From the Field: In-Market Representative Reports – July 2024

Food Export – Midwest and Food Export – Northeast have developed a network of 19 uniquely experienced In-Market Representatives around the globe. These local marketing experts in the food industry provide Food Export with on-the-ground assistance to implement our various programs and services.

In addition, through regular trade servicing, these local representatives report on local issues, trends, and opportunities for international buyers to connect with suppliers of U.S. agricultural and food products. Every month we share with you some of the top market insight from the trade servicing reports we receive in order to improve your international export efforts.

Vietnam: Pork Import Volume and Consumption Trends

Vietnam’s pork import market has shown notable trends recently. Despite a slight 1% decrease in expenditure, the volume of imports has risen significantly by 4.2%. Vietnam spent $18.69 million on importing over 8,400 tons of chilled or frozen pork, signaling a shift towards importing larger quantities at slightly lower costs. 

India has emerged as the largest supplier of meat and meat products to Vietnam, accounting for nearly 30% of the country’s total import volume. During the reviewed period, Vietnam’s meat and meat product imports from India surged to over 31,000 tons, valued at $94.62 million, representing a remarkable 58% increase in volume and a 73% increase in value compared to the same period in 2023. 

Vietnam’s imports from other markets have also increased significantly. Countries such as Poland, the Netherlands, Germany, Russia, and Australia have all seen a rise in their export volumes to Vietnam. This diversified import strategy highlights Vietnam’s effort to secure a stable meat supply from various international sources. 

In 2023, the per capita pork consumption in Vietnam was approximately 27.7 kilos. This figure is projected to rise to about 32.72 kilos per person annually by 2029, reflecting the growing demand for pork in the country. Despite the increase in imports, Vietnam’s pig farmers face challenges. The price of live swine at the farm gate has plummeted to a two-year low of $1.84 per kilogram. This decline, coupled with rising animal feed costs, has resulted in significant losses for farmers. 

A recent survey by VnExpress indicated that the price of live pigs is at its lowest in two years in many regions. This price drop has coincided with a substantial increase in the volume of pork and pork products imported in the first 11 months of the year, jumping 85% year-on-year to 102,000 tons and 104,500 tons, respectively. Notably, pork imported from countries such as China, Thailand, and Brazil is approximately 30% cheaper than local pork, further compounding the difficulties faced by Vietnamese pig farmers. 

While pig prices have spiked recently due to African swine fever and market fluctuations, the overall supply remains constrained. According to Nguyen Tri Cong, chairman of the Dong Nai Animal Husbandry Association, recent drops in pork prices have prompted many small livestock households to quit, further reducing supply. Cong predicts that prices will not rise enough to significantly boost supply due to low demand stemming from the economic recession and halted operations in many processing factories. 

As Vietnam navigates these complex dynamics in the pork market, the interplay between domestic production challenges and rising import volumes will be crucial in shaping the future landscape of the country’s meat industry. 

EU: Retail Sector in EU Markets 

In most EU countries, the retail landscape operates in similar ways. Generally, European retail markets are highly consolidated and dominated by a few major chains per country that hold up to 80% of the overall value and volume share, while the remaining percentages are covered by smaller, independent chains and specialized traders like organic supermarkets. The major chains are divided into full-assortment operations and discounters that, over the past two decades, have gained massive influence across Europe. While only a few full-assortment retailers are active in more than one market, Lidl and Aldi, the two discount powerhouses, are active in almost all EU member states. 

Compared to the United States, stores in Europe are much smaller, and the assortment is not as extensive, especially when it comes to individual product categories. Per individual item, there are usually only one or two options, with some exceptions like beer, yogurt, or butter. However, the overall product range available in EU supermarkets is quite similar to what consumers find in the U.S. 

For exporters looking to enter the EU retail market, it is important to note that, unlike in the United States, it is very unusual for a supermarket chain to work directly with an overseas supplier (except for major brands like Mars, Coca-Cola, etc.). The regular approach would be to go through a dedicated importer/distributor who will bring the product to the market, introduce it to a retail partner, and handle logistics. While adding another party to the distribution chain results in higher costs, this concept is usually unavoidable, especially for newcomers to the market. 

Brazil

Brazilians Prefer Brands Committed to Environmental Responsibility 

More than half of Brazilian consumers are choosing brands committed to environmental sustainability over those that lack environmental commitment. This trend is even stronger among higher-scale consumers from classes A and B (56%) compared to classes C, D, and E (52%), according to research by PwC Brazil and Instituto Locomotiva. Furthermore, 70% of consumers are willing to pay more for brands that protect the environment, and 69% spend more on products from brands that support social causes. This shift in consumer behavior, with 86% prioritizing sustainable brands and stores, highlights the importance of environmental and social responsibility in attracting and retaining customers. U.S. companies that meet these standards could benefit from this scenario. 

“Imposto do Pecado” Regulation to Tax Alcoholic Beverages and Sugary Drinks in Brazil Starting 2026 

Set to take effect in 2026, the new tax reform will impose a higher rate on products considered harmful to health or the environment. The “Imposto do Pecado” regulation will apply to beverages considered detrimental to health, including alcoholic beverages and sugary/soft drinks. The exact tax rate has not yet been determined, but it will consist of the standard rate (26.5%) plus an additional percentage to be defined. 

Hong Kong: Consumer Spending on Premium Pet Foods in Hong Kong Expected to Grow 

In 2023, Hong Kong’s global pet food imports recovered for a second consecutive year, growing 2% to $159 million year-on-year and expanding 14% compared to 2019. Pet food retained imports increased 2.8% to $112 million year-on-year. Given the slow recovery of neighboring economies, Hong Kong is set to keep more of its pet food imports for local sales and consumption. 

U.S. pet food is favorably recognized in the Hong Kong market. Thanks to its exceptional quality, innovative ingredients, advanced processing technology, and well-recognized and accepted certifications such as the “USDA Organic” label, U.S. pet food products have gained confidence among sophisticated consumers who seek premium products for the wellbeing of their pets. 

In addition to traditional suppliers from Europe and the United States, more pet food suppliers are coming from Taiwan, Japan, and Australia, along with a rising interest in pet supplements and less common meat ingredients such as rabbit and smaller packaged pet food. At a local pet food show, it was evident that pet owners are willing to pay for newer and specialized products. Visitors also looked for packages that highlighted “made in the United States” or “U.S. ingredients.” Show exhibitors used these labels to market their products, signaling that customers appreciate U.S.-sourced pet food and pet food manufactured with U.S. ingredients. 

Last year, U.S. pet food exports to Hong Kong slowed for a third consecutive year, dropping 5% to $32 million. The resident emigration flow of recent years contributed to the drop in the overall pet population. Traders also observe that the slowdown in exports is an effect of the recent dispirited economic situation in Hong Kong and neighboring markets. 

Nevertheless, according to official statistics released in early 2024, the Hong Kong resident population recovered to 7.5 million residents at the end of 2023. It is worth noting that the composition of new residents is not as internationally diverse as in pre-pandemic years and is presumably less inclined to own a pet. However, in general, residents who are pet owners continue to search for premium, organic, and more specialized pet food products. The good reputation U.S. pet food products and ingredients enjoy among Hong Kong pet owners uniquely positions U.S. exporters of niche and specialized products to compete in this market.