Agrifoods Market Report - EN

THE US MARKET FOR FOOD
& DELI AND OPPORTUNITIES

FOR PORTUGUESE SMES:
COMPETITION AND DEMAND
VOLUME ONE: REPORT
Produced by Marq Consulting Group and CH Academy
Commissioned by the Associação Empresarial de Portugal (AEP) Chamber of Commerce and Industry of Porto
Funded by the European Union (EU), Fundo Europeu de Desenvolvimento Regional (FEDER) / European Regional
Development Fund (ERDF)
Lead authors: Dr Laura J White and Alex Murray, Marq Consulting Group
Editors: Julie Peterson, Marq Consulting Group, and Carlos Lacerda, CH Academy
September 2016
2 • USA NEXT CHALLENGE
Table of Contents
Executive Summary 7
Acronyms 9
Lists of Figures 11
List of Tables 15
Section 1: Introduction 17
1.1 Report Parties 17
1.2 Report Focus 17
1.3 Report Methods 20
1.4 Report Subsectors and Product Categories 21
1.5 Conclusion 21
Section 2: Internal (US) Competition 23
2.1 Introduction 23
2.2 Top Countries Exporting to the US 23
2.3 Agrifoods – US Market Supply 25
2.3a Baked Goods 25
2.3b Preserved Meat 28
2.3c Cheese 35
2.3d Pure Olive Oil 37
2.3e Chocolate 40
2.3f Jams 42
2.3g Processed Fish 46
2.4 Conclusion 53
Section 3: External Subector Competition 57
3.1 Introduction 57
3.2 Top Sector Competitors 57
3.3 Global Competitors 62
3.3a Baked Goods 63
3.3c Cheese 65
3.3e Chocolate 67
3.3f Jams 68
3.4 European Competitors 69
3.4a Baked Goods 70
3.4c Cheese 72
3.4e Chocolate 74
3.4f Jams 75
3.5 Conclusion 76
Section 4: Legal regulations and Compliance 79
4.1 Introduction 79
4.2 Labelling and Packaging 79
4.3 US Sanitary Import Requirements 81
4.3a Meat, Animal Products, and Animal
Bi-Products 81
4.3b Cheese 82
4.3c Dried and Canned Fish 84
4.4 Special Requirements 84
4.5 Tariffs 85
4.6 Distribution Structure and Channels 86
4.7 Effects of Legislation 91
4.7a The Public Health Security and Bioterrorism
Preparedness and Response Act of 2002 91
4.7b The Trade Facilitation and Trade
Enforcement Act of 2015 92
4.7c Geographic Indicators 93
4.7d The Food Safety Modernization Act 94
4.8 Conclusion 99
Section 5: An Insider’s Perspective
of the US Agrifoods Market 101
5.1 Introduction 101
5.2 US Agrifoods Demand 101
5.2a Baked Goods Demand 102
5.2b Preserved Meat Demand 104
5.2c Cheese Demand 110
5.2e Chocolate 116
5.2f Jams 118
5.3 Trends Affecting Supply and Demand 124
5.3a Sustainability-Related Trends 124
5.3b The Mediterranean Diet Trend 125
5.3c The Health Food Trends 127
5.3d Specialty Food Trends 128
5.4 Understanding How the Competition
Responds to Trends 134
5.5 Conclusion 138
Section 6: Conclusion 141
6.1 Introduction 141
6.2 Portuguese SMEs’ Strengths and Challenges 143
6.2a Challenges 144
6.2b Strengths 148
References 155
Executive
Summary
This report was conducted by Marq Consulting
Group and CH Academy for the Next Challenge
USA project that was commissioned by the
Associação Empresarial de Portugal (AEP)
Chamber of Commerce and Industry of Porto.
It was financially supported by European Union
(EU) through Fundo Europeu de Desenvolvimento
Regional (FEDER) or, in English, the European
Regional Development Fund (ERDF) as part of the
Compete 2020 project. It contains two volumes.
This volume (Volume One) contains the report
content, and Volume Two includes all necessary
appendices. The projects and report aim to
improve and assess export development and
growth opportunities for over 150 Portuguese small
and medium-sized enterprises (SMEs) through
trade facilitation with the United States (US).
Section 1 introduces the report, report parties, and

report focus by giving an overview of global and
Portuguese trade. The section highlights current
Portuguese trade competitiveness – ranked 38th
out of 190+ countries by the World Economic
Forum for 2015 to 2016 – and how agrifoods
exports support Portuguese growth, gross
domestic product (GDP), and economic recovery.
Using a multi-factor analysis, the report examines
how US market access and growth can facilitate
development and growth in seven subsectors:
baked goods, preserved meat, cheese, pure olive
oil, chocolate, jams and processed fish.
Section 2 assesses US import competition, top

exporting countries, and import volume and
predicts intermediate growth in the US market.
Opportunities for export development and growth
THE US MARKET FOR FOOD & DELI

• 7
AND OPPORTUNITIES FOR PORTUGUESE SMES
look particularly strong for baked goods, cheese, one is specific to foreign suppliers. The underlying
chocolate, and processed fish, and they appear even message of Section 4 is that the US market is vast,
stronger for jams. Recent US legislation following highly competitive, and market entry is costly. The
the World Trade Organization’s (WTO) agreement opportunity exists for sustained long-term growth.
on trade facilitation and the United Nations’ work However, SMEs must ensure they that understand
to eradicate forced labor and human trafficking the US market and regulatory structure in order to
from supply chains will largely determine the scope be export ready.
of opportunity for SMEs exporting processed fish.
Prospects in other markets, such as preserved Section 5 fosters an “insider’s perspective” of how to
meat and olive oil pose, are also good, but SMEs compete effectively within the US agrifoods market.
may face export volume, US import demand, and Supply and demand analyses are conducted by
market access-related challenges. Portugal’s most subsector, and the report adds value by assessing
consistent competitors in the US agrifoods markets other product categories where SMEs may be
are Belgium-Luxemburg, Greece, Hungary, Japan, competitive that were not assessed in previous
Norway, Philippines, Tunisia, Uruguay, and Vietnam. sections. The findings highlight subsectors and
The section offers recommendations for sustainable products where import demand is lower and
strategy development, such as which competitors domestic supply is greater, and vice versa. Several
to evaluate when establishing comparative and subsector markets, such as preserved meat, cheese,
competitive advantages with US suppliers. and olive oil, are seeing trends towards domestic
sourcing – a relatively recent development resulting
Section 3 builds on the competition analysis of from increasing barriers towards European animal
the internal (US) market by examining global and products and US quality controls. However, demand
European competitors and Portugal’s performance for imported baked goods, chocolate, jams, and
in these markets. The section sees global and processed fish remains high. The effects of public
European competitiveness and export development policy, dietary shifts, specialty foods, and other
as two processes that shape a dynamic trends on supply and demand are examined.
environment for SMEs assessing opportunities in Then the report helps SMEs gain a competitive
the US market. Globally, Portugal’s most significant edge by profiling top US agrifoods companies,
competitors are Brazil, Ecuador, Egypt, New trade associations, trade shows, and publications.
Zealand, and Tunisia. Greece and Poland are the The analyses reinforce conclusions that the baked
most significant European competitors. Globally goods, chocolate, and jams subsectors are the most
and within Europe, Portugal is competitive in all secure for Portuguese SMEs. SMEs can be effective
agrifoods subsectors examined. The best strategies importing within other subsectors — such as cheese,
for improving competitiveness are consistent export pure olive oil, and especially processed fish — by
volume and developing a marketable product keeping pace with US and global developments.
“story” targeting American consumer preferences
when marketing to importers. Section 6 concludes this report with a sector-
by-sector, product-by-product summary of the
Legal regulations and compliance are the subjects competition, supply / demand, and opportunity
of Section 4. The section includes critical resources assessments. Though US import markets declined
that will help SMEs avoid costly mistakes, such in 2015 across industries, and trade growth for
as failure to comply with sanitary regulations on 2016 has proven sluggish, the report finds the best
preserved meat, cheese, and processed fish. Volume opportunities for Portuguese SMEs in baked goods,
One outlines the range of tariffs for each product chocolate, jams, and processed fish products.
category; Volume Two details tariffs for specific Although the US market is trending toward
products within these categories. The most critical domestic sourcing for preserved meat, cheese, and
resource for SMEs is Section 4.5 — Distribution olive oil, the US market is large and this sourcing
Structure and Channels — in which US companies is in such initial stages that opportunities for
offer advice for SMEs competing the US. The section SMEs remain. The US market for these imported
provides an overview of relevant US legislation. Of agrifoods is somewhat risky and less secure;
the three acts that most impact these subsectors, primary data suggests demand is trending towards
the Food Safety and Modernization Act (2011) is domestic and local products. The report concludes
the newest, coming into effect in September 2016 by discussing SMEs’ challenges and strengths in
for all large US supply lines and in 2017 for smaller the US market and operationalizing a model for
suppliers. Out of the seven rules that comprise the sustainable export development.
Act, six affect Portuguese agrifoods exporters, and

Acronyms
ACE Automated Commercial Environment
AEP Associação Empresarial de Portugal
APHIS USDA Animal and Plant Health Inspection Service
B Billion
BdP Banco de Portugal
BIT Bilateral Investment Treaty
BRC British Retail Consortium
CBP US Customs and Border Protection
CITES Convection on International Trade in Endangered Species of
Wild Fauna and Flora
Comtrade United Nations’ Commodity Trade Statistics Database
DWPE Detention Without Physical Examination
ERDF European Regional Development Fund
EU European Union
FDA US Food and Drug Administration
FEDER Fundo Europeu de Desenvolvimento Regional
FTA Free Trade Agreement
FSMA Food Safety Modernization Act
FSIS USDA Food Safety Inspection Service
FSVP Food Supplier Verification Program
FWS Fish and Wildlife Service
GDP Gross Domestic Product
GI Geographic Indicator
GVA Gross Value Added
HACCP FDA Hazard Analysis and Critical Control Points
HR House of Representatives
Trade Facilitation Act The Trade Facilitation and Trade Enforce-
ment Act of 2015
HS Harmonized (Tariff) System
IMF International Monetary Fund
IOC International Olive Council
ISO International Organization for Standardization
K Thousand
M Million
MFA Mediterranean Foods Alliance
NAFTA North American Free Trade Agreement
NMFS National Marine Fisheries Service
OEC Observatory for Economic Complexity
OFYP Other Fish, Including Yellowtail and Pollock

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SBS Sardine, Brisling, Sprat
SME Small and Medium-Sized Enterprise
TPP Trans-Pacific Partnership
TTIP Trans-Atlantic Trade and Investment Partnership
TSB Tuna, Skipjack, and Bonito
UAE United Arab Emirates
US United States
USDA US Department of Agriculture

List of Figures
Figure 1.1 – Portuguese Net Contributions to Real Volume One: 18
GDP Growth in Percentage Points (BdP 2016)
Figure 2.1 – Top Ten Countries Exporting Baked Volume One: 26

Goods to the US (2014)
Figure 2.2 – US Baked Goods Imports Market Volume One: 26

Value (Millions) By Country (2014)
Figure 2.3 – Top Ten Countries Exporting Baked Volume Two: 5

Figure 2.4 – Top Ten Countries Exporting Baked

Volume Two: 5
Figure 2.5 – Top Ten Countries Exporting Baked

Goods to the US (2011) Volume Two: 6
Figure 2.6 – Top Ten Countries Exporting

Preserved Meat to the US (2014) Volume One: 30
Figure 2.7 – US Preserved Meat Imports Market

Value (Millions) By Country (2014) Volume One: 30

Preserved Meat to the US (2013) Volume Two: 6


Figure 2.11 – Top Countries Exporting Cured Ham

to the US (2014) Volume One: 33
Figure 2.12 – US Cured Ham Market Value

(Thousands) By Country (2014)
Volume One: 33
Figure 2.13 – Top Countries Exporting Cured
Volume Two: 7
Ham to the US (2013)

• 11
Figure 2.14 – Top Countries Exporting Cured Ham Volume Two: 8
to the US (2012)
Figure 2.15 – Top Countries Exporting Cured Ham Volume Two: 8

to the US (2011)
Figure 2.16 – Top Ten Countries Exporting Cheese Volume One: 35

to the US (2014)
Figure 2.17 – US Cheese Imports Market Value Volume One: 35

(Millions) By Country (2014)
Figure 2.18 – Top Ten Countries Exporting Cheese Volume Two: 9

to the US (2013)

to the US (2012)

to the US (2011)
Figure 2.21 – Top Ten Countries Exporting Pure Volume One: 38

Olive Oil to the US (2014)
Figure 2.22 – US Pure Olive Oil Imports Market Volume One: 38

Figure 2.23 – Top Ten Countries Exporting Pure Volume Two: 10



Figure 2.26 – Top Ten Countries Exporting Volume One: 40

Chocolate to the US (2014)
Figure 2.27 – US Chocolate Imports Market Value Volume One: 41

Figure 2.28 – Top Ten Countries Exporting Volume Two: 11



Figure 2.31 – Top Ten Countries Exporting Jam to Volume One: 43

the US (2014)
Figure 2.32 – US Jam Imports Market Value Volume One: 43


Figure 2.33 – Top Ten Countries Exporting Jam to Volume Two: 12
the US (2013)

the US (2012)

the US (2011)
Figure 2.36 – Top Ten Countries Exporting Volume One: 47

Processed Fish to the US (2014)
Figure 2.37 – US Processed Fish Imports Market Volume One: 47




Figure 2.41 – Top Ten Countries Exporting TSB to Volume One: 49

the US (2014)
Figure 2.42 – US TSB Imports Market Value Volume One: 49

Figure 2.43 – Top Ten Countries Exporting TSB to Volume Two: 14

the US (2013)

the US (2012)

the US (2011)
Figure 2.46 – Top Ten Countries Exporting OFYP to Volume One: 51

the US (2014)
Figure 2.47 – US OFYP Imports Market Value Volume One: 51

Figure 2.48 – Top Ten Countries Exporting OFYP to Volume Two: 15

the US (2013)

the US (2012)

the US (2011)
Figure 5.1 – Google Trends for “Avocados Mexico” Volume One: 131
Search History (January 2004 – Mid-July 2016)

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List of Tables
Table 1.1 – Portuguese Agrifoods Export to the Volume One: 13
US (Data: OEC 2014)
Table 2.1 – Portugal’s Competitors in the US Volume One: 35

Jams Market (2011-2014)
Table 2.2 – Portugal’s Competitors in the US Volume One: 38

Processed Fish Market (2011-2014)
Table 3.1 – Average Subsector Export / Wholesale Volume One: 62

Price (2011-2014), Portugal and Portuguese
Competitors
Table 5.1 - Select US Baked Goods Product Volume One: 63

Categories Import Demand Levels (2011-2014)
Table 5.2 - US Preserved Meat Product Volume One: 105

Table 5.3 - US Cheese Except Fresh, Grated, Volume One: 111

Processed or Blue-Veined Import Demand
Levels (2011-2014)
Table 5.4 – US Pure Olive Oil Import Demand Volume One: 114
Levels (2011-2014)
Table 5.5 – Select US Chocolate Product Volume One: 117

Table 5.6 – US Jams, Fruit Jellies, Pureés and Volume One: 119
Pastes, Except Citrus Import Demand Levels
(2011-2014)
Table 5.7 – Select US Preserved Fish Product Volume One: 120

Table 5.8 – 2014 Markets for TSB, SBS, and Volume One: 121
Mackerel Products

• 15
Section 1:
Introduction
In 2015, countries continued to recover from on-going global crises,

and trade flows declined. Forecasts for global trade growth in 2016
remain modest at approximately 2%; political instability, currency
fluctuations, and restricted business and personal lending continues
to affect growth (WTO 2016; BdP 2016). There is reason, however, to
be optimistic about trade; trade flows are predicted to considerably
improve across 2017 to 2018 at a growth rate of 3.5 to 3.8% (WTO 2016;
BdP 2016). This report is similarly optimistic about Portugal’s ability to
utilize global trade growth through short and long-term, sustainable
export development strategies in the US market.
1.1 Report Parties
This report offers guidance on how Portugal can enhance agrifoods

exports and is the first of five market reports in the Next Challenge
USA project. Next Challenge USA was commissioned by the
Associação Empresarial de Portugal Chamber of Commerce and
Industry of Porto (AEP) and is supported by European Union (EU)
through Fundo Europeu de Desenvolvimento Regional (FEDER)
or, in English, the European Regional Development Fund (ERDF).
Part of the wider Compete 2020 project, Next Challenge USA
works to improve market access for over 150 Portuguese small and
medium-sized enterprises (SMEs) through trade facilitation with
the United States (US). Next Challenge USA supports SMEs’ role
in fostering sustainable market development and is orchestrated
through a series of reports, workshops, and seminars, hosted by the
Portuguese consulting group, CH Academy, and their American
contracting partner, Marq Consulting Group.
1.2 Report Focus
This report reflects on general and specific issues that shape

sustainable export development strategies through increased
US market access and growth. The analysis takes into account
the historical origins of Portugal’s export economy, dating back
to Portugal’s 15th century leadership in early mercantilist trade.
Portuguese exports across sectors have remained strong, but the
2008 global financial crisis has had deep effects on Portuguese
trade from which SMEs are still recovering. Specifically, the crisis
and underlying governance factors contributed to Portugal’s
need for financial assistance from the EU and International
Monetary Fund (IMF). After instituting reform with great success:
“the Portuguese economy has made significant progresses in the
correction of a number of macroeconomic imbalances, having
implemented measures of a structural character in several areas”
(AICEP 2016: 4). The report addresses these examples of general and
specifically Portuguese trade-related triumphs and challenges.
• 17
Painting a general economic landscape of Portugal’s current
trade profile, the latest projections from Banco de Portugal (BdP)
indicated growth in gross domestic product (GDP) between 1.5 and
1.7% for 2016. Growth figures were based on increased demand and
continued exports in Portuguese goods and services and tourism
promotion (BdP 2016; see Figure 1.1 below). There is, naturally, a
strong link between Portugal’s continued economic progress and
expanding its export market. According to the BdP (2016), export
volume in GDP terms should continue to recover across the coming
years, and the World Bank (2016) expects Portuguese GDP will rise
to pre-2008 crisis levels (Figure 1.1). Five-year trends show steady
progress since GDP declined considerably from $244.9 Billion (B) in
2011 to $216.4B in 2012 (World Bank 2016).
Figure 1.1 – Portuguese Net Contributions to Real GDP Growth

in Percentage Points (BdP 2016)
◼ Domestic demand
◼ Exports
◼ GDP (%)
Next Challenge USA’s goal is to improve Portuguese export

competition, particularly through the growth of SMEs, and this
report looks deeply at US, global, European, and Portuguese
competition. The World Economic Forum’s Competitive Index
ranked Portugal as the 38th (out of 190+) most competitive nation
for 2015-2016; from 2014-2015, it was ranked 36th. Portugal’s most
similar export competitors, across a five-year trend analysis, are the
Czech Republic, Greece, Poland, and the UK1. Portugal consistently
outcompetes Croatia, Finland, Ireland, and Belgium-Luxemburg; it
occasionally outcompetes the Netherlands, Malta, and Sweden and
is consistently outcompeted by Bulgaria, Estonia, Latvia,
1 The report was written before “Brexit” was negotiated, and the inclusion of the UK among
Portugal’s most similar competitors is subject to these changes.

Lithuania, and Slovakia in global trade (WTO 2015).2 However,
Portugal’s position within the World Economic Forum’s Competitive
Index reveals inconsistencies, and this report specifically targets
how inconsistent competitiveness has contributed to Portugal’s
overall competitiveness decline.
Portugal’s position within the top 50 most competitive export

nations has been fairly consistent and reflects the fluctuations
in GDP and post-2008 recovery factors presented above. These
factors affected Portugal’s agrifoods industry in the last quarters
of 2010 through the end of 2013. Since 2011 there has been a
decline in gross value added (GVA) from the agricultural sectors,
but the agrifoods industry continues to experience slow but
consistent growth overall in terms of GDP among three of its top
ten export destinations since 2008 (BdP 2014; AICEP 2013). Specific,
sustainable agrifoods export strategies for the US market can boost
economic recovery by continuing to stabilize Portuguese export
competitiveness and GDP, as agrifoods is one of Portugal’s fastest-
growing export sectors (AICEP 2013).
Table 1.1 shows the progressive annual breakdown of Portuguese

exports to the US in the general category of agrifoods, which
includes the sectors of animal and vegetable bi-products, animal
products, foodstuffs, and vegetable products. Exports in agrifoods,
across sector categories, have grown by an average annual rate
of 11.9% over three years. With current trade growth forecasts,
Portuguese export development in the US market appears
positive. Although animal and vegetable byproduct exports have
almost halved over the course of four years, vegetable product
exports appear highly promising. There is also room for export
improvements in both animal product and foodstuffs.
Table 1.1 – Portuguese Agrifoods Export to the US (Millions, M)
Change
Agrifoods sector 2011 2012 2013 2014 since 2011
Animal and Vegetable
$10.5M $9.91M $7.94M $5.9M -43.8%
Bi-Products
Animal Products $17.4M $17.2M $21.8M $22.1M +27%
Foodstuffs $98M $97.2M $111M $114M +16.3%
Vegetable Products $3.82M $3.6M $4.31M $5.65M +47.9%
2 “Consistently outcompetes” is measured by competition in all 5 or 4 years of the trend

analysis; “occasionally outcompetes” refers to competition within 2 or fewer years.

• 19
1.3 Report Methods
The report presents a market analysis for Portuguese SMEs looking

to develop their export strategy for the US agrifoods market by
focusing on five unique factors that influence sustainable strategy
development, including:
»» Internal (US) competition

»» Export competition (global and European)
»» Legal regulations and compliance
»» An insider’s perspective of the US market
»» Portuguese strengths and challenges.
The analysis of these factors produces an assessment of Portuguese

agrifoods exports competitiveness in the US, the world’s largest
imported goods market outside of the European Union (WTO
2015). The assessment relies on primary and secondary data and
qualitative and quantitative research methods, such as:
»» one-on-one interviews with US companies

»» customized surveys
»» desk research
»» case studies
»» comparative and statistical analysis
»» econometric forecasting and modeling and
»» data collected and cleaned from the United Nations’ Commodity
Trade Statistics Database (Comtrade) by the Observatory for
Economic Complexity (OEC) and report parties.
These methods were selected based on their appropriateness and

effectiveness in addressing the needs of the report. For example, the
analysis requires in-depth, regional, and state-specific information
from American agrifoods importers, distributors, wholesalers,
retailers, and trade associations. Interviews are the most appropriate
primary source for this data; whereas, competition analysis is most
appropriately conducted through statistical and econometric
analyses. After cross-checking sources of statistical data — such as
the World Trade Organization (WTO), IMF, World Bank — the report
uses Comtrade as its primary source.
The OEC, a project conducted by the Massachusetts Institute

of Technology’s Media Lab Macro Connections Group, provides
collection, cleaning, filtering, sorting, and organization of Comtrade’s
data and thus, is the predominant secondary data source in the
report. Except where explicitly cited, the data referenced in the
report is from OEC (2014). Global, regional, and national trade data
is compiled into large datasets, and time is required to process and
clean this data. For this reason, the report’s most recent data, in most
cases, is from 2014. Data from 2016 is not yet available, and data from
2015, in some cases, is not yet processed.3
3 Comtrade has data from 2015, and it is utilized throughout the report where appropriate;
however, their data does not take into account exports that are refused by US Customs and
Border Protection. OEC’s data does.
An expansive discourse exists on varied methods for collecting
and analyzing data, the methods employed in the report are
consistently deemed the most appropriate across industries and
individuals. For example, the report uses interviews with US sector
executives to understand the challenges to Portuguese agrifoods
exporters. The method is designed to fit the nature of the inquiry.
Similarly, the report aims to minimize detail that does not increase
clarity, such as assessing Portugal’s top ten export competitors
rather than top 20.
1.4 Report Subsectors and Product Categories
The report assesses export development and growth opportunities

in five subsectors, selected based on a range of analytical factors,
such as Portuguese export volume, US import demand, price/
profitability, and US market fluctuations. These subsectors include:
1. Baked goods
2. Preserved meat
3. Cheese
4. Pure olive oil
5. Chocolate
6. Jams
7. Processed fish.
For the majority of the report, the “unit of analysis” is at the

subsector – not product category – level to provide SMEs with
the most comprehensive information and assessment of export
opportunity.4 Where appropriate, the report goes into product
category detail. For example, within the preserved meat subsector,
the report has closely examined the US market for cured ham, and
the same level of detail is included for many product categories in
the processed fish subsector. All product categories selected for
analysis have US import values in the range of millions or billions
of dollars and carry the potential to enhance Portuguese export
competition, GDP, and economic recovery.
1.5 Conclusion
This introductory section has covered the who, what, and how
of the market report on agrifoods. The report is structured by
the five analytical factors presented in Section 1.3. The first factor
(Section 2: internal competition) provides a detailed snapshot
of the extensive competition Portuguese agrifoods SMEs face in
the US market. Second, Section 3 examines Portugal’s global and
European competitors, focusing on each subsector to demonstrate
how access to the world’s largest single-nation import market
can impact Portugal’s trade competitiveness. This section also
4 The “level of analysis” featured in the report is as follows: industry (agrifoods), sector (animal
products / foodstuffs / etc), subsector (baked goods / etc), and product category (cured ham
/ etc).

• 21
addresses how Portugal can outperform EU competitors like the
Czech Republic, Greece, Poland, the UK, Latvia, Lithuania, Slovakia,
Bulgaria, Romania, and Estonia.
Following the complete competition analysis, Section 4 transitions

to legal regulations and compliance issues – essential information
for SMEs in all stages of export development. The fourth analytical
factor provides Portuguese SMEs an insider’s perspective of the US
market in Section 5, including the importance of trends that are
often discounted by European exporters whose markets rely more
on tradition. The section’s key theme is that exporters have one shot
in the US market – be prepared to adapt and revise existing export
models specifically for the US. Section 6 reviews the findings of
the previous sections’ competition and supply / demand analyses
and uses this information to take a sophisticated approach to cost
/ benefit analyses by examining Portuguese SMEs’ strengths and
challenges in the US market. This section offers a comprehensive
understanding of the dynamics of the US agrifoods market, along
with general strategies and specific tools for increasing Portuguese
exports to the US.

Section 2:
Internal (US)
Competition
2.1 Introduction
The US, the largest single-country import destination for goods

and services, is a highly competitive market. Compete 2020, Next
Challenge USA, and the report all focus on competition because of
the dynamic nature of the US market. The American market has the
unique ability to easily replace one exporter’s products with another
if products do not conform to price and quality expectations. This
section profiles US agrifoods import competitors. A frequency
analysis is used to determine the top overall competitors. Then
competitors within specific subsectors (baked goods, preserved
meat, cheese, olive oil, chocolate, jams, and processed fish) are
analyzed. Because competition is the focus, the analysis highlights
countries that Portugal has potential of outcompeting in the US
market. Drawing on these analyses, the section makes preliminary
recommendations for Portuguese SMEs in specific subsectors based
on US import competition. The section aims to provide a snapshot
of competition in the US agrifoods market that begins to form a
picture of competition and opportunities for Portuguese SMEs.
2.2 Top Countries Exporting to the US
This section presents the most competitive agrifoods exporters

and addresses the general state of competition in the US agrifoods
market. The following section reflects the specific state of US
import competition in the seven agrifoods subsectors selected
for assessment. The discussion includes the top seven countries
exporting agrifoods to the US, Portugal’s ranking, and Portugal’s
most significant US competitors. Through a frequency analysis of
the subsectors in Section 2.3 from 2011 to 2014, the report finds that
the top US agrifoods exporting countries are:
»» Italy
»» Canada
»» France
»» Germany
»» Mexico
»» UK, tied with
»» Spain.5
5 See Appendix 3 for the complete listing of 45 countries.

• 23
It is not surprising to see Italy and France in the top three countries
exporting agrifoods to the US considering the vast popularity of
Italian and French food in the US, particularly within the food
service industry and the cheese, olive oil, chocolate, jams, and
processed fish subsectors. Italy was a top US exporting country 23
times in four years; whereas, Canada, Italy’s nearest competitor,
was a top US competitor 21 times in four years. Canada’s
competitiveness in the US agrifoods market is likely due to its
geographic proximity to the US and preferential trading agreement,
the North American Free Trade Agreement (NAFTA).
While Mexico – a top agrifoods exporting country 13 times from

2011 to 2014 – is similarly party to NAFTA, its US import success
is also contingent on the high demand for Mexican food and
authentic Mexican products in the US. Given the growing domestic
population of first and second-generation Mexican-Americans,
imports of certain processed or prepared foods have declined
and will potentially continue to do so as they are now increasingly
domestically produced. It is unlikely, however, that fresh as opposed
to processed Mexican imports, such as fruit and vegetables,
meat, and dairy products will decline in the US. Perhaps what is
most surprising about the frequency analysis is how competitive
Germany has been and continues to be.
It is clear that the most competitive countries exporting agrifoods to

the US are either NAFTA partners or European, and this preference
for European agrifoods products presents opportunities for
Portuguese SMEs:
»» Belgium-Luxemburg
»» Greece
»» Hungary
»» Israel
»» Japan
»» Norway
»» Philippines
»» Tunisia
»» Uruguay
»» Vietnam.
The frequency analysis reveals a mix of developed and developing

countries that are top US agrifoods exporters with the same
frequency as Portugal. Therefore, it is difficult to identify what
links these countries other than that they appear to be highly
competitive within a single subsector. Greece and Tunisia, for
example, were also top competitors across all four years in the US
imported pure olive oil market. Hungary and Uruguay were top
exporting countries (2011-2014) in preserved meat; the same can be
said for Norway in cheese, Belgium-Luxemburg in chocolate, and
the Philippines and Vietnam in the processed fish subsector. The
only US competitor from the above list for which this does not hold
true is Japan, which was twice a top country exporting baked goods
(2011-2012) and twice in processed fish (2011-2012) on the US market.

2.3 US Agrifoods Market Competition
After profiling the top countries exporting agrifoods to the US, this
section explores the countries dominating the US market for seven
agrifoods subsectors by examining five-year trends. The subsectors
were selected for analysis within the US market due to their
Portuguese export volume, product value, and SME industry factors,
such as production levels and values. The analysis of US competition
begins by profiling baked goods. This is followed by preserved meat,
cheese, pure olive oil, chocolate, jams, and processed fish.6 This
assessment of internal competition across subsectors provides a
solid foundation for the report’s recommendations to Portuguese
SMEs on export development and growth for the US market.
2.3a Baked Goods

The subsector category of baked goods features a large range of
products, including desserts, cakes, pastries, brownies, breads,
biscuits, and related products. The report opts to examine baked
goods for two key reasons. First, the global competition for baked
goods exports is led by European countries, such as Germany (13%
global market share), Belgium-Luxembourg (7% global market
share), and France (6.8% global market share). Unlike other markets,
US baked goods imports are not dominated by a small number
of countries. It is relatively diverse, and market diversity presents
solid opportunities for SMEs. Of course, there will always be large
multinational mega-corporations that make up a significant portion
of US imports, such as Grupo Bimbo (Mexico). Second, the US is the
world’s primary importer of baked goods. The 2014 global baked
goods market was valued at $31.4B; US imports comprised 11% of
the total. With such a large market, the opportunity to grow as US
exporter could prove very lucrative for SMEs.
Out of almost 1,220 global products, baked goods are the 779th most
complex and 106th most traded product (OEC 2014). In 2014, the US
import market value for baked goods reached $3.55B, a lucrative
market value for products with typically low overhead costs. Figure
2.1 shows the US market share for baked goods imported in 2014.
Of the $3.55B total US import market value, Figure 2.2 shows each
of the top ten 2014 exporting countries’ market value, compared to
Portugal’s market share (.065%).7
6 All Harmonized Tariff System (HS) codes are featured in Appendix 2 in Volume Two of this
report.
7 The terms market value and market share are used consistently in the report. Market value
is measured in currency, and share is a percent.

• 25
Figure 2.1 – Top Ten Countries Exporting Baked Goods to the US
(2014)
◼ Canada
◼ Mexico
◼ Italy
◼ Germany
◼ France
◼ India
◼ UK
◼ Thailand
◼ China
◼ South Korea
◼ Portugal
Figure 2.2 – US Baked Goods Imports Market Value (Millions) By

Country (2014)
◼ Canada
◼ Mexico
◼ Italy
◼ Germany
◼ France
◼ India
◼ UK
◼ Thailand
◼ China
◼ South Korea
◼ Portugal
In 2013, the US baked goods import market value was $3.47B.

Figure 2.38 shows the top ten US exporting countries’ market
share. Portugal held 0.059% of the market, and value was $2.06M.
Some notable changes from 2013 to 2014 include Italy overtaking
Germany as the third largest US baked goods exporting country,
and France replacing India as the fifth largest exporting country
due to a 16.6% value increase. This highlights just how close the
competition is between countries exporting to the US. Portugal also
increased its competitiveness by enhancing its market share by 10%
and value by almost 12%.
The 2012 US baked goods market was valued at $3.29B. Figure 2.4
reveals the top ten exporting countries’ US market share. Portugal’s
share was 0.063%,10% higher than 2013, but from 2012 to 2013,
Portugal’s market value remained unchanged. This could be due to
8 See Appendix 1 in Volume Two of this report for all Figures after 2014 across product
categories.

falling commodity or product prices in specific product categories,
currency fluctuations, or increased import costs. However, the
overall US market’s value increased, which makes it unlikely
that commodity or product prices were responsible, and further
investigation reveals the dollar-Euro exchange rate remained fairly
steady between 2012 and 2013. The most likely explanation is that
Portugal exported more product categories with a lower price
point than those with a higher product price, but because the
level of analysis is subsector, not product categories, this cannot be
verified. Other notable changes include Japan and Israel losing their
positions as top US baked goods exporting countries, and Thailand
and the UK becoming top countries exporting to the US, in the
seventh and eight positions, respectively.
In 2011, the US import market was $3.1B. Figure 2.5 shows the top
ten exporting countries’ US market share; Portugal’s market share
was 0.073% – the highest of all four years – and value was $2.25M,
second highest across the four years. Changes from 2011 to 2012
included Israel breaking out of its three-way tie with Denmark and
Japan, rising to eighth place. India also edged out China as the fifth
largest exporting country. The total imported baked goods market
value grew $19M (6.1%). Portugal’s market share and value fell
relative to the 6% US market growth.
Compared to highly competitive countries exporting to the US

like Canada (48% 2014 US market share) and Mexico (19% 2014 US
market share), Portugal does not hold a significant share (greater
than 0.0%) of the US baked goods imports. The total market value
of US baked goods imports has been growing slowly but steadily,
up 14.5% from 2011. Portuguese SMEs should examine existing
Portuguese subsector export strategy with particular attention to
what occurred between 2011 and 2013, where there was a consistent
decline in exports, and the small improvement that occurred
between 2013 and 2014. This investigation could help SMEs’ identify
a US partner with consistent product needs that may prevent high
degrees of export level variance witnessed across these years, which
has detrimental effects on SMEs’ sustainable development.
In this scenario, SMEs would monitor monthly Portuguese exports

to the US and at the end of each quarter, seek to adjust exports
to ensure consistent volume is maintained among importers
and distributors. A distributor interviewed said that their buying
process is almost entirely customer-driven and: “beyond this, buying
is based on practical things like how many orders we have for a
particular product. We supply supermarket chains, warehouses, and
distribution centers, and so we usually do large orders.”9 Therefore,
consistent export volume, as the report will reiterate, is key to
success in the US market.
Even if Portugal marginally increased its baked goods market share

from year to year or was able to keep pace with market growth,
SMEs could profit immensely. For example, if this market continues
to grow at its average annual rate of 3.4% and Portugal kept pace
with the market, imports from baked goods could equal
9 Interview 2, Appendix 5.

• 27
in $2.54M 2018. While this growth is modest, focusing on a 3.4%
annual growth rate would help Portugal work towards more
consistent export volume and market value and share growth. There
is room for development and growth in the lower end of the export
value range; keeping pace with this market would foster Portugal’s
ability to stay in the top 50 US import countries, slowly working
towards the top 40.
It appears some of Portugal’s competitors – in the top 50 countries

exporting baked goods to the US – have utilized comparative
competition analysis to effectively set sales targets and overtake
competitors in the US market. In 2012, Portugal was the 48th
largest US baked goods exporting country; Russia was the 42nd,
and Ethiopia was 54th. In 2013, Portugal was 49th, Russia was 41st,
and Ethiopia was 51st. In 2014, Portugal fell to 51st while Russia rose
to 39th and Ethiopia to 40th. As Ethiopia has demonstrated, large
gains are possible in this market; within three years, they rose 14
positions to outcompete Portugal and almost outcompete Russia.
With consistent and targeted export development, growth, and
competition strategies, Portugal could traverse from a top 50 to top
40 to top 30 US exporting country within a decade.
2.3b Preserved Meat

The report assesses competition in the subsector category of
preserved meat and, following, the specific product category of
cured ham for a few reasons. First, European countries dominate
the global and US markets for preserved meat. In 2014, these
countries held 74% of the global and 62% of the US market for
preserved meat. Italy alone enjoyed a 46% import share in US in
this year. While Europe possess an indomitable advantage, the
US market has unique features detailed in this section, as well as
Sections 3, 4, and 5, that affect US competition.
The second reason this subsector was selected for review is that
it poses interesting challenges for any European country’s export
development. In 2012, the US import market for preserved meat
declined by $14M. US imports of cured ham have also been
declining, but the product’s popularity has not. There is a growing
popularity of charcuterie and similar products in the US – fostered
by effectively marketing the products as luxury and gourmet –
making it one of the hottest, on-going trends (Bieler 2012).
Sections 5.2b and 5.3b will assess whether the growing popularity
of preserved meat will offer a sustainable future for European
exporters or whether the “localvore” trend, a preference for local
or domestic products, will further diminish European imports.
When asked what most influenced one importer / distributor’s
purchasing decisions, he instantly replied: “that the product is local
and exclusive to us.”10 Secondary source research suggests that
the localvore trend is in competition with the luxury and gourmet
trend, which is largely believed to be the product of European
travel, where American demand can be built through educational

and product sampling campaigns. When Americans consume
European foods in Europe, they are substantially more likely to buy
products from the country where they consumed that product.
However, a leading US trade association said that with the exception
of olive oil, which is seeing a strong trend towards local / domestic
preference over imports, countries exporting to the US have difficulty
competing in specialty products, such as preserved meat and cheese
from particular regions.11 Again, Section 5 explores developments in
the US preserved meat import market in further detail.
A third reason this market is examined is that local trends are

not only affecting European preserved meat imports. Canada, for
example, holds 38% of the 2014 US preserved meats market, and
it too will suffer from a preference for American-only preserved
meat. Canada and Italy occupy almost 90% of the US import
market; access and growth in this market will be challenging for
SMEs – a key reason this product was selected for assessment.
Similar challenges to SMEs are further discussed in Section 6.2a.
This section continues by focusing on competitiveness in the US
preserved meats import market.
Out of almost 1,220 global products, preserved meat is the 339th

most complex and 484th most traded product (OEC 2014). Figure
2.6 shows the top 2014 exporting countries’ US market share,
and of the relatively small $174M US import market value, Figure
2.7 lists each of the top ten exporting countries’ market value. In
this year, 22 countries exported preserved meat to the US, and
Portugal was not one of them.12 The report parties investigated why
Portugal did not exported preserved meat to the US, knowing the
quality of their products. Portugal is not on the US Department
of Agriculture, Food Safety and Inspection Service approved list
of eligible exporters of meat products. Very recently, Portugal
was one of 14 countries downgraded to negligible risk for bovine
spongiform encephalopathy (mad cow disease) – a key explanatory
factor for Portugal’s lack of export eligibility in the US (Sandler,
Travis & Rosenberg 2016i). To gain US market access, SMEs must
encourage Portuguese export authorities to begin work with the
US Department of Agriculture Animal and Plant Health Inspection
Service (APHIS) to conduct slaughter and processing facilitates
audits and complete a concurrent certification process that
will allow Portuguese preserved meat exports to the US. More
information about this process and relevant US governmental
agencies is available in Section 4.3a.
11 See Interview 12, Appendix 5.
12 This finding was cross checked with both OEC (2014) and Comtrade (2016).

