US food exports to PHL up 11% in January-August

In Photo: Hunter Haven Dairy Farm in Pearl City, Illinois. Dairy products top the list of the United States’s food exports to the Philippines.

The value of food and beverage products shipped by the United States to the Philippines rose by 11 percent to $631.4 million in January to August, from last year’s $568.3 million, according to a Global Agricultural Information Network (Gain) report.

The Gain report, which was prepared by the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) in Manila, attributed the increase to the improvement in the purchasing power of Filipinos and their increasing preference for American products.

“A mature market with a growing demand for consumer-oriented products, the United States remains the Philippines’s largest supplier for food, beverage and ingredient products,” the Gain report, which was published on December 7, read.

“The Philippines has a strong preference for US brands and is always looking for new American products to taste and enjoy. As incomes grow, more American brands are likely to find a market here,” it added.

The FAS said the demand for US consumer-oriented products in the Philippines will continue to grow due to rapid urbanization and the expansion of the upper and middle class.

The report also noted that the rising number of supermarkets, hypermarkets and convenience stores in the country would likely boost the purchase of food and beverage (F&B) products from the US.

“[There is] strong interest in Western brands among Philippine consumers [and] a growing awareness of the quality and health benefits of US food, beverage and ingredient products,” it read.

During the eight-month period, dairy products topped Philippine F&B import bill from the US, reaching $172.8 million. The figure is 11 percent higher than the $134.8 million recorded in the same period last year.

The report also indicated that shipments of pork and pork products recorded the highest increase at 37 percent in January to August. The value of pork and pork products exported to the Philippines reached $60.2 million.

Last year USDA data showed the value of American F&B products shipped to the Philippines reached $923.4 million, nearly 3 percent higher than the previous year’s $898.4 million.

The Gain report also indicated that Philippine food retail sales last year rose by 4 percent to $45.3 billion, from $43.5 billion recorded in 2015. It attributed the expansion to the growth of the Philippine economy.

“Driven by a growing population, strong domestic consumption and a buoyant economy, the food retail sector in the Philippines continues to grow,” the report read.

The Gain report said the country’s largest grocery retailers, such as SM, Robinsons and PureGold, continued to dominate the food retail business, which drove the expansion of the industry in the last five years.

“In 2016 these retail giants focused on expanding its midsized supermarkets and small format stores [i.e., convenience stores and minimarts] into smaller towns across the country,” it read.

“Filipino consumers increasingly prefer to purchase groceries from modern retail outlets, which provide a convenient format for one-stop shopping. This preference has led to the continuous expansion of both supermarkets and hypermarkets,” the report added.

The report said the bulk, or 59.5 percent, of total retail sales in 2016 came from “Mom & Pop” stores, more popularly known in the Philippines as sari-sari stores. Sales from these stores last year grew 2.7 percent to $26.94 billion, from the previous year’s $26.23 billion.

Revenues from supermarkets reached $10.21 billion last year, 7.13 percent higher than the $9.53 billion recorded in 2015.

The report also noted that food sales from hypermarkets in 2016 expanded by 5 percent to $2.61 billion, from the previous year’s $2.53 billion.

“Hypermarkets recorded a slower sales performance in 2016 at 3 percent growth, due to a smaller number of stores being opened during the year,” the report read. “Hypermarkets, however, still remain popular among consumers, serving as a one-stop store carrying a wide range of products, from food to general merchandise, which allows consumers to save time and effort.”

The report indicated that convenience stores posted the highest increase in terms of food sales, registering an 8-percent revenue hike last year. Food sales from convenience stores in 2016 reached $910 million.

“Convenience stores continue to expand due to the bullish business-process outsourcing sector and the increasing number of outlets opening in condominiums and areas outside Manila,” it read.

The FAS in Manila projected that total food retail sales this year could hit $47.4 billion due to the sustained growth of Philippine economy and the increase in the purchasing power of Filipinos.

Image Credits: Daniel Acker/Bloomberg