Spain Food Processing Ingredients 2018 2
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THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 3/30/2018 GAIN Report Number: SP1807 Spain Post: Madrid Food Processing Ingredients 2018 Approved By: Rachel Bickford, Agricultural Attaché Prepared By: Arantxa Medina, Marketing and Management Assistant Report Highlights: In 2017, Spain imported $1.7 billion worth of agricultural, fish and forest products from the United States. As Spain maintains its economic recovery the food processing sector continues to consolidate its position and importance as the main industrial sector in the country. Spain has some of the most competitive food processing industries in Europe, which makes this sector an important market for U.S. food ingredient exporters. Executive Summary: INDEX SECTION I. MARKET SUMMARY SECTION II. ROAD MAP FOR MARKET ENTRY A. Entry Strategy B. Market Structure C. Company Profiles D. Sector Trends SECTION III. COMPETITION SECTION IV. BEST PRODUCT PROSPECTS SECTION V. POST CONTACT AND FURTHER INFORMATION I. MARKET SUMMARY Spain Food Processing Ingredients 2018 2 Economic Trends Spain AGRICULTURAL PRODUCTS IMPORTS ($ Million) 2013 2014 2015 2016 2017 2018* Total Agricultural, Fish 39,800 40,446 36,359 38,003 41,583 41,000 and Forestry Products Total U.S. Agricultural, Fish 1,801 1,990 1,981 1,856 1,637 1,750 and Forestry Products Total Agricultural Products 30,0312 30,534 27,646 28,067 30,872 31,000 Total U.S. Agricultural Products 1,474 1,678 1,606 1,487 1,319 1,400 Total Fish and Seafood Products 6,349 6,861 6,364 7,022 7,890 7,000 Total U.S. Fish and 112 128 134 134 103 100 Seafood Products Source: Global Trade Atlas (www.gtis.com) (*) Estimate In 2017, the food processing sector continued to consolidate its position and importance as the main industrial sector pushing the economic recovery. Spain has some of the most competitive food processing industries in Europe, which makes this sector an important target for U.S. food ingredient exporters. Spain enjoys a modern food processing sector that pays special attention to the quality, safety, and traceability of the food products it produces. This sector provides 480,000 jobs, representing 21 percent of the total industrial workforce. The food industry in Spain comprises mostly small companies— in 2016, 53 percent of the 28,038 food processors employ 10 people or less. The industry as a whole produced an estimated $113 billion in product in 2016. The export sector keeps bringing positive news to the Spanish economy. Exports from the agri-food sector have maintained an upward trend seen since 2009. According to the data published by the Spanish Food Industry Federation (FIAB) in their annual report, exports in 2016 were valued at $31.1 billion. This positive trend provides opportunities for U.S. exporters as the demand for commodities, food ingredients and consumer-oriented products to be further processed increase in order to satisfy foreign demand. Table 1. The Food Sector in Spain 2016 Spain Food Processing Ingredients 2018 3 Total Production ($ Million) 113,290 Total No. Of Food Processors 28,038 Labor Force 480,000 Total Exports ($ Million) 31,143 Source: FIAB – Spanish Food Industry Federation Current market developments affecting the food processing sector include: Domestic food expenditure is slowly recovering, both at home and abroad. The food industry continues to compensate the accumulated loss by increasing exports, one of the sectors that significantly improved in recent years. In addition, tourist numbers support food consumption and therefore, the food industry. Changes in demographics and working patterns are shifting demand to more convenient and ready-to-eat foods. Busier lifestyles increase the demand for fast food, convenience products and ready-made meals, but it is worth noting that consumers are looking for healthier and higher quality options within these segments. New labeling, sustainability and traceability requirements in addition to environmental and animal welfare requirements are forcing consolidation of all levels of the food chain, from farm to fork. Consumers have become more health conscious and problems concerning food safety are widely publicized and usually receive immediate attention from government agencies. While Spanish consumers are seeking healthier food choices, organic food has experienced little growth in the domestic market, although production and exports remain largest in the EU. ADVANTAGES AND CHALLENGES FACING U.S. PRODUCTS IN SPAIN Spain Food Processing Ingredients 2018 4 Advantages Challenges Tourism is a strong and ever- Food imported from third countries, growing sector that provides sales including the U.S., must comply with