• 29
Figure 2.6 – Top Ten Countries Exporting Preserved Meat to the
US (2014)
◼ Italy
◼ Canada
◼ Spain
◼ Germany
◼ Uruguay
◼ Hungary
◼ Denmark
◼ Poland
◼ Netherlands
◼ Sweden
Figure 2.7 – US Preserved Meat Imports Market Value (Millions)

By Country (2014)
◼ Italy
◼ Canada
◼ Spain
◼ Germany
◼ Uruguay
◼ Hungary
◼ Denmark
◼ Poland
◼ Netherlands
◼ Sweden
The 2013 US preserved meat import market value was $170M.

Figure 2.8 highlights the top ten exporting countries’ US market
share. Some notable changes in this market from 2013 to 2014
were that there were only 17 exporting countries, and Denmark
displaced Poland as the seventh largest preserved meat exporter
to the US. The UK and Mexico imported vastly less, but Sweden
entered the US preserved meat import market with a significant
0.21% share. Italy and Canada – the two largest US preserved meat
exporting countries – both saw share increases. The Netherlands
also increased its market share by 225% and its total market value
increased by 2.53% ($4M).
In 2012, the US preserved meat import market value was $168M.

With 22 competitors in this year, Figure 2.9 details the top ten
exporting countries’ US market share. The most remarkable change
in this market was that Nigeria – in the only year it imported – was
the sixth largest exporter on the US market. Other notable changes

from 2012 to 2013 were that Uruguay’s market share was reduced
by half; France, and Chile dropped from the top ten, which led to
the Netherlands, Denmark, and Mexico becoming top ten countries
exporting to the US. The 2011 US import market topped out at
$182M, the highest value across four years. Figure 2.10 shows the
top exporting countries’ US share of this market value. This year also
saw more preserved meat export competitors than other years (24),
though the market declined $14M (7.7%). Other notable changes
from 2011 to 2012 were that Uruguay doubled its market share – an
unsustainable development when compared to 2012 and 2013;
Chile and France also enhanced their market share, which pushed
Ireland out of their 2011 three-way tie. Italy gained an impressive 11%
market share, and Canada lost 13%, swapping in rank.
This is perhaps the most interesting US import market, as competition

is extremely low with an average of 21 export competitors. The low total
market value is most likely why countries do not compete more in
this subsector. Compared with the $3.35B average annual US market
for imported baked goods with many more product categories in the
subsector, the average annual US import market for preserved meat
is only $173.5M. The lack of fierce or consistent competition presents
excellent opportunities for SMEs. For example, Nigeria imported for
only one of the four years and was a top ten exporting country in the
only year it competed; the Netherlands also took advantage of the
lack of competition to increase its imports 225% in one year, nearly
an additional half million dollars. An increase of half a million dollars
among a handful of exporters from one country has transformative
potential for SMEs. With so few competitors and only a handful of
competitors that consistently import within this subsector, this is
one of the only markets where one year of importing can present an
opportunity to be in the top ten, and the advantage of being a top ten
exporting country is origin and brand recognition, which can lead to
increase demand.
After becoming eligible for US preserved meat exports, Portugal’s

long-term objective in this market could be to compete at a same
level as Spain, which held 8.3% of the US market in 2014. Given
that the majority of Spanish preserved meats are marketed with
the “Iberico” designation rather than “Spain”, the report argues
that SMEs can effectively build their US market using the Iberico
designation. This strategy takes advantage of Americans’ lack
of European geographic awareness and high regard for Iberico
preserved meat. One retailer advised the Portuguese agrifoods
exporters will have more sales and marketing success as the
Portuguese cuisine becomes more popular and recognized with
American consumers. “The Spanish have done a really good job of
marketing their hams. That’s because there’s a big demand for their
food here.”13
Within the first three years, Portugal could target outcompeting

France, the UK, and Sweden. Within five years, Portugal could aim
to overtake the Netherlands, Poland, Denmark, and Hungary in this
market. Within eight years, Portugal could target outcompeting

• 31
Germany – only feasible if SMEs can establish consistent export
volume. By the tenth year, Portugal could have a greater US market
share than Spain by transforming perceptions and demand for
Iberico meat. The assumption behind this calculation is that Spain
and all other competitors will lose portions of their US market share
to Portugal every year.
This is one of the most exciting markets for Portuguese SMEs

because US demand for preserved meat is increasing, and
though this maybe more domestic than import demand, a well
thought out Iberico marketing campaign can continue to drive US
demand for imported preserved meat. An educational campaign –
complimented with product sampling – that informs the American
consumer about the importance of origin in regards to product
quality, pricing, reputation, and consistency can help establish
American demand for Portuguese preserved meat. Additionally,
Portuguese companies do not currently export to the US, meaning
that SMEs will not have to outcompete their larger, domestic
competitors. While Italy and Canada clearly dominate this market,
there are genuinely transformative opportunities for SMEs. If an
individual SME or a small “club” imported preserved meat to the
US, in a single year it could gain $2M in revenue, much as Nigeria
did. This sort of revenue presents a rare opportunity for SME growth.
Because the scope of opportunity is so great for SMEs, the report
examines a key product category within this subsector: cured ham,
one of Europe’s most consumed preserved meat products.
Out of over 4,600 product categories within the 1,220 global export
subsectors, cured ham is the 1277th most complex and 3220th most
traded (OEC 2014). In 2014, there were six cured ham exporters on
the US market, and Figure 2.11 provides their US market shares. Of
the small $10.7M US import market, Figure 2.12 reveals the top six
cured ham exporting countries’ market value. Because Portugal
was not eligible to import any preserved meat subsector products
into the US, they similarly not featured in this four-year analysis.
However, this analysis will give SMEs a solid understanding of their
cured ham competitors in the US market.

Figure 2.11 – Top Countries Exporting Cured Ham to the US
(2014)
◼ Spain
◼ Canada
◼ Italy
◼ Poland
◼ Dominican Republic
◼ UK
Figure 2.12 – US Cured Ham Imports Market Value (Thousands)

By Country (2014)
◼ Spain
◼ Canada
◼ Italy
◼ Poland
◼ Dominican Republic
◼ UK
In 2013, there were five countries exporting cured ham to the US in

the $8.75M US market, and Figure 2.13 shows their market shares.
Some notable changes in this product market from 2013 to 2014
were that the Dominican Republic began exporting to the US with
a significant market share of 0.5%, and Poland, after two years not of
not importing, reentered the US market with a 0.79% market share,
compared to its 2011 0.05% share. Germany did not import this
year, and Italy, the third largest exporting country, used Germany’s
absence to increase its share by 5.6%.
The 2012 cured ham US import market value was $9.46M – a 30.4%
value loss from 2011 ($4.14M) – and Figure 2.14 reveals the seven
exporting countries’ market share. From 2012 to 2013, Spain appears
to have taken 13% of Italy’s market share. The number of countries
exporting to the US decreased; this could have been an effect of the
2013 European horse meat scandal, but the countries that failed to
import were not European (Chile and Mexico). In 2011, the US cured

• 33
ham import market topped out at $13.6M; similar to the preserved
meat sector, this product category also had its strongest year in
2011. Figure 2.15 shows the six exporting countries’ share of this
value. Some notable changes in this product category were that
Poland did not import in 2012, as it did in 2011, and Italy’s market
share decreased by 6%. The UK was outcompeted by Chile, which
utilized a fractional market share increase to rise as the fourth
largest exporting country.
Cured ham is another interesting market for Portuguese SMEs,

albeit it not as profitable as some others. With such a small number
of US competitors, SMEs have tremendous scope of opportunity
for export development in the preserved meat subsector overall. In
this market, irregularity is common, although the report continues
to encourage regularity as a mechanism to build reputation with
importers, distributors, and retailers and brand recognition with
consumers. For example, Poland disappeared from the list of US
cured ham exporters in 2012 and 2013 but reentered in 2014 with a
market share much stronger than what it was in 2011. This is positive
for Portuguese SMEs as Sections 1 and 2.3a have highlighted that
Portuguese competitiveness suffers from irregularity in export
volume. The report would highly recommend that SMEs work
with national officials in meat or agricultural exports to become
eligible for exporting cured ham, as there is a growing US market,
Portuguese cured ham is highly regarded in other foreign markets,
and US competition is inconsistent and infrequent.
Spain’s average share of this US import market was 50.5% but its
share was as high as 58% in 2013 and 2014. Canada’s average share
was 36.5%, and its share was high as 38% in 2013 and 2012. There
is a clear US market preference for Spain’s cured ham – and this
report advises how Portuguese SMEs can take advantage of this
preference in Section 5.2b — but there is opportunity despite Spain
and Canada’s dominance. SMEs’ best target within the first year’s
importing will be a consistent market share, comparable to the UK
(four-year average share of .32%). This goal is highly attainable. Other
than Spain and Italy, the UK is the only other consistent European
country exporting cured ham to the US. Italy’s imports have been
declining at an average annual rate of 21%, and its average US
market share over these four years was only 12.4%. Within five to
ten years, Portuguese SMEs should target outcompeting Italy
in this US import product category, and assessing Italy’s recent
competitiveness in this market, this goal appears highly attainable.
While the report maintains that the preserved meat subsector

presents excellent opportunities for Portuguese SMEs, when
exporters like Germany pull out of markets, it may be indicative
of the market’s lack of profitability. Since 2011, these two US
imports have been in decline, from 2014 to 2015 a 50% decline for
preserved meats subsector imports and a 65% decline for cured
ham (Comtrade 2016). These findings suggest that either demand
for imported preserved meats is low, US demand in general is low,
or there are significant market access barriers for preserved meat
products in the US, something discussed further in Sections 4 and 5.

2.3c Cheese
The next subsector includes all cheese and curds, and cheese
is included in the report because US demand for imported
cheeses appears insatiable at $1.29B in 2014 and growing steadily
at an average annual rate of almost 4%. This is on top of a
domestic cheese producing industry that experienced 23 years of
uninterrupted growth, valued at $43.1B in 2013 (IDFA 2015). Europe
produces 88% of imported cheese on the US market. Out of almost
1,220 products, cheese is the 661st most complex and 103rd most
traded product – the most highly traded product in the report (OEC
2014). Figure 2.16 gives the top ten exporting countries’ share of the
cheese market for 2014. Of the $1.29B, Figure 2.17 provides each
exporting country’s market value, compared to Portugal’s .31%.
Figure 2.16 – Top Ten Countries Exporting Cheese to the US

(2014)
◼ Italy
◼ France
◼ Netherlands
◼ Spain
◼ Switzerland
◼ UK
◼ Denmark
◼ Norway
◼ Ireland
◼ Germany
◼ Portugal
Figure 2.17 – US Cheese Imports Market Value (Millions) By

Country (2014)
◼ Italy
◼ France
◼ Netherlands
◼ Spain
◼ Switzerland
◼ UK
◼ Denmark
◼ Norway
◼ Ireland
◼ Germany
◼ Portugal

• 35
In 2013, the US cheese import market was valued at $1.2B, and
Figure 2.18 gives the top ten exporting countries’ US market share.
Portugal’s share was 0.3% and value was $3.55M. From 2013 to 2014,
market value increased approximately $90M, the Netherlands
outcompeted Switzerland, and Germany also outcompeted Canada
to become the tenth largest exporting country. While the UK and
Norway increased their market shares, Italy’s share continued to
decline as it had done in recent years.
The 2012 US import market value was $1.14B. Figure 2.19 shows
the top US cheese exporters’ market share. Portugal’s held 0.27%,
a value of $3.08M. Notable changes were that US import market
increased $60M; Spain climbed to fourth place, and New Zealand
rose to the eighth largest exporting country. France increased its
market share by 2%, and Portugal, too, slightly increased its market
share, which resulted enhanced value by 15.3% ($470K). In 2011,
the US cheese market value remained consistent at $1.11B. Figure
2.20 shows the top exporting countries’ market share; Portugal’s
occupied 0.38% of the US market and reached its highest value
across four years, $4.23M. There were many competition changes in
this market from 2011 to 2012. Italy, France, Norway, Denmark, and
Finland become less competitive; some by sizeable amounts (2%
share loss), and others by less significant amounts (.1%). The UK, New
Zealand, and Ireland become more competitive. Portugal was less
competitive; a 29% market share decline resulted a $1.15M loss, as
the total imported cheese market continued to grow.
Also, 2.7% of all 2014 Portuguese agrifoods exports to the US were

in the cheese subsector. This made it the sixth largest Portuguese
US agrifoods export subsector. Despite Portugal’s relatively small
US market share of just 0.31%, Portugal still gained a considerable
market value of almost $4M (OEC 2014). Even a small boost in
market share could equate to a significant amount of value for
Portugal. Because of these reasons, it is worthwhile to determine
how Portugal can better tailor its imports to the US market.
Cheese is an interesting market that Europe dominates;

competition is fierce, and changes occur frequently, which indicates
that competition is fluid and consumer preferences are key. This
is encouraging for Portugal, which held a significant share (0.31%)
of the US import market in 2014. The market shows consistent,
uninterrupted growth, and demand for Italian cheese is declining,
while demand for French cheese fluctuates significantly. From
market research, it appears that Americans – particularly in more
eclectic markets like in the Pacific Northwest, New York, Florida,
or even Tennessee – are starting to shift away from traditional
parmesans and bries, although demand for these cheeses will never
disappear entirely. Americans are seeking out new, undiscovered
cheeses, and this market appears to mirror changes occurring
in the US wine industry. Several industry experts suggested that
cheese with a “good story” is hot in the US market presently, and
Portuguese artisan cheesemakers should seize this opportunity to
develop a strong export strategy and be able to “tell their story” or
position their brand effectively.
Portugal’s competitiveness in this US market has been somewhat

irregular, and it is essential that SMEs are aware that their “stories”
and marketing strategies are a key driver for US demand. After
its sudden 28.9% dip in market share in 2012, Portugal has
been recovering at an average 4.8% market share growth rate.
If Portuguese exports continue on this trajectory, outpacing the
subsector’s average growth rate, it could make Portuguese cheese
much more competitive. However, sustainability at such a high
growth rate will be difficult to maintain as US imports become
more significant. The report recommends that Portugal follow
Norway’s strategy.
While Norway fell from being the eighth largest country exporting
cheese to the US to tenth in 2012, it has risen one spot every year
since then. The sustainable element of Norway’s competition
lies within its market share, which has not increased. Because of
the volatility and irregularity of Norway’s closest competitors, it
has managed continued growth simply by maintaining its 3.4%
market share. Because the US market continues to grow steadily,
maintaining its market share has proven a highly effective growth
tactic for Norway – a $3.4M increase from 2013 to 2014 alone. If
Portugal grew its market share to 0.325% (keeping with its average
4.8% growth rate) and the US market continues to grow at 3.8%,
maintaining market share translates into a one-year $372K market
value increase. Portugal is currently 28th of 69 US cheese exporting
countries, and by utilizing this strategy, Portuguese SMEs could
foster a potential top ten ranking in the next ten years. This is not
unattainable, especially considering how New Zealand began as the
eighth largest US cheese exporting country in 2012.
2.3d Pure Olive Oil

This report assesses the pure olive oil (Harmonized Tariff System
code 1509) – as opposed to olive oil (Harmonized Tariff System
code 1510) – subsector for key reasons. The latter subsector (1510)
is “unfit for human consumption”, considerably less traded, less
demanded, and more processed. Second, imported pure olive oil
continues to be highly demanded in the US, with 2016 demand
already up 8% since 2015 (Kerner 2016). In 2014, 89% of US imports
came from Europe – predominantly Italy (48% of the 2014 US
market) and Spain (38%). Third, Italy’s US imports have also been
in consistent decline, and other countries are competing for the
market shares Italy is losing. While part of Italy’s decline is due to
a 2014 to 2015 crop blight that resulted in a lower yield, there are
continuing opportunities for Portuguese SMEs. Fourth, Portugal
was the fourth largest European exporter to the US for pure olive
oil and ninth largest overall exporter to the US in 2014. Pure olive
oil was one of Portugal’s largest agrifoods export products in 2014,
making up 6.2% of its global agrifoods exports and 3.4% of its US
agrifoods exports. The challenge for SMEs in this market will be
competing alongside large companies with an extensive history of
US importing, discussed further in Section 6.2a.
Out of almost 1,220 global products, pure olive oil is the 888th most
complex and 394th most traded product (OEC 2014). While the
US market for olive oil is almost as lucrative as cheese, pure olive
oil is not as frequently traded; cheese is the 103rd most traded,

• 37
compared to pure olive oil’s rank as 394th. Figure 2.21 details the top
ten exporting countries’ US market share for in 2014. Of the $1.08B
total US import market value, Figure 2.22 provides the top exporting
countries’ value, where Portugal is the ninth largest with a value of
$5.04M.
Figure 2.21 – Top Ten Countries Exporting Pure Olive Oil to the
US (2014)
◼ Italy
◼ Spain
◼ Tunisia
◼ Greece
◼ Morocco
◼ Turkey
◼ Chile
◼ Argentina
◼ Portugal
◼ Lebanon
Figure 2.22 – US Pure Olive Oil Imports Market Value (Millions)

By Country (2014)
◼ Italy
◼ Spain
◼ Tunisia
◼ Greece
◼ Morocco
◼ Turkey
◼ Chile
◼ Argentina
◼ Portugal
◼ Lebanon
The 2013 US pure olive oil import market value was higher than 2014
at $1.11B, and Figure 2.23 shows the top ten exporting countries’
share. Portugal held 0.52% of the US market, which equates to
$5.79M. The most notable change was that Spain increased its
market share by 18%, an almost $200M influx, despite the total
market decreasing by approximately $30M from 2013 to 2014, partly
facilitated by Italy’s 2% and Tunisia’s 5.5% market loss. Less notable
changes were that Turkey and Greece switched positions as the
sixth and fourth largest exporting countries. Argentina became
much less competitive and lost 2% of its US market share; between

Italy, Argentina, and Tunisia, almost 10% of this market fluctuate
between competitors. Portugal also became less competitive but
only lost .03% of its market; however, this fractional loss resulted in
three-quarters of a million-dollar value loss.
In 2012, the US olive oil import market value was $943M; Figure 2.24
shows the top ten exporting countries’ US market share. Portugal’s
market share was 0.6%, the second highest in these years, and
value was $5.62M, the third highest in this year span. From 2012 to
2013, Turkey became more competitive and Australia and Greece
less so, and Lebanon entered the top ten rankings, which displaced
Portugal from ninth position. Italy lost 5% of its market share while
the total market value increased $167M. The 2011 US pure olive oil
import market value was higher than 2012 at $953M. Figure 2.25
gives the top exporting countries’ US market share when Portugal’s
share was 0.88% and value was $6.53M, both the highest of all four
years despite a $10M total market decline. Some notable changes
were that Morocco, Australia, and Portugal were less competitive;
Turkey more than tripled its US market; and Chile doubled its
market share, perhaps at the expense of Argentina, whose share
dropped by more than half.
The US pure olive oil import market is not stable or steady; one
year the market grows, and the next it declines, and competitors
lose considerable market shares from year. Consider Tunisia’s 5.5%
loss and Spain’s 18% gain from 2013 to 2014, or Italy’s 5% loss from
2012 to 2013. From 2014 to 2015, the US import market rose by
8.3% (Comtrade 2016). It will be essential for SMEs exporting olive
oil to further investigate the US olive oil market in 2016, which will
reflect two recent developments: the olive blight in Europe from
2014-2015 and a growing demand for domestic olive oil in the
US. The European continent suffered especially bad weather that
affected olive oil production, but it appears the US supplemented
its European imports with those of non-affected countries (Parsons
2014). One importer hypothesized: “maybe that’s why olive oil is
going down [in sales] for us; a lot of exporting countries have had
to increase their prices because of various reasons, and consumers
are trying different oils that are [more heavily] marketed here like
coconut oil or nut oils”.14
However, instability could create opportunity for SMEs, especially

as large exporting countries scramble to recover their 2015 US
market loss. The key will be in understanding how to benefit from
other countries’ exporting to the US losses, as Spain has done
(Olive Oil Times 2014; Olive Oil Times 2015, 2015i). It is unlikely that
SMEs can outcompete Italy, Spain, or even Greece in the next few
years, but through a collaborative marketing strategy that aims
to improve knowledge and availability of Portuguese olive oil to
US consumers, SMEs can aim to increase competitiveness among
Portugal’s nearest competitors – such as Australia, Turkey, Lebanon,
or Argentina – which saw its market share drop from 3% in 2013 to
just 0.97% in 2014. Because pure olive oil makes up a considerable
share of Portugal’s agrifoods exports, SMEs may find that a well-

• 39
executed marketing campaign and US partner search more than
justify investment in export development for the US market – the
second-largest pure olive oil import market.
2.3e Chocolate
The chocolate subsector includes most cocoa and dessert products,
and the report examines this subsector for two key reasons. First,
the US is the world’s top chocolate export destination; it imports
more chocolate than Oceania, Africa, and South America combined.
The top global chocolate exporters are European, but in the US,
approximately 70% of chocolate is imported from Canada and
Mexico. It will be essential to understand if Portuguese SMEs can
compete with North American market dominance. Second, the
countries that import chocolate to the US change frequently, and
the changes that occur as countries gain and lose small market
shares represent millions of dollars. This characteristic often
presents opportunities for SMEs to gain large revenue shares if able
to gain market access and market their products effectively.
Out of almost 1,220 global products, chocolate is the 448th most

complex and 131st most traded product – the third most highly
traded product in the report following cheese and baked goods
(OEC 2014). Figure 2.26 highlights the top exporting countries’ US
market share for chocolate in 2014. Of the $2.31B US import market,
Figure 2.27 shows each of the top ten 2014 chocolate exporting
countries’ US market value, compared to Portugal’s .01% share.
Figure 2.26 – Top Ten Countries Exporting Chocolate to the US

(2014)
◼ Canada
◼ Mexico
◼ Germany
◼ Belgium-Luxembourg
◼ Switzerland
◼ France
◼ Italy
◼ Ireland
◼ Poland
◼ UK
◼ Portugal

Figure 2.27 – US Chocolate Imports Market Value (Millions) By
Country (2014)
◼ Canada
◼ Mexico
◼ Germany
◼ Belgium-Luxembourg
◼ Switzerland
◼ France
◼ Italy
◼ Ireland
◼ Poland
◼ UK
◼ Portugal
In 2013, the US chocolate import market was valued at $2.2B.

Figure 2.28 shows the top ten exporting countries’ US market share.
Portugal’s market share was 0.02% and value was $340K. Some
notable changes from 2013 to 2014 were that the market grew by
an impressive 5% ($110M), and France and Canada became even
more competitive. Canada gained a 4% market share, half of which
it appears they claimed from Mexico. The UK also lost a fractional
market share (.4%), a $9M value loss that enabled both Ireland and
Poland to outcompete the UK in the US market.
The 2012 US import market value was $2.1B, and Figure 2.29
provides the top countries’ exporting to the US chocolate share.
Portugal’s market share was 0.01% and value was $239K. The
only changes in this market from 2012 to 2013 were that market
value grew by 4.8%, and Italy outcompeted France. In 2011, the
US chocolate import market was $2.14B. Figure 2.30 details the
top ten’s share of the US market when Portugal’s dropped to
0.01% with a $228K value, $76K less than its 2014 value when
it held the same market share. From 2011 to 2012, the market
uncharacteristically decreased $40M (1.9%), Ghana and Sweden,
both top 2011 competitors, lost their top ten rank, but Poland joined
the top ten in 2012.
Much like in the baked goods subsector, Canada and Mexico are
dominant in this market, in part due to their proximity to the
US. However, while Canada’s share of the US market has been
increasing, Mexico’s has been declining; other top exporting
countries have also declining market shares. The US imported
chocolate market is becoming slightly more diverse with chocolate
growers, such as Ghana, exporting to the US. This is promising for
SMEs, but the international chocolate market is highly dominated
by large companies, such as Godiva (Belgian), Lindt and Sprüngli
(Swiss), and Mondelez International (American), otherwise known
as Kraft, which purchased its competitor Cadbury’s in 2010.
However, of the top ten world’s best chocolatiers, the only mega
chocolate producer listed was Godiva. This indicates that while large
companies dominant US and international markets, their chocolate

• 41
may not always be highly regarded (Intelligent Travel 2012). Section
5.2e explores this further, but at first glance, it appears good news
for SMEs trying to break into a monopolistic market.
Portugal’s market share is not yet significant (0.0% or greater),

and the focus for SMEs should be market access and branding.
It appears that what is hottest right now on the US market – also
discussed further in Section 5.3c – is chocolate with a higher cocoa
percentage, as low as 10% in the US by law but as high as 90%
by consumer preference. SMEs should know whether their target
market is the upscale high-cocoa-content market or the downscale,
lower cocoa-content market; each strategy has its advantages
and disadvantages that affect, among other factors, marketing
and production costs. For some importers or distributors, price is
more flexible than quality, as quality drives consumer demand in
gourmet markets. “[Our purchasing decisions are] more based
on the product than the price. For us, price isn’t the issue; we sell
gourmet and upmarket goods. If a product sells, it sells, price
doesn’t matter. But it also depends if the product fits within the
scope of our business – does it reflect the rest of our products or is
it a one-off that probably won’t sell well with our retail customers.”15
Therefore, SMEs should understand what chocolate market their
products are best suited.
This analysis has shown that there are considerable opportunities for
Portuguese SMEs in the US market, where .4% of the market is worth
$9M and .04% of the market is worth between a half and three-
quarters of a million dollars. The market has shown consistent, almost
5% growth from 2012 to 2014. From 2014 to 2015, the US market for
imported chocolate declined by 15%. Again, Section 5.2e will explore
details about why US demand for imported chocolate has declined,
but there are other factors to consider that may be important for
SMEs. First, the product prices for chocolate have continued to
increase, with the higher cocoa products fetching an even greater
price per product. Global demand is also changing. While high-
income countries are reducing their consumption of lower cocoa
percentage chocolate and more sugar-rich products, demand
for these types of chocolate products is growing in other parts of
the world, such as China and rapidly-developing African nations.
Second, in the global and US chocolate market, there has also been
increased demand for fair trade chocolate and chocolate that is
grown and produced consistent with certain labor standards. These
developments have affected US demand, consumer preferences,
market prices, and chocolate imports. Like olive oil, this is one of the
more challenging subsectors for export development and growth for
SMEs because of these somewhat unpredictable factors.
2.3f Jams
The subsector category of jams includes a range of products,
including fruit jellies, marmalades, and fruit and nut purees and
pastes. The US jams import market has been growing steadily at an
average rate of 4.5% per year, and like other subsectors reviewed,

competition is dynamic, diverse, and highly contested. Dynamic
and diverse competition fosters opportunities for SMEs, but highly
contested competition may place SMEs outside of the scope of this
market. Portugal, overall, is doing well in the US jams market; since
2011, it has more than tripled its market share, and assessing overall
market growth demonstrates that through effective marketing
and collaboration, discussed further in Sections 5 and 6, SMEs have
potential in this market.
Out of almost 1,220 global products, jams are the 841st most
complex and 625th most traded product (OEC 2014), the least
traded out of all subsectors in the report. The total US import
market value is comparable with preserved meat but the product
price is considerably lower. Figure 2.31 highlights the top exporting
countries’ jams market share for 2014, and Figure 2.32 gives each
top exporting countries’ market value of the $253M total US market,
compared to Portugal’s .17% market share.
Figure 2.31 – Top Ten Countries Exporting Jams to the US (2014)
◼ Canada
◼ France
◼ Chile
◼ Mexico
◼ India
◼ Italy
◼ Argentina
◼ Germany
◼ Ecuador
◼ Turkey
◼ Brazil
◼ Portugal
Figure 2.32 – US Jams Imports Market Value (Millions) By

Country (2014)
◼ Canada
◼ France
◼ Chile
◼ Mexico
◼ India
◼ Italy
◼ Argentina
◼ Germany
◼ Ecuador
◼ Turkey
◼ Brazil
◼ Portugal

• 43
In 2013, the US jams import market was valued at $238M, and
Figure 2.33 shows the top ten jams exporting countries’ share.
Portugal’s held 0.07%, a value of $176K and an increase of almost
145% in a single year. Between 2013 and 2014, Portugal became a
significant competitor in the US market, a $15M gain. Other notable
changes included Turkey and Brazil displaced China in the top
ten, and Argentina also entered the top ten as the seventh largest
exporting country. India and Italy became more competitive, and
Germany and Costa Rica declined, although Germany was able to
stay in the top ten.
The 2012 US jams import market value was $229M; Figure 2.34
shows the top exporting countries’ US market share relative to
Portugal’s consistent 0.07% share, which was worth $6K less in
2012 than 2013. From 2012 to 2013, the total market increased 3.9%,
almost $10M. Ecuador and China were less competitive, as was
French Polynesia, a high-income country like the US and Portugal.
Germany – having lost its place in the top ten in 2012, as did French
Polynesia – regained its rank in seventh place (World Bank 2016).
In 2011, the US import market value was $212M. Figure 2.35 shows
the top jams exporting countries’ US market share when Portugal’s
was 0.05%, a $111K value. Notable changes in this market were
Costa Rica rose to the fifth largest exporting country, and Ecuador
greatly improved its competitiveness, as the total market grew
$17M (8%). Though China lost 0.4% of its market share, it overtook
French Polynesia, demonstrating difficulty the small island had in
competing in the US market this year.
The top four US jams exporting countries (Canada, France, Chile,

and Mexico) have a secure hold on the US market, but there are
variations that could change this market composition. For example,
Canada’s market share has been slowly but steadily decreasing
while France’s and Mexico’s have been gradually increasing. The
top four jams exporting countries hold about half of the market,
and the gap between these consistent top four countries exporting
jam to the US and the rest is significant. Costa Rica and India are
consistent competitors for fifth position, and they have become
even more competitive in the last two years. A relatively small shift
in market share can mean the difference between fifth and sixth
place, as it did for India in 2014. Competition among the rest of the
top ten – Ecuador, China, Germany, Italy, and French Polynesia – is
also highly contested.
Portugal’s market share has been increasing, with a 142.9% jump in

2014 from insignificant levels of 0.07% to significant imports at 0.17%.
This is a difficult market to pin down Portugal’s most consistent
competitors, for reasons highlighted throughout the analysis.
Competition is dynamic, diverse, and highly contested, and Table 2.1
makes this highly evident. Table 2.1 lists Portugal’s most consistent
US jams import competitors in this market; entries are highlighted
when competitors are eight or more positions higher or lower
than Portugal in rank, indicating that they were not a consistent
competitor that year. Vietnam is the most inconsistent competitor for
Portugal, but this is more because its rank – except for in 2012 – has
stayed consistent while Portugal’s has continually improved.

Table 2.1 – Portugal’s Competitors in the US Jams Market
(2011-2014)
2011 Rank 2012 Rank 2013 Rank 2014 Rank Average Rank
Portugal 52 44 48 39 46
Hungary 49 53 47 44 48
South Korea 48 49 49 43 47
Malaysia 53 51 43 50 49
Netherlands 60 43 40 40 46
Russia 56 45 51 41 48
Uruguay 51 47 54 53 51
Vietnam 38 46 38 38 40
By calculating each country’s average rank – reflective of its

individual performance rather than rank among competitors –
Table 2.1 reveals that the Netherlands is Portugal’s most consistent
competitor, along with South Korea, Hungary, Russia, and Malaysia.
The report advises that Portuguese SMEs exporting or looking to
export jams continue to monitor these countries’ US imports as part
of their export development and growth strategy, with the goal of
outcompeting Vietnam to move into the top 40 countries exporting
to the US. The table also reveals that export consistency is key for
SMEs, as Portugal aims to establish a more consistent US import
level, similar to Vietnam or South Korea.
Overall, the jams market in the US is performing better than

chocolate, and it is more secure than olive oil and chocolate; the
same might even be said of the US cheese and preserved meat
import market. The US is the second largest jams exporting country
behind Germany, and from 2014 to 2015, there was only a 1.7% US
import decline despite sluggish global trade markets and increases
in domestic demand across these years. Across subsectors,
jams appear to the be the most secure, least risky, and possibly
one of the strongest subsectors for Portuguese SMEs in export
development and growth. Portugal’s existing export development
strategy also appears to be working well; imports have become
significant. Short- and longer-term competition targets have been
laid out, but the most immediate goal will be sustainability through
consistent export volume and competitiveness.

• 45
2.3g Processed Fish
The report turns to the final subsector, processed fish, and within
that subsector, two product categories are isolated for analysis:
»» tuna, skipjack and bonito and other fish, including yellowtail and
pollock.
Portugal is one of the world’s largest fish exporters; processed fish

is Portugal’s third largest agrifoods subsector export to the US, and
Portuguese fisheries are currently expanding to make Portugal even
more competitive in fish exports. The US market is a difficult one;
consumers prefer frozen or fresh fish to preserved or canned. They
also prefer white fish, such as tilapia or catfish, to oily fish, such as
sardines, anchovies, or mackerel – predominant Portuguese fish
exports. While the most consumed fish in the US is fresh or frozen
shrimp, the market for canned tuna and pollock is very large.
Therefore, this subsector and the associated product categories
explored here represent both challenges and advantages, as well as
opportunities for Portuguese SMEs.
The US is the top global importer of processed fish, with a 2014

market value of $1.62B, and Thailand is currently the largest
processed fish exporter, capturing 34% of the US market in 2014.
However, the US Trade Facilitation and Trade Enforcement Act
(Trade Facilitation Act, forthwith) that passed in February 2016,
countries – such as Thailand, where supply chains are linked to
illegal labor practices, such as forced labor and human trafficking
– face potential product expulsion at the US border (US Congress,
Senate, and House of Representatives 2016, cited as HR 644,
forthwith; Smith 2016). As a result, major US canned fish brands,
like Bumblebee, Chicken of the Sea, and generic store brands,
such as Wal-Mart, have been forced to investigate and potentially
replace their current suppliers (Hodal 2016). SMEs that are quick
to respond to US suppliers potential supply gap may find lucrative
opportunities in the US market.
Beginning with the subsector of processed fish, out of almost 1,220

global products, processed fish is the 1102nd most complex and
213th most traded product, more highly traded than jams, pure olive
oil, and preserved meat but less than cheese, baked goods, and
chocolate. Figure 2.36 provides the 2014 US market share for each top
US processed fish exporting country. Of the $1.62B US 2014 import
market, Figure 2.37 shows top ten’s market value, compared to
Portugal’s share .4%. In developing the report subsectors for analysis,
the report parties have learned through their network of Portuguese
industry and business officials that Portugal believes it is not
competitive with Greece in certain categories of fish exports. While
this may be accurate within the single (European) market, this report
provides a Portuguese-Greek processed fish US import comparison.
For 2014, Greece held a .0077% US market share of processed fish
exports; its market value is also provided in Figure 2.37.

