Dominica Foods in North America and Beyond
Estimates of sales of Caribbean prepared foods already top $400 million. Dominica foods exported to the U.S. is a minute portion of that.
On Thursday May 29th, 2003, a group of Caribbean trade ministers convene 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 farmers. Culpability lies squarely elsewhere – take your pick. The farmers do not deviate from their daily task and common round. Year in, year out, they 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 American. On 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. We need to engage them with innovative ideas so that they can break free of antiquated trains of thought. 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 can be equally progressive with sound business acumen.
It is noteworthy to point out that a majority of the food sales growth in North America is in specialty foods (gourmet foods, natural foods, sustainable foods, Kosher foods, organic, without preservatives etc.). It must be highlighted that Dominica’s foods are substantially organic by default. We, children of the soil, have been planting organic food for decades. However, we were unaware of the true value of the food we cultivated. We had paltry means to purchase fertilizers, so we depended on animal waste and burnt shrubs. Procuring pesticides at exorbitant prices meant that we had no choice but to resort to using our hands to destroy caterpillars on our vegetables. We did not have the foresight or the marketing intelligence to see that organic food was never, ever a niche market. It was a steadily increasing mass market. For decades, our foods have been organic by default. 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 get there?
The Nutrition Business Journal placed total organic foods sales in the region of $8.5 billion in 2002 with 50% of the population classified as either heavy or frequent purchasers of organic foods. In addition prospects fair for a greater increase in 2003 - $11 billion, according to the Organic Trade Association. 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. In addition, 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. Thus, we cannot use shipping cost as an alibi for lack of market penetration.
Coupled with the natural food craze is the increase exploration of ethnic foods or specialty foods and this is where we should distinctively take our positions. “With an expanding Caribbean craze, grand opportunity awaits processors who can capture the color, tastes and excitement of this multi-faceted cuisine. In fact, retail sales of Caribbean-inspired foods already are climbing. Estimates of sales of Caribbean prepared foods already top $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 bag of strategic advantage we can move our country steadily up-market.
We must begin to understand customers and the markets to institute practical plans – not theories- 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 attack now! We must strike a preemptive blow- 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 little man. Eustus Fagan, Marketing Director of Bello USA, contends that shelf space real estate 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, from my vantage point, an unwarranted increase in food imports. It is absolutely essential that Caribbean tourism departments nurse 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 under this train of thought would indefinitely result 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 together. I await 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 to the eye is to have an industry cluster (DEXIA, NDC, DCP, Bello, Benja Shoe, Buydominica, Caribbean Supplies, Benjo Seamoss and the like) of interdependent firms that can cross-pollinate project, people and ideas. For instance, these Dominican companies could attain degrees of synergy by sharing shipping and distribution channels to maximize output.
