upper-middleincome
High-income
Share of 2001 Retail Sale Value
Japan
14%
Others
15%
Brazil
Developed Countries
Dominate Processed Food
Retail Sales...
Russia
China
EU 25%
23%
Mexico
Turkey
Canada
US 23%
South Korea
Japan 3%
But, Developing Markets
Account for Over ThreeFourths of 2001 Population...
Vietnam
US
EU
10%
7%
Mexico
Russia 19%
China
33%
Brazil
Indonesia
Source: Euromonitor, 2002
Includes 53 major countries.
Others
19%
India
27%
Developing Countries Also Make Bigger Changes on
All Food Items With Change in Income
Low
Middle
High
Percent change in consumption
with 1% change in income
Food as share of total budget
0.72
0.59
0.32
Cereals
0.54
0.40
0.20
Meat
0.77
0.63
0.34
Dairy
0.80
0.65
0.35
Fruit & Vegetables
0.61
0.49
0.26
Beverage & Tobacco
1.18
0.81
0.42
Share of food budget
Source: Seale & Regmi, 2002.
Developed Country Retail Food Markets are
Large
Country group
Per capita
retail sale
US $
High-income
Upper-middle-income
Lower-middle-income
Low-income
Source: Euromonitor, 2002
1190
491
209
107
Share of per capita retail sales
soft
hot
packaged alcoholic
drinks
drinks
food
drinks
13
13
12
7
4
4
4
5
64
67
63
68
18
15
20
17
But Developing Country Retail Food Markets Grow Faster
Growth in per capita retail sales of packaged food
28.5%
12.8%
6.7%
1.8%
H
HM
LM
1996-2001
Source: Euromonitor, 2002
L
1.4%
2.2%
H
HM
4.4%
LM
2001-2005
5.5%
L
Middle-Income Countries Top Growth
in Retail Sales of Processed Food
Bulgaria
Romania
Vietnam
Indonesia
Poland
Hungary
Brazil
Mexico
Ukraine
Colombia
China
Percent growth
Percent growth
Per capita
Total retail
1996-2001
179.5
178.0
40.4
40.0
17.0
18.8
15.3
16.9
14.3
14.3
14.3
14.0
11.6
13.3
11.4
13.2
13.6
12.6
7.7
9.5
8.4
9.2
Per capita
Total retail
2001-2005
9.6
11.2
8.9
9.6
6.1
7.8
7.2
6.8
5.7
6.8
5.0
6.6
3.4
6.3
5.3
6.1
3.7
6.0
4.1
5.7
2.8
5.1
Source: Euromonitor, 2002
Vietnam
China
Indonesia
Romania
South Korea
Turkey
Saudi Arabia
Thailand
India
Morocco
Philippines
Discussion
• A major shift in increased food sales towards
developing countries is highly likely in the next decade.
• But developed countries will remain a big and changing
market.
• Changed preferences in developed and developing
markets are driving changes in the food supply chain.
• What are the implications of changed preferences, and
the ever-evolving supply chain on food producers and
food trade?