Figure 2.36 – Top Ten Countries Exporting Processed Fish to the
US (2014)
◼ Thailand
◼ China
◼ Ecuador
◼ Vietnam
◼ Canada
◼ Philippines
◼ Fiji
◼ Indonesia
◼ Morocco
◼ Mauritius
◼ Portugal
◼ Greece
Figure 2.37 – US Processed Fish Imports Market Value (Millions)

By Country (2014)
◼ Thailand
◼ China
◼ Ecuador
◼ Vietnam
◼ Canada
◼ Philippines
◼ Fiji
◼ Indonesia
◼ Morocco
◼ Mauritius
◼ Portugal
◼ Greece
In 2013, the US import market was valued at $1.72B, and Figure 2.38
shows the top processed fish exporting countries’ US market share.
Portugal’s share was 0.34% ($5.8M value), and Greece’s share was
0.0073% ($125K value). The notable changes in this market were
a continued market decline of 5.8% ($100M) and that Indonesia
outcompeted Morocco. Thailand’s market share continued to slowly
fall by 2% as China’s continued to slowly increase by 1%.
The 2012 US processed fish import market reached $1.79B, the

highest of all four years. Figure 2.39 highlights the top US exporting
countries’ share of this market. Portugal’s share was 0.31%, and
value was $5.52M; Greece’s market share was 0.0087%, a $156K
value. Some notable changes in this market were that total
market value decreased by 3.9% ($70M), and Morocco temporarily
outcompeted Indonesia, Mauritius outcompeted Japan, and
Canada outcompeted the Philippines. In 2011, the US processed
fish import market was valued at $1.55B. Figure 2.40 shows the top

• 47
ten’s US market share, when Portugal held 0.34%, a $5.29M value,
and Greece occupied 0.0094% of the market ($146K). From 2011 to
2012, the Philippines, the third largest exporter, Japan, and Poland
declined in competitiveness, while Vietnam rose to fourth place.
Fiji entered the top ten at seventh position, and the market value
uncharacteristically increased by 15.5% ($240M).
Many economists theorize that markets often self-correct. When this

import market grew at a rate of 15.5% in a single year, it was unlikely
that this growth was sustainable. Indeed, from 2012 to 2014, the US
processed fish import market declined by $170M, almost negating
the $240M increase that the 2011 to 2012 spike precipitated. It
appears as if this spike helped Vietnam and Mauritius but made it
difficult for Poland to keep pace. From 2014 to 2015, the US import
market declined another 14.5%. However, Portugal has done well
by entering the top 25, importing in consistent volumes, gaining
market shares and values slowly over time (despite declines in the
total market), and improving its competitiveness. Table 2.2 takes a
closer examination at Portugal’s nearest US processed-fish import
market competitors, and like Table 2.1 highlights where competition
or US import volume was irregular or inconsistent. The “-“ symbol in
Table 2.2 indicates missing data, which most likely means that the
Solomon Islands did not import to the US or did not import in a
significant volume in this year.
Table 2.2 – Portugal’s Competitors in the US Processed Fish

Market (2011-2014)
2011 Rank 2012 Rank 2013 Rank 2014 Rank Average Rank
Portugal 27 26 25 25 26
France 25 21 26 24 24
Marshall Islands 26 28 32 31 29
Malaysia 28 25 22 22 24
Papua New Guinea 17 27 27 55 32
Solomon Islands - 41 24 26 30
Portugal performed considerably well compared to France and

Malaysia; however, this consistent excellent performance may mean
SMEs will have a harder time gaining access to the US market with
established exporters doing so well. France’s US imports have been
fairly consistent; although it appears that like Vietnam and Malaysia,
France’s imports were also helped by the 2011 to 2012 spike in
US imports. One thing to consider is the US’ rules on labelling of

dolphin-safe processed fish, particularly tuna, which may have
affected imports in these years. The rules previously were limited
to a dispute with Mexican processed fish imports, but to settle
the dispute, the US has extended the rules to all other exporting
countries, and this may impact the post-2016 processed fish market
and TSB product category (Lawder 2016). In continuing to develop
their sustainable export strategies, SMEs should consider France
and Malaysia their primary competitors and work to ensure they are
not outcompeted by the other competitors listed in Table 2.2 in the
years to come.
Moving from the subsector level to the product category level of

analysis, out of over 4,600 product categories within 1,220 global
export subsectors, tuna, skipjack and bonito (TSB) is the 4508th
most complex and 381st most traded product (OEC 2014). Figure 2.41
shows the top exporting countries’ market share in 2014, and of this
$1.04B US import market, Figure 2.42 shows each of the top ten’s
market value, compared to Portugal’s .19% and Greece’s .0002%.
Figure 2.41 – Top Ten Countries Exporting TSB to the US (2014)
◼ Thailand
◼ China
◼ Ecuador
◼ Vietnam
◼ Philippines
◼ Fiji
◼ Indonesia
◼ Mauritius
◼ Colombia
◼ Mexico
◼ Portugal
Figure 2.42 – US TSB Imports Market Value (Millions) By

Country (2014)
◼ Thailand
◼ China
◼ Ecuador
◼ Vietnam
◼ Philippines
◼ Fiji
◼ Indonesia
◼ Mauritius
◼ Colombia
◼ Mexico
◼ Portugal

• 49
The 2013 US TSB import market was valued at $1.11B. Figure 2.43
provides the top ten exporting countries’ share of this market;
Portugal’s market share was 0.16%, a $1.78M value; Greece’s share
was 0.0015%, a $16.2K value. Some notable changes from 2013
to 2014 were that the market decreased by 6.3% ($70M), and
Thailand’s share continued to decline (3%) as China’s continued to
rise (1%), though Thailand remains the top US exporting country,
with four times the market share of China. Like China, Portugal also
gained a small market share in this year.
In 2012, the US import market reached $1.16B, the highest of all

four years; Figure 2.44 highlights the top TSB exporting countries’
share of this value. Portugal’s held 0.11%, a $1.33M value, and
Greece had 0.0011%, a $13K value. Notable changes in this market
were that China and Vietnam exchanged second and fourth
positions, a 2% market share gain for China, and the market value
increased by 4.3% ($50M). The 2011 US import market value was
$983M. Figure 2.45 gives the top ten’s share, with Portugal’s share
at 0.17% ($1.71M). Greece’s did not appear to import TSB to the US
this year. Some notable changes in this year were that Colombia
outcompeted Mauritius, Mexico outcompeted Papua New Guinea,
and Fiji overtook Indonesia for the sixth spot. The total market value
increased by 18% ($177M), and Portugal was able to capitalize on
this growth to increase its US imports slightly.
From 2014 to 2015, there was a 18% reduction in Thailand’s TSB

imports to the US (Comtrade 2016).16 The United Nations, where
Comtrade’s data originates, and their affiliated organizations, such
as the International Organization for Migration, were working with
the Thai fishing industry from 2014 to 2015 to identify and eradicate
forced labor and human trafficking from the Thai fishing (and
shrimping) industry. Importers and a US International Trade Center
analyst interviewed for this report indicated that consumer and
market preferences associated with increasing knowledge of forced
labor in Southeast Asia supply lines, in general, are a likely cause for
this import decline. This report argues that 2015 Thai imports will
continue to decline and 2016 imports will cease, almost altogether.
A large North American fish importer said that they are: “familiar
with the labor issues, of course, and everyone is working with supply
chains to ensure that they are clean. Because we deal mostly in
canned fish and not frozen, Thailand is a big supplier for us. That
may change”.17
A large US distributor contacted for this report is currently facing

lawsuits for continuing to sell Thai fish and seafood products in
the US, and a major Thai-based US importer – also involved in the
same lawsuits – has been under investigation since 2014 for using
forced labor in its supply chain (Milman 2016). If SMEs can respond
dynamically, something discussed further in Sections 4 and 5, the
US TSB import market could present a fortuitous opportunity.
Portuguese companies are already considerable exporters of TSB to
16 A US International Trade Center International Trade Analyst in the Office of Industries,

Agriculture, and Fisheries Division confirmed an 18% drop in Thailand’s canned tuna and
tuna loin US imports.

the US – ranked 17th out of 42 exporting countries for 2014 – and the
US is a growing market for TSB products with clean supply chains.
The other product category within this subsector, other fish,

including yellowtail and pollock (OFYP), is the 3065th most
complex and 1100th most traded product out of over 4,600 product
categories within 1,220 global export subsectors (OEC 2014). Figure
2.46 details the top exporting countries’ 2014 US market share, and
of the $119M total US market, Figure 2.47 highlights the top ten’s
market value, compared to Portugal’s .38%. Greece does not appear
to have imported OFYP into the US from 2013 to 2015 (Comtrade
2016; OEC 2014).
Figure 2.46 – Top Ten Countries Exporting OFYP to the US

(2014)
◼ China
◼ Canada
◼ Thailand
◼ Other Asia
◼ Philippines
◼ Germany
◼ Vietnam
◼ South Korea
◼ Japan
◼ Chile
◼ Portugal
Figure 2.47 – US OFYP Imports Market Value (Millions) By

Country (2014)
◼ China
◼ Canada
◼ Thailand
◼ Other Asia
◼ Philippines
◼ Germany
◼ Vietnam
◼ South Korea
◼ Japan
◼ Chile
◼ Portugal
In 2013, the US OFYP import market value was $131M. Figure 2.48
provides the top exporting countries’ market share; Portugal’s share
was 0.41%, a $539K value. Some notable changes in this product
market from 2013 to 2014 were that China gained an 11% market

• 51
share, while Canada lost 13%; Thailand overtook Other Asia as the
third largest exporter, and Chile outcompeted South Korea. These
are extensive changes in a market that decreased by 9.2% ($12M) in
a single year.
The 2012 US OFYP import market reached $143M, the largest of all
four years. Figure 2.49 shows the top ten exporting countries’ US
market share when Portugal’s share was 0.41% and value was $591K.
Greece was a US OFYP exporter this year, with a 0.0021% share and
$3K value. From 2012 to 2013, Germany reached its peak ranking as
the fourth largest exporting country, outcompeting the Philippines,
Israel became a top country exporting to the US, and South Korea
lost almost half a million of its US market, while Thailand continued
its market gains. The market value also decreased in this year, by
8.4% ($12M). In 2011, the US OFYP import market increased by
16.3% to reach $123M, the second highest value within four years.
Figure 2.50 shows the top exporting countries’ share of this market
value. Portugal’s share was 0.22%, a $266K value, and Greece’s
share was 0.0036%, a $4K value. Some notable changes in this
product market were that Argentina, the fifth largest exporter in
2011, was not a top ten exporting country, and Sweden and France
both became top ten countries exporting OFYP to the US in 2012.
Portugal almost doubled its US market share from .22% in 2011 to
.41% in 2012.
This market could be characterized as inconsistent; since 2012, it has

been declining, and most likely this can be linked to US demand,
discussed further in Section 5.2g. Portugal has increased its OFYP
US import market by 14% over four years – moving from the 18th
largest exporting country to the 15th – and while this growth rate is
not vast, it is steady in the face of overall market decline. This could
prove an opportunistic market for SMEs to develop or grow exports,
particularly as top exporting countries seem to fluctuate and
Portugal is close to reaching the top ten. Thailand’s rank as a top
exporting country is also important to consider. Again, SMEs that
are quick to respond to supply gaps have a genuine opportunity to
transform export development.
Assessment of Portuguese Processed Fish in the US Market

Portugal’s 2011 to 2014 average market share growth rate for the
processed fish subsector was 4.1%. The continued issue of forced
labor and human trafficking in a few Southeast Asian exporting
countries’ supply lines shapes the scope of opportunities in the US
market, but considerable opportunities exist at this moment, with
the further potential to fill a market gap as large as $360M. The
challenge for SMEs will be to gain a share of this supply gap when
established exporters are contacted — as they likely will be — by US
importers about filling the gap. The window of opportunity within
this subsector is finite, and SMEs must ensure export readiness,
something discussed throughout Section 4.
Within the subsector product categories (TSB and OFYP), SMEs

have the opportunity to be highly competitive, especially in OFYP.
In the TSB product category, Portugal has seen steady growth at
an average annual rate of 2.8%. In the OFYP category, Portugal

has seen a 14.6% average annual growth rate in market share from
2011 to 2014, though the total market value has decreased. Though
this market is currently characterized as dynamic, with large-scale
supply changes occurring presently, the report fully encourages
SMEs to explore export development and growth within the
subsector but specifically within the two product categories
identified. Section 5.2g examines other product categories for which
Portugal is a significant global exporter; however, US demand for
other product categories is not as high as TSB and OFYP.
Also worth noting here is Portugal’s perception of its Greek

competition in this subsector. Within the subsector and two
product categories, Greece is not a significant competitor for
Portugal; Greece is not a significant US processed fish exporting
country, and its current US imports continue to decline. Contra
Greece, Portugal’s US processed fish imports continue to increase,
and within the general subsector, its competitors appear to be
France, the Marshall Islands, Malaysia, Papua New Guinea, and the
Solomon Islands. This report fully recommends Portugal develop
exports in this subsector with the understanding that Greece is not
a US competitor.
2.4 Conclusion
This analysis of US import competition has yielded important

findings, and in many ways forms the core of the report by helping
Portuguese SMEs understand their competition and providing
recommendations for enhancing export development strategy in
the selected subsectors. This section will summarize the findings
and reflect on the top countries exporting agrifoods to the US and
Portugal’s most similar US market competitors.
Beginning with the findings, the report finds overall growth

across the majority of subsectors. Prospects for Portuguese export
development look particularly strong in the cheese, jams, and
processed fish subsectors. Within baked goods, Portugal has
suffered from irregularities in export volume, which has affected
SMEs’ competitiveness in this subsector. However, the US market
continues to grow at an average annual rate of 3.4%, which
presents opportunities for SMEs. A long-term strategy for ensuring
consistent export volume would be to establish a US trade office or
headquarters.
As Section 5.2 will demonstrate, SMEs can establish an advantage

in the US market by responding to supply issues and gaps before
importers, distributors, and retailers are affected. Not only do
monitoring export volume and setting up a US trade office foster
greater possibilities for success in accessing the US market, but
these strategies also help in developing positive relations and
customer service with US importers, distributors, retailers, and
food service companies. This recommends delegating the task to
an export manager – someone who follows US agrifoods import
volumes and product trends and is proficient at econometric, trade,
and statistical analyses.

• 53
Competition among top importers — such as Canada, Mexico, Italy,
Germany, and France — does not vary greatly for many subsectors.
Portugal is currently a top US exporter in pure oil olive and ranks
highly in processed fish, but its performance in these markets in
recent years has varied. In pure olive oil, it has been declining; in
processed fish, US imports are increasing. Ambitious SMEs can
work towards importing pure olive oil that stabilizes this recent
decline and filling supply gaps in processed fish. This short-term
strategy becomes part of a larger, longer-term, sustainable strategy
where SMEs look to establish their own consumer base in the US
with specific demand for their products over ones currently on the
market. This incremental growth strategy can also be applied to
other subsectors, such as cheese, chocolate, and jams.
Within the baked goods subsector, Portugal’s closest competitors

are Trinidad and Tobago, Bulgaria, and Croatia, and Lithuania,
Ukraine, and Finland in particular. It is important to note that
none of these countries are exporting baked goods to the US
in significant amounts (greater than 0.0%). However, Portugal’s
competitiveness in this subsector has declined, and these
competitors appear to have capitalized on Portugal’s loss.
The preserved meat is one of the most interesting subsectors

assessed in this section, though Portugal is not yet eligible to export
meat products to the US. Because the size of this subsector market
is so small, its main competitors – when they enter the US market –
will be the top competitors: Canada, Italy, Spain, Germany, Uruguay,
Hungary, Denmark, Poland, Netherland, Sweden, the UK, Chile, and
France, from least to most competitive. It is unlikely that Portugal
will import at Canada’s level (37% of the US market in 2014) within
the next ten years, but a significant market share (0.0% or greater)
would require outcompeting the UK, which exported $105K worth
of preserved meat in 2014. For the first two to five years, a collective
sales target among SMEs of $50K would be appropriate. Building
up to the UK’s level of exports is highly achievable within ten years
and would put Portugal near the top ten, if current completion
trends hold. The difference between the UK (ranked 11th) and
Sweden (ranked 10th) in 2014 is $260K.
Within the cheese subsector, Portugal’s closest competitors are

Jamaica, Turkey, Belgium-Luxembourg, Cyprus, and Lithuania.
Discerning the specific cheese product category these competitors
are importing will be essential in developing sustainable export
strategies. These countries are currently at significant levels (greater
than 0.0% market share), and as with baked goods, Portugal’s
competitiveness in the US has declined in recent years. Lithuania
has the highest growth rate; in interviews it did not appear that
Lithuanian cheese is currently trending upward or that US tourism
to Lithuania is experiencing a significant increase. It may be that
Lithuania is importing less traditional, domestic cheese and more
cheese that is specifically tailored to American tastes.
In the pure olive oil subsector, Portugal’s closest competitors

are Lebanon, Australia, France, Chile, Argentina, and Morocco.
It is important to note that all of these countries were in the US
market top ten, presently or historically. Portugal’s rank among

these competitors has remained relatively stable in recent years.
Lebanon, Australia, and Argentina have been isolated as Portugal’s
top competition, and SMEs should develop a story for their pure
olive oils that distinguishes its products from these competitors’
oils. American consumers particularly like the image of Portugal
as an oceanic and mountainous (and ceramic-tiled) country with
a leisurely pace of life. Along with this sort of branding, packaging
is essential to American consumers. They tend not to consume
olive oil “raw” or “cold”, such as with bread and vegetables; they
have historically preferred olive oil with a milder flavor for cooking
and for dressings and marinades. However, this may be changing
(Narula 2014). For these purposes, olive oil products should include
considerable product information on the bottle and be packaged to
be drip-free and, if possible, with reusable containers.
Within the chocolate subsector, Portugal’s closest competitors are

Indonesia, Iceland, Norway, and the United Arab Emirates (UAE).
None of Portugal’s closest competitors are exporting chocolate to
the US in significant amounts (greater than 0.0% market share);
Portugal’s largest four-year market share was .02% in 2013. The UAE,
however, has made large gains from the 88th largest US chocolate
exporting country in 2011 (out of 97 countries) to the 57th largest in
2014, and upon close examination, the UAE appears to be Portugal’s
top competition. Generally speaking, in the US the chocolate
market is divided into the gourmet market and lower-priced
chocolate. Portugal may find one of the best ways to compete in
this market is to cater to Americans’ diverse and complex palate
by importing filled chocolate. Section 5.2e will also detail how
chocolate demand in changing in the US.
Portugal’s top competitors in the jams subsector the Netherlands,

South Korea, Hungary, Russia, and Malaysia. It is important to note
that not all of these countries have consistently imported jams to
the US in significant amounts (greater than 0.0% market share) year
after year. Portugal has made impressive progress in the US market,
surpassing several of these competitors across the years. With jams,
Portugal may find strong opportunities are not in retail but food
service (Research and Markets 2016iii). For example, a large US
distributor clarified that: “most of [our] items go from distributors
to restaurants. We do some retail items, but more for Italian items”,
such as olive oil and pasta.18
Finally, the processed fish subsector – the most complex subsector

at present – where Portugal’s closest competitors are the France,
the Marshall Islands, Malaysia, Papua New Guinea, and Peru. Both
Papua New Guinea and the Solomon Islands have had inconsistent
export volumes, which likely indicates that the other competitors
are Portugal’s fiercest competition. All countries are importing
in significant amounts, and Portugal’s US import volume has
reached the top 25 and remained fairly consistent. Competitors’
positions varied from year to year, such as France, which was 21st
in 2012 and 26th in 2013. A small change in market shares affects
competitiveness and market value, and Malaysia and the Solomon

• 55
Islands have had many good returns in recent years. Supply line
changes in Southeast Asia and the Trade Facilitation Act have
and will continue to affect Portugal’s competitiveness in this
market, and SMEs are advised to devote resources to monitoring
developments and filling urgent supply gaps.
Further strategy recommendations included in this section’s

analysis were:
1. Making gradual and sustainable market share increases within

subsectors with sizable market values, such as baked goods,
chocolate, and processed fish – the three billion-dollar US import
markets where US demand for imports is steady and Portugal is
a significant US exporter
2. Focusing on identified competitors’ export volume when setting
US market sales targets
3. Establishing effective positioning / crafting a story around
Portuguese products to appeal to the US market
4. Monitoring industry news and US policy (Trade Facilitation Act)
to more effectively revise strategy
5. Building on recent momentum and demand for Portuguese
products in subsectors like jams to ensure continued growth
6. Quickly responding to supply gaps, such as those precipitated by
supply chain issues and the Trade Facilitation Act.
Having analyzed the internal, US import market competition,

the report now narrows its focus on the recommendations by
examining SMEs external competition, globally and within Europe,
within these subsectors. Combining US export development
strategies with development and / or growth in other foreign
market allows SMEs to compound successes experienced in varied
markets while improving overall competitiveness in the agrifoods
sector – the goals of Next Challenge USA and Compete 2020. The
next section is organized similarly, with an introduction, analysis
of the top global and European competitors, and examination of
Portugal’s top sector exports.

Section 3:
External Subsector
Competition
3.1 Introduction
The US market is the largest single-country import destination

for global goods and services, and it is highly competitive. For
the Portuguese SMEs to develop long-term, sustainable export
development and growth strategies, a full picture of market
competition is essential. Competition and demand are the
cornerstones of export strategy, which makes knowledge of external
competition fundamental. This section aims to enhance Portuguese
SMEs’ understanding of how competitive the US market is through
a snapshot of external market competition for subsector products.
Portuguese SMEs face exorbitant competition globally but the

analyses from Section 2 revealed that Portugal’s top competitors
in the US market were often European. Both European and non-
European countries with considerably less export experience
and smaller GDPs have utilized comparative and competitive
advantages to outcompete Portugal in the US and global market.
The objective of the report is to help Portuguese SMEs develop
sustainable export strategies by recovering pre-2008 export volume.
This section discusses who competes in the global agrifoods
industry for access and dominance of the US market. A frequency
analysis identifies Portugal’s most significant global and European
competitors. A close-up of this distribution is examined by looking
at each subsector covered in the report, first globally and then
within Europe.
3.2 Top Sector Competitors
This section analyzes the largest global and European agrifoods

exporters within the subsectors examined in this report – baked
goods, preserved meat, cheese, pure olive oil, chocolate, jams, and
processed fish. It examines the general state of global agrifoods
competition and isolates Portugal’s European competitors to give
Portuguese SMEs a better idea of how to improve competitiveness
globally and within the common (European) market in these
seven subsectors. Global competitors are analyzed first and then
European competitors follow; to accommodate for this division,
2014 global market values are given for all competitors. This allows
for comparison across exporting countries. Through a frequency
analysis, these six exporters represent the strongest competitors
on the global market from 2011 to 2014 in these subsectors, with all
European competitors removed:

• 57
»» US ($21.62B)
»» Canada ($12.55B)
»» China ($12.48B)
»» Turkey ($6.5B)
»» Mexico ($3.35B)
»» Chile ($1.62B).19
Portugal’s total global exports were $3.92B.
It is of little surprise that the US is ranked first; perhaps of greater

surprise is China’s position above Turkey as an agrifoods exporter.
China’s agricultural export industry is not as advanced as Turkey’s,
and China only joined the WTO in 2001. China’s agrifoods are also
notorious for lacking quality of control; for example, arsenic has
been found in many basic agrifoods products from rice to milk
power. The rankings of Canada and Mexico are testaments to both
their size and their proximity to the largest export destination (the
US). They also both have Atlantic and Pacific coasts, which has likely
helped these countries expand their export reach. Chile also has
easy access to all Pacific export destinations, many of which are
small island or developing nations with growing agrifoods needs.
Additionally, Chile is a leading agrifoods exporter within South,
Central, and North America, and it is party to many American and
Asian regional free trade agreements (FTAs). Portugal’s global
exports in these subsectors equates to about 250% of Chile’s, but
competition among Portugal’s European competitors highlights
considerable challenges to Portugal’s competiveness.
Shifting to the largest European global agrifoods exporters, the

report finds that across the seven subsectors from 2011 to 2014 the
top competitors were:
1. Germany ($57.93B)
2. Italy ($36.65B)
3. France ($33.27B)
4. Netherlands ($31.78B)
5. Belgium-Luxembourg ($25.95B)
6. Spain ($23.54B)
7. Denmark ($12.36B).
19 See Appendix 3 in Volume Two for the complete listings of both non-European and
European top exporters in the global market.

If European competitors were to be integrated into the global
competitors rank (in these seven subsectors), a different picture
emerges.
1. Germany ($57.93B)
2. Italy ($36.65B)
3. France ($33.27B)
4. Netherlands ($31.78B)
5. Belgium-Luxemburg ($25.95B)
6. Spain ($23.54B)
7. US ($21.62B)
8. Canada ($12.55B)
9. China ($12.48B)
10. Denmark ($12.36B)
11. Turkey ($6.5B)
12. Mexico ($3.35B)
13. Chile ($1.62B).
Excluding Europe, the US is the largest global agrifoods exporter,

but all European agrifoods exporters listed above – save Denmark –
outcompete the US in the global market by considerable margins.
The reason is the European common market, which gives member
countries access to uninhibited trade between most European
nations. Being part of the common market is a significant asset
in global agrifoods trade. Another factor that explains the US’
competitiveness ranking in the global market is that many of its
agrifoods products are banned in Europe, the largest collective
export market. Part of the product ban is bound in European
sanitary and phytosanitary standards, but the prohibition of
American produce and animal products, in particular – a $31B
export sector in 2014 – is a historically political sticking point
between the US and its European allies – so much so that it is, in
part, responsible for the inability to conclude the Trans-Atlantic
Trade and Investment Partnership (TTIP) agricultural negotiations.
The competitive distribution of European nations has few surprises,

as it more or less reflects political-economic power within the
EU. Canada has been an active global trade leader since the
outset of the multilateral system in 1945, and its competitiveness
in global agrifoods is similarly of little surprise. While Denmark is
not one of the largest European trading powers, economically,
it is one of the largest global pork exporting countries; pork is its
third largest overall export ($3.24B). Turkey is perfectly positioned
between Europe and Asia and is a historical trading power. Mexico’s
comparatively lower competitiveness is more surprising for North
Americans. As Section 2 revealed, Mexico is one of, if not the,
largest country exporting agrifoods to the US. However, Mexico’s
lack of global competitiveness is advantageous for Portugal, which
exported $574M more than Mexico between 2011 and 2014.
Portugal’s global exports of these products amounts to $3.92B,

and its global export volume is about 17% of its neighbor, Spain’s.

• 59
Examining Portugal’s global agrifoods subsector competitiveness,
it was a top global exporter (with Europe isolated) four times across
the seven subsectors (pure olive oil) within four years (2011-2014).
There were five global and two European countries with the same
frequency:
»» Brazil ($3.58B)
»» Ecuador ($5.2B)
»» Egypt ($2.26B)
»» New Zealand ($6.08B)
»» Tunisia ($1.9B)
»» Poland ($20.92B)
»» Greece ($4.19B).
Portugal’s global exports in these seven agrifoods subsectors

equates to about 3.2% more than the average subsector exports
of its most similar global competitors20 and about 20% of Poland’s
and 95% of Greece’s average export volume. It is clear that average
export value from these subsectors ranges vastly, from $1.9B
to $20.92; however, these competitors remain Portugal’s most
similar competitors. A key reason for this is consistent export
volume, but product prices also affect the numbers greatly. As
this report emphasized in Section 2, export consistency affects
competitiveness. Poland’s $20.92B export volume can be attributed
to its ability to hold a higher exporter rank in the European
processed fish market across three years – fourth in 2011 and third
from 2012 to 2014. Whereas, Portugal’s $3.92B export volume can
be compared to its performance as fourth in the pure olive oil
(European market) from 2011 to 2013, and third in 2014.
The small difference between Portugal’s agrifoods subsectors

export volume and Greece’s ($4.19B) can be seen as the product of
Greece maintaining its position as the third largest European pure
olive oil exporter from 2011 to 2013, despite Portugal outcompeting
it in 2014. One olive oil importer interviewed said of his interest in
Portuguese olive oil: “if a customer wanted Portuguese products,
I’d be interested in some of their items, yes. I’d have to first find
out how sustainable and viable the market is and the volumes
available.”21 Presently, consistent export volume is perhaps the most
essential advantage for SMEs looking to partner with US importers,
distributors, retailers, and food service representatives.
With regard to product price, two of the three exporters with

the highest values on the above list were top global exporters in
processed fish. New Zealand, the other exporter with high values,
was a four-time global top cheese exporter. Those with lower values
(Tunisia, Greece, and Portugal) were all top global olive oil
20 This was calculated by averaging the 5 non-European competitors with the same
frequency of being a top global exporter as Portugal. The average was $3.8B, but some
similar exporters, such as Ecuador and New Zealand, had much higher values; while other
similar exporters, such as Egypt and Tunisia, had considerably lower values.

exporters, which would make it appear as if pure olive oil – more or
less a commodity – has less price security (see discussion of variance
below) and / or profitability. It was certainly the case with New
Zealand’s 2011 to 2014 olive oil exports.22 This was also confirmed in
an interview with an importer: “even though olive oils aren’t always
commodities, it still seems that’s where we don’t have a lot of
success. Those other highly traded items have become difficult.”23
Looking at Portugal’s most similar global and European competitors

within the seven agrifoods subsectors, Table 3.1 gives context to
Portuguese global and European competitiveness through average
price comparisons.24 Footnote 21 discusses the concept of variance
– how much ($) yearly price can differ (+ / - ) from the average,
and variance, to a degree, indicates how accurate these average
subsector export / wholesale prices are on a yearly basis. In the
baked goods, sector, variance was low for all producing countries
except New Zealand (+ / - $4.20 per kilo) and Tunisia (+ / - $3.56 per
kilo). In preserved meat, New Zealand’s yearly price variance was
very high; the lowest price, $6 per kilo, was in 2012, and the highest
price, $102.40 per kilo, was in 2013, and this confirms difficulty US
importers had in estimating an average market entry wholesale
price for preserved meat products.25 The preserved meat product
category of “swine meat” has a much lower average wholesale price
than, for example, an entire leg of Iberico ham, and this average
price data for preserved meat is less reliable for Portuguese SMEs
because so few of Portugal’s most similar competitors export
preserved meat.
22 The variance – or degree of difference between the average yearly olive oil prices – for New
Zealand from 2011 to 2014 was 14.75. Based on this sample of annual data, the yearly price for
New Zealand olive oil can vary from the average ($16.18, see Table 3.1) by $14.75; for example,
prices for New Zealand olive oil were as high as $20.50/kilo in 2013 and as low as $12.20/kilo
in 2011.
24 These averages were calculated by dividing each competitors’ 2011, 2012, 2013, and 2014
export value ($, rounded to the tenth) by export net weight (kilos), which gives an average
export market (wholesale) price for the seven subsectors. Because the scope of the report
is limited, this data is given at the subsector level, rather than at the product category level,
where prices may vary. For example, the wholesale price of unfilled chocolate is greater than
filled chocolate. Section 5.2 examines specific product categories within each subsector as
a product of US import demand, which SMEs should consider when developing sustainable
export strategies.

• 61
Table 3.1 – Average Subsector Export / Wholesale Price (2011-
2014), Portugal and Portuguese Competitors
New
Portugal Brazil Ecuador Egypt Greece Zealand Tunisia
Baked Goods $3.78/kilo $3.45/kilo $3.48/kilo $3.13/kilo $5.20/kilo $10.78/kilo $2.93/kilo
Preserved Meat - - - - - $36.20/kilo -
Cheese $9.15/kilo $6.28/kilo $4.73/kilo $3.25/kilo $8.20/kilo $4.05/kilo -
Pure Olive Oil $3.98/kilo $3.30/kilo $6.60/kilo $3.03/kilo $4.43/kilo $16.18/kilo $3.35/kilo
Chocolate $10.68/kilo $6.25/kilo $8.13/kilo $18.05/kilo $7.03/kilo $10.57/kilo -
Jams $3/kilo $1.38/kilo $1.28/kilo $1.63/kilo $3.95/kilo $2.73/kilo $10.73/kilo
Processed Fish $6.20/kilo $14.70/kilo $5.25/kilo - $10.35/kilo $5.53/kilo $7.60/kilo
Variance was the lowest in the pure olive oil (discussed above Table
3.1), cheese, and jams subsector where only New Zealand, again,
had a significant degree of variance (+ / - $1.50 per kilo for cheese
and $1.26 for jams). This indicates that the average price data for
these subsectors is considerably reliable. Portugal has the highest
average export prices, which could affect competitiveness. However,
to reiterate, this data is at the subsector level, and wholesale cheese
prices vary tremendously by product type and craftsmanship. In
chocolate, variance was significant for all Portugal’s competitors
except Ecuador (+ / - $0.68 per kilo), which is likely a product of
fluctuating demand and product category exported. Portugal’s
chocolate price had the lowest variance (+ / - $0.27 per kilo), which
stimulates two reflections. First, stable prices are a competitive
advantage in developing relationships with US suppliers, as price
stability can be desirable. Second, it may be the case – depending
on product category exported – that Portugal can vary its chocolate
export prices slightly to manage sustainable export investment and
profitability to keep pace with other competitors. Finally, variance
in the processed fish subsector was significant for Greece (+ / - $3.91
per kilo) and Tunisia (+ / - $1.91 per kilo), and this may be related to a
number of factors ranging from product category exported, political
conditions, fish stocks, subsidies, etc. Next, this section will examine
the performance of top global and European exporters in the seven
subsectors to better understand the interacting processes and
events that shape external export competition.
3.3 Global Competitors
Detailing the top five global competitors in a product category

within each subsector provides insight about market dynamics

that influence external export competition, which, in turn, shapes
internal US competition. The US is often a top exporter within these
subsectors on the global market. This is referred to as a dialectical,
where several concurrent processes or events influence outcomes
that produce differing effects for competitors. For example,
commodity prices, trade policy, import / export quotas, and
countries’ trade surpluses / deficits, banned products, embargos,
and anti-dumping and countervailing duties26 for one exporter
has an impact on markets all over the world. A very notable
example within agrifoods was the global “banana war” between
the US and the EU regarding how former colonial relationships
influenced the banana import preferences, a dispute involving
many dialectical factors that persisted for 20 years. The US’ trade
deficit with China is also a factor that shapes global interactions
influencing competition. This report argues that is essential that
SMEs understand the complex context that shapes US, global, and
European competition.
3.3a Baked Goods

In 2014, the global market value for baked goods subsector products,
the second largest subsector of the seven assessed, was $31.4B.
Europe holds the largest share of the global market – discussed more
in depth in Section 3.4a – but Asia and North American are almost
identical in their share of the rest of the global market. Asia held
16.2% or $5.08B, and North American claimed 16.1% or $5.07B in
2014. The top five non-European exporters of this product were the
US (market share: 6.5%, market value: $2.04B), Canada (market share:
5.7%, market value: $1.8B), Turkey (market share: 2.9%, market value:
$900M), Mexico (market share: 2.5%, market value: $785M), and China
(market share: 2.1%, market value: $652M).
In Section 2.3a, Canada and Mexico held a combined 67% of the

2014 US baked goods import market, compared to their respective
5.7% and 2.5% of the global market. Portugal holds .71% ($222M)
of the global market for baked goods, but only .065% of the US
market for the same year, compared to Mexico’s 19% of the US
market. Mexico is the fourth largest non-European global baked
good exporters – home to Grupo Bimbo, with 10,000 products and
100 brands in 22 countries, and $14.06B in 2014 sales – and it only
has 1.8% more of the global market than Portugal. Here it becomes
apparent how influential dialectical factors — such as proximity, free
trade agreements, and banned products — are in the development
of export strategies.
Therefore, developing baked goods exports would be a strongly

recommended path for Portuguese SMEs, despite inherent
advantages other exporters may have in the US market, because:
26 Dumping refers to: “the practice of trying to sell products in the United States at lower
prices than those same products would bring in the producer’s home market” due to
subsidies or artificially deflated prices (CBP 2006). Anti-dumping refers to trade policy that
places import quotas and countervailing duties against these products. Countervailing,
as the name implies, duties are applied with the intention to offset the impact on the US
(or other countries’) economies to adjust for the effects of dumping and can range from a
fractional percent to over 500%.

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»» Portugal’s global market share is significant (greater than 0.0%);
»» Contribution to GDP from baked goods exports is 1/1000th ($222M)
of Portugal’s 2014 GDP ($230.1B); and
»» SMEs can capitalize on Portugal’s global baked goods export
reputation, demand, and volume to enhance its US import
opportunities through improving competitiveness in the global
market.
Baked goods fall under the foodstuffs sector of global trade, and
in 2014, foodstuffs was Portugal’s seventh largest export sector,
behind machines, transportation, textiles, mineral products, metals,
and plastics and rubbers. Within foodstuffs, there are almost fifty
subsectors. Baked goods alone contributed 0.1% of Portugal’s 2014
GDP. Looking at 2011 to 2013, the global competition does not vary
greatly among top five exporters. However, global market value has
seen an average annual growth rate of 4.4%, which on a global scale
is positive and steady, showing few signs of risk. What is slightly risky
is that over these years, American and Turkish global exports have
increased consistently; the US at an average annual rate of 7.3% and
Turkey at 11.2%. Rather than view this as a risk factor for SME export
development, it should be seen as a natural continuation the top
exporters’ market dominance within this product category, and it
may be the case that these rapidly growing exporters are driving the
4.4% average annual baked goods global growth.
3.3b Preserved Meat

The 2014 global market for preserved meat was valued at $5.08B,
29 times larger than the 2014 US preserved meat import market
value. While European countries hold 74% of this export market, the
second largest single-country exporter of preserved meat is Brazil.
The top five non-European global exporters in this subsector were
Brazil (market share: 12%, market value: $626M), Thailand (market
share: 4.9%, market value: $249M), the US (market share: 4.9%,
market value: $248M), Canada (market share: 2.1%, market value:
$107M), and China (market share: 0.85%, market value: $27.4M).
South America accounts for only 13% of global preserved meat

exports, and Brazil’s preserved meat exporters comprise 92.3% of
South America’s global share. Brazil did not export any preserved
meat to the US in 2014 for myriad reasons, not least of which may
be due to the US Bioterrorism Act of 2002, discussed further in
Section 4.7a. The two countries have been in negotiations for beef
market access for many years, but Brazil has scheduled its first US
meat import for mid-2016, despite market access not being fully
negotiated between all parties (Rousseau 2016). Gaining US market
access, as is widely known, is expected to exponentially increase
global Brazilian preserved meats exports. This is yet another
example of how dialectical factors have far-reaching effects on
diverse markets, particularly US market access.
In 2014, Portugal held 0.54% (market value: $27.4M) of the global

preserved meat market. This is less than a third of the 1.8% global
market share it held in 2011, but it is still significant (greater than
0.0%) and far beyond its non-existent US imports. Preserved

meats exports are not a significant contributor to Portugal’s GDP
(less than 0.0%), and Portugal’s global market share has declined
at an alarming average annual rate of 24%. If SMEs are proactive
in stabilizing global market loss – a large and challenging task –
Portuguese exporters can use the global market to improve their
competitiveness while they complete the process of becoming a
US-eligible exporter of preserved meat products.
3.3c Cheese
In 2014, the global market value for cheese was $32.7B, the largest
global market value out of the seven subsectors assessed in this
report. Unsurprisingly, Europe holds the majority of the global
market (82%), followed by Oceania (6.4% global market share), and
North America (6.1% global market share). The scope of Europe’s
dominance in this subsector is highly encouraging for Portuguese
SMEs, as European cheesemakers have an extensive comparative
advantage competing in all markets. The top five non-European
global exporters of cheese in 2014 were the US (market share: 5.3%,
market value: $1.74B), New Zealand (market share: 4%, market value:
$1.32B), Australia (market share: 2.3%, market value: $753M), Egypt
(market share: 1.2%, market value: $386M), and Argentina (market
share: 0.89%, market value: $290M).
Looking at the non-European global cheese leading export nations,

the US has an average annual growth rate of 15% and New Zealand
of 4%; the other top five have negative growth rates – Australia of
-6.5%, Egypt of -1%, and Argentina -6.7%. A global industry study on
cheese pointed to the Asia Pacific as the fastest growing regional
cheese market, with a 7.9% growth rate projected until 2019
(Research and Markets 2016ii). Like chocolate, it appears cheese is
also experiencing growing demand in developing countries, such as
India and China; the global cheese market is expected to grow to
$105B by 2019 (Research and Markets 2016ii).
With any market of this size, large companies and countries will
dominant. The American giant, Mondelez International, introduced
in Section 2, has a large stake in the global cheese market, as does
Arla Foods (US), Bongrain (France), Fonterra Co-operative Group
(New Zealand), the Bel Group (France), and GCMMF (India), among
others (Research and Markets 2016ii). In certain products, such as
fresh cheese with a limited shelf-live, SMEs will face competition
challenges if unable to finance rapid-transit, temperature-controlled
supply chain conditions that are prevalent among these large
multinational producers. In aged and artisanal cheeses where
marketing is heavily linked to tourism, SMEs will likely have greater
opportunity. One importer suggested that customer demand
for cheese is driven by: “tourism a lot of times and also brand
marketing. If they had something they liked on vacation, they’ll ask
for it here or maybe if a particular brand’s products are marketed
effectively, it makes them want to try it.”27 Portugal held 0.18% of the
2014 global market share (market value: $59.4M) compared to 0.31%
or $3.98M of the US cheese market for this year.

