Food for thought
Competitive as it is, the lucrative US food market is worth a shot by Egyptian exporters, writes Sherine Nasr
While Egypt is actively seeking to increase its exports, the gargantuan food market in the United States is being considered a tempting yet challenging market.
"The American food market is a $800 billion business. Over the past 10 years, some 25,000 new food products have been introduced. It is easy to imagine how promising this market can be for Egyptian exporters," said Patrick Kiernan, a US food expert and a participant in the Market Outlook 2004 Conference, an annual event which focusses on issues relating to Egyptian exports and business prospects in general.
The three-day event, held in Cairo last week, highlighted the American market as perhaps the most promising yet competitive market for Egyptian exporters. The event addressed trade flows and market opportunities in the US, distribution channels and logistics management, labelling and packaging regulations, trademark issues, new consumer trends and the importance of customer service.
"Our ultimate aim is to provide in-depth information about the complexity of the US food market and to highlight export opportunities and potentials for Egyptian food exporters," said Nagui El-Fayoumi, executive director of the Egyptian Exporters Association (ExpoLink).
"It is vital to have a good product but it is equally important to have a thorough understanding of the different mechanisms that govern this huge market," said Ali El-Saied, co-director of the Market Information Services at the Agriculture-Led Export Businesses (ALEB). ALEB's mission is to improve the global competitiveness of the Egyptian food-processing industry, and to aid related services industries and associations in achieving sustainable export growth.
According to Kiernan, the American breed of consumer will not be an easy one to please. "They demand various choices, more proof of the quality of the product, more information about the product itself. They also seek accessibility and convenience in addition to inexpensive prices," said Kiernan.
A recent trend is that food is sold almost everywhere in the US: in gas stations, department stores and even pharmacies. "A consumer always needs food anytime, any place and on his own terms," commented Kiernan.
Another factor to consider is the vast ethnic diversity of the US, and the need to cater to the varying food tastes of different groups within America.
The American food market is dominated by fast food restaurants, huge supermarkets and department stores, such as Wal Mart, which also have grocery sections. Wal Mart is one of the leading food sellers, with a network of 500 stores nationwide and total sales of US$265 billion.
"This is where opportunity lies before the Egyptian exporter," said Roger Robbe, a food industry consultant. He clarified that Wal Mart is not the only option to pursue, as a handful of other giant retailers can each provide feasible alternatives for Egyptian exporters. Despite certain distinguishing characteristics, the retail giants have certain qualities in common, emphasising low prices and uniformly high-quality products.
Robbe advised exporters to create trading groups and to visit a range of stores in the US which focus on creative ideas and top-quality products. "Egypt can introduce a number of good products. Egyptian olive oil, for example, is already building a good reputation in our markets. Egyptian cheese stands a good chance of competing with international brands," he said.
It is worth noting that with the extensive assistance of ALEB, Egyptian olive exports to the USA recorded exponential growth during the first half of 2003. According to El-Saied, olive exports for this year were eight times more than all the olive exports to the US over the past 10 years. "Egypt has become the ninth largest supplier of this product worldwide, surpassing many traditional suppliers such as Argentina, Syria and Jordan," he added.
In addition to upgrading their food products, however, Egyptian exporters must also build a viable electronic system for the direct exchange of information and funds. "US food retailers also expect unique packaging, global sourcing for pricing, ethnic products for greater diversity, transparency and integration with regard to language and exchange systems," said Robbe.
"This may not sound easy to achieve, but it is perhaps the only way to guarantee long- term success, not only in the US market, but also worldwide," said El-Fayoumi.
