COUNTRY PROFILE
Discover more about the Honduras market including overviews about the retail, food service, and food processing sectors. Events, resources, and more are linked throughout the profile.
3rd
largest importer of U.S processed foods in Central America
$348.3 Million
total of U.S. processed foods imports in 2022
3% Increase
U.S. exports to Honduras increased another 3% in 2023
Euromonitor reports that the economy in Honduras expanded in real terms in 2022, driven by increasing public and private consumption and external demand. However, in 2023 global economic slowdown, elevated inflationary pressures, and tightening financial conditions were set to undermine business and consumer confidence globally, raise uncertainty, and weigh on the country’s economic outlook. This slowdown reflects several factors, including a weakening global economy, particularly in the U.S., which will limit export growth by volume and remittance inflows, resulting in weaker private consumption growth; a drop in investment as hurricane repairs are completed; and the dampening effect of high inflation on consumers and businesses.
The 2023 Honduran population is 9.5 million (CIA World Factbook Est.). Honduras’ population growth rate has slowed since the 1990s and is now nearly 1.3% annually with a birth rate that averages 2.1 children per woman and more among rural, indigenous, and poor women. Honduras’ young adult population, ages 15 to 29, is projected to continue growing rapidly for the next three decades and then stabilize or slowly shrink. The 2023 median age is 25.3 years. Population growth and limited job prospects outside of agriculture will continue to drive emigration. Remittances represent about a fifth of GDP.
USDA’s Office of Agricultural Affairs (OAA) in Tegucigalpa, hereinafter referred to as FAS Post Tegucigalpa, reports that remittances from Hondurans working in the U.S. a record high of US$8.7 billion in 2022, accounting for more than 20% of GDP. Strong remittances and a healthy international demand, which was boosted by the recovery in the U.S. economy, increased private consumption. In December of 2022, inflation broke through the top band and approached 9.1% for the year, indicating supply-side issues as well as some demand pressures from strong remittances and increasing government spending.
The U.S. is Honduras’s main trading partner in total trade and in agricultural products. U.S. agricultural exports increased with the implementation of the Dominican Republic-Central America-Free Trade Agreement (CAFTA-DR) in 2006. Most U.S. agricultural products have duty-free access to Honduras.
Honduras has an open and expanding trade policy through 12 Free Trade Agreements with the main markets covering 36 countries, of which the majority are multiparty. The free trade agreement (FTA) between Taiwan and Honduras was to end in 180 days from June 8, 2023, according to the Ministry of Foreign Affairs. Honduras and the People’s Republic of China began negotiating a trade agreement in July 2023.
Honduras is the third largest export market in Central America for processed food products from the U.S., importing US$348.3 million from the U.S in 2022, an incredible growth of 27%. In 2023 U.S. exports to Honduras increased another 3% to US$357.3 million.
Top processed food exports to Honduras in 2023 included:
$1.9 Billion
estimated total of retail sales of packaged food products in 2023
34.5%
increase of estimated total of retail sales of packaged food products since 2019
$2.7 Billion
estimated growth in sales of packaged food products by 2028
Euromonitor has estimated that the retail sales of packaged food products in Honduras will reach over US$1.9 billion in 2023. This also represents an increase of US$498.7 million or 34.5% from 2019. Euromonitor also forecasts the packaged food market to grow to nearly US$2.7 billion by 2028, an increase of US$590.3 million and 28.1% from 2024.
High growth categories in the forecast include:
FAS Post Tegucigalpa reports that consumer-oriented products are conducted mostly by supermarkets, mini-markets, and convenience stores. The supermarket retailing industry is growing rapidly. Supermarkets have opened stores in various medium and large urban locations and most populated cities in the country. Most of the regularly employed population takes advantage of promotions and buys their food at these supermarkets. Many supermarket chains are also expanding, remodeling, and modernizing. In recent years, the Honduran market for imported processed foods has become increasingly competitive, with supermarkets entering the market and taking the spotlight away from importers, which has meant that they have had to invest in advertising.
In Honduras, modern grocery retailers’ sales growth overtook that of small neighborhood stores in 2022, continuing a long-term trend. These retailers operate in the warehouse clubs and convenience stores channels. Small local grocers (including open markets) are frequently the only conveniently accessible grocery shopping option in remote areas. Meanwhile, consumers in cities have easier access to modern forms. As a result, as Honduras’ urbanization increases, convenience stores and warehouse clubs, as well as supermarkets, hypermarkets, and discounters, benefit at the expense of small local grocers. The global tendency is for retail enterprises to develop their own private brands, and while no official data are available, Honduras has not lagged. In recent years, supermarkets have added a diverse choice of private brands, promoting them with gondola areas and in-store promotions.
Walmart Centro América SA maintained its advantage in food retailing with its Despensa Familiar, Maxi Despensa, Paiz, and Walmart Supercenter brands. In 2021, the firm established its fourth Supercenter location, emphasizing the “buy everything in one place” theme and unique services for this market, such as self-checkout.
Super mercados La Colonia de Honduras SA de CV was ranked second after Wal-Mart but number one in top-of-mind brands. Walmart de México y Centroamerica (Walmex) operations in Honduras, as well as El Salvador and Nicaragua, were being evaluated for possible joint ventures, strategic partnerships, or even sale at the end of the review period, with the retailer seeking to focus efforts on operations in Mexico, Costa Rica, and Guatemala.
Walmart is the largest grocery store in Latin America, with a 10.8% market share in the country. Walmart presently runs 111 retail locations in Honduras, divided into four formats. Walmart’s Despensa Familiar accounts for 4.2%, Walmart Supercenter accounts for 2.8%, Maxi Despensa accounts for 2.2%, and Paz accounts for 1.6%. Euromonitor estimates Walmart’s Honduras retail value (without sales tax) for 2022 to be US$838 million.
