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An Assessment of the Agri-Food Distribution Services Industry in Caricom

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An Assessment of the Agri-Food Distribution Services Industry in Caricom CARIBBEAN REGIONAL NEGOTIATING MACHINERY AN ASSESSMENT OF THE AGRI-FOOD DISTRIBUTION SERVICES INDUSTRY IN CARICOM Final Draft PREPARED BY: Robert Best and Lawrence Placide West Indian Projects Ltd Trinidad and Tobago November 2006 FUNDED BY: Inter-American Development Bank/Multilateral Investment Fund TABLE OF CONTENTS ACKNOWLEDGEMENT ........................................................................................vi ACRONYMS …..................................................................................................... vii INDUSTRY TERMS ............................................................................................ viii INTRODUTION AND METHODOLOGY ........................................................... xii EXECUTIVE SUMMARY ....................................................................................xvi 1. AGRI-FOOD DISTRIBUTION SERVICES INDUSTRY - DEFINITION & ROLE IN THE ECONOMY 1 Introduction...........................................................................................................................1 Agri-Food Distribution Services Industry ..........................................................................1 Food Retail Sub-sector ........................................................................................................4 Food Service Sub-sector ......................................................................................................5 Food Wholesale Sub-sector .................................................................................................6 Structure of Consumer Markets .........................................................................................7 Traditional Retail Market ....................................................................................................8 Modern Retail Markets ........................................................................................................8 Emerging Retail Markets .....................................................................................................9 Policy Definition for Food Distribution Services ............................................................11 Importance of the Food Distribution Services Industry ...............................................15 Conclusion ..........................................................................................................................19 2. INTERNATIONAL FOOD DISTRIBUTION SERVICES INDUSTRY TRENDS .....21 Introduction.........................................................................................................................21 Global Food Retail Markets...............................................................................................21 Global Food Retail Sector ..................................................................................................24 Global Food Retail Trends.................................................................................................30 Developed Country Food Retailer Trends......................................................................30 Developing Country Food Retailer Trends: Latin America ...........................................32 Developing Country Food Retailer Trends: Africa ........................................................34 Global Quick Service Restaurant Industry ......................................................................35 Leading Global QSR Chains...........................................................................................35 Fast Food Industry Sub-sectors......................................................................................43 Mainstream Sub-sectors............................................................................................44 Caribbean Sub-sector................................................................................................46 Global Quick Service Restaurant Industry Trends .........................................................49 Global Food Distribution Service Regulatory Environment…………………………..50 Developed Countries ………………...………………………………………………...50 iii Developing Countries ……………………………………………………………...….51 Conclusion ...........................................................................................................................51 3. CARICOM FOOD DISTRIBUTION SERVICE INDUSTRY.......................................53 Introduction...........................................................................................................................53 Contribution of Food Distribution Service Industry to the CARICOM Economy ......53 Trade and Production.....................................................................................................56 Household Budgetary Data.............................................................................................58 Field Interviews with Industry Leaders and Specialist...................................................58 CARICOM Food Distribution Services Industry Size ....................................................58 Key Trends Driving Food Retail Market Changes..........................................................60 Per Capita Income ..........................................................................................................60 Population.......................................................................................................................61 Demographics.................................................................................................................61 Conclusion ...........................................................................................................................64 4. CARICOM FOOD RETAIL SUB-SECTOR ...................................................................66 Introduction.........................................................................................................................66 Food Retail Service Sector .................................................................................................66 More Traditional Food Retail Sectors............................................................................68 More Modern Food Retail Sector...................................................................................72 Emerging Food Retail Sectors........................................................................................80 Key CARICOM Food Retailers.........................................................................................84 CARICOM Food Retail Industry Competitiveness Trends............................................88 CARICOM Restrictions on Trade ....................................................................................98 Conclusion ...........................................................................................................................99 5. CARICOM FOOD SERVICES SECTOR......................................................................101 Introduction.......................................................................................................................101 Food Service/Quick Service Restaurant Sector .............................................................101 CARICOM QRS Sub-sectors...........................................................................................105 Key CARICOM QRS Involved in Services Trade.........................................................112 CARICOM QSR Industry & Competitiveness Trends.................................................118 CARICOM Restrictions on Trade ..................................................................................127 Conclusion .........................................................................................................................128 6. CARICOM FOOD WHOLESALE SECTOR ...............................................................130 Introduction.......................................................................................................................130 Food Import/Wholesale Sector …………………………………………………….......130 CARICOM QSR Industry & Competitiveness Trends.................................................133 CARICOM Restrictions on Trade ..................................................................................140 Conclusion .........................................................................................................................140 7. FOOD DISTRIBUTION SERVICES INDUSTRY DEVELOPMENT STRATEGY Introduction.......................................................................................................................142 Business Activity ………………...………………………………………………...….142 iv Case for Food Distribution Industry Policy ...................................................................143 Constraints.........................................................................................................................145 Improving Industry Competitiveness .............................................................................146 Industry Organization and Associations and Participation .........................................152 Future Work......................................................................................................................153 Conclusion .........................................................................................................................155 8. RECOMMENDATIONS FOR CARICOM PARTICIPATION IN SERVICES TRADE NEGOTIATIONS ...……………………….. ......................................................157
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