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3.3d Pure Olive Oil
The 2014 global market value for pure olive oil was $7.04B. More
so than cheese, Europe controls the global pure olive oil export
market (92%), followed by Africa (3.8%), Asia (2.5%), South America
(1.3%), North America (0.42%), and Oceania (0.29%). The top five
non-European global exporters of pure olive oil in 2014 were Tunisia
(market share: 3.1%, market value: $219M), Turkey (market share: 1.3%,
market value: $91.1M), Argentina (market share: 0.63%, market value:
$44.6M), Chile (market share: 0.59%, market value: $41.6M), and
Morocco (market share: 0.54%, market value: $38.1M).
Continued growth in the olive oil export industry (including other

olive oil-related subsectors) is driven by demand for its end-
use, including in food processing and cosmetics (Research and
Markets 2013). Like cheese, demand increases are also linked to
development, particularly in Brazil, India, and China, and in the
developed world, demand increases are linked to high quality olive
oil (Research and Markets 2013). Though not a top pure olive oil
exporter in 2014, the US is growing at an impressive 9.7% average
annual rate, and is a top global exporter in other olive-oil related
subsectors (Research and Markets 2013). In 2014, Portugal held
6.9% (market value: $487M) of the global pure olive oil market and
was the third largest global exporter of pure olive oil. Portugal had
more market share than all African, Asian, and North American pure
olive oil exporters combined. This subsector contributed 0.21% of
Portugal’s 2014 GDP. This is significant but unsurprising considering
pure olive oil is Portugal’s largest animal and vegetable byproducts
export and third largest agrifoods export globally after wine and
rolled tobacco.
Portugal’s global pure olive oil export market share grew at an

impressive 8.9% growth rate from 2011 to 2014 while the global
market value grew at an average rate of 4.5%. Most recently, Tunisia’s
global olive oil export market share was 3.1%, less than half that
of Portugal with an average annual growth rate of -6.4%. Tunisia’s
pure olive oil export decline can be linked to its recent regime
changes, political turmoil, and the impact of terrorism, which have
intensified since 2014. The next largest non-European competitor
is Turkey, which held 1.3% of the global market share. Turkey had
been steadily increasing its global market share before it declined
in 2014; even with this decline, its average annual growth rate is
16.5%. Recent events in Syria may further boost Turkey’s olive oil
exports growth rate; as a result of Syria’s continued civil war, Turkey’s
Minister of Customs and Trade established a preferential export
program for Syrian olive oil to Turkey (Syrian Economic Forum 2016).
Supplementing domestic demand with Syrian imports means that
Turkey has greater quantities of its olive oil available for international
export. Compared to its top non-European pure olive oil global
competitors, Portugal has an impressive growth rate and unique
political stability. Economic stability and EU funding will likely
continue to shape Portugal’s future as a top global exporter, and
Section 5.2d will examine how dialectical factors, such as a decline
in Portuguese olive oil exports in 2015 and a growing demand for
domestic olive oil in the US, will influence the sustainability of SMEs’
export development in this subsector.

3.3e Chocolate
In 2014, the global market value for chocolate was $27.2B, the third
largest of the seven subsectors assessed. Europe held 75% of the
2014 global chocolate export market, followed by North America
(13%) and Asia (8.3%). The top five non-European global exporters of
chocolate for this year were the US (market share: 6%, market value:
$1.63B), Canada (market share: 4.5%, market value: $1.23B), Mexico
(market share: 2%, market value: $549M), Turkey (market share: 1.9%,
market value: $525M), and Singapore (market share: 1.6%, market
value: $422M). The top global chocolate exporters countries are
largely similar to the top exporters to the US, but market shares
differ considerably; Canada and Mexico held 50% and 20% of the
2014 US import market, respectively, but only 4.5% and 2% of the
global market. Again, this demonstrates how dialectical factors,
such as geographical proximity, preferential trade agreements, and
access to US compliance assistance can impact competitiveness.
Macro-level changes in this market mirror the markets for cheese

and pure olive oil; increasing development, particularly across
China, India, and Brazil are driving and changing demand. Demand
for dark chocolate similarly mirrors demand for higher grades of
olive oil, which has effectively divided the markets for chocolate.
Cheaper chocolate made with a higher percent of milk solids is
more prevalent among developing nations with a newly acquired
tastes for high-sugar chocolate, and the more cocoa-heavy, bitter
blends are experiencing increasingly demand in the developed
world (Research and Markets 2015). Sugar and cocoa commodity
prices have been essential factors shaping global trade in this
subsector; India and Brazil are top global sugar exporters, but the
sugar grown in these countries is more often used for ethanol than
foodstuffs (Research and Markets 2015). The dialectical factors that
shape global chocolate trade are extensive, including regional
conflicts in African countries that are top global cocoa exporters.

chocolate market, compared to its 0.013% share of the US market.
The global market grew at an average growth rate of 4.5% from 2011
to 2014, but Portugal’s global share has decreased by almost a third.
In a relatively stable and growing market, Portugal’s export decline
is concerning. Portugal sends most of its chocolate exports to Spain
(35%) and Angola (17%). The report recommends that if SMEs are
producing higher percentage cocoa and / or dark chocolate, the
US and other developed countries are top export destinations. If
producing more sugar and milk solid-rich chocolate, SMEs should
consider devoting more resources to product marketing. This
combined strategy should not only improve SMEs profitability and
target marketing but also Portuguese contributions to GDP from
chocolate trade.
The US, the largest non-European chocolate exporter, increased its

global market share by 9% from 2011 to 2014 and Turkey by almost
19%, highly similar to olive oil. The overall global chocolate market
looks to grow at an average annual growth rate of 5% from 2014
to 2019, and like other markets with high growth, SMEs should be
aware that large companies and high-income countries will seek
to dominate these markets. The top global chocolate exporting

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companies are the Ferrero Group (Italy), Mars (US), Mondelez
International (US), Ritter (Germany), Lindt and Sprüngli (Swiss), and
Petra Foods (Singapore) (Research and Markets 2015).
3.3f Jams
In 2014, the global market value for jams was $2.95B, the smallest
of all seven subsectors. The global market value grew at an average
rate of 4.5% per year from 2011 to 2014, the same average annual
rate as the US import market. As with all other subsectors assessed
so far, Europe controls the global market; in 2014, Europe held
62%, followed by Asia (16%), North America (9.2%), and South
America (9.1%). The top five non-European global exporters of jams
in 2014 were Chile (market share: 6%, market value: $178M), Turkey
(market share: 5.4%, market value: $161M), the US (market share:
3.8%, market value: $111M), India (market share: 2.6%, market value:
$77.3M), and Mexico (market share: 2.2%, market value: $65.4M).

jams market; while not a significant contributor to Portugal’s GDP
(less than 0.0%), Portugal has been outpacing global market
growth at an average annual rate of 6.2%. Many of the top non-
European competitors in the global market — such as Chile, Mexico,
India, and Turkey — also lead the US market. If Portugal continues
growing its jam exports at this pace – especially in the US, where its
average annual growth rate was 35.8% – jams appears to be a safe
and secure subsector for SME export growth and development. The
global sector, despite declines in trade flows, is expected to grow at
a rate of 3.7% from 2016 to 2020/ (Research and Markets 2016iii).
Chile, the largest non-European global competitor has had

inconsistent market shares despite maintaining its top exporter
status. Turkey, the second largest, has been growing its market
share at an average of 10.7% per year since 2011, and this growth rate
recently earned it a top exporter position. Strategies for improving
competitiveness in this global (and US) market include: improving
information on the product label; marketing to the cook-at-home
demographic by highlighting how products can be used in salads,
cookies, sandwiches, smoothies, etc; and marketing to the health-
conscious demographic by labelling products as “natural” or non-
GMO. Consumers are also gravitating towards gourmet or luxury
marketing within this subsector.
3.3g Processed Fish

In 2014, the global market value for processed fish was $16.2B, the
fourth largest subsectors. The global market had been growing at
an average growth rate of 5.4% from 2011 to 2013 before it took a
$1B hit in 2014; however, this market looks to continue expanding
at an average annual rate of 3.8% from 2016 to 2021 (Research and
Markets 2016i).28 The top five non-European global exporters of
28 This estimate includes processed fish from both the foodstuffs and animal product sector
and other related subsectors, such as frozen fish, crustaceans, and processed fish not for
human consumption. The report focuses on processed fish within the foodstuffs sector, see
Appendix 2 for the relevant Harmonized System codes.

processed fish in 2014 were Thailand (market share: 19%, market
value: $3.1B), China (market share: 13%, market value: $2.04B),
Ecuador (market share: 8%, market value: $1.3B), Morocco (market
share: 4%, market value: $652M), and Vietnam (market share: 2.8%,
market value: $460M).
This subsector, unlike any other in the report, is not dominated

by European exporters; the top three global exporters are Asian
(Thailand and China) and South American (Ecuador), though their
market shares fluctuate somewhat from year to year. Asia holds
the largest market share – 43% compared to Europe’s 29% in 2014.
Following Asia and Europe, Africa possessed 12%, South America
held 9.6%, North America claimed 4.9%, and Oceania had 1.8%.
Beyond the top handful of exporters, the global market is fairly
fragmented between nearly 160 countries; almost every country in
the world exports processed fish, and even a fractional market share
can translate into millions in market value.
Section 2.3g advised Portugal to keep an eye on how the US market

will change in regards to Southeast Asian supply lines. Of the ten
largest global processed fish companies, three were Norwegian; two
were Thai; two were Japanese; and the rest were from Greenland,
the USA (High Liner Foods Incorporated), and Spain / Portugal
(Pescanova) (Research and Markets 2016i). The Trade Facilitation
Act could affect two of these top competitors in the US market
(Charoen Pokphand Foods PCL and Thai Union Frozen Products
Public Company Limited). In 2014, Portugal held 1.4% (market value:
$233M) of the global processed fish market, and this subsector –
the fifth largest within the foodstuffs sector – accounted for 0.1% of
Portugal’s 2014 GDP, a significant contribution.
The greatest challenge for SMEs will be competing with large

companies. Portuguese SMEs will undoubtedly be familiar with
Pescanova; this is the scale of competition that they face in competing
to fill a large US supply gap where large, mostly European countries
dominate the global market – despite Europe’s smaller market share
when compared with Asia. These European competitors are discussed
further in Section 3.4g. A market report also highlighted that one of
the most significant challenges to growth in this subsector is the price
of feed in aquaculture, and for this reason, sustainable, integrated
aquaculture is an essential strategy for SMEs competing in this
market (Research and Markets 2016i). However, current Portuguese
aquaculture may be more directed towards frozen fish exports than
processed fish that is high in demand in the US, such as tuna, skipjack,
bonito, yellowtail, or pollock.
3.4 European Competitors
This section focuses exclusively on Portugal’s European competitors’

performance within the global market. Examining Portugal’s
European competitors allows the report to better assess how
Portugal can improve competition within the common market.
Again, there are dialectical factors at work in this assessment that
impact Portugal’s competitiveness within the American market. For
example, Portugal’s post-2008 recovery aid from the EU and IMF

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influences its competitiveness, and assistance is ending (European
Commission 2016). Portuguese businesses will be expected to
drive export growth with less input from Brussels, the IMF, and
the Portuguese government, and the effect of this process has
yet to be determined. While this may put Portugal at a temporary
disadvantage with some European competitors, such as Italy,
France, and the Netherlands, Portugal continues to have a plethora
of advantages over other European competitors. Greece is still in
crisis; Moldova requires enhanced export infrastructure, and Estonia
is comparatively further from France than Portugal. Dialectical
factors remain in play, but this section provides intimate detail that
further illuminates export development and growth opportunities
for Portuguese SMEs.
3.4a Baked Goods

In 2014, the European share of the global baked goods market
($31.4B) was $20.2B or 64.3%. The top five European exporters of
baked goods were Germany (European market share: 20%, global
market value: $4.12B), Belgium-Luxembourg (European market
share: 11%, global market value: $2.19B), France (European market
share: 11%, global market value: $2.14B), Italy (European market
share: 10%, global market value: $2.1B), and the Netherlands
(European market share: 8.1%, global market value: $1.64B). The 9%
gap between Germany and Belgium-Luxembourg, the largest and
second largest European baked goods exporters, is significant, but
more notable is that 9% equates to an almost $2B difference in
market value, emphasizing the scope of this market.
The global market grew at an average annual rate of 3.9% from

2011 to 2014, and the European market appears to be keeping
pace at an average annual rate of 3.5%. Comparatively, Asia’s
average annual growth rate was 4.6%, and North America had a
5.4% average annual growth rate. Growth in this category will be
concentrated along lines of convenience, health-consciousness
(whole or specialty-grain), and unique and diverse flavor and
nutrition combinations within baked good products (Research and
Markets 2016). From ready-to-consume pretzels to savory breakfast
cakes, the second-largest packed food subsector, behind cheese
/ dairy, presents considerable opportunity to SMEs. Many of these
consumers tend to prefer smaller, artisan brands compared to large
producers, such as Einstein Bros Bagels or Dunkin Donuts, and
corporate dominance is not as entrenched as in other subsectors,
such as chocolate (Research and Markets 2016).
Portugal’s share of the 2014 European market was 1.1% (and global
value $222M), which is most similar to Ukraine (European market
share: 1.1%, global market value: $219M), the Czech Republic
(European market share: 1.6%, global market value: $329M), and
Bulgaria (European market share: 0.97%, global market value:
$197M). From the analysis in Section 3.3a, the report concluded that
Portugal has a significant market share, globally; contribution to
GDP from baked goods exports is strong, and though Portugal will
likely not become a top US exporter of this product, it can use its
strengths in the global market to enhance US import opportunities.

The European exporter that Portugal would be best advised to
target in improving competition in this product category would be
the Czech Republic. More competitive than the Czech Republic
is Ireland, which holds 1.7% of the European market, a global
market value of $338M, and Russia, which also holds 1.7% European
market share, a $348M global market value. Portugal has held its
1.1% market share for the last four years. A short-term goal would
be to focus on increasing export volume to outcompete the Czech
Republic, a market value increase of $107M, which gives SMEs an
idea of the export sales volume that they could aim to contribute.
Outcompeting Ireland or Russia, on a longer-term basis, requires an
increased export value of between $116M and $126M.
3.4b Preserved Meat

In 2014, the European share of the global preserved meat market
($5.08B) was $3.74B, 73.6% of the total global market. The top five
European exporters of preserved meat were Italy (European market
share: 24%, global market value: $888M), the Netherlands (European
market share: 16%, global market value: $605M), Germany
(European market share: 14%, global market value: $529M), Spain
(European market share: 14%, global market value: $526M), and
Denmark (European market share: 12%, global market value: $461M).
Portugal’s share of the 2014 European market was 0.73% (and

global value $27.4M), which is most similar to the Czech Republic
(European market share: 0.64%, global market value: $24M), Sweden
(European market share: 0.57%, global market value: $21.2M), and
Switzerland (European market share: 1.4%, global market value:
$50.6M). This is a difficult market to assess. Other industry analyses
lack a focus on preserved meat, and this may be due to its lower
market value compared to some other animal product subsectors,
such as pig or poultry meat. Across assessments, increased North
American demand is consistent, but reports present conflicting
findings about increased demand across developed nations,
such as Japan and New Zealand, and developing nations, such as
Thailand, China, and India. While growth is considerable across all
meat categories – attributable to rising incomes across the world
– it is not clear if growth in preserved meat is growing, as more
than half of global meat product manufacturers have experienced
financial decline (Research and Markets 2016iv).
The European market value has mirrored the general pattern of ups
and downs of the global market, with an overall increase from 2011
to 2014. The top five European exporters possess 80% of the total
European market share, indicating the difficultly SMEs will likely
face in breaking into this export market. However, one US importer
said exporter company size matters less and that: “in the US, there’s
always a market if there’s a good product”.29 This market also shares
features with the baked goods market. For example, Belgium-
Luxembourg and the UK both held a 3% European market share
and virtually the same market value; other exporters were separated
by similarly narrow margins compared to the top five European

• 71
exporters. There are challenges to competing in this market, but
close competition also has its advantages.
A marginal advantage over another competitor could yield

continual results. For example, Spain markets its preserved
meats products mostly as “Iberico” in the US, due to American’s
association with the high-quality Iberico ham. Section 5.2b will
discuss how SMEs can leverage this marketing strategy in further
detail. While Portugal’s European preserved meats exports have
fallen, Spain’s have been increasing. European countries dominate
global preserved meat exports, and this is largely the same in
the US import market; therefore, adopting a similar marketing
strategy globally and in the US could have compounded effects
for SMEs exporting preserved meat. Leveraging the region’s
brand recognition could support Portugal’s global and US export
development and growth.
3.4c Cheese
In 2014, the European share of the $32.7B global cheese market was
$26.7B7B — 82%, reflecting the largest European agrifoods market
dominance so far examined. The next largest competitor, Oceania,
held a mere 6.4%. This European dominance is also reflected in
the US cheese import market, where Europe holds 88% of the
market share and top exporters are highly similar, though market
shares differ. Improving competition in the global market is akin to
improving competition in the US market and vice versa.
The top five European exporters of cheese were Germany (European

market share: 19%, global market value: $5.05B), the Netherlands
(European market share: 16%, global market value: $4.21B), France
(European market share: 15%, global market value: $4.1B), Italy
(European market share: 11%, global market value: $2.85B), and
Denmark (European market share: 6.6%, global market value:
$1.77B). Within the American market, French and Italian exporters
have much more of a competitive edge compared to Germany
and the Netherlands’ competitiveness in the global market. For
example, Germany held 19% of the European global market share
in 2014, but only 3.3% of the US import market share. Conversely,
Italy held 11% of the European global market share and 27% of the
US market share. This again suggests that dialectical factors are
at play, such as US consumer preferences and European exporter
preferences about paying high US cheese tariffs.
Portugal’s share of the 2014 European market was 0.22%, and

global value was $59.4M, which is most similar to Estonia (European
market share: 0.25%, global market value: $65.8M), Latvia (European
market share: 0.21%, global market value: $56M), and Serbia
(European market share: 0.17%, global market value: $46M). Section
3.3c showed that Portugal’s global cheese export market value is
not a significant contributor to its GDP, but its global market share
is significant (greater than 0.0%). Portugal’s average annual growth
rate across 2011 to 2014 was 5%, compared to Estonia’s 6.6% decline,
Latvia’s 4.4% decline, and Serbia’s astounding 20.4% average annual
growth. If Serbia can sustain this level of growth, by the end of 2016,
it will outcompete Portugal in cheese exports.

Beyond these three most similar competitors, SMEs should monitor
Bulgarian, Russian, and Ukrainian cheese exports. These countries
outcompeted Portugal by significant margins in 2014. Bulgaria’s
2014 global cheese exports amounted to $123M, Russia’s to $93.9M,
and Ukraine’s to $120M. Bulgaria’s growth continues at an average
annual rate of 11.8%; Russia’s average annual growth is more modest
at 1.75%, and Ukraine’s has suffered a 27.9% average annual decline
due to political and economic turmoil. Within the US market, two of
Portugal’s global competitors are significant: Estonia and Bulgaria.
Latvia, Serbia, Russia, and Ukraine do not appear to perform as well,
but Bulgaria has an average US cheese import annual growth rate
of almost 1%. Comparatively, Portugal, which exports about 70%
less cheese to the US as Bulgaria, had a negative average annual
US cheese export rate (-1.5%). Portugal imports over twice as much
cheese to the US as Estonia, which is declining in the US market at a
rate of 11%, compared to the 6.6% global decline in cheese exports.
This analysis reveals that while Portugal’s global cheese exports

are not a significant contribution to GDP, they are significant with
respect to market share. Average annual global growth is also
positive. Some of Portugal’s closest and more distant competition
in the global cheese market either fail to export significant and
consistent volumes to the US or experience negative growth rates.
From these findings, the report suggests SMEs should target
outcompeting Bulgaria in global, European, and US markets, as
these markets bear similarities. Bulgaria’s global cheese exports
for 2014 were almost 50% greater than Portugal, and US cheese
imports were between three and four times more than Portugal.
Exporting cheese in all markets at Bulgaria’s level, therefore, should
be reflected in SMEs short and longer-term export development
and growth models.
3.4d Pure Olive Oil

In 2014, the European share of the global pure olive oil market
($7.04B) was $6.46B, almost 92% of the global market. The top five
European exporters of pure olive oil were Spain (European market
share: 27%, global market value: $1.76B), Portugal (European market
share: 7.5%, global market value: $487M), Greece (European market
share: 5.4%, global market value: $349M), and France (European
market share: 0.88%, global market value: $56.9M).
Portugal became the third largest European global exporter in

2014 when it outcompeted Greece. It had been steadily growing
its European global market share in the years prior with an average
annual growth rate of 15% between 2011 to 2013. Section 3.3d
showed that Portugal has a significant global market share and
GDP contribution from exports of this subsector is very strong. In
fact, pure olive oil exports contributed the most to Portugal’s 2014
GDP (0.21%) out of the seven agrifoods subsectors in this report.
To reiterate some figures that will be essential for comparing the
global, European, and US markets, the report highlights that in
the global market, Portugal’s average annual growth rate was 8.9%
(2011-2014) and the global market average annual growth rate
was 4.5%. Within the US, Portugal held .47% of the market in 2014;

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Portugal’s highest US market share between 2011 and 2014 was .6%
in 2012, and its US imports are declining at an average annual rate
of 6.3%.
As Portugal looks to expand its pure olive oil market share both
globally and in the US, it will be crucial to understand its European
competitors. Portugal currently exports less pure olive oil to US than
countries that it outcompetes in the global market by significant
amounts, such as Tunisia and Turkey – the third and sixth largest US
pure olive oil exporting countries for 2014, when Portugal was ninth.
This may be, in part, because 45% of Portugal’s pure olive oil exports
are going to Brazil, but Brazil is aiming to decrease its olive oil
imports by as much as 30% by 2018 in an effort to boost domestic
production (Higginson 2014). Portugal holds more than half of the
Brazilian olive oil market; this transition to domestic, Brazilian olive
oil – if successful – will deeply impact Portuguese olive oil exporters.
India is also launching its domestic olive oil industry and could
become a potential global and US market competitor (Research
and Markets 2013).
It is clear that growth for Portuguese olive oil in the global market
(8.9%) is outpacing the total growth of the global market (4%). The
strategy for SMEs exporting pure olive oil will be to discern why
success globally has not translated to US market success and utilize
this knowledge in making headways in the US market. The success
of Portuguese olive oil globally is likely due to a combination of
dialectical factors, both within and out of SMEs’ control, but it may
be important to effectively market the health advantages of pure
olive oil from Portugal in the US. This could include encouraging
higher-end retailers to push the product through creating strong
brand positioning, in-store demonstrations, and promotions. Once
the Portuguese olive oil industry fully recovers from the recent
blight that reduced production and exports, a US marketing
campaign that focuses on health and the use of olive oil for cooking,
customizable dressings, and as a condiment would be an advisable
strategy. This same strategy could be used in developing markets
like China.
3.4e Chocolate
In 2014, the European share of the global chocolate market ($27.2B)
was $20.5B, 75% of the market. The top five European exporters
of chocolate were Germany (European market share: 23%, global
market value: $4.74B), Belgium-Luxembourg (European market
share: 9.2%, global market value: $1.89B), the Netherlands (European
market share: 8.3%, global market value: $1.71B), and France
(European market share: 8%, global market value: $1.64B). These top
European global exporters are mostly unchanging year to year, with
the exception of the Netherlands outcompeting France in 2013.
Portugal’s share of the 2014 European market was 0.15% (and global
value $30.5M), which is most similar to Greece (European market
share: 0.17%, global market value: $33.9M), Latvia (European market
share: 0.17%, global market value: $34.2M), and Belarus (European
market share: 0.24%, global market value: $50.2M). Similar to

its global market share, Portugal’s share of the European global
chocolate export market has decreased in recent years. It fell, on
average, by 8% per year from 2011 to 2014. Portugal largest chocolate
export destination are Spain (35% in 2014) and Angola (17% in 2014).
Portugal’s market share in each of these countries’ markets has been
falling while some of its European competitors, especially Germany
in Spain and the Netherlands in Angola, have gained share in these
markets. If SMEs can trace these market share losses to specific
strategies or companies, they may be able to discern a competitive
edge to halt global, European, and US export losses.
Section 2 advised that SMEs should focus on the singular goal of

gaining US market access, as large Portuguese companies are not
importing to the US in significant levels. The Section 2 analysis, as
well as the analysis in Section 3.3e, directed SMEs to understand
market demand differentiation for chocolate products. There is
growth in both the global and US markets for dark chocolate
or chocolate with a higher percentage of cocoa, not milk solids,
which is touted not only for its health benefits but richer flavor and
varied uses. SMEs are also advised to develop how to distinguish
their export products from that of multi-national competitors
dominating global, European, and US markets.
3.4f Jams
In 2014, the European share of the global jams market ($2.95B) was
$1.84B, 62% of the total market. The top five European exporters
of jams were France (European market share: 20%, global market
value: $371M), Germany (European market share: 14%, global market
value: $255M), Belgium-Luxembourg (European market share: 11%,
global market value: $202M), Italy (European market share: 11%,
global market value: $201M), and Spain (European market share:
7.6%, global market value: $141M).
Portugal’s share of the 2014 European market was 0.67% (and

global market value $12.3M), which is most similar to Ireland
(European market share: 0.65%, global market value: $12M), Belarus
(European market share: 0.47%, global market value: $8.59M), and
Serbia (European market share: 0.74%, global market value: $13.6M).
Though it is unlikely that Portugal will become a top five European
global jam exporter, SMEs can harness recent growth to improve
their US presence. US jam imports from Portugal have increased at
an average annual rate of 40.9% from 2011 to 2014. Ireland has also
had positive US market growth (11.5%), as has Belarus (26%).
Europe accounted for 62% of the global jam market, but only 33%
of the US import market, narrowly outcompeting North American
exporting countries. Similar to other subsectors, the challenge
here is from exporters like Chile and Turkey, growing at an average
annual rate of 15.7% and 35.3% respectively in the US import market.
This report recommends SMEs take advantage of Americans’
perceptions of high quality and purity surrounding European jams,
particularly as North and South American exporters to the US,
such as Mexico and Argentina, continue to experience decline. This
analysis also reveals that demand for French jam exports is also
declining the US, which could mean this market is opening up to

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lesser-known and smaller brand jams. As one importer / distributor
explained: “having an existing market here in the US helps, but I
don’t think it’s necessary to sell good products.“30
3.4g Processed Fish

In 2014, the European share of the global processed fish market
($16.2B) was $4.7B, again the only report subsector where Europe is
not dominant. The top five European exporters of processed fish were
Germany (European market share: 18%, global market value: $850M),
Spain (European market share: 18%, global market value: $829M),
Poland (European market share: 8.6%, global market value: $404M),
the Netherlands (European market share: 7.8%, global market
value: $368M), and Denmark (European market share: 7%, global
market value: $328M. The top two global processed fish exporters,
Thailand and China, had a combined market value of over $5B, which
demonstrates the scale of Europe’s global export competitiveness.
Portugal’s share of the 2014 European market was 5% (and global

value $233M), which is most similar to Italy (European market
share: 5.5%, global market value: $257M), France (European market
share: 4.2%, global market value: $196M), and the UK (European
market share: 3.6%, global market value: $170M). Section 3.3g
showed that Portugal has a significant global market share and
GDP contribution from exports of this subsector is strong. Portugal
has seen overall growth in its European global market share, and in
2014 the difference between its market share and the fifth largest
European processed fish exporter was 2%. Portugal came even
closer to being a top exporter in 2013, when it held 5.9% of the
European share of the global market, compared to the fifth largest
European exporter, the Netherlands’ 6.4%.
The European global market value had an average annual growth

rate of 2.2% from 2011 to 2014, and Asia had a 1.7% average annual
growth rate. European growth is outpacing Asian growth, and with
issues in Southeast Asia’s supply chain, Asia’s market share and
growth may be significantly reduced in the US and global market.
European countries’ share of the US market could substantially
increase with consumer preferences shifting towards clean supply
lines. SMEs can use their positive labor and supply relations with
US importers to their advantage, but they will also be competing
with large Portuguese exporters, as well as German, Spanish, Polish,
Dutch, Danish, and Italian processed fish exporters – the six European
exporters that outcompeted Portugal in the 2014 global market.
3.5 Conclusion
A large amount of information – both numerically and conceptually

– has been presented in this section on external competition. The
report views competition and export development as part of the
dialectical equation that influences agrifoods trade – two factors in
a constantly changing environment. Section 3.2 used a frequency

analysis to uncover the top exporters within this industry, from
Germany to Chile. Europe dominates – a result of the common
market – but excluding Europe, the US is the largest global agrifoods
exporter. The US topped the lists of non-European global baked
goods, cheese, and chocolate exporters and appeared as a top
five global preserved meat and jam exporter as well. Portugal was
a top global exporter (pure olive oil, 2011-2014) four times, as were
Poland and Greece. Outside of Europe, Brazil, Ecuador, Egypt, New
Zealand, and Tunisia are Portugal’s nearest global competitors across
subsectors. Though Portugal is most similar to Greece and Brazil
when examining global export value, its total sector exports amount
to only 20% of Poland’s. Part of this is because of olive oil commodity
prices and profitability, but it is also related to export consistency.
In baked goods, Portugal is a significant global exporter (greater

than 0.0%). The global baked goods market had an average annual
growth rate of 3.9% and appears stable and relatively low risk for
SME export development and growth. Asia and North America
have been growing at a faster pace than Europe in this market,
which will require SMEs to monitor this market on a global scale.
European countries dominate, holding 64.3% of the market in
2014. Germany, Belgium, Luxembourg, France, and Italy combined
have 52% of the European global export market. Portugal’s closest
European competitors in the market in 2014 were Ukraine, the
Czech Republic, and Bulgaria, and this report suggests focusing on
outcompeting the Czech Republic while ensuring Ukraine does not
close the $3M market value gap that separates it from Portugal.
Within preserved meat, Europe holds 74% of the global export

market, but Brazil is a notable competitor with 11% of the global
market. Portugal’s market shares have been in decline; its 2014
European global market share was closest to the Czech Republic,
Sweden, and Switzerland. This market seems to be especially
affected by dialectical factors like consumer preference and trade
regulations. The report advises Portugal to start an aggressive
marketing campaign to increase market share, especially in
competition with Spain.
The global cheese market is the most valuable of the seven

subsectors in the report, and Portugal is a significant (greater than
0.0%) exporter. Europe held 82% of the market in 2014, led by
Germany, the Netherlands, and France. This is another subsector
where dialectical factors impact competitiveness. For example,
Germany is much more competitive in the European market
than it is in the US, and consumer preference, legal regulations,
and high tariffs influence European competitiveness in the US
market. The global market for cheese is growing, as incomes
increase worldwide, but Section 5.2c will address the most essential
question: is US demand for imported cheese increasing?
Portugal is the third largest global exporter in the pure olive oil
market, which is almost entirely held by Europe. Portugal’s global
market share has been growing at an 8.9% average annual growth
rate, which contributed to Portugal recently outcompeting Greece
in the global market. Its other global competitors are Spain and
Italy, but in the US market, Tunisia and Turkey are top competitors.

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Brazil imports large volumes of Portuguese pure olive oil, and as
Brazil begins to focus on enhancing domestic production, SMEs
exporting pure olive oil must expand their US imports should they
remain a top global exporter.
In the chocolate subsector, Portugal is a significant exporter, but

its market shares have been declining. Europe prevails in this
subsector with 75% of the global market, as do large, multinational
companies. Though Europe’s market share is stable, the US and
Turkey have been growing their exports at a competitive rate.
Portugal’s closest European competitors in the global chocolate
export market are Greece, Latvia, and Belarus. To improve global,
European, and US competitiveness, the report advised SMEs to
know which chocolate market they are going after and target
export destinations accordingly. The gourmet, dark or higher cocoa
chocolate markets may offer SMEs less multinational conglomerate
competition, but consumers are highly discerning in this market, as
opposed with the higher sugar and milk solids chocolate market.
Portugal’s share of the global jam market has grown at an average

rate of 6.2% per year. Though these exports do not contribute
significantly to Portugal’s GDP, it possesses a significant market
share. Like other subsectors in this report, Europe controls a majority
of the global market (62%). However, non-European exporters – like
Chile, the fifth largest global jam exporter with a 6% global market
share, and Turkey, the sixth largest with a 5.4% global market share
– have continued to grow in the global market. Portugal’s closest
European competitors in the global jam export market are Ireland,
Belarus, and Serbia, but none have outpaced Portugal in global
average annual growth; it will be essential for SMEs to contribute to
sustaining this growth rate.
The final subsector, processed fish, is unique in that Asia holds more
of the global market than Europe. It is also different from other
subsectors in this report in that there is deep uncertainty among
Southeast Asian exporting countries within this market. Other top
global exporters, such as Ecuador and Morocco, may rise to fill
the supply gap, but SMEs that are export ready could provide an
economical and effective solution, as well. Portugal faces challenges
in developing and enhancing its export development and growth
strategy. This report focused on general and specific ways that
Portuguese SMEs can work toward short and long-term goals that
will enable them to export sustainably. The report turns to setting
out, in broad detail, legal and regulatory compliance issues necessary
to gain US market access, with the hope of assisting Portuguese
SMEs in this complex endeavor with many moving parts.

Section 4:
Legal Regulations and
Compliance
4.1 Introduction
This section focuses on legal, regulatory, and compliance issues in

the US. Portuguese SMEs are encouraged to familiarize themselves
with US import regulations and compliance beginning with the
200-page document, Importing into the United States: A Guide for
Commercial Importers (“importing guide” hereafter), from the US
Customs and Border Protection Agency (CBP), a division of the US
Department of Homeland Security. The document includes advice
on expedited merchandise clearance, full scope documentation,
foreign trade zones, bonded warehouses, packing, invoicing, and
country of origin marking. As a resource for guidance, this section of
our report and the CBP importing guide are intended to provide an
overview and do not contain the sort of verification and detail that
parties like licensed brokers or customs attorneys would be legally
authorized to provide.
For more detailed compliance and regulatory information,

the report encourages SMEs to contact a US CBP attaché,
representative, or specialist at one of the European foreign offices.
They will most likely also be able to assist exporters with the
transition from the Automated Commercial Environment (ACE) –
how US imports and exports are currently processed – to the Single
Window, a paperless system designed to improve efficiency and
ease in compliance with US import regulations and compliance.
The transition is expected to be completed by December 2016.
Exporters of food products to the US can expect US Food and Drug

Administration (FDA) inspections when the products arrive at a
port of entry. Importers are responsible for compliance with the US
sanitary, labeling, and safety requirements, but this responsibility
may also rest with the exporter, depending on the relationship
between the two parties (FDA 2014). Although the FDA cannot
sanction importers, products, labels, or shipments, it does have
the authority to detain shipments and / or reject imports that are
noncompliant (FDA 2015v). Further guidance for SMEs is available
online through the US Department of Agriculture’s Compliance
Guide Index (FSIS 2016i).
4.2 Labelling and Packaging
Clear labelling is one of the best ways to expedite the process

of importing to the US. The CBP advises that “palletization” –
transporting cargo in pallets or other consolidated units – is another
effective technique that can aid the import inspection process
once cargo has arrived at a US port. The CBP also recommends

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that itemized labelling and documentation of materials helps
the exporter receive the correct tariffs applied to each product.31
If different items packaged collectively are not clearly labelled,
the highest tariff for all items packaged together will be applied;
having interviewed trade associations, importers, and distributors
the report fully recommends care and compliance with US labeling
and packaging requirements. Upon reaching the first port of entry,
items are also sampled and verified, and evidence for performance
testing is evaluated.
Some subsectors in this report are subject to more specific labelling

and packaging regulations than others, such as olive oil, chocolate,
preserved meat and / or Iberico ham, and processed fish. Not all
requirements are listed here, as requirements are highly product-
specific; the following serve as examples:
1. Products with an incorrect country of origin label (either

explicitly or through symbolization) are prohibited from entry.
2. Meat product labels claiming that the product is “natural” must
explain elsewhere on the same label what is meant by natural
(e.g. no artificial ingredients, no added hormones, etc) (FSIS
2015).
3. Olive oil is labeled based on “grades” set by the USDA, not
International Olive Council (IOC) standards (USDA 2010).
Labelling olive oil grade is voluntary and can be assigned by the
USDA for a fee (Marq Consulting Group 2014).32
4. There is a labelling distinction for foods with no artificial
chocolate or flavor from a source other than cacao beans; this
may be labeled chocolate. Other foods with artificial chocolate
or a cocoa percent less than 10% are labeled “chocolate flavor”
(FDA 2015i).
5. Labels on fish products must display market name that is not:
“fanciful or coined” to inaccurately characterize the value, quality,
or other feature of the fish product (FDA 2016iii).
All food packaging in the US is required to comply with FDA

labeling standards – specific to the product – and include
requirements such as:
1. The principal display panel, often referred to as the PDP, is the

front label and features all required and any product-particular
specified label statements, such as the product name, net
quantity (in metric and US customary units), and / or organic
status.
2. The informational panel (if not provided on the PDP) includes
information such as the manufacturer, packer, or distributor’s
contact information with a qualifying phrase stating the firm’s
relation to the product (“distributed / manufactured by”),
ingredient list, nutritional information, and allergen warnings.
31 See Appendix 3 for a sample list of tariffs that apply to the subsectors and product
categories assessed in this report.
32 See Appendix 6.