Super Mercados La Colonia ranked number one brand in top-of-mind awareness (TOMA) with 49% recognition by the Hondurans, for the year 2021-2022, and Maxi moved up to second place. In 2022, Supermercados La Colonia had a 7.5% market share in grocery retailing with 57 retail units, company sales of US$578 million (excluding sales tax) and 0.4%-point change in market share for the years 2020 to 2022.
Supermarkets and wholesale clubs account for the largest sales volume of consumer-ready (canned, preserved, processed, frozen, and chilled) food products. Sales of fresh fruits and vegetables continue to increase, as improvements in cold chain technology allow for longer shelf life of perishable items, including sausages, hams, pork cuts, and other deli meat products.
Euromonitor reports that the number of convenience stores rose over the last few years as this format appeals to the way Hondurans shop. Convenience stores such as Pronto and Circle K are certainly being well embraced by the population and are growing. These two companies are also forecourt retailers, aligning themselves with petrol stations, in order to boost their sales, especially the Pronto franchise. Discounters are also a growing format, particularly the Maxi Despens and La Despensa Familiar brands, both of which are part of the Walmart group.
FAS Post Tegucigalpa reports that U.S. products with high potential in the Honduran retail food market include prepared foods, condiments and sauces, snack foods, pork and products, processed vegetables, dairy, wine and beer, poultry meat and products and chocolate and cocoa products.
26.1%
Hotels and restaurants presented an annual growth of 26.1% for 2022
1.9 Million
tourists to Honduras in 2022
131% Increase
in tourism since 2021
FAS Post Tegucigalpa reports that the in general, Hondurans enjoy eating out, both as a matter of convenience (mostly for those who work outside the home) and as a family trip on the weekends. Honduran families are increasingly selecting local and foreign fast-food franchises when selecting a restaurant.
Hotels and restaurants presented an annual growth of 26.1% for 2022, spurred by the tourism industry recovery. Honduras attracted more than 1.9 million tourists in 2022, 131.4% higher than in 2021 (825,796), according to the Honduran Institute of Tourism (IHT). IHT established 49.4% of people (943,246) arrived in Honduras by sea (cruise ship), while 487,676 (25.7%) entered by land and 480,166 people (25.3%) by air. According to official data, the United States was the first issuer of tourists with 43.4% of the total number of visitors, followed by El Salvador (17.4%), and Nicaragua (13.9%). The Ramón Villeda Morales airport in San Pedro Sula had the highest number of arrivals. Guasaule was the principal land point of entry for day visitors.
Shopping centers and malls are becoming increasingly popular. Consumers have replaced recreational activities with visits to malls and shopping complexes not only for convenience of the one-stop (multiband) stores, food, entertainment, banking, etc., but also because a sense of confidence that they can go about their business safely within the enclosed guarded areas that are typical of these shopping venues in Honduras.
In general, all types of fast-food outlets improved in 2022 compared to the previous year.
Resulting in the growing popularity of pizza and burger restaurants nationwide and the firm foothold of fried chicken have created solid demand for U.S. shredded pizza cheese, French fries, chicken nuggets, chicken wings, chicken thighs, dairy product alternatives, and condiments.
Honduras has more than 140 franchises, surpassing El Salvador, which was the country that led the number of franchises in the region. INTUR (Burger King, Little Caesars, Church’s Chicken, Popeye’s, Dunkin,’ Baskin Robins, Chili’s, Pollo Campero, It’s Just Wings and Circle K) and Grupo de Comidas (Pizza Hut, Kentucky Fried Chicken, and Denny’s) manage 13 fast food brands and are the leaders in the fast-food industry in Honduras. INTUR, with 226 stores in Honduras and 19 in Guatemala, has registered 12% sales growth the past two years.
FAS Post Tegucigalpa reports that high value products offer good market opportunities in Honduras, especially ready-made or convenience food, wholesome, and healthy products. A list of favorite imports from the foodservice sector includes pre-cooked potatoes, snacks, frozen or ready-made food, seafood, cheese, vegetable oil, frozen vegetables, condiments and dressings, and margarine.
FAS Post Tegucigalpa reports that Honduran food processors often source raw, semi-processed and processed ingredients from several different supply chains, including importers/distributors, vertically integrated supply chains, and local sources. Multinational food processors operating in Honduras often maintain a global procurement office as well as a local procurement office to identify and manage supplies for Honduran operations.
These global brands leverage vendors along their global supply chain to provide them their ingredients. Small- and medium-sized Honduran food processors generally source ingredients from a network of Honduran brokers and distributors. If production/input volumes are high enough, some processors import directly from U.S. exporters.
The U.S. remains the primary food supplier of food processing ingredients to Honduras. U.S. products benefit from shipping proximity as well as a reputation for quality and stable supplies. The Central American Free Trade Agreement (CAFTA-DR) protects U.S. investments and intellectual property, eliminates most tariffs and other trade restrictions on American goods going to the Central American market, and establishes more open trading standards. In addition to facilitating more regional trade, CAFTA-DR aspires to do away with tariffs between Central American nations.
FAS Post Tegucigalpa reports that top food processing products exported from the U.S. to Honduras include food preparations; powders for the preparation of puddings, creams, ice creams, hors d’oeuvres, jellies and similar preparations; compound preparations for the beverage industry; dairy product substitutes including imitation cheese; liquid preparations based on corn syrup and partially hydrogenated palm kernel oil; stabilizers and emulsifiers; preparations of the kind used as flavorings in the food industry, based mainly on milk solids, caseinate, sodium chloride, carbohydrates, and fats.