EU in the HRI sector, as well as food law, which varies considerably from demand for more international U.S. regulation and practice. foods. Spain’s food industry relies on imported Lack of consumer awareness of U.S. brands ingredients, many from the U.S. and varieties of U.S. products. Good image and reputation of U.S. products. Competition from neighboring EU countries, where tastes and traditional products may be well known. Good network of agents and importers to U.S. exports face higher transportation costs help get product into the market. and difficulties in shipping mixed or smaller container loads versus EU competitors. Consumers are increasingly health EU labeling, traceability, and packaging conscious, demanding on trend products laws. not available domestically. Distribution structure is modern and High import tariffs and import regulations many companies cover both Spain impose a price disadvantage on non-EU and Portugal. based companies. Food products in the market are becoming High marketing costs (advertising, more diversified. Consumers are becoming discounts, etc.) are necessary. more open, creating opportunities for new and foreign products. II. ROAD MAP FOR MARKET ENTRY Spain Food Processing Ingredients 2018 5 A. Entry Strategy Success in introducing products in the Spanish market requires local representation and personal contact. A local representative can provide up-to-date market intelligence, guidance on business practices and trade related laws, sales contact with existing and potential buyers, and market development expertise. The Office of Agricultural Affairs in Madrid maintains listings of potential importers and develops sector-specific information to help you introduce your product in Spain. Furthermore, a directory of European importers (many of them HRI suppliers) is available online at: American Foods in Europe Directory. European importers of U.S. products are listed by product category and company/country index. Customs are involved in the implementation and enforcement of EU legislation relating to imports, not only for customs duties and commercial policy measures, but also as regards security, environmental, anti-dumping, consumer protection, cultural and agricultural controls. Goods imported into the EU must meet the EU sanitary and phytosanitary requirements to protect human and animal health and as part of the custom union, Spain implements EU rules and regulations. However, there are subtleties that you should learn about if you are thinking of exporting to Spain. For more information, we invite potential U.S. exporters to contact FAS/Madrid for additional, unpublished sector-specific information. Generally speaking, U.S. exporters already exporting to other EU member states will likely be meeting most of the requirements for exporting to Spain. Typically, HRI operators buy their food ingredients from importers or wholesalers. Some large companies buy directly from foreign suppliers. Around 20 percent of the Spanish food production is sold to export markets, mainly to the EU. Some food-processing companies concentrate on the domestic or on export markets, but most of them will have mixed customers. Companies supplying mainly the domestic market frequently market their products directly and have their own logistics infrastructure. However, their customers will vary from wholesalers to buying groups and retailers. Companies producing for the export market may have their own marketing office overseas, local agents or may work with local importers. U.S. exporters now face even greater challenges, because of the new EC labeling and traceability regulations. Any product that contains genetically modified ingredients must be labeled for consumer information. Since consumers have relatively low acceptance of genetically modified foods, food processors, retailers and the HRI sector are reluctant to purchase these processed products or food ingredients for processing. The following documents are required for ocean or air cargo shipments of foodstuffs to Spain: Spain Food Processing Ingredients 2018 6 Bill of Lading and/or Airway Bill Commercial Invoice Phytosanitary Certificate and/or Health Certificate when applicable If your product is or contains plant or animal products, it will require a phytosanitary or health certificate issued by the competent U.S. authority. In addition, if you are exporting animal products, your production plant has to be approved to export into the EU. Import Certificate Most food products require an Import Certificate issued by the competent Spanish authority. However, the Import Certificate is obtained by the Spanish importer and/or the agent involved in the business and is intended for tariff classification purposes. Also,