3. Explanation of any product-related health claims (“reduces
cancer” or “supports heart health”)
4. Any state-specific labeling requirements, such as a sell-by date
for perishable foods or lot code, which assists with identification
and may also be a sell-by date; some states also require a label
approval process.
5. All labeling information in English or Spanish in Puerto Rico (FDA
2014). One importer believed that mandatory English labeling
can serve as an access barrier for some exporters and advised:
“if you have an exporter that’s already doing well in the British
market, that’s their best leg up on the competition here.”33
The FDA also prohibits “intervening material” – defined as any

information not required by the FDA – between required labeling.
For example, the universal product code, which is not a FDA
requirement but often required by retailers, cannot be placed
between the nutrition facts and the ingredient list (FDA 2016ii).
The FDA is available for questions regarding accurate labeling, but
questions can also be best directed through importers.
4.3 US Sanitary Import Requirements

This section highlights key sanitary regulations for imported
agrifoods products; however, this information is not exhaustive.
The report has focused on sanitary requirements that affect the
subsectors selected for this report, but other agrifoods products,
such as those containing foreign fruit, vegetable, seed, plant, or
plant products, have further phytosanitary requirements that the
report scope omits.34 SMEs are encouraged to fully understand and
discuss sanitary requirements for the US market with importers
as part of becoming export ready; Section 2.3b highlighted that
Portugal is not exporting cured ham to the US because they are not
on the list of eligible exporters, which involves SMEs and Portuguese
national trade and agriculture authorities working to become
certified by completing audits and inspections. Further information
can also be found by consulting the sources cited in the section.
4.3a Meat, Animal Products, and Animal Bi-Products

The USDA’s Animal and Plant Health Inspection Service (APHIS)
at times requires a veterinary permit for some imported meat,
meat products, poultry, milk, eggs, and dairy products, as well
as food products containing trace amounts of these ingredients;
butter and cheese are exempt. It is unclear whether preserved
meats require a permit, and the report suggests that importers
would likely be the best source for addressing this concern. The
USDA’s Food Safety and Inspection Service (FSIS) regulates meat,
poultry, and egg product imports for human consumption, and
these imported products require a health certificate that meets
both APHIS animal health requirements and FSIS public health
requirements (APHIS 2012). Portugal, like several EU countries, is
34 See APHIS 2012 in the references of this volume.

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not currently on FSIS’ list of countries approved to export meat,
animal products, and byproducts to the US, and the FDA reserves
the right to detain imported meat products from Portugal without
physical examination (FSIS 2016), partly due to the presence of
bovine spongiform encephalopathy. This right is further discussed in
Sections 4.3b and 4.3c.
Some European exporters, such as Denmark, France, Hungary, Italy,

Germany, the Netherlands, Poland, Sweden, and parts of the UK,
have completed a process that allows them to export certain meat
and meat products to the US. The process SMEs need to undergo to
be allowed to import preserved meat into the US is as follows:
Countries that are eligible to export meat, poultry or and/or egg

products have gone through the initial equivalence process that
includes submission of documentation that supports government
oversight of their food safety inspection system. After conclusion
of document reviews, FSIS has performed an onsite audit, the
rulemaking process has concluded, and the country has been
listed as equivalent in the Code of Federal Regulations (FSIS 2016).
Because government authorities can be slow to progress, the

report advises SMEs lead or participate in this process, working
with Portuguese national trade and agriculture authorities. Without
doing so, it is unlikely the situation will change. Though the process
is somewhat intimidating and arduous, the businesses that lead this
process will undoubtedly be the first Portuguese preserved meat
producers on the US market. The report acknowledges the difficult
tasks of partner searches and sales remains after becoming eligible
for export; however, the report has demonstrated – and will further
demonstrate in Section 5.2b – growing US demand for preserved
meat products. The investment has deep return potential for SMEs
willing to put in the work, and resources like the AEP-Chamber of
Commerce and Industry of Porto can possibly assist SMEs in this
process (Nunes de Almeida 2016).
4.3b Cheese
Cheese imports are subjected to more specific regulations and
requirements compared to other dairy products within the animal
byproduct sector, which must comply with certain APHIS and FDA
requirements. For example, any goat milk product is required to
have a USDA import permit if the product is from a region classified
as affected with foot-and-mouth disease or rinderpest; although
Portugal has been cleared of certain animal diseases, such as
African swine fever, it is still subject to these restrictions because
of its trade relationship and / or proximity to regions rinderpest
affected countries (CBP 2015).
Additionally, the FDA has 18 “import alerts” for Portuguese agrifoods

products. An import alert – also known as detention without
physical examination (DWPE) – is a notice from the FDA to all ports
that all future shipments of the imported product can be refused
without examining the product. For example, if a Portuguese
cheese manufacturer’s imports were refused because FDA testing
discovered evidence of Listeria, Salmonella, E coli, etc, all future

Portuguese cheese products listed in that import alert can be
refused. However, the alerts specify that it is primarily imports from
manufacturers listed on the alert that are refused, although the FDA
reserves the right to refuse all imports of the product type from the
country previously found in violation of FDA standards.
Two import alerts are specifically for cheeses, with 16 Portuguese

cheese producers listed as having their products DWPE. This
information can be found on the FDA’s website by searching
“import alerts” and browsing by “country / area”. The FDA Import
Operations Office advised further.
Once a firm / product is placed on Import Alert, the firm and

product will remain on Import Alert until they petitioned to be
removed by supplying evidence that the violation no longer exists
and preventative measures have been put in place to prevent
the violation from occurring in the future. In order for FDA to
consider removing a product and / or firm from DWPE, FDA must
have evidence which establishes the conditions that gave rise to
the apparent violation have been resolved and which gives FDA
confidence that future entries will be in compliance with the
Act. The manufacturer should conduct a thorough Investigation
to determine the root cause of the violation and document this
investigation in detail. The firm should then compile a Corrective
Action Plan to resolve the conditions that led to the product
becoming violative. The firm should compile a Preventative Action
Plan to ensure that goods do not become violative in the future.
Once this has been completed, the firm can export five (5) routine
size shipments of each product to the U.S. or twelve (12) shipments
of multiple products. Upon entry, the goods will be DWPE by
the FDA in accordance with the Import Alert. The Importer
of Record will receive a Notice of FDA Action stating that the
goods in question have been DWPE. At this time, the Importer
has the opportunity to hire a third-party private lab in the U.S. to
conduct sampling of the goods to demonstrate the goods are in
compliance with U.S. regulations. If the products are found to be
in compliance, they can be released. Once the manufacturer has
successfully shipped five consecutive shipments for one product or
twelve for multiple products, they have been sampled by a third-
party lab, and released by the FDA, then the firm may submit a
petition for removal from the Red List of the Import Alert.35
SMEs may be well advised to conduct intensive research into the

companies and products being refused, locate (former) importers,
and utilize the information for the opportunity to fill a supply
gap. While the FDA reserves the right to fully reject all cheese
imports from Portugal, SMEs can use import alerts to uncover
opportunities for export development and growth. This emphasizes
35Rotational Duty Officer, Division of Import Operations – IOMB,

Office of Regulatory Affairs, US Food and Drug Administration;
further guidance is available at http://www.fda.gov/forindustry/importprogram/
actionsenforcement/importalerts/ucm493806.htm and http://www.fda.gov/ICECI/
ComplianceManuals/RegulatoryProceduresManual/default.htm.

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the importance of full compliance with US import, CBP, and FDA
import standards as well.
4.3c Dried and Canned Fish

The FDA, National Marine Fisheries Service (NMFS), and Fish and
Wildlife Service (FWS) regulate seafood imports. The FDA’s Hazard
Analysis and Critical Control Points (HACCP) regulations for
imported seafood includes measures such as inspecting foreign
processing facilities, sampling seafood offered for US import,
domestic surveillance sampling of imported products, inspecting
seafood shipments, evaluating filers of seafood products, assessing
foreign country programs, and submitting relevant information to
FDA overseas offices (FDA 2015ii).36 In July, it was announced that
the FDA is inviting public comment on continuing the information
collection provisions of HACCP (Sandler, Travis and Rosenberg
2016). There are also import quotas on certain types of dried and
canned fish, such as tuna and anchovy (CBP 2015i). All US imports of
sturgeon, paddlefish, and their products (e.g. caviar) are required to
have a Convention on International Trade in Endangered Species of
Wild Fauna and Flora (CITES) export or re-export certificate from the
exporting country’s CITE Management Authority (CBP 2008).
Like cheese, up to five import alerts may similarly affect processed

fish imports from Portugal, particularly regarding HACCP
compliance and acid levels in canned foods. Surveying the FDA’s 18
import alerts for Portugal, it appears as though eight Portuguese
companies that export products within the subsectors assessed in
the report have their imports DWPE at US ports, including several
TSB and other product categories of processed fish. The rejection of
imports presents considerable opportunity for SMEs that are able
to devote resources into further investigation and assessment of
supply gap capability; the companies being rejected range from
large multinationals to smaller exporters.
4.4 Special Requirements
In terms of special religious dietary requirements, producers should

be aware of both kosher and halal labeling requirements, which
are typically consistent internationally. Over 13% of the American
population (11.2 million) regularly buys kosher (Marq Consulting
Group 2014). Muslims account for 16% of the kosher market because
of limited halal products available locally, and the US Muslim
population is predicted to grow from 2.6 million in 2010 to 6.3
million in 2030 (USHA 2012). Demand for kosher and halal products
will continue to grow, and imports are typically a high percentage
source for halal foods in particular. It is advisable that SMEs
exporting products containing gelatin or animal products, such as
chocolate, baked goods, jams, and cheese, consider whether kosher
or halal certifications would not enable them to reach a wider and
growing US market.
36 See also: “Fish and Fishery Products Hazards and Controls Guidance – Fourth Edition 2011”
for additional information on controls for fish products.

Additionally, SMEs should understand that the costs of obtaining
certifications – kosher, halal, organic, etc – remain with the exporter,
not the US importer / distributor.
It’s the manufacturer or supplier’s responsibility; they need to

make sure by the time it arrives to FDA that it’s certified. It’s a cost
and process, and it takes a little bit of work. For us, we only deal
in USDA organic, non-GMO certified… When new products come
in we need all documentation where it comes from and that
it has passed all the tests. The importer or supplier would incur
these costs. For us, there’s no other cost we add; we just need the
certification before we can start selling the product.37
While the extra costs of product certification may be a deterrent

to SMEs, certain certifications will expose SMEs to differentiated
markets where they may find an opportunistic and profitable niche
for their products in the US market.38
4.5 Tariffs39
The report analyzes a vast range of subsector product categories and

aims to give tariff information where Portuguese SMEs are most likely
to encounter tariffs on their imports. This section focuses specifically
on tariffs for the subsectors product categories analyzed in Section 2.
For other subsector products where Portuguese exporters face tariffs
upon entry into a US port, further information has been provided in
Appendix 3 and HS codes can be consulted in Appendix 3.
The US has bilateral investment treaties (BITs) and / or free trade

agreements (FTAs) with a range of countries, and the general
rate of duty (tariff) does not apply to these countries. They receive
preferential or “special” duty rates. Additionally, there are “column
2” or “statutory” rates, which are reserved for countries where the US
has issued an embargo, such as Cuba or North Korea. Beginning
with baked goods, Portuguese SMEs will face tariffs in only one
product category (19059090 – corn chips and similar crisp savory
snack foods; pizza and quiche; and other products) of 4.5% tariff per
kilogram (kilo). The tariffs for preserved meats range from 2.3% per
kilo to 1.4 cents per kilo. Only two cheese product categories are free
from tariffs.40 All other product categories are subject to tariffs that
range from 2.7-25% per kilo and / or $1.055-$2.269 per kilo. Many
cheeses are also subject to import or quota restrictions (CBP 2015).
Tariffs on pure olive oil products range from $0.034-$0.05 per kilo.
For chocolate, three product categories are tariff-free; all other
38 The distributor from Interview 7 serves as a good example of how SMEs can grow through
niche markets like kosher.
39 The World Customs Organization applies updates to the HS every 5 years, and on January
1, 2017 around 230 tariff changes will go into effect, including changes to particular fish
products. SMEs are advised to consult the relevant HS codes for their products after this date.
40 These HS codes and product categories are 04069056, sheep’s milk cheese in loaves,
suitable for grating and 04069057 pecorino in loaves, not for grating.

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products, tariffs range from 3.5%-10% per kilo and $0.52-$0.528
+ 8.5% per kilo.41 The jams subsector has one tariff-free product,
and all other products have tariffs that range from 1-131.8% per
kilo and $0.02-$0.326 per kilo/liter.42 Finally, in the processed fish
subsector there are almost 50 products that are tariff-free; the
product categories with tariffs range from 2.7%-15% per kilo and
$0.011 per kilo. Exporters should also be aware that certain products
are subject to US tax and / or user fees upon entry and that tariffs
differ from US port to port. Generally speaking, the sea port with the
lowest tariffs is Newark, New Jersey, while New York state has some
of the highest rates of duty. For detailed information, exporters are
advised to contact an import specialist at the port through which
products will arrive.
4.6 Distribution Structure and Channels
When beginning to uncover potential market entry points, SMEs

may discover that retailers are easy to identify and speak with a
purchasing manager, but retailers often lack decision-making
power. For example, one retailer interviewed was interested in
competitively priced Portuguese products but: “it would all have
to be handled through our distributor; we have no say over that.”43
Distributors with the capacity to make purchasing decisions
expressed low interest in new products. “Email their catalogue, and
we’ll get back to you if we’re interested.”44 Several US importers focus
exclusively on specialty products, such as French cheese, Greek olive
oil, or Middle Eastern foods. An importer that focuses on European
confectionary products illustrated the difficult process SMEs face in
gaining US market access. “We have certain manufacturers we deal
with exclusively; we aren’t looking to be more diverse.”
There are US importers that are more open to new products; several
offer diverse products on their website and purchase from overseas
suppliers only when an US order is placed rather than regularly
stock products that are not in consistent, high demand like French
butter.45 For other US importers, the process of purchasing new
products and forging new partnerships remains internal. As one
importer / distributor said: “we go out and find products we are
interested in, but producers also submit products to us… There’s a
variety of ways we find new products.”46 Market entry and potential
partner search options and challenges are numerous, but the vast
majority of US suppliers responded that product purchasing and
distribution decisions are driven by consumer demand.
41 The tariff-free products include 18062020, a specific range of cocoa fat, butterfat, and milk
solids chocolate preparations consisting wholly of ground cocoa beans, 18061005, chocolate
containing less than 65% by weight of sugar, and 18061010, a particular description of cocoa
powder containing sugar or sweetener.
42 The tariff-free product includes 20079930, guava jam.
43 Interview 1, Appendix 5; see also Interviews 2 and 3.
44 In contacting over 100 US companies, this was a rote response; see Interview 2, Appendix
5 as example.

Either we know the product and go after it because we know
there’s a market here or a customer finds it. We need a customer
before we can place an order; we need to identify a market before
we can place a big order from overseas. So new products are
mostly retail driven; the customer will either tell the retailer what
they are looking for or the retailer will attend trade shows and
see something they like. If they think they can sell it, they tell the
distributor, who tells the importer.47
This structure appears top-down and straightforward, but there is no

standard model for US market entry and distribution. Some producers
enter the US market by partnering with a few importers and / or
distributors, but other US importers or distributors require exclusive
rights over producers’ products, limiting producers to a single importer
or distributor’s market. If the supplier does not effectively market
the product, it is unlikely to sell, and SMEs receive a poor return on
their investment with the supplier. A handful of suppliers work as a
collective, as was the case with one distributor interviewed.
On our website, the “products” link goes to several other

distribution companies. We all know each other within the
market; we would work together when the necessity arises.
We specialize in some products they do not, and they have
some products that we do not. If I have a customer looking
for something we don’t have, we can get it from one of our
distributors, one of our friends. I’d call it a strategic alliance.
It’s easier for the customer and for the logistic costs for the
distributor, and this helps keep the prices of imported foods low.
It becomes a really nuanced conversation we have with them
because of course they are our competitors; but the end of the
day it’s operational.48
One newly launched pastéis de nata producer was deeply familiar

with the challenging options for distribution in the US and
responded by setting up a US headquarters in California, which they
said they selected for its climate.
We just thought setting up in the US would be more coherent. We

were having difficulty getting on the US market, and so it made
sense to set up US entity. It has allowed us to represent ourselves
and our business interests better; setting up face to face meetings,
going out and meeting at trade shows, talking to people, and
having a US address and phone number seemed a better
strategy. We find that in the US the buyers are predominantly
on the East Coast, and so it didn’t matter where we are based as
we can do everything online from any US location. It’s a whole
different challenge finding our market here and finding importers
or distributors in the US. Our US base gives confidence to
retailers [in our ability to fill orders consistently and troubleshoot
distribution issues], but whether this confidence translates into
success has yet to be seen.49

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This nata producer said they were targeting US foodservice outlets,
particularly gourmet and eclectic coffee shops, and foodservice
may be highly appropriate market entry points for SMEs producing
larger quantities of products, such as cheese, olive oil, chocolate,
jams, and possibly processed fish (see Interview 7, Appendix 5). A
trade association for US distribution companies suggested demand
for imported food in the foodservice industry ranges: “from five-star
resorts to naval bases to oil platforms”, and demand is high.50 Food
manufacturing service accumulated more than $2.8B in annual
sales in 2015, but the fastest source of growth within foodservice is
in hotels, universities, and related, in-house catering services. With
American incomes recovering in both urban and rural areas, growth
in foodservice markets appear unabated (USDA Economic Research
Service 2016i). Entering the US market through foodservice outlets,
building a brand presence, and transitioning to the slightly more
lucrative retail market offers an impactful, sustainable strategy
suitable for certain SMEs. Though foodservice and retail occupy
almost equal shares of the US agrifoods market, retail food sales
reached $703.7B in 2014; foodservice topped out at $675.4B (USDA
Economic Research Service 2016).
The US food retail market is largely concentrated among large,

chain stores that are either national or regional in scope, such as
Wal-Mart, Kroger, Safeway, and Publix Super Markets. However,
some of these more conventional retailers are slower sources
growth, and many reported that they do not buy imported
or specialty products (Specialty Foods Magazine 2016). When
speaking to a mega-retailer that has four regional chains of stores,
the retailer expressed interest in Portuguese cheese, but: “we sell
mostly the usual white cheese, queso blanco, and feta.”51 Therefore,
conventional retailers may not offer the best market for Portuguese
agrifoods. On the contrary, over half of importers’ sales of specialty
or imported food goes through distributors for retail and food
service, as opposed to direct consumer sales. A further 65% of
importers, 60% of distributors, 64% of brokers, and 56% of retailers
are looking to expand their specialty and imported food selection,
which could mean big business for Portuguese SMEs, especially
those importing specialty products (Specialty Food Magazine 2016).
Specialty, natural, and upmarket retailers – large, medium, and

small – may offer the best opportunities for Portuguese SMEs
producing conventional quantities of products to find their way into
the US market. They are the fastest growing distribution channel for
specialty and / or imported food in the US, reaching $120.5B in 2015
and growing at an annual rate of 27% (Specialty Foods Magazine
2016). Whole Foods, Sprouts / Sunflower Markets, Safeway, Harris
Teeter, Trader Joe’s, Hannaford, Albertsons, Food Lion, Pathmark,
and SuperTarget are some of the larger retailers of specialty and
imported food.
51 Interview 1, Appendix 5; the interviews included in Appendix 5 are the substantive

interviews selected for use in the report. However, over 100 companies were contacted, and
several provided answers to basic data collection questions, such as: “Do you buy imported
products?”.

Another rapidly growing source of US food retail is within
e-commerce; particularly with imported specialty products like oils,
mustards, and vinegars, online retailers are seeing increased sales
as a product of the “convenience economy” – grocery shopping
that can be done from the convenience of home. The US market
is burgeoning with e-commerce food retailers from iGourmet,
which sells imported Portuguese products, to pre-packaged, pre-
measured weekly grocery deliveries that provide all ingredients for
meals. Amazon, the e-commerce giant, recently launched a grocery
service. Findings indicate that 65% of importers, 60% of distributors,
64% of brokers, and 56% of retailers are looking to expand their
specialty and imported food selection, which could mean big
business for Portuguese SMEs (Specialty Food Magazine 2016).
Varied distribution structures and options pose unique challenges

with particular advantages and disadvantages that are specific to
the products and the SME, such as establishing a brick-and-mortar
headquarters as the pastéis de nata producer did. Membership in
a US trade association can also offer SMEs resources to help them
make these critical decisions as most appropriate for their business.
“Some [of our members] need much more help from us because
they can’t afford to set up a US presence. They would find it easier
to have a presence here if they are breaking into this market. It’s not
an easy market to break into because there are so many players; the
amount of foreign suppliers trying to get their products on the US
market is intense.”52
Gaining an import license is likely the most direct but costly

mechanism for producers to enter the US market and distribute
their products, and SMEs exporting highly regulated products,
such as cheese or preserved meat may benefit from considering
this option. Speaking to three US importers, the report parties
learned that Spanish preserved meat producers have been able to
corner the market by serving as their own importers. The market
barriers for these products are higher than other agrifoods products
– discussed throughout the next section – and importers and
distributors are eager to carry these highly demanded products to
sell to both retail and food service. By serving as the importer and
facilitating the often cumbersome regulatory process themselves,
Spanish companies have partnered with US suppliers to offer their
products online and in their catalogues. When an order is placed,
the Spanish importer sends the product directly to the consumer
– a process known as “dropshipping” that eliminates the need for a
physical stock of perishable items.
Employing the expertise of a Portuguese representative that is

deeply familiar with the US agrifoods market or a US trade, customs,
or compliance specialist may be a cost-effective alternative to
gaining an import license or establishing a US headquarters.53 “It is
good advice for [agrifoods exporters] to get a broker or compliance
specialist”, but an experienced Portuguese representative based
in the US is useful for facilitating the day-to-day operations of

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distribution, compliance, sales, and relationship building.54 This
individual or collection of individuals – possibly more cost-effective
than a broker or trade lawyer – serves as SMEs’ primary point of
contact in making introductions with industry decision-makers.
There is also the option that SMEs could collectively employ one or
more US-based representatives. This strategy has the potential to
reach a greater population of US suppliers, as suppliers reiterated
variety is often necessary to compete with larger producers that
catalogue thousands of products. In the US, both consumers
and suppliers enjoy product diversity. Similarly, one importer
suggested Portuguese SMEs should work with a US supplier that
“that consolidates orders from all over the world”, such as Specialty
Commodities, Incorporated.55
An even more cost-effective strategy for SMEs to enter the US

market is to develop new relationships, engage industry experts,
market specialty products, and offer samples, special offers, and
product demonstrations through trade shows, publications,
associations, and state, regional, and national conferences –
explored further in Section 5.4. Whatever distribution and market
entry option (or options) is most effective for specific products
and SMEs, an online English-language presence can be critical
in developing and growing a US market, providing product
information, and establishing market positioning. A point of
reference is “Foods & Wines From Spain”, a website showcasing
product diversity, cross-marketing, and business-to-business
links for Spanish producers and international suppliers. Foods &
Wine From Spain further penetrates the US market through bi-
monthly newsletters, Facebook, YouTube, Twitter, blog posts, events
calendars, and extensive data sources. A strong US social media
brand presence tied to Portuguese tourism can also prove fruitful
for establishing and intensifying demand (Fischer and Hartmann
2010).56 “Portugal is really trending in terms of travel and tourism.
It’s on a lot of people’s radar than ever before. When you travel to
Portugal you have great food experiences, and you come back to
your country and look for it.”57
When building a market for Portuguese products, concentrated

populations of Portuguese migrants or Portuguese-Americans can
offer highly strategic entry points. Targeting these areas, such as
those in the states of Rhode Island and Massachusetts, may offer
SMEs market access with lower initial investment and marketing
costs by focusing on consumers that are familiar with the quality
and range of Portuguese products. “The Portuguese population here
travel to Portugal once a year or so and sample the foods there.
Those would be my first consumers here, for ones I would target for
sales, the Portuguese community. The ones who don’t would need
to sample it like crazy”.58 Once SMEs have successfully entered the
54 Interview 4, Appendix 5; see also Interview 7.

US market, these Portuguese / Portuguese-American communities
can serve as critical resources for boosting further product and
brand development and growth. “In southeastern Massachusetts,
we are representing Portugal very well… There’s interesting products
that I’d like to trial, not talking container loads, just a trial on
bringing it into the market.”59
With Portuguese food trending in the US (see Section 5), SMEs may
discover a growing demand for authentic Portuguese products
that extend from Portuguese-centric communities and Americans
who have travelled to Portugal to mainstream consumers. Once
Portuguese products are more widely available on the US market
and consumer demand stimulates US suppliers’ to import,
distribute, and purchase more Portuguese products, SMEs with
initially lower export investment resources may be able to revise
distribution structure by gaining an import license or establishing
a US headquarters. Again, varied options for US distribution exist
to allow producers of all sizes, with a vast array of products to
compete in the US market, and selecting the most appropriate
and sustainable strategies requires assessing market entry points,
investment costs, export development goals, and market barriers,
such as legislation to which this report now turns.
4.7 Effects of Legislation
This section explores key legislation that impacts Portuguese

SMEs US market access and growth. Section 4.3 highlighted how
sanitary import requirements can impact SMEs exporting animal
products, such as preserved meat, cheese, and processed fish. This
section provides an overview of other challenges to SMEs’ ability
to gain access to the US market; again, a broker or trade lawyer is
able to provide specific guidance and should be consulted as SMEs
become export ready.60
4.7a The Public Health Security and Bioterrorism Preparedness and

Response Act of 2002
The Public Health Security and Bioterrorism Preparedness and
Response Act of 2002 (the Bioterrorism Act, henceforth) gave the
FDA, as a part of the US Department of Health and Human Services,
the authority to establish and enforce tighter food safety measure
in an effort to prevent any corruption of the US food supply. Four
key regulations resulted. The first is registration of food facilities; any
facility (American or foreign) that manufactures, processes, packs,
or holds any food for American consumption must register with the
FDA (CBP 2015).
An FDA representative communicated that these food safety

regulations are related to food recalls. “We need to be able to
immediately get into contact, at all supply chain levels, with foods
that are found to have a health or safety concern.” The registration
59 Ibid.
60 For further guidance, consult the FDA website at FDA.gov and, specifically, the document
titled: “Prior Notice of Imported Food Questions and Answers (Edition 3): Guidance for Industry”.

• 91
requires: “things like a supplier verification form, which says that
they know where their products are coming from, where they are
produced / manufactured, and that the manufacturer / producer
has not only trained their staff on important health and safety
regulations but that their products have passed health and safety
certifications”.61
Second, the Bioterrorism Act also requires importers or producers

to notify the FDA in advance of food arriving into the US to ensure
for timely health and safety product testing (FDA 2015). The FDA
representative suggested that testing also be carried out in advance
of exporting.
You have to test your own products before they come in, and
when you test it at the border, you have to have all the paperwork
and be confident that it will pass inspection at the border.
[Customs has] to be confident that [your shipment] has all the
right paperwork, everyone here [in the US supply chain] and at
the product origin is registered, and when you fill out the ‘prior
notice’ to let the FDA know a new product is coming in, you have
to fill out where its coming from and going to.62
Third, maintenance and inspection of records are required of

anyone who manufactures, processes, packs, transports, distributes,
receives, holds, or imports foods for American consumption. The
FDA representative emphasized that the full supply line must be in
compliance to ensure that they are able to identify all sources. “No
one is exempt because we must be able to trace all food and food
products coming into this country… it’s mostly a paperwork trail
to do with supplies… If something goes wrong; it allows us to have
more control in getting contaminated food out of the supply line.”63
Fourth and finally, the FDA is authorized to detain any food if there
is credible reason to believe it poses a threat to humans or animals,
also known as DWPE – discussed in Section 4.3 (FAS 2016). On this
regulation, the FDA representative conceded that the regulations
are more intimidating and challenging for SMEs. She offered
that SMEs: “just have to make sure you’re adhering to rules and
regulations”. While this sounds like simple and practical advice, the
report advises that export readiness can be a difficult process for
SMEs – partly why the report recommends a trade specialist, broker,
or customs lawyer – and the costs of noncompliance are particularly
high. For example, noncompliance with the second regulation –
advance notification and testing – has resulted in 18 import alerts
against Portugal that threaten SMEs’ ability to get their products
through US customs.
4.7b The Trade Facilitation and Trade Enforcement Act of 2015

The Trade Facilitation Act was signed into law in February 2016
61 Interview 8, Appendix 5; see also “FDA’s Voluntary Qualified Importer Program Guidance
for Industry”.
62 Ibid.
63 Ibid.

and encompasses a range of trade protections and policies. It
expanded regulations on imports and sought to improve the
health and safety of products brought into the US. It also increased
intellectual property rights and other protections such as dumping
prevention.64 One of the most pertinent parts of the legislation is
Section 910, which prohibits the importation of products made
using forced or indentured labor. This eliminates a previous
“consumptive demand” exception which allowed imports of
goods using those labor practices if the product was scarce (HR
644 2016). This report has argued in previous sections how the
Trade Facilitation Act could impact the US fish import market. The
biggest fish exporters to the US and globally, such as Thailand,
the Philippines, Vietnam, Cambodia, and Myanmar, have either
been banned from exporting fish to the US or face harsh import
quotas (Milman 2016). The Trade Facilitation Act gives the public,
including Congress until September 2016 to request reports on
other producers suspected of forced labor in supply lines (FishWise
2016; HR 644 2016). Other countries, such as Indonesia, Malaysia,
Bangladesh, and Saudi Arabia, maybe be affected as well, as these
countries labor and supply line practices are under investigation by
international organizations such as the International Development
Law Organization and International Organization for Migration,
and advocacy groups, such as Amnesty International. This was
confirmed by a top trade association interviewed. “There’ll be some
[anti-dumping and import quota changes] coming up soon with
canned fish from those Asian countries.”65
The Trade Facilitation Act and US consumer preferences on clean

supply lines has changed and will continue to change US processed
fish supply. For suppliers to regain access to the US market, they
will have to prove that their suppliers are fully compliant with
US regulations, and this will require eradication or evidence of
eradication of forced labor from their supply lines (HR 644 2016). A
supply gap in US imports has emerged, and many US importers,
distributors, and retailers are reevaluating their supply chains. The
report parties are aware that one of the US’ largest retailers has
been searching for new suppliers for their processed fish products,
particularly canned tuna (TSB) where Thai imports dropped 18% in a
single year. Hence, the report suggests SMEs that are proactive have
enhanced opportunities in the US market.
4.7c Geographic Indicators

In terms of geographic indicators (GIs) or traditional specialty
products, the US laws differ from those of the EU; the US relies on
rules governing intellectual property rights and the patent system
rather than a system of product protection for GIs. As a result,
fewer products are protected in the US; for example, gorgonzola or
asiago need not be Italian in origin or follow the same guidelines for
cheese making and manufacturing as in Europe. Product indicators
that are deemed generic terms for a product, such as parmesan
64 See Interview 12, Appendix 5 for some products and competitors that are currently under
investigation for dumping.

• 93
cheese, are not protected unless under trademark, allowing several
producers to use them without restriction (Watson 2015).
The Trans-Pacific Partnership (TPP) deepened these rules,

threatening to eradicate GI foods’ public protection in the US by
treating them as private property; however, the TPP has faced
strong opposition among US policymakers, including both 2016
presidential candidates. Just as American meat product bans in
the EU endanger the future of TTIP, the lack of protection for GIs
is an obstacle in advancing this and other mega-regional FTAs
(Inside US Trade 2016). Although the European producer view of
the current American GI policy is generally unfavorable, Portuguese
producers could use the policy to their advantage, particularly when
marketing preserved meat products. If, in the future, SMEs believe
their products require protection under US law similarly to how GIs
are protected in the EU, filing for a US trademark can be a potential,
albeit lengthy and expensive solution.
4.7d The Food Safety Modernization Act (FSMA)

The Food Safety Modernization Act (FSMA) was passed in the US
in 2011 and is one of the most comprehensive, far-reaching pieces
of legislation affecting US agrifoods in recent years with seven
sections. Several of the provisions mirror compliance outlined in the
Bioterrorism Act, and the FDA representative stipulated that: “what
the new guidelines require is mostly paperwork and completion
of food safety training.”66 The key mandates involve prevention of
food-borne illness outbreaks, inspection and compliance, response
actions and lines, enhanced food safety certification procedures for
importers and exporters, and enhanced partnership with food line
suppliers and the FDA. One US importer believes FSMA currently
has and will continue have a deep impact on agrifoods imports.
Demand has changed… legally, what we have to do to get

products on the market. The US demands more and more
imported food, but now a lot of the larger safety and compliance
issues are the market driver. It will impact the products people
are trying to export to the US… A lot of companies are going
to have a rude awakening here, both in losing their market to
distribute foreign products and in exporting their products.67
In interviews, the report parties estimated that less than half of US

importers are currently prepared for new FSMA regulations that will
come into force in September 2017 for larger companies and 2018
for all others. Upon asking one trade association what percent of
importers were FSMA-ready, they replied that they: “have no way of
knowing. We offer a lot of info on FSMA to our members as it affects
them greatly. It’s one of the US market’s access barriers.”68 Specialty
Foods Magazine – a key source of FSMA guidance – featured a
distributor’s perspective on how FSMA is affecting specialty foods
imports, saying: “we are up to date for FSMA as well, [but] importing

restrictions and laws might cause significant changes in how
business is done and understanding those challenges will be a
huge focus this year” (2016: 7A).
Other importers discounted that FSMA will impact their operations,

appearing as if they were almost unaware of the new regulations.
We’re dealing with legitimate people, and we’re not expecting a

lot of problems… we are just making sure they are being proactive
on their end to get all products certified and all facilities [staff
are] trained. Our government can make a small issue quite
complicated but I don’t expect that this will cause any issues with
our supply chain… We’ll hire some staff soon to make sure we’re
fully compliant. We know we have to be prepared when our ships
come to port. If there’s an issue and one or two containers get
held up initially, we’ll be sure to have another supply sent shortly
after to cover any gaps.69
The FDA representative agreed that: “some people not taking this
seriously right now and [are] thinking it won’t be a big deal or affect
their business. It will be deal when their products get stopped
at the border.”70 Another large importer verified what the FDA
representative said, contrary to the large importer quoted in the
above paragraph. He indicated what effect FSMA has on exporters
getting their products on the US market.
It’s very complex and not easy… it’s really changing the way we
operate… Most people are so far behind – exporters and importers
– but we are so large that our liability is so great. We service
large companies – retail and distribution – and so now we have
a team that only works with compliance. That has limited our
ability to find and look at products we may be interested in. If a
company has nothing in the way of compliance with the FSMA,
we won’t even talk to them, and that’s why a lot of importers
and distributors are asking to see your catalogue before they will
speak with you. They want to see if the products are compliant,
which has caused a lot of difficulty for exporters to the US.71
The FDA representative advised that the FDA has a webform on

their FSMA website where agrifoods businesses can directly contact
a FDA representative to ask specific questions on how FSMA will
affect them. She added that there has been an ongoing public
outreach campaign for businesses signed up to receive FDA email
alerts. The representative also said that the result of this outreach
and informal question and answer will be guidance, particularly for
exporters, but she was unable to confirm if it will be available by
September 2016 or the later 2018 compliance deadline. “There’s a
lot of good info in Q&A section for each of the seven sections of the
FSMA rules on our website, and that could be very helpful to your
foreign suppliers.”72
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Joining a US trade association may also help SMEs ensure they
are FSMA compliant, which could help in attracting importers’
attention. One trade associations interviewed offers FSMA legal
consultation. “We also have legal counsel to help translate difficult
legislation into terms that everyone can understand. Every time
there was [FSMA] rulemaking that affected our people, we were
present at a public meeting. Our people had really positive relations
with FDA.”73 Another trade association reported providing guidance
for importers and exporters.
We’ve been holding the training sessions for the people these
companies are hiring, actually. We have a certification [process]
for those companies hiring consultants on FSMA. We’ve also
published a guidebook for importers recently on FSMA. We have
started but haven’t finished one for exporters. In the end, we have
no way of knowing if people are prepared or what percent are
prepared. We just have to wait and see what happens when the
compliance deadline hits.74
The new FDA authorities include, among others, the ability

to enforce mandatory preventative controls in food facilities,
establish food testing laboratory accreditation standards, and
issue mandatory recalls (FDA 2015iv). In regards to imported
goods, FSMA aims to ensure foods are safe before they even reach
the US through certifications of mandatory food safety training,
documentation, and FDA registration. Although much of the
responsibility is placed on the US importers, some small importers
may pass this compliance responsibility onto exporters. “It costs
someone, somewhere on the export-import-distribution line to do
a third party audit and the kitchen test. Some importers will pay
it if the product is good, already selling in the US, but the cost will
mostly be on the exporter.”75
The report found this was the consensus with importers and
distributors, but US companies suggested SMEs view the challenges
of compliance and product certification as a way to reduce
competition. “It’s not easy, and it takes time and money. It’s an
investment in the business; if not everybody would be doing it.
Someone has to put in the time to certify the product otherwise we
can’t sell it. The exporter will probably have to incur the cost, but if
their product is already selling well on the market, they might be
able to get the importer to help share the costs.”76
The FDA will allow third parties that have gone through a
qualification process to verify that the foreign foods are in
compliance. For certain “high-risk” foods, a third party verification may
be deemed mandatory, but mandatory or voluntary, having a third
party audit may be a non-tariff barrier for SMEs in the US market.

