Food Processing Sector - 2009

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: GAIN Report Number:
11/17/2009

CI9026

Chile FOOD PROCESSING SECTOR 2009

Approved By: Joseph Lopez, Agricultural Attaché Prepared By: María José Herrera M., Marketing Specialist ReportHighlights:
Consumer spending on food and beverages has risen significantly to reach US$ 24.3 billion in 2008. This growth has mainly been propelled by improving living standards as a result of falling unemployment and increased purchasing power. Chile’s natural geographical advantages, a solid economic foundation, a relatively high technology-based industry, and a sound environment are the main factorsbehind the development and growth of Chilean agriculture and the food industry. The slowdown in the global economy has however quickly filtered through to Chile. Although Chile has used booming copper exports to build up substantial cash reserves and is therefore better shielded from the global economic downturn than some other countries in Latin America, the slowing rate of Chile’s economic growthhas had a significant effect on consumer spending.

Consumption trends influencing the type and quality of inputs being used include easy-to-prepare food, new fast foods and snack foods, diet and light foods, which continue capturing market share. The organic food market, while still small, has also been steadily growing over the past eight years. The market continues to consolidate throughmergers, leaving a wide gap in size and capacity between the leading food producers and the universe of small ones.

Post: Santiago

Author Defined:
Disclaimer: This report was prepared under the supervision of the Office of Agricultural Affairs of the USDA/Foreign Agricultural Service in Santiago, Chile for U.S. exporters of domestic food and agricultural products. While every possible care wastaken in the preparation of this report, information provided may not be completely accurate either because policies have changed since its preparation, or because clear and consistent information about these policies was not available. It is highly recommended that U.S. exporters verify the full set of imports requirements with their foreign customers, who are normally best equipped to researchsuch matters with local authorities, before any goods are shipped. FINAL IMPORT APPROVAL OF ANY PRODUCT IS SUBJECT TO THE IMPORTING COUNTRY’S RULES AND REGULATIONS AS INTERPRETED BY BORDER OFFICIALS AT THE TIME OF PRODUCT ENTRY.

Section I. Market Summary. A. Country Overview. Chile, with a population of 17 million, is a very centralized country with an estimated 10 million living in and aroundthe greater Santiago Metropolitan Region. The capital city of Santiago hosts most of the industrial activity and business activities in general. In 2008, Chile’s GDP (purchasing power parity) reached US$ 169.5 billion and per-capita GDP of US$ 10,000. Over the past 15 years, annual growth has averaged 5.5%, while per capita income has more than doubled. GDP growth reached approximately 4% in 2008despite the economic slowdown, while in 2009 the economy is expected to grow only 2.5%. Santiago, the capital city, is home to some 60% of the population and the great majority of the HRI sector companies that would purchase imported food products. Chileans spend on average around 20% of their household income on food, drinks and tobacco. In per capita terms, Chile is the second biggest consumerof bread in the world (96 kilos per year) after Germany, the 4th consumer of tea (700 grs), and an important consumer of pastas, rice,

seafood, carbonated beverages and beer. Supermarkets are the leading retail channel for food products. Chile has a longstanding commitment to trade liberalization and has signed free trade agreements with the European Union, Mexico, Canada, South Korea, EFTA,...