Right now, if an exporter wants to get their product [listed] with
us, we won’t look at it unless it has these [FSMA] certifications
and has been through a third party audit. I would say if you
have a producer that has the [British Retail Consortium], BRC,
certification from England and a has undergone a third party
audit, this is mandatory for us to look at their products right
now. If they don’t have that, we can’t even look at this moment,
we’re so busy. There’s also International Organization for
Standardization (ISO) standards for exports, and I don’t even
know all of them. But if someone has it, they are in a much better
position to get their products on our market right now.77
Finally, FSMA gives the FDA full authority to DWPE if they have
reason to believe imports might be contaminated and pose a
serious health threat to humans or animals, thus taking pressure
off the FDA to test all imported products (FDA 2016i). FSMA places
definitive responsibility with importers for ensuring that the food
safety measures taken by their foreign suppliers comply with the
US food safety laws, but the importer quoted above stated that the
reality can differ.
It is good advice for [foreign producers] to get a broker /

compliance specialist… First, you have FDA hurdles to clear, and
now you have new laws. For some of the small artisan producers
it’s going to impact them and be tough. But they can add the
cost into the product; in fact, they have to add the cost into the
product because they can’t absorb all of it, and neither can the
importer. What may be a low price item now may change. Once
they add it into the cost, everything will even out. For now, it’s
like starting back up from the beginning with agrifoods imports.
The laws changed everything, and the real negative impact is on
exporters who don’t have a specialty product that’s already in
demand like olive oil from Italy, France, Spain.78
These requirements for importers are mainly outlined in the FSMA

Final Rule on Foreign Supplier Verification Programs (FSVP) for
Importers of Food for Humans and Animals. Importers must create
and maintain a FSVP for every supplier and imported food they
work with. In these programs, the importers must follow FDA-
established steps, including:
1. Determine potential hazards across products;

2. Utilize hazard analysis to evaluate risk and foreign suppliers’
performance;
3. Use risk evaluation to approve foreign suppliers and create best
practices guidelines;
4. Conduct best practices assessment;
5. Proceed with corrective actions for suppliers not in compliance
with best practices (FDA 2016).
77 Interview 4, Appendix 5; see also “Third-Party Auditor/Certification Body Accreditations for

Food Safety Audits: Modern Accreditation Standards” at FDA.gov.
78 Ibid.

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Some foods are exempt from the FSVP rule if they comply with
other laws, including certain fish products, food imported for the
purpose of processing and export, some meat products, types of
crackers and cookies, and certain jam products (FDA 2016iv).
The report has conducted extensive primary research with

importers, distributors, the FDA, CBP, and Department of State to
help SMEs understand the impact of FSMA on the future of US
agrifoods imports. Sentiments range from seeing FSMA as a new
starting point to having little effect; the simple truth is that for
SMEs, FSMA presents a considerable non-tariff market access barrier
where the costs of both compliance and noncompliance are high.
SMEs may possess an advantage if they currently export to the UK,
as English-language labeling and third-party audits / certifications,
such as those conducted by the BRC or ISO, will mostly likely
already be in compliance.
An importer reported that other importers often ask for product

catalogues to determine if products are FSMA compliant, and as
such, SMEs are advised to be FSMA compliant before approaching
US importers or distributors.79 Compliance serves as more
than a market access barrier for SMEs; it is a relationship and
communication barrier. Without compliance, SMEs will encounter
difficultly even speaking to an importer on the phone, much less
making a sales pitch. One distributor advised that: “it seems like a lot
of info in the beginning, and it can be overwhelming. But it becomes
part of the regular process and second nature after some time.”80
The preventive controls rule goes into effect in September 2016,

but the FDA has granted some smaller businesses extensions given
the scope of the requirements.81 Small businesses (those with less
than 500 employees) have a one year extension for compliance
while very small businesses (defined as having annual sales less
than $1M) have three years (Purcell, Ting, and Van Esseltyn 2016).82
These regulations have yet to come into full effect, and following
their implementation, there could be further changes that affect
FSMA compliance. “This is the biggest hurdle for small producers.
It’s unfortunate people don’t know. I don’t know why this info hasn’t
reached producers. At the Fancy Foods show, so many producers
came to show, and they don’t have a clue.”83 SMEs are encouraged
to closely monitor FMA implementation and use BRC and ISO
compliance to draw importers’ attention to how their products can
fill any emerging demand. If SMEs are not BRC and ISO compliant,
becoming compliant may be a key asset in the US, while also
facilitating export development in the UK.
81 In addition, there are approximately five documents on FDA.gov specific to the FSMA and
small entity compliance as it differs from larger companies’ compliance and timelines.
82 See also Interviews 4 and 8, Appendix 5.

4.8 Conclusion
As this section draws to a close, it is appropriate to highlight to

Portuguese SMEs that the US market is vast and highly competitive
(this will be the subject of the immediate and coming sections).
There are many companies of various sizes and expertise looking to
gain or increase US market access and distribution. Although the
costs of compliance can be significant, there can be mandatory
waiting periods if compliance is not adhered to or if products fail to
be approved. In a market of this size, where competition is extensive,
second chances are uncommon. The costs of not being “export ready”
are great. To continue to clarify the US market picture for SMEs, the
next section features an insider’s perspective of the US market.

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Section 5:
An Insider’s Perspective
of the US Agrifoods
Market
5.1 Introduction
In this section, the report offers Portuguese SMEs a behind-the-

scenes sketch that first looks at the US agrifoods sector and
subsector imports. This differs from the competition analyses
of Sections 2 and 3, as it analyzes supply and demand, rather
than import / export origin. Following this, the report shifts to
an exploration of US trends that affect agrifoods demand by
examining market indicators. Here the report aims to refine export
development strategies and give a sense of the best states in which
to market products.
After exploring US demand, the report turns to helping Portuguese

SMEs understand how they can supply US demand through a
series of recommendations, building on the previous sections. This
includes what Portuguese SMEs should expect when competing
in the US market, including information on trade shows and
publications that is essential to begin or enhance US networking
and relationship-building campaigns. The goal of this fifth section is
to provide SMEs with exclusive information that can be used to gain
a competitive edge.
5.2 US Agrifoods Demand
This section begins by looking, generally, at US demand for products

within sectors included in this report and then, specifically, at US
demand for the subsectors within the report. This gives both a
macro and micro view. The US agrifoods industry’s competitiveness
is due to large internal and North American market demand,
governmental support / subsidies, utilization and reliance on cheap
foreign labor, and powerful lobbying at local, state, national, and
global levels. It is not only a highly protected industry, it also has
very specific market features – from large agribusinesses to complex
consumer product preferences.
Within this context, there is such considerable demand for

imported agrifoods – a $153.8B US market in 2014 – that establishing
even a small market presence has transformative potential for SMEs.
Demand is largest for vegetable products ($72.3B) and foodstuffs
($46.7B) and smallest for animal and vegetable bi-products ($3.84B).
Section 6 highlights the comparative sizes of some US states,
such as Texas, California, Massachusetts, and Oklahoma, GDP to
Portugal and its key European competitors’ GDP, and the most

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valuable understanding from this comparison is that each US
state is equivalent to highly productive and competitive European
nations. As there are 50 US states, the report aims to encourage
SMEs to invest in export development in this continually growing
and profitable market by imparting knowledge about US import
demand and supply.
The US government provides fundamental assistance to the farming

industry, and the impact of agricultural subsidies on international
competitiveness and domestic agrifoods supply and demand sets
the context for this section’s analyses. Legal and compliance factors,
like those discussed in Section 4, can influence demand in some
categories. Most notably, import tariffs, heavy regulation, and product
bans restrict the selection and sourcing of imported products. As
one distributor explained: “it’s not like a supermarket; [retailers] buy
what we have. They can’t pick from a range of products. They either
buy our products or they don’t.”84 However, importers have a differing
perspective, with some noting that the largest threat to their industry
is the emphasis on the “localvore” trend, discussed further in Sections
5.2b and 5.3b (Specialty Foods Magazine 2016). “If [large retailers]
ask for a certain product, we go through hoops to find it. That’s how
the consumer still drives demand, but demand has changed”.85 This
section examines US demand per subsector and how US demand for
imported has changed.
5.2a Baked Goods Demand

Baked goods was the fourth largest import subsector in the
foodstuffs sector in 2014, behind spirits, wine, and beer. Foodstuffs
is the tenth largest US import sector out of 21 total sectors. The
US demand for imported baked goods is larger than any other
subsector in the report – a $3.55B market in 2014. In 2014, the most
in-demand baked good product categories in the US were:
1. Other baked goods86

2. Sweet biscuits, waffles, and wafers
3. Gingerbread and the like
4. Rusks, toasted bread, and similar toasted products
5. Crispbread.87
The top two product categories each represent more than 2%

of the total US imported foodstuffs market and 6.2% of the total
baked goods subsector, meaning that the other three product
categories, combined, constitute about .2% of all US baked goods
imports. Gingerbread, except seasonably, rusks, and crispbread have
86 This product category includes bread, pastry, cakes, biscuits, similar baked products, and
puddings, whether or not containing chocolate, fruit, nuts or confectionery; corn chips and
similar crisp savory snack foods; and pizza and quiche. Nes refers to “not elsewhere specified”
and are commonly thought of as byproducts.
87 See Appendix 2 for HS product codes.

low US import demand. SMEs exporting these products will find a
fractional market – still valued at over $45M each – in the US. From
2011 to 2014, there were no significant demand changes in these
subsector product categories.
Table 5.1 shows a general breakdown of US import value and sector

market percentage of the two top product categories within the
US baked goods import market from 2011 to 2014. Though there is
little fluctuation in product categories, the extent to which these top
products are demanded changes. The other baked goods category
that includes a range of baked goods has been increasing in demand
slowly while the sweet biscuits, et al category that includes waffles
and sweetened wafers has been declining. Portugal exports both of
these product categories globally and to the US. One factor in the
continued demand for the other baked goods category could be
that these products are not commonly produced domestically in the
US, particularly rice paper. The decline in sweet biscuits, et al could
be linked to increased domestic production compared to previous
years. The other three product categories are products that are more
common in Europe, and this may be linked to low US demand.
Table 5.1 - Select US Baked Goods Product Categories Import

Demand Levels (2011-2014)
Other Baked Sweet Biscuits,

Goods et al
2014 Value $2.14B $1.26B
2014 Share 3.9% 2.3%
2013 Value $2B $1.32B
2013 Share 3.7% 2.4%
2012 Value $1.84B $1.31B
2012 Share 3.4% 2.5%
2011 Value $1.7B $1.28B
2011 Share 3.4% 2.5%
As noted in Section 2.3a, the US market for baked goods imports

is growing steadily, both in total market value and as a percent
of the foodstuffs sector. From 2014 to 2015, the US import market
increased 9.6% (Comtrade 2016). Consistent with previous
market analyses in this report, the US appears to be an excellent

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destination for Portuguese baked good exports due to its increasing
demand for imported products and profitability. It will be key for
SMEs to make the highest quality products within the smallest
production margin, as the costs of import and initial compliance
will be high. Therefore, profit margins for the first couple of years will
be small to negligible, while increasing in the years following initial
market access. Again, the other baked goods product category that
includes a large range of baked goods products appears a more
stable and profitable market. To clarify, the other baked goods
category includes:
»» Bread
»» Pastry
»» Cakes
»» Biscuits and
»» Similar baked products and puddings, whether or not containing
chocolate, fruit, nuts or confectionery.
The sweet biscuits, et al product category that also includes baked

waffles and sweet wafers where US demand for imported products
is decreasing, includes sweet biscuits, waffles, and wafers.
5.2b Preserved Meat Demand

The preserved meat subsector is the smallest US import market
considered in this report, valued at $174M in 2014, and only the 22nd
largest subsector within the US import market for animal products.
In 2014, the most in-demand product categories within preserved
meat were:
1. Swine meat, salted/dried/smoked not ham/shoulder/belly

(“swine meat”)
2. Bellies (streaky) of swine, salted, dried or smoked (“swine bellies”)
3. Hams and shoulders, swine, salted, dried or smoked (“cured ham”)
4. Bovine meat salted, dried or smoked (“bovine meat”)
5. Meat and edible offal cured, flours, meals nes (“meat and offal”).
Table 5.2 provides the import values and percent of animal products
imports for all five preserved meat product categories across 2011
and 2014. US consumer preferences on preserved meat appear not
to fluctuate greatly, which allows SMEs to slowly build their market
over time. The US import market for this subsector fell in 2012, as
discussed in Section 2.3b, but has been slowly recovering; three
of these product categories (swine meat, bovine meat, and meat
and offal) did not experience any decline. Rather than the decline
experienced by the subsector as a whole, these product categories
have increased their share of the US animal products import market
from 2011 to 2014. US demand for imported preserved meat is small,
but demand for charcuterie is growing (Marq Consulting Group
2014). A Portuguese specialty retailer confirmed a growing demand
for not only preserved meat but Portuguese-origin preserved meat.
“Locally, there’s a lot of cured meats produced that are not of the

same quality, but the locals have adopted these chorizos, hams, and
prosciutto. Folks ask for the imported stuff all the time, and we have
to tell them it’s not available.”88
Table 5.2 - US Preserved Meat Product Categories Import

Swine Swine Cured Bovine

Meat Bellies Ham Meat Meat and Offal
2014 Value $121M $38M $10.7M $2.46M $2.1M
2014 Share 0.39% 0.12% 0.035% 0.077% 0.0068%
2013 Value $103M $56.3M $8.75M $1.26M $727K
2013 Share 0.4% 0.22% 0.034% 0.0048% 0.0028%
2012 Value $94.3M $57.9M $9.46M $3.25M $2.82M
2012 Share 0.38% 0.24% 0.038% 0.013% 0.011%
2011 Value $87.6M $78M $13.6M $1.94M $1.23M
2011 Share 0.37% 0.33% 0.058% 0.0083% 0.0052%
Table 5.2 indicates that demand for imported swine meat and
bovine meat are the most stable and growing product categories,
and a leading US agrifoods trade association confirmed this.
“Generally, it doesn’t seem like there’s a reduction in imports, but
most of that is because our products are specialty. There’s limited
domestic competition, if any.”89 In 2014, there were eleven countries
exporting swine meat to the US for a total import market value of
$228.2M; in 2015, there were nine countries exporting swine meat
for a total US import market value of $199.5M (Comtrade 2016). Is
the decline in the number of exporting countries and market value
directly related, ie: value declined because exporting countries
declined? Or did the number of exporting countries and market
value decline due to decreased US demand for imported swine
meat? One importer / distributor suggested the latter. “A lot of local
charcuterie is outstanding. So our market is changing because
people want to buy local product. It’s a good thing; it’s good for US
business, for the environment, etc. Local is big, and it’s changing
our market for European products.”90 This importer / distributor’s

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perspective conflicts with that of the trade association quoted
above, making a definitive assessment problematic.
In 2014, there were six countries exporting bovine meat – the same
number of countries exporting cured ham to the US – for a total
US import market value of $4.8M, compared to the $10.7M import
market value for cured ham in this year (Comtrade 2016). In 2015,
there were five countries exporting bovine meat for a total US
import market value of $6M. The imported bovine meat market
featured fewer exporting countries in 2015 and a 25% market
value increase. US demand for imported bovine meat is the safest
and most secure market of the five product categories within the
preserved meat subsector; having said, success in this market is not
guaranteed and will require intensive further analysis, such as:
»» identifying where (states, regions, food service, retail) US demand

for bovine meat is growing (ie: states, regions, food service, retail)and
targeting sales to importers / distributors in those particular areas;
»» understanding why New Zealand discontinued US bovine meat
exports in 2015 when the market and competition is growing; and
»» clarifying whether US domestic production of swine meat is
increasing, perhaps best assessed by attending trade shows.
At present, Portugal is not on the approved list of eligible animal

product exporters. Section 4.7 addressed the processes Portuguese
national export and agricultural authorities would need to
undertake to get Portugal on the list of eligible exporters. Like all
governmental agencies and trade in animal and plant products,
significant compliance procedures are required. However, the
report suggests that these procedures should not be viewed as
market barriers; rather, SMEs should begin the process of becoming
eligible themselves, as facility inspections and audits are required.
This would allow SMEs to approach national authorities with the
full scope of requirements and needs to become eligible. National
authorities may be more agreeable to assisting SMEs if they come
to authorities prepared, using the information in this report, than if
the SMEs simply requested national authorities conduct the process
themselves, getting delayed as governmental authorities often do.
Section 4.7d outlined the costs of compliance that accompany

FSMA’s implementation. If SMEs are seeking partnerships with large
US importers or distributors, compliance deadlines occur in the fall of
2016. For more medium-sized importers, compliance occurs in 2017,
and for small or micro importers, compliance deadlines are in 2018.
The law was passed a while ago, but food safety laws have
different stages for different levels. Starting in fall of 2016, all large
to medium-sized importers and distributors have to be compliant,
and if company is small they may have until 2017; micro may have
even longer than it. So that would be one way for someone who
isn’t compliant yet to get on the market, but the change is here.
And it is costly.91

Using this knowledge, SMEs exporting preserved meat should
assess the costs of compliance, including completion of
documentation, FDA registration / inspection, and food safety
training and certification for staff. In addition to these compliance
costs, marketing and import costs, including but not limited to
transport and tariffs, must be assessed on a case-by-case SME
basis.92 One foreign supplier interviewed commented on their
challenges now that they have relocated their export business to
the US.
We’ve got the landed costs, which are dependent on quantity,

and we’ve got to work in different margins; everyone takes a cut
here, which isn’t hugely efficient based on our previous business
model, the fact that we are importing now, and just in general
getting products to consumers. In London we make the product
there; here we are bringing it from Portugal. It makes the product
more expensive, but it’s still unique. That’s why we took a slightly
different approach in being here because we were having trouble
getting on the US market with all the inherent costs.93
Tariffs for preserved meats range from 2.3% per kilo to 1.4 cents
per kilo – a detailed breakdown can be found in Appendix 4.
Comparatively, these tariffs are low, but tariffs on meat and cheese
products have presented market barriers for SMEs looking to enter
the US market. SMEs can look to reduce costs by sharing air cargo
or shipping arrangements with other exporters, and this strategy
may also be effective to market a wider and more diverse line of
Portuguese products to importers, distributors, retailers, and food
service. Therefore, the response to this question is very much a case-
by-case assessment of opportunity costs and investment approaches.
SMEs should also consider that in 2014, there were only six cured
ham producing countries on the US market. Between 2014 and
2015, the US market for imported cured ham increased 32%, and
Canada, the most competitive producer, increased their US market
by 20% (Comtrade 2016). This indicates that the market for imported
cured ham is indeed growing in the US. One importer / distributor
confirmed how the lack of competition diversity affects price and
profitability. “For Serrano ham there are lots of varieties: bone in,
boneless, whole, sliced; wholesale starts in $8/9 per kilo, and most
retailers are going to double their money on that… It depends a lot on
the [quality of the] product.”94 The product with the highest demand
and highest price point in this category is Iberico ham, and it will not
surprise SMEs exporting preserved meat / cured ham that American
demand for Iberico ham is outpacing supply.
The reason there are so few exporting countries is because cured

ham – particularly Iberico ham, only imported since 2007 – is
heavily regulated in the US, as well as in the producer countries,
to maintain quality control and reject non-authentic products.
Searching American retailers selling Iberico ham produces few
94 Interview 6, Appendix 5; see also Interview 14 for preserved meat pricing.

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results, and the majority of importers currently do not have
Iberico ham available. Speaking with one importer, the report
parties learned producers, themselves, have become the import
agent for these products, as the US Department of Agriculture
(USDA) and Food and Drug Administration (FDA), which regulates
agrifoods products, have strict labeling requirements. Additionally,
because the US does not adhere to the geographic indicator
labelling system as Europe does, several Iberico ham producers
have registered trademarks with the US Patent and Trademark
office.95 Because the US does not subscribe to the GI system used
in Europe, there is no exclusive right to use the word “Iberian” or
‘”Iberico” except for the trademarks listed in Footnote 95. Marketing
preserved meat products as Iberian in origin is a distinct advantage
Portuguese SMEs have over other US competitors.
Also, cured ham has additional regulations, such as the hoof is

not allowed to be attached to the product once it reaches the US,
some products the bone is not allowed, and some products must
be butchered or processed prior to their US arrival. Though costs of
compliance and becoming an eligible US pork and pork product
producer can be high, when there is an established specialty market
or a demand for a specific type of product the return on investment
can be significant. For example, a full Spanish Iberico bone-in or
boneless ham sells for between $450 and $1,200 on the US retail
market, depending on the length of the aging process. There is
a growing US market for preserved meat and cured ham where
competition is not as fierce as it is within Europe, and one retailer
offered product marketing advice, building on the demand for
Iberico ham. “Iberico is big and growing now, but demand would still
need to be created at the consumer level… The consumer would have
to be educated on this ham… Producers would need to create events,
like an event where a charcuterie master comes in.”96 Though average
American consumers may be less aware of the quality of Iberico ham,
US demand continues to outpace supply, and some savvy producers
have attempted to utilize this high demand and undersupply in
finding ways around import regulations on Iberico ham.
Two Spanish entrepreneurs worked with the Spanish and US

government to import the black, Iberian pigs to a location in Texas
that the entrepreneurs say mimic the farming conditions of the
pigs in Spain and Portugal. “Instead of importing it, we’re making
it here… Like the Europeans who planted vines in California” (Leiber
and Fesser 2016). Leiber and Fesser (2016) reported that 50 high-
end US restaurants have placed orders with the entrepreneurs,
who have been forced to limit orders due to high demand and
time required for production. However, importers and retailers
95 Searching the US Patent and Trademark Office’s database for “Iberico” reveals that in
the past 20 trademarks related to the word “Iberico” have been filed; 11 are “live”, and 9 are
“dead”, meaning no longer protected by trademark, which is expensive to maintain. Six
live trademarks are related to charcuterie, pork, or jamon products: “Iberico Fresco – Pure
Iberico De Bellota – Artisanal Pork”, “Iberico Fresco”, “Iberico Singular”, “Legado Iberico”,
“Ibericos Covap Momentos De Placer”, ”I (heart symbol) Jamon Iberico & Serrano”, “R Pura
Raza Ibericos”. Though the report does not recommend SMEs misrepresent “Iberico ham”
products, as they are subject to strict quality controls; SMEs are legally able to market their
products as Iberian in origin as long as they do not violate registered trademarks.

interviewed did not believe the domestic product would be as
highly regarded as the imported. “There are so many factors that
make these products what they are; they require environmental-
specific conditions to have the renowned flavor that they do,
whether that’s the type of acorn they are eating or it being near the
ocean … I don’t think those pigs will be the same as the true Iberico
that is imported.”97
SMEs exporting these products should be aware that there is a

tremendous market for their products in the US, especially the
upmarket and gourmet products like Iberico ham – only produced
in Spain and Portugal. “For sure, we have high demand; we carry a
variety of it. It’s a high seller.”98 If SMEs can assist national authorities
in getting Portugal on the list of eligible pork and pork product
exporters, a vast and growing market awaits their products. As the
years pass where other imported products are not able to reach the
US market, domestic producers will work to fill this gap with locally
produced products. “This [US] region – being largely a Portuguese
[migrant] region – the locals have now adopted a preference for the
local [preserved] meats because they couldn’t get the imported
stuff. These domestic producers have carved out a nice niche for
themselves.”99 The sustainability question, again, goes back to
opportunity and investment strategy, assessed on a case-by-case
basis, for import and compliance costs.
By utilizing this supply / demand analysis, understanding US

food trends, and leveraging Iberico branding, SMEs have good
opportunities for developing preserved meat exports to the US.
Branding strategy should focus on filling demand for high-quality
preserved meats and the specialty breed, diet, and curing process
of Iberico ham, and SMEs offering these products at a more
competitive price than Spain and Italy may establish an advantage
in the US market. In the long-term, SMEs should work towards
building brand and product distinction for Portuguese-origin
preserved and Iberico meat. The goal is to slowly replicate the
demand that Portuguese preserved meats enjoy in the European
market in the US.
Another strategy is to focus on the fact that, for US consumers,

tourism and agrifoods demand are deeply linked. SMEs are
advised to work with the US companies like Whole Foods, trade
associations, such as the World Food Travel Association, and
Portuguese tourism boards and authorities to create food-themed
travel experiences. Heavy marketing near popular US tourist
destinations, such as with villas, hotels, and restaurants frequented
by Americans, can also drive consumer demand. “I would advise
them to market and prepare their products by following food
trends; charcuterie is big.”100 To go the “extra mile” in pursuing
97 Customer service representative at European Imports, Inc, importer and distributor; see
also Interview 14, Appendix 5.
98 Customer service representative at European Imports, Inc, importer and distributor.
100 Ibid.

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this strategy, SMEs might work with Portuguese-focused retailers
and restaurants in the US to sell their products, crafting pairings
across subsectors, such as certain meats with certain cheeses.
Portuguese cuisine is trending upward in the US, and a cohesive
export development strategy should harness this momentum to
increase export volume (Purcell, Ting, and Van Esseltyn 2016). SMEs
could partner with ViniPortugal and related wine organizations to
harness collective growth in the US market by creating a stronger
link between food and wine.
One retailer commented on their expansion from a Portuguese ethnic

market to an expanded demographic for mainstream consumers.
We were very ethnic before and with the new market [we created
two years ago], we are a Portuguese market for everybody… We
created an experience rather than a market. As a result, we’ve
attracted a lot of attention; we used to sell 90-98% strictly to our
Portuguese [ethnic] population; today 60-30% are Portuguese
consumers. It’s partly because the market here feels different,
and people often tell us it’s more than a market. We’ve seen the
creation of a trend in our area. We have people with a new interest
in Portuguese food. Consumers come into a market that’s 75%
Portuguese, and they are intrigued by the variety of goods we offer.101
By creating a destination story around products, SMEs can better

appeal to the US consumer and gourmet food retailers. Regardless
of the strategies selected, SMEs would be wise to focus on the
bovine meat and cured ham product categories while investigating
the swine meat category as suggested above.
5.2c Cheese Demand

The US cheese import market was valued at $1.29B in 2014, but its
share of the US animal products sector import market has been
falling, down from 4.7% in 2011 to 4.2% in 2014. Still, the US cheese
imports market is relatively stable and highly lucrative. From 2011 to
2014, the most in-demand imported product categories within the
cheese subsector in the US were:
1. Cheese except fresh, grated, processed or blue-veined102 (“other

cheese”)
2. Fresh cheese, unfermented whey cheese, curd (“fresh cheese”)
3. Blue-veined cheese (“blue cheese”)
4. Processed cheese, not grated or powdered (“processed cheese”)
5. Grated or powdered cheese, of all kinds (“grated / powdered
cheese”)
102 This is an extensive product category that includes bryndza, cheddar, edam, gouda,
gjetost, goya, sbrinz, romano, reggiano, parmesan, provolone, and provoletti, swiss /
emmentaler, gammelost, nokkelost, colby, and many more processed versions of these
cheeses and other cow’s and sheep’s milk cheeses in various forms.

The first product category constituted 3.7% of the total 2014
US animal products import sector. The remaining four product
categories in the cheese subsector each only hold a range of 0.22%
to 0.0081% of the sector market share. The report focuses on US
demand for imported cheese only in the product categories where
imports are significant (greater than 0.0%) – the first three listed
above. Portugal currently exports all five product categories to the
US, but only began exporting grated / powdered cheese in 2013.
Table 5.3 offers a breakdown (value and share) of the three

significantly imported cheese product categories from 2011 to
2014. Other cheese – a vast portion of which are European specialty
cheeses or sheep’s milk cheese that is not commonly made in the
US – continues to grow in value, but share continues to decline. This
could be due to a decline in import demand but increased product
price; there are also the usual issues associated with production
and importing, including commodity, shipping, and compliance
costs. In Section 4.7d, an importer suggested the costs of FSMA
compliance will be increasingly added into imported product price,
and while it could be slightly premature for this to appear to such
an extent, FSMA was signed into law in 2011. There are also currency
fluctuations that could have affected market value; however, each
of these explanations, in themselves, seem a bit far-fetched in
explaining a 3.4% market value increase in four years. It is more
likely that each of these explanations played a small role in the
value increase.
Table 5.3 – Select US Cheese Import Demand Levels (2011-2014)
Other Fresh Blue

Cheese Cheese Cheese
2014 Value $1.14B $69.5M $44.3M
2014 Share 3.7% .22% .14%
2013 Value $1.06B $65.7M $41.8M
2013 Share 4.1% .25% .16%
2012 Value $1.01B $59.5M $37.8M
2012 Share 4.1% .24% .15%
2011 Value $995M $47.9M $37M
2011 Share 4.2% .2% .16%

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Moving to fresh cheese, as a share of US cheese imports, there has
been inconsistency across all years, but between 2014 and 2015
values dropped significantly, by 38.8%. The number of countries
exporting to the US did not change, and this indicates that product
price and demand for imported fresh cheese declined. From
secondary research, it appears that an increase in quality and
production of domestic artisan cheese makers is a considerable
factor shaping the imported fresh cheese market. The International
Dairy Foods Association (2015) highlighted that US dairy production
set new records in 2014 for 11.45 billion pounds, up 3% from the
previous year, and the largest category of fresh cheese produced
was “Italian style” (mozzarella, provolone, etc). American style
fresh cheese production continues to grow (cheddar, etc), as does
production in varied types of fresh cheeses, such as muenster, blue
and gorgonzola, gouda, cream and Neufchatel, and Hispanic style
cheeses (IDFA 2015). One fresh cheese importer, who previously
imported large quantities of French cheese, gave a similar
indication. “We’re a cheese company; that’s our bread and butter.
We are definitely more interested in domestic artisan products
rather than expanding our French line. Our goal lately in the last
years has been representing America more in cheese.”103
This market would be considered tumultuous for SMEs due to

recent decline in demand for imported fresh cheese, verified
with Comtrade data, industry interviews, and secondary research.
A marketing campaign that involves US foods service outlets
and retailers pairing popular Portuguese cuisine and wine with
particular Portuguese artisan cheeses could have a positive effect
on the market. As the same importer said: “When we are looking
for new and exciting things, we look for producers who can keep
up with product demand (export volume), and for something good
with a nice story.” Export consistency remains key to sustainability
in the US market; SMEs should locate potential US partners with
comparable production and sales goals to ensure that SMEs and US
suppliers have similar, agreed upon export levels.
Finally, blue cheese is seeing increasing values in US imports;

however, the share of total imports has been intermittent. It
appears between 2014 and 2015, the US market for imported blue
cheese declined by 9.6%, and this is likely linked to enhanced
US production of blue cheese, as highlighted above (Comtrade
2016; IDFA 2015). The increased value for imports is likely linked to
production costs and increased demand for high-quality European
blue cheeses, such as those from Denmark, France, and the UK.
However overall, US demand for imported cheese is still growing
in value, up from 0.95% of all agrifoods imports in 2011 to 0.97%
in 2014. In addition to increased demand for imported cheeses,
US cheese imports from Europe have reached record levels and
are set to continue, providing Portuguese SMEs with excellent
opportunities for export development (Chew 2016).
Notably, 2.7% of Portugal’s 2014 agrifoods exports to the US were in

the cheese subsector, though this is down from 3.3% in 2011. Other

cheese made up 18% of Portugal’s animal products sector imports
to the US in 2014, 96.3% of all cheese subsector imports. The only
other cheese product category Portugal imported to the US with
significance (greater than 0.0%) is grated / powdered cheese, which
was a $2.51M market in 2014. Other cheese US imports hold good
opportunity for SMEs, albeit carrying a small amount of risk, but
the market for other cheese is much more lucrative than grated
/ powdered cheese; product price is also likely higher for other
cheese than grated / powdered, although there could be exceptions
to grated cheese, which carries a higher price because of inherent
labor costs. Additionally, the number of countries exporting to
the US declined slightly from 2014 to 2015, which indicates less
competition for SMEs. There is enough US demand for SMES
to justify export development and targeted marketing, but it is
important for SMEs to consider factors discussed under Section 4.6.
Section 5.2d Pure Olive Oil

The 2014 US import market for pure olive oil was valued at $1.08B.
Pure olive oil is a subsector within the animal and vegetable
byproducts sector, the smallest agrifoods sector. As US demand
for olive oil has grown, so too has demand for high quality olive
oil, according to USDA standards. The USDA has its own set of
grading standards for olive oil, as discussed in Section 4.2, which is
distinct from IOC standards. The USDA’s olive oil certification is not
mandatory, but it greatly assists with marketing, ensuring product
consistency and comparison. The current USDA olive oil grading
standards, ranked from highest to lowest quality, are:
»» Extra Virgin Olive Oil

»» Virgin Olive Oil
»» Olive Oil
»» Refined Olive Oil
»» Virgin Olive Oil Not Fit for Human Consumption Without Further
Processing (USDA Agricultural Marketing Service 2016).104
Currently, 66% of US olive oil consumption is extra virgin grade,

followed by 33% refined olive oil (USITC 2013). The US is the third
largest olive oil consumer globally and the largest market outside
of Europe, representing 9% of global demand (AOOPA 2016). There
are only two product categories in the pure olive oil subsector: 1)
olive oil, virgin, (“virgin olive oil”) and 2) olive oil, fractions refined,
not chemically modified (“other olive oil”). Table 5.4 provides insight
into import demand of these two product categories. From 2013 to
2014, pure olive oil was the third-most imported sector within the
animal and vegetable byproduct sector; from 2011 to 2012, it was
the fourth-most imported, demonstrating the increased demand
for imported pure olive oil in these years. However, from 2007 to
2010, pure olive oil was the second-most imported subsector, and
from 2004 to 2006, it was the most imported subsector within the
animal and vegetable byproduct sector in the US, highlighting that
104 See Appendix 6 for a more detailed explanation of USDA olive oil grades.

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demand for imported olive oil is inconsistent. When pure olive oil
was the most in-demand subsector within the sector, it peaked at
30% of total sector imports. Pure olive oil remained the top import
in the sector from 1999 to 2006, and this helps to clarify that there
are deep changes occurring in pure olive oil imports. Since shifting
to the third-most imported subsector (2013-2014), its share of total
sector exports has declined, reaching only 16% in 2014 from its 30%
peak in the late 1990s to early 2000s.
Table 5.4 – US Pure Olive Oil Import Demand Levels (2011-2014)
Virgin Olive Oil Other Olive Oil
2014 Value $773M $310M
2014 Share 12% 4.7%
2013 Value $795M $311M
2013 Share 12% 4.7%
2012 Value $677 $266M
2012 Share 10% 4%
2011 Value $700M $252M
2011 Share 9.6% 3.5%
Pure olive oil is a commodity (oilseeds), and the report has

discussed in previous sections how an almost European
continental-wide blight drastically affected 2014 to 2015 production.
However from 2014 to 2015, US virgin olive oil imports increased
15%, but other olive oil imports declined 8.5% (Comtrade 2016).
This could reflect strategy on behalf of the major European
producers not to allow growing conditions to affect export volume
in the highest demand product category (virgin olive oil) while
allowing lesser-quality oil (other olive oil) exports to decline as to
not lose favor with US consumers. It would appear that Europe’s
competitors, possibly aware of the impact of the blight on
production, attempted to seize an opportunity to increase their
own US imports. The number of countries exporting to the US
increased almost 7% in this year (Comtrade 2016).
This data is somewhat at odds with the primary data gathered

for the report, which indicates that demand for imported olive oil
is declining. One importer argued this will become increasingly

the case as the costs of becoming FSMA compliant discourage
producers. “We sell an olive oil from US, and the changing price
[due to FSMA compliance] – if the consumer doesn’t want to take it
on – may change demand from foreign to domestic.”105 Distributors
and importers indicated that the domestic olive oil industry is
beginning to have an impact on foreign olive oil in the US market,
and one European and North African importer has scaled back their
imported olive oil purchasing.
We aren’t selling a lot of [imported] olive oil anymore; we were

in the past – a lot of it – but we’ve found it’s not a big seller for us
anymore. It’s become difficult because of [domestic] competition.
Right now, I only carry one from France. It’s very high end, and
to be honest, it’s not a big seller. We don’t know how much we’ll
continue to [import]. I constantly get approached by olive oil
companies wanting to sell their product [on the US market], but
it’s just not something we are doing anymore.106
It’s not only the presence of a US pure olive industry that has large,
European producers concerned about their US market share;
it’s that the US producers’ capacity for production also appears
significantly more competitive (Robison and Silver 2016). One
2,200-acre California grove is producing 3,200 gallons of olive oil an
hour, and as desertification impacts the west, midwest, and south
of the US, olive groves are becoming “the new wine” industry in the
US (Robison and Silver 2016). An agrifoods trade association with
foreign and US members commented that: “One of our sections is
the North American Olive Oil industry trade association. We know a
lot about this, and it’s changing. Domestic competition is growing,
especially from California. It’s cheaper for the US consumer, and
there are a lot of people who want to buy local. They also want
quality olive oil for a lower price.”107 Large-scale demand changes in
the US have the potential to drastically affect top global exporters,
such as Portugal. There are also a number of investigations into
fraudulently classified imported olive oil, as USDA certification is not
mandatory (Koba 2015).
The combination of these events has led to increased demand for

domestic olive oil, just as recalls of foreign cheese for food-borne
illnesses have birthed a domestic cheese making industry in the
US. In 2012, the US produced approximately 4,000 metric tons of
olive oil, and in 2013, production increased to 10,000 tons; “domestic
producers, especially those in California, have begun campaigning
to gain acceptance in a market that overwhelmingly, and perhaps
irrationally, favors imported varieties” (Narula 2014). However, only
2% of domestically-produced olive oil is currently consumed in
the US (AOOPA 2016). The remaining 98% of olive oil consumed
is imported. As the American demand for olive oil grows, it will
continue to be a promising market for exporters like Portugal, but
for how long is uncertain. Secondary research suggests SMEs may
find a market for foreign olive that is still growing in the US in: “‘non-

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traditional’ areas for olive oil, and those living in the Midwest and
South” (Robinson and Silver 2016).
5.2e Chocolate
The US demand for imported chocolate is the second largest
considered in this section, valued at $2.31B in 2014. It is the sixth
largest import subsector in the foodstuffs sector. Foodstuffs is the
largest agrifoods import sector and tenth largest US import sector
out of 21 total sectors. In 2014, the most in-demand chocolate
product categories in the US were:
»» Chocolate / cocoa food preparations nes (“chocolate”)

»» Chocolate and other food preps containing cocoa, greater than 2
kilos (“chocolate and cocoa products”)
»» Chocolate, cocoa prep, block / slab / bar, not filled, greater than 2
kilos (“unfilled chocolate”)
»» Chocolate, cocoa prep, block / slab / bar, filled greater than 2 kilos
(“filled chocolate”)
»» Sweetened cocoa powder.
The top two product categories each constituted more than 1% of

the total US foodstuffs import market. The product categories in the
chocolate subsector range in value from $447M to $47.8M, and the
majority are significantly imported products (greater than 0.0%).
From 2011 to 2014, there was only one significant product category
change; in 2012, imported cocoa powder dropped from 0.43% of
the foodstuffs demand to 0.17%. As a result, filled chocolate became
the fourth-most demanded chocolate product category, a value it
has retained.
Table 5.5 shows a general breakdown of US imported chocolate

product categories’ values and sector shares from 2011 to 2014. With
exception to sweetened cocoa powder, there is little change in
imported chocolate product categories demand. Beginning with
chocolate products, demand for imported chocolate appears to
be increasing at slow but steady rates, indicating a strong import
market for specific types of chocolate products. SMEs should
revisit discussions from previous sections to ensure their products
are appropriate for the US market and that they know which US
states or regions will be most predisposed to prefer their chocolate
products. With regard to the category of chocolate and cocoa
products, import levels declined in 2012, and while shares have not
reached their 2011 levels, values continue to grow at an average
annual rate of 1.44%. This market may offer slightly less opportunity
for SMEs’ profitability, compared to the chocolate product category,
but growth is steady and risk is low.

Table 5.5 – Select US Chocolate Product Categories Import
Chocolate and Unfilled Filled Sweetened

Chocolate Cocoa Products Chocolate chocolate Cocoa Powder
2014 Value $978M $631M $447M $208M $47.8M
2014 Share 1.8% 1.1% .81% .38% .0087%
2013 Value $929M $594M $395 $207M $74.6M
2013 Share 1.7% 1.1% .73% .38% .14%
2012 Value $886M $577M $339M $203M $89.4M
2012 Share 1.7% 1.1% .63% .38% .17%
2011 Value $813M $596M $318M $196M $218M
2011 Percent 1.6% 1.2% .63% .39% .43%
Examining the last three product categories, imported unfilled

chocolate appears to have experienced a recent surge in US
demand, a 40.6% increase from 2011 to 2014 and 13.2% increase
from 2013 to 2014 alone. This product category features a lower
price point compared to the other two imported chocolate product
categories; however, it appears a low risk and steady product
category for SMEs’ export development. For filled chocolate, the
average annual growth rate from 2011 to 2014 was 1.5%. Compare
this growth rate to that of the chocolate and cocoa product
category, and there is little difference; however, the product
price and overall market value for filled chocolate is significantly
less. There is little reason for the report to discourage SMEs from
importing filled chocolate products to the US, as it features
relatively the same risk and growth factors. Profitability, on the other
hand, may not be as considerable, and if SMEs were to weigh the
costs and benefits of imported filled chocolate versus the chocolate
product category, it is likely that chocolate would fare better.
Sweetened cocoa powder is the riskiest of all chocolate product
categories regarding US import demand, which has declined at an
alarming pace. This import market has declined almost 80% in four
years, and the report would not recommend this product category
for SME export development.
Overall, there are positive opportunities for SMEs’ export

development and growth within the chocolate subsector in the US.
Imported chocolate appears to be increasing in demand. In 2014,
chocolate reached its peak as the sixth most in-demand subsector

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within foodstuffs; it was seventh most in-demand subsector within
foodstuffs in 2013 – where it ranked in 2011 as well. In 2012, it was
replaced by raw sugar and moved to eighth most in-demand. The
lowest demand for imported chocolate within a ten-year period
was in 2007, when it was the 14th largest subsector within agrifoods.
Interviews gave the impression that the American chocolate market

may becoming more competitive; one gourmet importer suggested
that they can easily move chocolates through their mostly imported
products website, but the chocolates that they sell are domestic.108
A popular national magazine listed the world’s best chocolatiers,
and half were American, in Chicago, Illinois, Berkeley, California,
New York, New York, Fort Meyers, Florida, and Santa Cruz, California
(Intelligent Travel 2012). Therefore, these states might pose greater
access barriers for SMEs and / or less profitable markets. The US
remains the largest importer of chocolate globally.
5.2f Jams
The 2014 US demand for imported jams was worth $253M. Though
it makes up a mere 0.46% of the US foodstuffs market, the market
has been growing at a solid pace with an average growth rate of
4.5% per year. In 2014, the most in-demand jams product categories
in the US were:
»» Jams, fruit jellies, purées and pastes, except citrus

»» Homogenized jams, jellies, etc
»» Citrus-based jams, jellies, marmalade, etc.
It is worth noting that that the jams, fruit jellies, purées and pastes
product category includes Nutella and Speculoos (cookie butter)
products that have enjoyed increased demand in the US in
recent years. This product category constituted 0.42% of the total
US foodstuffs import market. The other two product categories
contributed just 0.029% and 0.011% respectively and are, therefore,
not considered significantly in-demand import markets. Neither
of these two product categories have reached significant levels
(greater than 0.0%) of US import demand, and as such the analysis
focuses exclusively on the first jams product category. Table 5.6
offers insight into US import value and sector share of the first jams
product category from 2011 to 2014. The market for this imported
jam product category is increasing steadily.

Table 5.6 – US Jams, Fruit Jellies, Purées and Pastes, Except
Citrus Import Demand Levels (2011-2014)
2014 Value $230M
2014 Share 0.42%
2013 Value $219M
2013 Share 0.4%
2012 Value $206M
2012 Share 0.39%
2011 Value $185M
2011 Share 0.37%
As noted in Section 2.3f, US demand for imported jam products is

increasing though it is a relatively small market. With an effective
marketing strategy, SMEs have opportunities to secure market
shares from other US market competitors that are experiencing
declining demand, such as Canada, or outcompete similar
countries exporting to the US market, such as Vietnam and South
Korea. Therefore, it appears the majority of development necessary
for SMEs to succeed in the US imported jams market is related to
marketing, and the report parties can offer considerable resources
in this area to assist in export development.
5.2g Processed Fish

The US demand for imported processed fish was valued at $1.62B,
the third largest import market within this report. It is the US’
twelfth largest import subsector in the foodstuffs sector. It is the
second most demanded US import from Portugal in the foodstuffs
sector behind wine, and the third largest US import in Portuguese
agrifoods overall. There are nine product categories within the
processed fish, and the in-depth analysis focuses on three:
»» Tuna, Skipjack, Bonito, Prepared/Preserved, Not Minced (“TSB”)

»» Sardine, Brisling, Sprat Prepared/Preserved, Not Minced (“SBS”)
»» Mackerel, Prepared or Preserved, Not Minced (“Mackerel”).109
109 For a complete listing of the 9 preserved fish product categories, see Appendix 2.

• 119
The product categories in Table 5.7 were selected because TSB
and SBS are significantly imported product categories; mackerel
was selected because it is a top Portuguese processed fish export,
despite its lack of popularity in the US. “Most want the pretty
picture of the fish, and smell-proof packages. [US consumers] don’t
want any fishy smells or tastes.”110 TSB and SBS have maintained
a relatively steady share of the US foodstuffs import market while
imported mackerel demand has been irregular. Demand for TBS
peaked in 2012, and there have been no significant changes in
these product categories’ US demand from 2011 to 2014.
Table 5.7 – Select US Preserved Fish Product Categories Import

TSB SBS Mackerel
2014 Value $1.04B $119M $28.1M
2014 Share 1.9% 0.22% 0.051%
2013 Value $1.11B $115M $26.9M
2013 Share 2% 0.21% 0.049%
2012 Value $1.16B $116M $38.4M
2012 Share 2.2% 0.22% 0.072%
2011 Value $983M $98.5M $32.7M
2011 Share 1.9% 0.19% 0.064%
Table 5.8 aims to provide similar information as presented in

Sections 2 and 3 to help SMEs gain a fuller understanding of US
supply and demand and competitiveness. Within TSB, Portugal
held 0.77% of the global market and 5% of the European share
of the global export market in 2014, a value of $58M. In 2014,
Portugal exported $1.94M worth of TSB to the US, the second
largest European exporter of this product to the US market behind
Spain. The US is the top importer of TSB globally, demonstrating
the scope of opportunity for SMEs in the TSB product category. For
TSB, the most significant market supply / demand factor continues
to be the decline of Thai fish products imported into the US. It has
yet to be seen whether the supply gap remedy will be somewhat
equally distributed across the 73 other countries that supplied the
US market in 2015 or if one or several exporting countries seize the

opportunity to significantly expand their US market share, which is
the strategy the report recommends for SMEs who are export ready
(Comtrade 2016). As Table 5.8 shows, Portugal was a top five global
TSB exporter within Europe, and SMEs who are export ready have
the opportunity to compete with large exporters and substantially
increase their profitability and competitiveness.
Table 5.8 – 2014 Markets for TSB, SBS, and Mackerel Products
Top 5 Countries Top 5 Global Top 5 Global Exporters

Exporting to the US Exporters (within Europe)
1. Thailand (44%) 1. Thailand (31%) 1. Spain (53%)

2. China (11%) 2. Ecuador (15%) 2. Italy (14%)
TSB 3. Ecuador (10%) 3. Spain (8.2%) 3. Netherland (12%)
4. Vietnam (7.7%) 4. Mauritius (4.7%) 4. Germany (5.8%)
5. Philippines (6.9%) 5. Indonesia (4.4%) 5. Portugal (5%)
1. Morocco (25%) 1. Morocco (36%) 1. Portugal (25%)

2. Canada (20%) 2. Thailand (14%) 2. Latvia (21%)
SBS 3. Poland (15%) 3. Ecuador (6.7%) 3. Poland (11%)
4. Thailand (12%) 4. Portugal (6.2%) 4. Croatia (8.1%)
5. Ecuador (6.9%) 5. Latvia (5.3%) 5. Spain (5.7%)
1. China (41%) 1. China (25%) 1. Portugal (25%)

2. Thailand (26%) 2. Thailand (12%) 2. Denmark (24%)
Mackerel 3. Vietnam (13%) 3. Morocco (9.3%) 3. Germany (11%)
4. Japan (5.6%) 4. Portugal (9.2%) 4. Sweden (9.3%)
5. South Korea (2.8%) 5. Denmark (8.9%) 5. Latvia (7%)
Moving to the SBS product category, with $80.3M in global market

value, Portugal held 6.2% of the global market and 25% of the
European share in 2014. The US is also the top global importer of
SBS. Portugal is the top European exporter in this product category
and the fourth largest global exporter, behind Morocco, Thailand,
and Ecuador. Portugal’s SBS exports to the US were valued at
$3.07M in 2014. Almost 4% of their global market is in the US, and
the report urges SMEs to increase this market share. A large portion
(20%) of the US SBS supply needs are met by Canada, an example
of how factors like proximity and FTAs can impact supply. With
consumer preferences and the Trade Facilitation Act transforming
the US market, the report suggests this window of opportunity
presents a critical moment for SMEs to increase Portugal’s share of
the US market and grow their SBS global exports, as they are the
top European exporter.
Portugal is the top European exporter of mackerel with a 9.2%

share of the global export market, behind China (25%), Thailand
(12%), and Morocco (9.3%). In the US, Portugal is the second largest
European producer behind Poland but only holds 1.2% ($348K) of

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the market. Portugal is in the top ten countries exporting to the
US for mackerel, but six of the top ten are in Asia, which holds an
astounding 91% of the import market. Again, the Trade Facilitation
Act makes the US a dynamic market, but the US is only the ninth
largest import market for this product category. Portugal has yet to
transfer its global and European export success to the US processed
fish market. SMEs that are export ready or who can become export
ready by early 2017 have excellent potential opportunity.
Assessment of US Agrifoods Demand

The results of this analysis are encouraging, as the majority of the
subsector and product category analysis continue to confirm
the findings of previous sections: positive opportunities for SMEs’
agrifoods export development and growth in the US market. The
US baked goods import market is the largest, and the other baked
goods product category looks the most promising for SMEs as it
contains a large array of sweet and savory products, including cakes,
breads, biscuits, and pizzas.
Demand for imported preserved meat remains incidental in the

US, but demand is growing — albeit it remains uncertain whether
demand is higher for domestic or imported preserved meat.
Portugal does not currently export preserved meat to the US, and
this report believes that non-tariff barriers, such as the Bioterrorism
Act and FSMA compliance, are key explanatory factors. Preserved
swine and bovine meat present some of the most promising
opportunities for SMEs looking to export within this subsector.
Recent trends paired with demand generated by marketing,
increased tourism, and other strategic activities will help increase
demand in SMEs’ favor, but cost / benefit analyses remain a case-by-
case, product-by-product basis.
Portugal only accounts for 0.31% of US cheese imports, but cheese

makes up 2.7% of Portuguese agrifoods exports to the US market,
contributing significant value to GDP. The US market can be
characterized as inconsistent but growing, and opportunities are
likely to be greater in certain product category markets. In the other
cheese product category – which includes the majority of European
specialty cheeses – US import levels, values, and shares are unsteady
but appear to be growing in 2015. In the fresh cheese product
category, an increased demand for domestic American cheeses
has resulted in decreased demand for imported fresh cheese.
As Americans are less familiar with Portuguese cheese, market
demand must be created by, among other strategies, maximizing
the current interest in Portuguese wine and cuisine and offer
pairings along with combining the positioning with gourmet
products, such as preserved meat.
Although the US market is a major export market for olive oil,

Portugal has recently been losing market share. Comtrade’s data
suggests the US market for imported olive oil is growing, but
while imports are dominating, there is growth in domestic olive
oil production that will likely impact imports. US demand for olive
oil is increasing – domestic or imported – and continuing to be
competitive in price and high quality. If SMEs have resources to

develop their US market through direct sales, relationship building,
increasing brand visibility, educational campaigns, and so forth, the
US market offers positive opportunities. However, as several foreign
olive oils are being investigated for fraudulent labelling – because
the USDA’s olive oil certification is not mandatory – SMEs could find
themselves facing significant market barriers. It will be helpful for
SMEs to know that high-quality olive oil is the most in demand,
packaging and non-drip containers matter considerably more to
the US consumer, and the US Midwest and South offer the best
opportunities for success.
Imported chocolate is the second-most highly demanded subsector

assessed in the section; the US is the top global chocolate importer.
Most (70%) of the US market is held by Canada and Mexico, but
European chocolate is certainly demanded, especially as a luxury
treat. European imports make up 26% of the US market, and several
categories offer positive opportunities for SMEs with exception to
sweetened cocoa powder, which is not recommended for SMEs. The
main product category (chocolate) is safe and steady; chocolate and
cocoa products carries slight risks because of inconsistent demand,
which is highly similar to the filled chocolate product category. The
difference between these two product categories is that chocolate
and other cocoa products is a more lucrative market than filled
chocolate. Both feature steady growth on average, though some
years are better than others. By contrast, the unfilled chocolate
product market offers steady growth and low risk, though like filled
chocolate a lower market value. It is questionable as to whether any
of the imports in the unfilled chocolate product category are used
for American domestic production, which also appears to be more
in-demand compared to past years.
The US imported jams market is growing at an impressive pace,

and the most demand is the primary jams product category.
The important element of export development in this product
category is marketing. There are good opportunities for SMEs to
partner with foodservice, as well as retail. The retail market will
require more resources in product marketing; whereas, price (and
quality) competitiveness will reveal greater opportunities in the
foodservice market.
Imported processed fish is perhaps one of the most interesting

market to monitor. The report parties’ insider knowledge suggests
that major US retailers are aware of an existing and widening supply
gap. The US is the largest global importer of processed fish, and
opportunities for SMEs are rife, if they are or can quickly become
export ready. TSB and SBS product categories are the most in-
demand; demand for mackerel remains low. As a dominant global
and European exporter, the report fully encourages SMEs to begin
export readiness and relationship building towards sales goals
highlighted in Section 2, particularly in the TSB product category
where demand is consistent and high.
Mackerel presents a unique challenge that Portuguese (and many

European) SMEs will find difficult to understand; the American
pallet simply does not reflect a strong demand for mackerel,
despite the well-known health benefits of consuming this fish. “It’s a

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very particular taste that’s more common in Europe or ethnic foods
that we don’t have here, no matter what the health benefits. I think
if it was included in the Mediterranean diet trend, people would
pick and choose what to adopt from it and leave out the stinky
fish.”111 Here, the report suggests expanding to other foreign markets
while aiming, in the long-term, to enhance US imports. The report
cannot emphasize enough that timing is key in the US market.
5.3 Trends Affecting Supply and Demand
This section focuses on giving Portuguese SMEs an idea of how to

supply demand in the US market by examining trends that affect
supply and demand. Trends in the US, in general, are much stronger
market forces compared to Europe. For example, while Europe
tends to rely on tradition and regional specialties, the US embraces
trends and fusion, and the consumer directs the market, meaning
that trends can play even more of a role. Supply and demand is not
only consumer driven; it is also influenced by legislation targeting
improved sustainability in agrifoods trade. The passage of the
Trade Facilitation Act and increasing consumer consciousness has
been emphasized throughout this report as a critical window of
opportunity for SMEs. The US’ historical reliance on unsustainably
cheap agrifoods – whether through trade-distorting subsidies or
importing products with dubious labor practices – has the potential
to affect future trends. However, in agrifoods – and agriculture,
more generally – weather and climate can be powerful forces
affecting trends. The advent of US olive oil producers, for example,
is an example of how weather and climate affect trends towards
domestic products that affect import demand, discussed below.
5.3a Sustainability-Related Trends

Desertification – caused by a combination of natural climate cycles
and unsustainable farming practices – is affecting US crop yields,
soil nutrition, farmable land, and, hence, supply and demand. From
California – the cornerstone of American agriculture – to Texas,
desertification is having a deep impact on American agrifoods, and
the effect is spreading. Over 1,200 square miles bordering the San
Joaquin River in California sank by almost a foot annually from 2008
to 2010 due to groundwater pumping during this historic drought.
In areas of Texas where cedar trees, which have deep roots and
have extensive water needs, were once predominant, farmers have
changed their crops altogether. Texas olive groves are now drawing
comparison to those of southern Spain, and Texan and California
olive oil have begun filling olive oil supply gaps (Ramchandani 2014).
A national agricultural trade association interviewed suggested that

the strongest trend in US agriculture now is the shift towards large-
scale consolidation, where many small, sustainable farms are being
purchased for use by large industrial farming – further exacerbating
industrial agriculture’s effect on the sustainability of US agriculture.
“And it’s not good for competition; it’s not good for farmers; it’s not

good for anybody. I don’t know if it will continue to go this way or if
the government will have to shut it down sooner or later.“112
However, where nature threatens industry, science and technology

respond. Another sustainability trend shaping US agrifoods demand
is indoor farming, also referred to as “vertical farming” and “urban
agriculture”. This sustainable production method is less susceptible
to climate or weather-related events that affect domestic supply
and import demand; however, water needs in indoor farming
can vary based on mode of production (ie: hydroponic versus
conventional irrigation). The “farms” can be stacked in rows on top of
one another, thus maximizing the amount of crops and minimizing
the space needed for agricultural production (Bhanoo 2014).
An interesting example of how this change in production affected

US supply and demand is a certain food that became popular
with Americans: dulse, a type of highly-nutritious seaweed that is
traditionally very difficult to harvest. The crop does very well when
cultivated indoors. Indoor dulse farmers are poised to be largely
profitable because they are able to supply this superfood on such
a mass scale (Wallace 2016). The report makes particular mention
of this product and mode of agricultural production because the
report parties are aware that related modes of sustainable agri-
and aquaculture are growing in Portugal. Superfoods often trend
strongly for long durations of time in the US, and their popularity
typically spreads to other international markets. SMEs that are
engaged in this type of production – or who have resources to
develop similar modes of production – have the opportunity to get
ahead of this coming agrifoods trend.
5.3b The Mediterranean Diet Trend

The Mediterranean diet’s popularity in the US is inspired by
Americans’ perceptions and experiences with the cuisines of
regions such as Spain, Greece, Cyprus, and southern Italy. The diet
is neither a new or dissipating trend in the US, and Americans
see the cuisine as a means of achieving both weight loss and a
healthier lifestyle. The Mediterranean diet is based on olive oil, fruits,
vegetables, fish, whole grains, and beans; it is low in red meat, dairy,
and saturated fats. There are lower rates of heart disease in countries
that typically follow this kind of diet, though it is possible this is due
to a variety of healthful lifestyle factors and not solely the diet (AHA
2014). Since it first entered the US mainstream in the 1990s, this diet
has become a popular choice for Americans concerned with their
heart health and overall wellbeing. It was ranked the fourth best
diet overall by a popular US news magazine (US News 2016). Google
began recording search data in 2004; the diet saw major spikes in
Americans searching for information about the diet in 2004, 2010,
and 2013 (Google 2016).
In addition to its health benefits, Americans also perceive the

Mediterranean diet as aspirational because of the impressions of
the region and the quality of life of the people who traditionally

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follow it. They romanticize the Mediterranean lifestyle as ideal
and charming. Following the diet is a small and simple way of
bringing some of those desirable elements into their daily lives.
The popularity of the Mediterranean diet has increased Americans’
familiarity with: “country of Portugal and its cuisine and culture…
Portuguese food is becoming more popular” (Crowe, Klainbaum,
Meszaros, and Ting 2016: 94).
Most Americans traditionally perceived the Mediterranean diet

in terms of Greece and Italy. An importer that specializes in
Mediterranean agrifoods concurred. “Our customers think of us as
France, Italy, and Greece, but their perceptions may be flexible if
they knew more about Portugal… [Success in importing Portuguese
products] would probably need to be heavily linked to tourism and
effective marketing.”113 Ancel Keys, a key US figure in promoting the
Mediterranean diet’s health benefits, began drawing attention to
the Portuguese cuisine as part of his studies (Dupler 2005).
Through building the Portuguese brand, discussed in detail in

Section 6.2a, SMEs can capitalize on a fresh wave of interest
building on this lifestyle and diet but with Portuguese distinction.
Not only will this help educate the US about Portugal and its
culture, it can help aid demand for Portuguese foods. Oldways – a
nutrition-focused organization that aided in the Mediterranean
diet’s US popularity – founded the Mediterranean Foods Alliance
(MFA) to promote the diet by providing support Mediterranean
foods companies through activities like educational programs and
partnerships with companies. As discussed in Section 4.6, this report
does not believe that working exclusively with Portuguese and
Mediterranean-related US resources is a fully sustainable strategy;
however, networking with associations like the MFA could be a
major asset in market entry for SMES.
Finally, there are presently key differences between Americans

interpretation of the Mediterranean diet and that of Portuguese
cuisine, such as higher consumption of bread and red meat and
lower consumption of beans and oily fish, as an importer indicated
in Section 5.2. Americans have a particular distaste for strong-
smelling, oily fish with small bones like mackerel. Rather than see
this as an impenetrable market for processed fish exports of oily fish,
SMEs are encouraged to be creative, clever, and perceptive in their
marking – relying on health benefits of consuming oily fish (omega 3
fatty acids) to induce Americans to try these processed fish products
that are popular in other major global markets. The same importer
suggested the most opportunistic market for SMEs exporting this
type of processed fish. “There’s a trend in most of these canned fish
categories, but it’s almost all in ethnic food markets – retail or food
service. Chefs are blending oily fish into ethnic foods, but other than
this it’s almost never been in demand in the US. I don’t see a great
push for many of our retail customers looking for product.”114
114 Interview 7, Appendix 5; see also Interviews 12 and 14.

Americans are adventurous in their eating habits – especially at
restaurants (food service) compared to at-home preparation – and
perfectly willing to try new foods if there is a high (perceived or
actual) health benefit. SMEs exporting certain types of processed
fish, such as SBS or mackerel where US demand is low, may benefit
from pooling resources with other SMEs using targeted marketing
campaigns to promote the Portuguese cuisine through this trend.
However, much like the British, the Americans have a strong
distaste for fish with bones, and therefore, deboning processed fish,
as is done with canned tuna, will likely yield more positive results
with American consumers. One retailer familiar with Portuguese
processed fish advised further.
Maybe there’s something between US marketing with Portuguese

migrants and Portuguese tourism. It’s not entry-level food, but a
lot of people are still turned off by [canned sardines or mackerel].
The tuna is the exception to the rule. The stuff from Portugal
is the best, and people all over the US eat tuna. Once you try
Portuguese tuna, you won’t try anything else. If you want to
introduce people to other canned fish in the US, start with tuna.
Let them know how good it is, and it speaks for itself. If I was in
the canned fish business, I’d invest in Portuguese tuna.115
5.3c The Health Food Trend

The Mediterranean diet and dulse are specific facets of a much
larger trend in the US around health foods. According to Nielsen,
a global market researcher, approximately 88% of American
consumers are willing to pay a premium for healthy foods (Gagliardi
2015). Consumers are growing more and more savvy about nutrition,
especially around so-called superfoods. One recent health food
trend in the US has centered around dark chocolate, reputed for its
antioxidants’ effects on heart health.
In 2013, most Americans – or 51% of those who consume chocolate –

preferred milk chocolate over dark (35%) or white (8%) chocolate. This
is a slight shift from 2011, when 57% of chocolate consumers preferred
milk and 33% preferred dark; “progressively better understood health
benefits of dark chocolate may be increasing its popularity as more
consumers are looking for indulgent foods that can serve multiple
functions such as nutrition or convenience” (Mintel 2013). For health-
conscious Americans unwilling to give up their sweet tooth, a switch
to dark chocolate from milk is a relatively simple substitute, especially
in the over-55 demographic. Around 46% of men and 48% of women
55 years-old or older prefer dark chocolate to milk due to “added
nutritional benefits”, and 73% of US chocolate consumers appear to be
aware of dark chocolate’s superior health benefits (Mintel 2013). When
marketing chocolate for the US market, SMEs are advised to market
their dark chocolate products as not just as luxuries, but as a luxury
indulgence for the health-savvy consumer.

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Another major US health food trend is in fish consumption.
Americans are eating more fish than ever before, and this can
be largely linked to its health benefits as a lean source of protein
and other nutrients (USDA 2002). Per capita, the top-consumed
seafoods in the US in 2010 were shrimp, canned tuna, salmon,
tilapia, pollock, catfish, crab, cod, pangasius, and clams (NOAA
Fisheries 2016). While high-cholesterol seafood, such as shrimp and
crab, tend to have fewer health benefits to consumers, the shift
marks a trend in lower consumption of red meat and pork that
previously drove the American diet. SMEs will also note that oily fish
that is a staple in the Mediterranean diet – as discussed above – is
absent from American’s most preferred fish, with a much higher
reliance on whitefish, such as tilapia and cod, or processed fish
(canned tuna or pollock). Again, a highly educational marketing
campaign that targets the health-conscious US consumer who is
willing to try new food if its health benefits are clear could help
SMEs looking to export SBS or mackerel, but as one importer stated:
“American consumers don’t like fishy products.”116
5.3d Specialty Food Trends

Specialty foods, which are perceived as unique, authentic, and
worth a higher price, are having a moment in the US market. One
importer said that the most successful imported specialty products:
“[have] to be different, have value, and if you don’t have a product
like that, you have to work on creating demand.”117 These include
charcuterie, artisan cheeses, speculoos (more commonly known
as “cookie butter” in the US market), vinegars, mustards, coffee,
and olive oils. Another importer confirmed that their best-selling
imported products now are: “a lot of olives, crackers from Italy,
and vinegars and mustards [that] continue to do really well… It’s
those exceptional specialty items that do well for us… Other items
that aren’t special just aren’t selling for us.”118 Examples of specialty
foods that have trended upward in the past in the US are French
macaroons, bacon-flavored or bacon-added foods, and small
batch soda. Mainstream retailers account for the majority (78%) of
specialty food sales, although there is a strong e-commerce market
for specialty foods, particularly targeted towards food service, which
comprise the remaining 22% of US specialty food sales (Specialty
Food Magazine 2016).
This is a market that only continues to grow, as Americans demand

authentic, from-the-source products. Cheese, charcuterie, chocolate,
and baked goods are (in order) in the top ten specialty food trends
this year. Charcuterie, in particularly, was originally viewed as a luxury
product; it is working its way down into the mainstream, and part
of this may be due to an influx of domestic producers – particularly
in-house made charcuterie within the food service sector (Huffington
Post 2015). Demand for imported preserved meat has been slightly
decreasing in recent years, but there is potential for imported
charcuterie to reclaim its popularity. The US’ largest specialty and

organic food retailer, Whole Foods, is backing imported charcuterie
as a worldly yet accessible trend (Strange 2013).
The recent trend towards regional cheeses can be paired with
the rise in charcuterie and vice versa. Marketing campaigns could
offer pairings with the fast-growing Portuguese wine sector and
combine specialty food products in a single marketing campaign
to target the more upmarket consumer. This report suggests tying
wine, tourism, and the high quality of life the Portuguese enjoy
with specialty foods marketing is a proven strategy used by other
countries to create a connection with products from a specific
place. “We think that tying our product to tourism is the initial
attraction for people who have been to Portugal and Lisbon and
[have already] tried them. That’s how it started in the UK as well
with all Portuguese foods, but by the nature of USA geography,
Portugal has little to no recognition in the US.”119 Therefore,
positioning specialty Portuguese food in the US market must be
initiated by SMEs looking to grow their market.
Spreads like Nutella and Speculoos have achieved a somewhat

cult-like status in the US in the last five years. Both are common
products in Europe but because Americans do not have a strong
European crepe, waffle, or pancake culture, the products gained
popularity on the US market much later. In the case of cookie
butter, it was strategic partnering from one brand that made the
product more the mainstream. As far back as the 1980s, Belgian
Speculoos manufacturer, Lotus Foods, partnered with the American
airline, Delta, to serve their cookies on flights. Soon, American
consumers were searching for the product among retailers, being
met with no supply, and attempting to self-import through
international mail, demonstrating the link between food and travel.
It was not until about 2008 that Lotus entered US supermarkets,

and when they developed a spread made of the cookies, they used
low-cost, strategic methods again to educate the American public
about the product. They utilized media attention and social media
websites like Pinterest, and major brands like Ben and Jerry’s ice
cream and retailers like Trader Joe’s began branding products with
the Speculoos name (Goldberg 2015). During the five years Speculoos
has been on the US market, it has enjoyed enormous success and
publicity, yet another example of how creative, clever, and perceptive
marketing can shape demand for lesser-known products.
One importer relayed that: “our buying decisions are based on

our customers’ demands. We don’t import items without having
customer demand.”120 When American consumers are exposed to
a foreign product, they will find a way to bring it to their market,
through formal or informal distribution channels. As one retailer
emphasized of their buying process for four chains of large, regional
US supermarkets: “it’s always demand driven – what the consumer
wants the consumer gets.”121 Another distributor agreed but added
that demand can be shaped in other ways. “If there’s no demand,
people do similar things to what you are doing, call us up and ask

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questions.”122 There is always a market for a good product in the US.
As discussed in Section 5.2d, American olive oil consumption
has been increasing for several years. When imported olive oils
flooded the US market, the USDA created its (optional) set of
quality standards to make it easier for the American consumer to
discern between different olive oil grades. However, the majority
of American consumers remain fairly unaware of the differences
between olive oil grades and their various uses (Marq Consulting
Group 2014). For SMEs looking to enter or grow in the US market,
an educational marketing campaign is highly advisable. Similar to
how foreign wines grow in the US market, through tastings, pairing,
and seminars, the average consumer requires detailed information
about Portuguese olive oils’ superiority to stimulate demand.
When Mexican avocado producers launched their “Avocados from

Mexico” campaign, their goal was to shift the American perception
of avocados as more than just an ingredient in guacamole – a highly
popular Latin American dip or condiment. More specifically, they
wanted to differentiate Mexican avocados as being of higher quality
than other countries’, such as Israel, which also has an FTA with the
US. The campaign – entirely about Mexican avocados’ superiority–
featured television spots and in-store promotions, but the most
effective marketing occurred when producers pooled together to
buy a highly costly but highly viewed piece of commercial time – a
30-second-or-less advertisement during the US Superbowl that
cost, on average, $4.5M in 2015 (Boyd 2013; Schwartz 2016).
The advertisement featured a very simple jingle (“Avocados from

Mexico”). Figure 5.2 shows the Google search history trends for
the term “avocados Mexico” from January 2014 through mid-
July 2016 (Google 2016i). The regional interest in this search
term was concentrated entirely in the US, and the enormous
peaks in searches for this search terms in February 2015 and
February 2016 are a result of the repeated Avocados from Mexico
Superbowl advertising campaign; the ad ran for peak price
during the Superbowl and for a significantly reduced rate in the
weeks following the annual event. The success of the Avocados
from Mexico campaign is a poignant example of marketing and
advertising tactics that can be highly successful in the US but may
not be familiar to Portuguese marketing firms. SMEs may consider
pooling resources for such a clever, creative, and perceptive
marketing campaign.

Figure 5.1 – Google Trends for “Avocados Mexico” Search
History (January 2004-Mid-July 2016) (Google 2016i)
Assessment of US Trends
This section has aimed to explore how trends, such as indoor
agriculture, the Mediterranean diet, health food, and specialty
foods, can help SMEs not only gain insider knowledge of the US
agrifoods market, but also supply increasing areas of demand. The
report highlighted two, highly successful marketing campaigns
/ tactics (Specuoos and avocados from Mexico) to highlight how
creative, clever, and perceptive marketing can considerably affect
competitiveness and profitability for SMEs exporting specialty
products. Marketing methods should suit the product, and airline
partnerships and Superbowl ads may not be the most appropriate
for gourmet products, such as preserved meat, cheese, and olive oil.
As one distributor suggested: “Bringing a new product in requires
different type of implementation depending on the product. There
can be visits to customers, making some demonstrations, or other
marketing tools. It’s all specific to each product and its story.”123
The importance of keeping pace cannot be overstated. For

companies seeking to succeed in this highly competitive market,
this means being ahead of the curve when it comes to US trends,
but trends change. By the time Portuguese SMEs digest this
report and begin to form an action plan for sustainable export
development, some of these trends may have less potency. This
section has shown how growing demand for healthy and nutritious
foods is a trend in the US market and how domestic and foreign
agrifoods businesses respond to that demand. Another trend is that
the American palate is becoming more complex and adventurous,
and this is good news for SMEs, who can market their products
as a new and exotic. These two trends point to one particular
demographic: young people, especially those living in urban
environments. Young Americans are generally more concerned
with health, more active and adventurous, and more responsive to
creative, clever, and perceptive marketing.
In general, the younger “millennial” generation (born between 1981
and 2000) is increasingly driving demand trends. In addition to
an affinity for unfamiliar foods, millennials value health-conscious
options that are convenient – both in packaging and in preparation
–important factors to consider in packaging agrifoods. Single-

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serving and all-inclusive product options, such as ready-made
meals with plasticware included, are more appealing to this market.
While this may translate into higher production and packaging
costs, millennials are also more willing to pay a premium for
specialty or new foods they perceive to be of higher quality, better
nutritional value, or more ethical in supply chain (Marq Consulting
Group 2014).
The advent of new technologies paired with evolving US distribution

and consumer habits have fueled a rise in agrifoods e-commerce. Up
to 85% of US specialty food manufacturers offer direct sales through
their website, and almost half also use third-party platforms, such as
Amazon, to reach the supply chain (Specialty Foods Magazine 2016).
Online goods retailers like Amazon and Instacart have diversified
by selling fresh and shelf stable agrifoods products, and many US
supermarkets, including natural or organic grocers, offer online
shopping and delivery. E-commerce for agrifoods is increasingly
appealing to Americans, who work more than the residents of any
other industrialized country (Schabner 2016).
According to “Today’s Specialty Food Consumer,” a 2015 report

conducted by the Specialty Food Association and Mintel, 53
percent of specialty food consumers made at least one online
specialty food purchase in the last six months. The report also
indicates that a full 31 percent of specialty food consumers
are using or actively seeking an online grocery delivery service.
According to Nielsen’s 2015 “The Future of Grocery” report, one
quarter of global consumers are purchasing groceries online, and
55 percent indicate that they are willing to do so in the future
(Crocker 2016).
Making buying food faster, easier, and more convenient is especially

appealing to millennials, who tend to work several part-time jobs
as part of the “gig economy” and other groups of busy consumers.
As millennials have grown up in a world with constant access to
technology, e-commerce is not a huge leap for food shopping.
Another major appeal of e-commerce is the increased selection,

which is something SMEs should use to their advantage. Several
importers interviewed suggested that there is always a market for a
good product, even if demand is not particularly high, as they can
special order a foreign product when customers request it. Simply
offering a product as part of an importers’ catalogue may help
SMEs enter and grow in the US market. SMEs can also work towards
this goal by having an effective and searchable English-language
website, either for direct US customer sales – as demonstrated in
the Speculoos example – or so importers and distributors can find
sources for products that will be or are in high US demand. A large
US retailer said that when they look for new products they

have in-house business development specialists that look for new
opportunities with new items.124
This is also how Trader Joe’s, a popular US, German-owned natural

foods grocery chain with 453 stores, acquires new products. Unlike
Whole Foods – which asks suppliers to submit products and
compelling story about their products, explaining why they fit the
Whole Foods brand – Trader Joe’s is more of a closed market, using
an in-house team to travel the world (both physically and virtually)
in search of products that meet the Trader Joe’s model and market.
SMEs should take precise care to ensure that their products fit
the model of the importer, distributor, retail, or food service outlet
where they are pitching their products. This was reiterated heavily
throughout the report in reference to chocolate, as there are two
clear distinct US and global markets, and this recommendation is
especially pertinent for SMEs looking to work with natural grocers,
the fastest growing source for imported and specialty products. One
distributor explained further.
We do mainly organic, natural, and vegan products; we also

distribute non-GMO verified foods. The imported foods we
distribute have to align with what we do. We try to do local as
much as possible… If you wish to sell new products to us, we have
to discern if it meets the requirements for us, if that’s organic, non-
GMO, kosher, or whatever. If it aligns with us and has certifications,
we would sell it as a distributor.125
The report advises providing complete product information to

communicate with and educate consumers, importers, distributors,
retailers, and food service about the product, brand, and origin,
including recommended pricing and shipping times. Price is always
negotiated in the US based on several variables, quantities, terms,
logistics, etc. “The exporter has to be flexible on price; the market
will dictate what consumers are willing to pay. Consumers won’t
want to pay more for just any product; they want a product that
speaks to them and their experiences.”126 When the purchasing
director for a large chain of regional grocers was asked how they
select new products for purchase, she said she conducts product
research and passes along information for products she’s interested
in to her distributor.
I would have to do my research where I could [source] the product;

then I would contact C&S, our distributor; they are a large national
distributor. They set the prices but of course availability and location
matters too… We would contact our distributor; they then decide
the product and upcharge. From there, we have our own internal
formula for what we charge at different stores based on regions.127
A final way to be effective in supplying US trend demand –

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millennial or otherwise – is foodservice, an increasingly important
channel for specialty foods. Sales have been growing faster through
food service distribution than through retail – 27% versus 19.7%
(Purcell, Ting, and Van Esseltyn 2016). Recall Speculoos’ success
through Delta Airlines; SMEs who are less successful through
traditional retail market entry or e-commerce should perhaps
consider strategically planned partnerships in food service. A
distributor suggested that trends tend to play less of a role with
food service — especially specialty products. “Trends don’t really
affect us since we deal in high quality products and beverages,
which are always in demand.”128
5.4 Understanding How the Competition Responds to Trends
Becoming a top US producer requires strategy development and

enhancements, some of which are outside the scope of this report.
Consistent sustainable export development that is supported –
financially and with other resources – by the European, Portuguese,
and local business and agricultural communities, such as AEP and
the Agência para o Investimento e Comércio Externo de Portugal
(AICEP), puts US market access and growth opportunities within
the grasp of Portuguese SMEs. Before concluding, this section will
help SMEs understand how the competition responds to US market
trends and why this gives them a competitive edge.
The top US trade associations (no particular order) for Portuguese

SMEs’ networking are:
»» Specialty Foods Association
–– Established in 1952 with now more than 3,000 US

andforeignfood artisans, purveyors, importers, and
associated businesses
–– Holds summer and winter trade shows attended by almost
all US businesses contacted for the report; the industry
leader for specialty food
»» National Grocers Association (NGA)
–– Represents independent retail and wholesale grocers,

distributors, affiliated associations, manufacturers, and service
suppliers to enhance consumer price, variety, quality, service,
and value choices
–– NGA Economic Impact study finds that independent grocers
account for one percent of US GDP and $131B in sales
»» Association of Food Industries Inc (imports)129
–– Offers assistance to exporters trying to navigate US

governmental regulations
–– Monitors regulatory changes and prepares relevant information
and statistical data for members

–– Holds annual conferences to share information and provide
networking opportunities
»» National Restaurant Association
–– Largest (over 500,000) collective of global foodservice

businesses representing industry interests including financial
and regulatory changes
–– Offers tools, systems, networking, education, and research to
protect members’ economic interests, share best practices, and
inform and shape emerging trends
»» Cheese Importers of America
–– Incorporated in 1948 to help global dairy producers and

importers facilitate efficient cheese imports into the US
–– Compliance and regulatory specialist with wide-reaching
network of global government officials
»» Biscuit and Cracker Manufacturers’ Association (baked goods)
–– Founded over 100 years ago

–– Largest consortium of baking industry professionals in the world
–– Represents brand, private label, and contract manufacturers as
well as supplier
–– Offers conferences, training courses, events, and other programs
for members
»» National Confectioners Association (candies)
–– Members represent firms involved with manufacturing and

marketing confectionaries, both in the US and internationally
–– Offers assistance with government regulations
–– Advocates on behalf of members on a range of public policy
issues
»» Fine Chocolate Industry Association
–– Association of over 200 members promoting quality, innovation

and best practices in global gourmet chocolate industry
–– Identifies trends, communicates with consumers, media, and
decision-makers
»» SNAC International / Snack Food Association (SFA)
–– Promotes networking between manufacturers, suppliers, and

marketers
–– Speaks on behalf of the snack industry in front of the US
government and media
–– Compiles industry and consumer data for members and
educates them about important industry topics

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»» International Meat Trade Association (meats)
–– Represents over 60 importers, exporters, and wholesalers in the
international industry
–– Offers assistance with regulatory requirements for several
countries
–– Helps with troubleshooting day-to-day issues (containers stuck
at port, customer queries, etc).
While existing relationships are most influential in US agrifoods

importers’ and distributors’ purchasing decisions, several who were
interviewed attend trade shows, including those listed below. This
was the case with one distributor, who gave the caveat that: “almost
all of our orders come from people we deal with on a regular
basis.”130 On a rare occasion sales occur on the show floor – although
an importer said this is rare because many foreign suppliers come
to trade shows without being in compliance with US import laws.131
Other objectives can be achieved, as sales do not typically occur
on the show floor; trade shows are valuable for building awareness,
lead development, product positioning, and networking.
A pastéis de nata producer, who ran a highly successful business

out of London, said they used a trade show as an opportunity to
launch their product in the US.132 Trade shows are excellent sources
for information on US compliance and product launching, and
they help build relationships towards future sales, but they are
also opportunities to observe how competitors take advantage of
US trends. “It’s a whole different ballgame, and really more about
production and more about international marketing. Leaders from
all over the world attend; even if they don’t specifically deal in
farming practices, it’s good for trends and knowing what’s going on
globally and in the US agricultural market.”133
Some of the top US trade shows that SMEs may be interested in

attending are:
»» Fancy Food Show134
–– North America’s largest annual specialty food and drink trade

show
–– Thousands of exhibitors from all over the world exhibiting over
180,000 products
–– Two shows per year:
25-27 June 2017 in New York City, NY

22-24 January 2017 in San Francisco, CA
134 See Interviews 2, 3, 4, 5, and 6, Appendix 5.

»» Americas Food and Beverage Show and Conference135
–– 20-year show featuring more than 11,500 decision makers /
buyers
–– Offers networking, product showcasing / tastings, tips for
hiring a US agent or distributor, guidance on FSMA and FDA
compliance, and seminars on sales and marketing targeting
American tastes
»» Sweets and Snacks Expo
–– Held 23-25 May 2017 in Chicago, IL

–– Largest confectionary and snack show in North America: over
750 international companies and 16,000 industry professionals
attending
–– Offers seminars, product awards, and networking opportunities
for exhibitors
»» Natural Products Expo136
–– Two shows per year: 8-12 March 2017 in Anaheim, CA and

September 2017 in Baltimore, MD
–– World’s largest trade show focused on natural, organic, and
healthy products
–– Presents workshops, educational sessions, and business-to-
business relationship-building opportunities
»» Association of Nutrition & Foodservice Professionals Conference &

Expo
–– Four-day event that showcases products that are premier

resources for foodservice
–– Focus on products that offer optimal nutrition
»» Food Network & Cooking Channel South Beach Wine & Food
Festival
–– Five-day destination event showcasing the talents of the world’s

most renowned wine and spirits producers, chefs, and culinary
personalities
–– Focus on food and tourism link
–– Excellent place to conduct research and develop relationships
for marketing Portuguese food and wine pairings.
It is also essential for SMEs to stay current with industry news and
trends so they can best respond to trends, import alerts, dumping
news, and supply gaps affecting the US agrifoods market.137 Some of
the industry’s leading publications include:
»» Specialty Foods Magazine
137 Some trade associations – for example, the one in Interview 12, Appendix 5 – can also
assist with help on navigating US dumping and duties on a case-by-case basis.

• 137
»» Supermarket News
»» American Journal of Agricultural Economics
»» Aquaculture Magazine
»» Bon Appetit
»» Cheese Connoisseur
»» Chocolate Connoisseur.
Understanding of how competition responds to US trends is

essential in establishing a competitive advantage in the US. As
highlighted in Section 5.3, one of the most effective mechanisms
for being competitive in supplying US demand is to respond to
supply gaps or issues that have not yet become critical – the US
processed fish market is an example. This section argues that an
insider’s perspective on how the competition is responding to US
agrifoods trends is essential in mastering the knowledge necessary
to establish a competitive advantage. At some junctures, the
most effective mechanisms for being competitive in supplying
US demand is being import compliant / ready, understanding US
distribution structure and channels, differentiating products from
the competition, and developing clear product positioning and
strategy. The US agrifoods market is vast, and the US remains a top
import destination for many subsectors in this report. As a result,
it can be tempting for producers to expend resources without
building a long-term, sustainable US market. It is, therefore, critical
for SMEs to understand US market structure, regulatory compliance,
and the essentiality of trends for export investment to deliver
consistent returns.
5.5 Conclusion
Global trade is currently in a precarious position. Increasing

protectionism in G20 markets, Brexit, and commodity and currency
fluctuations put Portuguese SMEs in a challenging position.
WTO Director-General Roberto Azevêdo believes 2016 will be
the fifth consecutive year with sluggish global trade growth, the
“weakest sustained level of trade growth for 30 years” (WTO 2016i).
Nonetheless, this report – and the WTO – has a positive outlook for
trade growth in 2017 and 2018, and using the contents of this report,
SMEs developing export strategies for the US market will be well
positioned for the lucrative years ahead.
Section 5.2 highlighted the importance of SMEs’ ability to recognize

and prepare to supply future trends, and respond to industry
developments like the Trade Facilitation Act and increasing US
consumer consciousness. The capability to comply with complex
government regulations and be export ready for FSMA will also be
paramount to working with importers. This can be accomplished a
variety of ways. One foreign supplier interviewed suggested that a
US headquarters made more sense for their business: “We’re trying
to get interest in our product and use some of our experience selling

the product successfully in the UK to the US market.”138 Even if SMEs
rely on trade shows for networking and relationship-building, sales on
the show floor are unlikely (though several shows advertise this). It is
more likely that a representative would need to be present in the US
to ensure import compliance, and communicate and network with
importers, distributors, and retailers. A representative would also have
access to industry pricing knowledge for specific products that is
outside the scope of this report.
Section 5.3 examined trends that affect US agrifoods supply and

demand, including policy, popular diets, health, and specialty foods.
The analysis targeted ways SMEs can seek to develop their target
market in the US, as markets, supply, demand, compliance, and
regulations vary by state or region. Most critically, differential product
positioning and pricing is key; products will not sell simply by
being present on the market. SMEs will require targeted marketing
strategies and revisions of those strategies pending developments.
Section 5.4 examined how Portugal’s competitors respond to
US trends by presenting top US agrifoods trade associations,
trade shows, and publications. Using these resources, Portugal’s
competitors are able to gain a competitive edge over other foreign
suppliers. Being connected to a wide variety of contractor, subsector,
and product-specific resources helps exporters better prepare to fill
US supply gaps before they present problems.
The following section provides a summary of the report and

highlights where Portuguese SMEs have the greatest opportunities
to be competitive in the US market, noting the challenges that
mark the path ahead. The conclusion also provides benchmarking
information to enable SMEs to know when goals traverse market
access to market development and growth, where strategy
reassessment may be necessary. The conclusion also offers advice
for sustainable growth once Portugal becomes a more consistent
US agrifoods producer.

• 139
Section 6:
Conclusion
6.1: Introduction
This report has analyzed, evaluated, and recommended strategies

for export development and growth in the US agrifoods market.
The report’s analysis of internal (US) competition (Section 2) found
slow but steady growth across the majority of subsectors, with
highly lucrative possibilities for Portuguese SMEs in baked goods,
cheese, chocolate, jams, and processed fish. Portugal has performed
best in the US with olive oil and cheese. Preserved meat and olive
oil are uncertain and riskier markets for SMEs exporting to the
US. However, risk taking – combined with effective marketing and
consistent export volumes – can yield positive opportunities for
increasing competitiveness.
The majority of the top competitors in the US market are within

Europe (Italy, France, Germany, UK, and Spain), and they are also
Portugal’s main export destinations and sources of foreign direct
investment. Improving Portugal’s competitiveness within Europe
would also have a positive effect on its World Economic Forum
Competitiveness rating. Outside Europe, Canada and Mexico
dominate many US subsector markets. Key competitors for Portugal
in the US market are:
»» Russia and Ethiopia (baked goods)

»» France, the UK, and Sweden (preserved meats)
»» Australia, Turkey, Lebanon, or Argentina (pure olive oil)
»» the Netherlands, South Korea, Hungary, Russia, and Malaysia (jams)
»» France, Malaysia, and the Marshall and Solomon Islands
(processed fish).
Key strategies to improve internal competitiveness in the US market

include:
»» Focusing on short-term goals, such as export consistency,
outcompeting key competitors
»» Enhancing exports in other foreign markets, as part of a longer-
term strategy on US export volume and increasing product
visibility and service
»» Monitoring developments in US and key competitors’ markets
through 2018, especially preserved meat, cheese, olive oil, and
processed fish
»» Developing relationships and building industry contacts through
a US brick and mortar presence or a representative.

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By examining external, global and European competition (Section
3), the report uncovered the top global and European agrifoods
exporters (see pg 47). Portugal holds a significant portion of the
global market for baked goods, preserved meat, cheese, olive oil,
chocolate, and processed fish, but exports of preserved meat and
chocolate are in decline. Portugal is not a significant exporter of
jams globally, but within Europe, Portugal is a significant exporter
of all of these products. This section’s objective was to translate
complex “dialectical” relationships that shape global, European, and
US trade in agrifoods. The strategy recommendations that emerged
from this section’s analysis confirm the findings from Section 2:
»» Develop targeted markets and marketing campaigns for the US

market based on assessments of competitive advantage
»» Monitor developments in US domestic production of preserved
meat, cheese, chocolate, and olive oil
»» Ensure export levels stay consistent through quarterly monitoring
and setting sales targets to respond to declining export volume
»» Build relationships in the US and enhance exports in other foreign
markets as part of a longer-term strategy to access and grow in
the US market.
Section 4 provided general guidance for SMEs in complying with

US legal regulations and guidance with particular focus on labeling
and packaging, sanitary requirements, special requirements, tariffs,
and distribution structure and channels. US distribution research
yielded interesting results. Specialty foods are, by far, the most in
demand in the US market, with an average of 60% of importers,
distributors, retailers, and brokers searching for specialty products.
The fastest growing distribution channel for specialty products and
/ or imported food in the US is through “natural” supermarkets.
Conventional supermarkets are sources of the slowest growth, and
many buy only domestic / local products. There is no standard US
model for product distribution, and varied distribution structures
and options pose unique challenges, with particular advantages
and disadvantages that are specific to the products and the SME.
Potential partner searches would be best directed through a brick

and mortar presence, US-based representative, or an importer that
specializes in consolidated orders of thousands of products from
Europe or all over the world. This section also highlighted how
US legislation, such as the Bioterrorism Act, the Trade Facilitation
Act, FSMA, and those regulating intellectual property rights /
trademarks, can affect Portuguese SMEs’ opportunities for export
development and growth. The US CBP, FDA, and USDA are key
agencies with which SMEs should be deeply familiar. Above all,
the report relayed the scope of the US market, the challenges
of compliance and the importance of being export ready before
approaching potential US partners.
Finally, the report offered an insider’s perspective of competition

and opportunities to supply US agrifoods demand (Section 5).
Assessing US import demand within each of the seven subsectors
revealed that, with the exceptions of preserved meat, cheese, and

olive oil, US demand for imports presents positive opportunities for
SMEs. Exports of other baked goods, bovine meat, other (artisan)
cheese, almost all chocolate (save sweetened cocoa powder), jams,
TSB, and SBS product categories present the best opportunities for
Portuguese SMEs. However, between reduced global trade flows,
dumping, protected US industry, and distaste for certain foreign
products, Portuguese SMEs will find it challenging to develop
sustainable strategies for US market development and growth.
Some of these product markets carry more risk, and several must be
assessed as a case-by-case basis with intimate knowledge of SMEs’
goals and resources. SMEs must be creative, clever, and perceptive
in growing their export market. A constant theme throughout the
report is that there is always a market for a good agrifoods product
in the US.
To succeed in the US, SMEs must have:
»» certified, quality products,

»» clear understandings of US regulations and compliance,
»» a target market (at the state or regional level) supported by a
unique story and customized marketing strategy,
»» strong relationships and industry connections,
»» knowledge of US trends,
»» understanding of how to utilize resources to gain a completive
edge,
»» collaborative, resourceful short and longer-term strategies.
The simplest way to emphasize the scope and potential for

development and growth in the US market is to compare the GDP
of European countries to specific American states. From largest to
smallest:
»» the UK’s GDP is comparable to California;

»» Italy’s GDP is equivalent to that of Texas;
»» Poland’s is similar to Virginia or Massachusetts’;
»» Portugal’s GDP is most similar to Alabama or South Carolina;
»» Greece’s GDP is between South Carolina and Kentucky’s; and
»» the Czech Republic’s GDP is akin to Oklahoma’s (US Department
of Commerce 2015; World Bank 2016).
6.2 Portuguese SMEs’ Strengths and Challenges
In this final section, the report explores what it sees as Portugal’s

strengths and challenges in the US agrifoods market. Intended to
compliment the insider’s perspective (Section 5), this summary
may give Portuguese SMEs critical insight into how to market
their products effectively in the US market. The summary draws
the report to a close by bringing together internal and external
competitiveness, legal regulations and compliance, and supply and
demand analysis.

• 143
Beginning with challenges, this final section examines:
»» critical resources SMEs need to increase their competitiveness

and respond to opportunities to supply US demand;
»» difficulty SMEs may encounter when building Portuguese product
visibility and recognition;
»» outcompeting European competitors who have been leveraging
their competitive advantage(s) and exporting in higher or more
consistent volumes in the US market for several years.
Following a discussion of these challenges, the report closes by

highlighting strengths that should motivate SMEs to seek access or
export growth to the US market via:
»» a comparison of Portuguese SMEs’ export potential to that of their

European (and/or global) competitors
»» assessment of competitive advantages that Portuguese SMEs
possess
»» underscoring how strategy-led growth can help SMEs work
towards recommendations from previous sections, such as:
–– consistent export volume

–– establishing brand recognition through marketing and
partnerships
–– building relationships and establishing a US presence / industry
network
»» utilizing momentum in other foreign markets and goodwill

towards US-EU trade relationships
»» building a model for sustainable export development and growth.
6.2a Challenges
The challenges Portuguese SMEs face in the US market are
significant; the report parties are similarly SMEs and know first-
hand the challenges of developing and growing in the dynamic
US business environment. The most well-developed export
development and growth strategies can easily go wrong. In Section
5.3, this report repeated the caveat that succeeding at any level of
business – in the US, Portugal, or globally – requires a bit of luck.
Being in the right place at the right time requires luck and skill, and
the best way to prevent unforeseen events from disrupting export
development strategies is to be resourceful and flexible.
The most critical resource SMEs require to succeed in the US

market will be financial; the report has repeated that import and
compliance costs pose market (tariff and non-tariff) barriers to
exporters but particularly SMEs. A good anecdote to help SMEs
realize the financial burden of growing their export market in
the US is looking back at the US market around or before 1995.
With growing financial security, Americans craved the tastes of
places they had visited (or might want to visit), and a plethora
of small and medium-sized importers and distributors provided

the market with highly demanded foreign products. Fast forward
twenty years, and many American producers can now manufacture
foreign foods; what cannot be manufactured domestically is sold
via large corporate importers, distributors, retailers, and food
service networks. Rather than a handful of small artisans with
limited resources, exporters compete alongside Nippon, General
Mills, Kellogg, Mondelez, and Unilever – many, supra-national
conglomerates with vastly superior resources.
Trade financing and SME financing are now top priorities for the
WTO. The lack of positive opportunities for SMEs is affecting trade,
economic development, and sustainability. Though Portugal has
made great headways in meeting the terms of their IMF and EU
economic and financial readjustment deals, Portuguese SMEs
are unlikely to receive any further financial assistance from the
European Commission (European Commission 2016). SMEs can
look for loans to finance their export development, but Portuguese
banks are unlikely have resources or lending capability following
the announcement of suspension of EU Structural and Investment
Funds. Even if Portuguese or foreign banks could offer financing
for SME trade development, banks often require resources that
SMEs lack to guarantee loans. The International Trade Centre – an
institution that ensures coherence between the WTO and the
United Nations’ trade and economic development agencies –
published How to Access Trade Finance: A Guide for Exporting
SMEs in 2009, and it remains a vital source for SMEs engaged in
international trade. The guide opens by conceding that banks are
no longer a viable source of financing for SMEs before providing
information on other financial instruments that may be better
suited to SMEs’ needs, including application advice.
In applying for other sources of trade financing, SMEs may find it

beneficial to highlight Portugal’s strong track record of satisfied
foreign direct investment (FDI) customers. “FDI, in net terms,
registered an amount close to €5.4B in 2015, [down] 5.2% in relation
to 2014. The highest value in the last five years was registered in
2012, when FDI reached €6.9B and in 2014 with €5.7B” (AICEP 2015:
8). Portugal’s top sources of FDI in 2105 were the Netherlands and
Spain (with 24.9% and 22.6% of the total respectively), Luxembourg
(18.5%), the UK, and France (7.3% and 4.9% respectively). FDI from
non-European countries reached 11.8% of total FDI in 2015, and key
contributors were Brazil (2.3%), Angola, Switzerland and the USA
(with 1.6% each) and China (1.2%) (AICEP 2015).
Collaboration among SMEs is also a second-line of defense should

Portuguese SMEs be initially or ultimately unsuccessful in their
endeavors to enhance their financial resources. Establishing a US
presence, following dynamic trends, employing a trade and export
monitoring specialist, supplying diverse product needs in the US,
and building relationships are all expensive and complex tasks for
a single small or medium-sized business. Often small producers
form export clubs where they can pool resources, such as those
necessary to buy a $4.5M Superbowl advertisement. Such a degree
of collaboration requires resource allocation, trust, mutual goal-
setting, and, most likely, a series of legal agreements.

• 145
Should SMEs feel uncomfortable collaborating with competitors,
the Specialty Food Association that puts on the biannual Fancy
Food shows offers an Online Solution Center for members. Like
joining any other trade association, the Online Solution Center is
a forum for asking questions to supplement gaps in knowledge
about the US market and exporting (Crocker 2016i). Resources like
the AEP-Chamber of Commerce and Industry of Porto and AICEP
can also help SMEs better understand resources and markets and
facilitate business-to-business exchanges. Financial support for
trade liberalization is the most critical resource that will help SMEs
juggle the many elements that contribute to coherent and cogent
export strategies, and for the first time in a long time, this issue is
starting to draw the attention of major institutions with the power
to assist SMEs.
A second challenge Portuguese SMEs face in developing or growing

in the US agrifoods market is building brand recognition and
increasing Portuguese products’ visibility. As revealed in interviews,
some importers, distributors, and / or retailers have preferred
sources for particular foods, be that American charcuterie, Spanish
or Canadian preserved meat, or French butter. Those more open
to alternative sources find new products in various ways, such
as through existing relationships, online research, or product
submission. A strong US presence may be an essential response to
this challenge, whether the presence is a brick and mortar shop,
US-based representative, US trade office, or consistent trade show
attendance with an extended period in the US to conduct follow-up
relationship building.
“General awareness drives sales. If people know or are interested

in trying a product, it sells, and it goes from there. There’s also
demand that’s stimulated in trade publications, tv, celebrity chefs,
and cook books; that seems to have an impact, particularly for
Italian and French food.”139 In Section 5.4, the report listed the Food
Network and Cooking Channel South Beach Wine and Food Festival, an event that
gathers renowned wine and spirits producers, chefs, and culinary
personalities; this is an excellent opportunity for SMEs to work
on building brand recognition and increasing product visibility.
Another specialty foods retailer confirmed that New York chefs, in
particular, are helping to boost Portuguese agrifoods sales.140
Once presence and product visibility have been established, the

goal is to improve Portuguese product recognition. The objective
is to place Portugal in the front of US consumers’ minds, and this
can be achieved through targeted marketing. US marketing firms
will be infinitely more experienced in reaching US consumers than
Portuguese marketing firms will be, though the latter may offer more
value for money and be more familiar to SMEs. Networking with
US firms will also expose SMEs to a much larger network, including
potential partners, who will also have a specialized network.

For SMEs in the agrifoods industry, networking should be viewed as
a cost-effective strategy for short and longer-term sales development
and growth. For example, gaining access to US distributors may not
result in direct sales, but SMEs may be able to network their way into
accessing highly-specialized trade associations or other resources
that can assist with large-scale challenges, such as supply chain
optimization and other operationalization.141 Networking with and
through US trade associations also offers cost-effective direct services
for foreign producers.
They are able to take advantage of the US services we provide,

things like export packaging advice, arrival notices, FDA
registration. We’ve also had a lot of overseas members come to
us for the information we provide on trade relations. We have a
regular meeting in the fall that we call a town meeting, where
we give updates on regulations and trends… We also have annual
directory (in print) that a lot of companies use as a resource
for getting information on suppliers. It’s for importers looking
for products, exporters looking for importers, and domestic
distributors looking for importers.142
After establishing a presence, the most important variable in

building brand and product recognition is consistency, in both
export volume and continued presence. Having contacted over
100 US importers, distributors, retailers, trade associations, and
food service representatives, the report can attest that SMEs
must demonstrate tenacity. In this experience, the report parties
learned that email is not an effective way to make contact with
potential partners in the US. Phone contact is better; however,
often companies have a series of automated menus and messages,
some of which simply end in an unknown voicemail box. Person-
to-person contact is the most advisable method for SMEs to grow
their exports in the US, and SMEs should ensure they are fully
informed about all their products’ particulars as well as how their
products fit in the US business’ model and brand. In developing a
negotiable price, the report recommends SMEs explore the USDA’s
“Food Markets and Price” guide, which has information on retail,
wholesale, and food service industry pricing and is updated on a
regular basis.
Where Portugal is currently an exporter to the US, the goal must be

consistency. Portugal was outcompeted by its European competitors
because it has, in several subsectors, failed to export in consistent
volumes. For example, Portugal is a top olive oil and processed fish
producer, but year to year, the export volume varies significantly.
While this can be related to demand, agrifoods demand is driven
by consumers, and if Portuguese products are unavailable, US
consumers will simply replace it with a comparable product.
Consistent presence in the US can help ensure export levels remain
as consistent as possible despite sluggish trade growth.

• 147
A final challenge SMEs face in the US market is outcompeting their
European competitors. Some of Portugal’s European competitors
(such as Bulgaria, Estonia, and Lithuanian) have only recently
joined the EU. Various domestic conditions — such as low labor
costs, taxation, and momentum around development in the newly
industrialized, capitalist economies — have helped these countries
to establish an advantage in the US market that makes them more
competitive against high-volume exporting countries like Chile,
compared to Portuguese SMEs.
Additionally, the US may have FTAs or BITs with many of Portugal’s

competitors where market access and trade facilitation are better
funded and focused and tariffs are lower or non-existent. Within
Europe, the US has BITs with Albania, Bulgaria, Croatia, the Czech
Republic, Estonia, Georgia, Latvia, Lithuania, Moldova, Poland (two
BITs), Romania, Slovakia, and Ukraine. Some of these countries have
been Portuguese competition targets in Sections 2 and 3, and some
are Portugal’s overall (global) competitiveness targets. The majority
of the US’ preferential trading agreements are with its North,
Central, and South American partners and a few Asian and Asian-
Pacific nations. Here, SMEs should focus on understanding their
competitive advantage through high-quality, gourmet products
that are typically not available in this market. For example, how
Portuguese preserved meat can be positioned as a more up-market
brand than preserved meat products coming from Uruguay.
AICEP (2016) reported that Portuguese goods and services exports

to the US have doubled in the last five years because of bilateral
relations and export development cooperation. However, the
majority of these goods were in textiles, wine, software, and
industrial machinery. With many export countries receiving
preferential treatment or investment priority over Portugal, SMEs
must mobilize all aforementioned resources and strategies
to outcompete foreign producers in the US market, including
networking, consistent export volume, and creative, clever, and
perceptive marketing. Many exporters with FTAs or BITs will have
an already established and consistent export presence in the US
agrifoods market, compounding the challenge.
6.2b Strengths
Confronting these challenges – rather than attempting to avoid
them – is instrumental in SME success, as is leveraging strengths.
When comparing Portuguese SMEs’ export potential to that of
their European or global competitors, it’s important to consider
comparative advantage. A comparative (economic) advantage is
the ability of one country or company to produce a product more
efficiently, using fewer resources, given all the other products that it
could produce. Comparative advantage is one variable in a complex
formula that country and company leaders use to assess costs and
benefits of production. At the global trade level, this is how trade
deficits / surpluses are configured, and why it is good business for a
country to import products that they also produce for domestic and
foreign markets – essential in the success of large trading nations,
such as the US, Germany, and China.

Obvious reasons for utilizing comparative advantage are to
supply diverse needs, cope with dynamic markets, negotiate
BITs and FTAs (lower import costs), and respond to consumer
demands and preferences. Several interviews are relevant here.
One interviewee argued it made no sense for him to import
charcuterie when consumers are asking for local and costs are lower
for local products. Another responded that they were interested
in Portuguese products but do not presently purchase them
because the distributor has not yet acquired any. Finally, several
US companies contacted simply said they weren’t interested in
working with new producers, and if they were, they would locate
the products themselves using in-house resources. In consideration
of these challenges to Portuguese SMEs, what comparative
advantages can be leveraged?
Foremost, many US companies prefer to work with SMEs. “You

get a small company with a good management, and we want
to work with them. You can also get a large company with bad
management, but it’s difficult not to work with them… so the
diversity helps when things don’t go according to plan.”143 For
example, SMEs can be comparatively effective at delivering small
or urgent orders, such as the US’ processed fish supply gap. Well
networked SMEs can play an instrumental role in filling supply gaps
immediately due to low communication and labor costs. Portugal
is 8 hours by air and 9 days by sea to Newark, New Jersey – one of
the US’ busiest ports – and 11 hours by air and 20-40 days by sea to
Houston, Texas, another very large port. Recall the large processed
fish importer who discounted the effects of FSMA, saying that: “If
there’s an issue and one or two containers get held up initially,
we’ll be sure to have another supply sent shortly after to cover any
gaps.”144 Networking to discern this importer’s distribution network
could place SMEs in an advantageous position to cover that
potential supply gap before the importer’s next shipment arrives.
Furthermore, if the initial shipment is stopped at port due to lack of
FSMA compliance, it is unlikely that the second shipment will pass
unabated, providing another opportunity for SMEs to outcompete
larger rivals.
Portuguese SMEs could also demonstrate reliability to US suppliers

by sending an initial order of (shelf stable) products via air cargo
and a larger supply immediately following by sea, and the costs – in
terms of shipping time and transportation – would be comparatively
lower than by air alone. Portuguese SMEs also have access to
a national shift towards more advanced and technologically
innovative modes of production, supply, and exporting, which
hold potential comparative advantages. Additionally, the costs
of exporting heavy materials — such as large drums of olive oil or
canned or bottled products — is a much larger concern for distant
exporters, giving Portugal an enhanced comparative advantage.
Portugal also avoids paying tax to use the Panama Canal in
accessing east coast US ports, which one distributor said is a
144 Interview 9, Appendix 5; see also Interview 14.

• 149
consideration for them in selecting new products.145 Portugal’s trade
infrastructure (road, rail, air, sea, and broadband networks) is also
already well established, and this existing infrastructure, combined
with high levels of English language proficiency, will contribute to
further comparative advantages for Portuguese SMEs (AICEP 2013).
In most subsectors reviewed in the report, Portugal has established
thriving domestic and European industries; the comparative
advantage is in understanding the extent to which these export
industries can be expanded to the US.
Second, competitive advantage, as opposed to comparative, is

the ability of a country or company to produce products more
effectively by offering better value, quality, and service; the goal is
to establish competitive advantage that is sustainable. Portuguese
SMEs can offer added value by being more competitive on cost,
though interviews suggest that cost is not a particular market entry
barrier in the US with its large market for gourmet and up-market
products. From preserved meat to more general industry, this report
has offered pricing resources that will help SMEs in setting a “bottom
line” and range of prices for negotiations, as the US supply line has
many added costs.146 When discussing importing highly-demanded
Portuguese products with a specialty retailer, the report parties
discovered SMEs will have difficulty outcompeting local products
where demand is also growing. “My concern would be the prices; it
would be higher than what we can buy locally. We’re a little more on
the gourmet end; we’re able to sell things other Portuguese markets
are not. Our market is more progressive. I’d still be very interested,
but I know that the prices would be my concern. I’ve experiment
with some Spanish products; its priced significantly higher than the
domestic product. They move, but it’s a slow mover.”147
SMEs should expect cost to be added to their product every

time it changes hands. SMEs should carefully understand what
US importers and distributors are paying for their products. This
assessment has two core benefits; the first is that products should
not be offered on the US market until prices are at the very least
comparable to products — basic or gourmet — currently on the
market. The second is that this assessment will also help SMEs
determine if there is greater competitive value in establishing a
US brick-and-mortar presence and obtaining an importers’ and/or
distributor’s license should they find themselves priced out of the
US market.
In addition to the resources highlighted in Section 6.2a, SMEs

should also be savvy in the acquisition of financial resources,
including grants and opportunities to participate in nationally
and EU-funded research. For example, several universities and
research institutions receive European Research Council funding
to investigate barriers to SME growth, and the WTO and United
Nations are focusing on SMEs as part of their new agendas.
146 See the USDA’s “Food Markets and Price” guide, referenced on pg 113, and Interview 14 for
preserved meats.

Some newly developed SMEs may find that they are eligible
for Portuguese or EU start-up investment tax credits, local tax
and stamp duty exemptions, or research-and-development
opportunities funded by tax. Participation in seminars and
workshops, such as those held by the report parties and trade
associations, are also cost-effective investments for SMEs.
The combination of quality agrifoods products at comparatively

low prices has helped Portuguese companies succeed in the past.
Flexible labor laws, high education standards, a highly skilled
labor force, low minimum wages, and existing US partnerships in
business and research all create advantages that SMEs can leverage
to increase their US market access. SMEs also tend to have more
flexibility in supplying demand with the ability to do customized
orders, tailor products to consumer demands, and negotiate on
price. They can replicate successes they and other larger companies
have had in the European and African markets to US markets. SMEs
can also devote resources to deep relationship-building leading to
a partnership with one US state or large company. Becoming the
primary supplier for Iowa’s olive oil or Rhode Island’s pico (cheese)
is an effective way to establish a competitive advantage. As revealed
in Section 2.3, a 03% share increase in the US olive oil market results
in $750K and a .01% market share increase in the US imported
chocolate subsector results in $228K.
Third, Portuguese SMEs can overcome the difficulty of

implementing the recommendations in this report by
“operationalizing” – dividing a complex process into actionable
steps. Strategy becomes a process of development, assessment,
revision, analysis, and achievement. For example, the process of
exporting in consistent volumes involves:
1. gathering subsector or product category export volume data and

analyzing five to ten year trends148
2. conducting a series of statistical analyses to determine average
export volume149
3. assessing how competitive advantage could help improve export
volume consistency150
4. using forecasting models to predict irregularities in export
volume, and applying predictive modeling to production cycles
to fill supply gaps before they present a problem; this not only
ensures that export volumes stay consistent, but also establishes
SMEs as industry leaders
5. applying predictive modeling to benchmark consistent export
volume to know when to launch new US relationship building
campaigns to advance from development to growth.
148 The report does not advise analyzing trends beyond 2008, as the export volume and
trade data will not be consistent with continued post-recession economic patterns and
trade flows.
149 The report would recommend conducting a “box and whisker plot” analysis to see
means, medians, and outliers of export volume.
150 The report suggests a highly complex “multivariate regression analysis” to indicate what
variables likely contributed to irregular export volume and to incorporate supply and value
chain analyses.

• 151
As indicated in the fifth step, relationships can be built through
campaigns, and it is essential that campaigns target the most
appropriate importers, distributors, retailers, states, and regions for
SMEs’ specific products. Through operationalization, challenges
appear more manageable, and markets that seemed unattainable
to SMEs open up via a series of revisable step-by-step actions. With
limited exception, all export businesses began as SMEs, and the
challenges presented in Section 6.2a are not unique to Portugal or
the agrifoods industry. They have been overcome in the past and
can be overcome again, even in the world’s second largest single-
nation import market.
Fourth, SMEs can become large exporters by capitalizing on

momentum in other foreign markets. Agriculture and fishing are
two of Portugal’s fastest growing export sectors, and in large part,
the success of Portuguese agrifoods can be witnessed in the UK’s
high import volume (AICEP 2013). One of the clearest examples
of this is in the export of peri-peri sauce, especially as popularized
through Nando’s restaurants in the UK. Beyond the UK, Portugal
is a key global baked goods, cheese, olive oil, and processed
fish exporter and top exporter in high volume markets, such as
France, Germany, and Brazil. SMEs should also capitalize on their
success with these top export destinations when approaching
US companies, as knowledge of Portuguese innovation, product
quality, and legacy in global trade may not be as prevalent in the
US as it is in western Europe. However, knowledge of French and
German production, quality, and export-led growth is common in
the US. SMEs should embrace American’s preferences for these
western European exporters’ quality and reliability while exploiting
their lack of differentiation among European exporters. Portuguese
SMEs may find, for example, that associating their products with
those of Italy, rather than Greece, provides better leads in the US.
In making presentations at trade shows or in face-to-face sales

calls or networking events, Portuguese SMEs should introduce
their companies and products with images and stories about
large-scale successes of the Portuguese agrifoods industry. The US
is a large market, and first impressions are essential; SMEs must
make a lasting impression on US buyers and decision makers. Any
association that SMEs can make with these large-scale successes
and their products – such as building their US market in preserved
meat through the Iberico origin labelling, where appropriate –
should be heavily featured. On the contrary, SMEs should also
know how and when to distinguish their products to demonstrate
superiority, — for example, how Portuguese olive oil is perceived as
superior to Greek in western Europe and other parts of the world.
As many US importers, distributors, and retailers emphasized – and
this is particularly true for large natural grocers like Whole Foods – a
product with a good story almost always sells in the US. That’s why
marketing is so essential to SMEs looking to gain US market access.
Finally, SMEs are also encouraged to utilize work that local and
national business chambers and trade associations have done to
support Portuguese development and growth. For instance:

»» Portugal is better: 3-minute video showcasing Portugal’s strengths
in technology, infrastructure, investment, trade, product quality,
quality of life, and business opportunity
»» Choose Portugal: 6-minute video about Portuguese natural and
human resources and continued capacity for development and
growth in various sectors
»» Invest in Portugal: 35-page PDF featuring Portugal’s competitive
advantages, including information on correction of structural
imbalances and implementation of reforms and support services
»» Web summit 2016: conference event that featured 21 sector
summit meetings, 500,000 international guests that gained
global press, including coverage by Bloomberg, the New York
Times, CNBC, and the Guardian and participation by Google,
Apple, Microsoft, IBM, Cisco, Tesla and SpaceX.
Finally, Portuguese SMEs have many report recommendations,

resources, and strengths that contribute towards building a model
for sustainable development and growth. To build a suitable
and sustainable model, this report suggests that SMEs examine
conditions that led to the following:
»» Portugal’s World Economic Forum’s Competitiveness Index

Rankings:
–– 2015-2016: 38th
–– 2014-2015: 36th
–– 2013-2014: 51st
–– 2012-2013: 49th
–– 2011-2012: 45th
–– 2010-2011 46th.
»» Portugal’s exports outcompeting:
–– Croatia
–– Finland
–– Ireland
–– Luxemburg.
»» Portuguese exports being outcompeted by:
–– Bulgaria
–– Estonia
–– Latvia
–– Lithuania
–– Slovakia.
»» Portugal’s exports being similar to:
–– The Czech Republic

–– Greece
–– Poland
–– The UK.

• 153
The core competitiveness issues that SMEs should consider in
building this model are:
»» Ensuring export volume consistency to improve competitiveness

»» Understanding why:
–– Countries with considerably lower GDPs outcompete Portugal;

Portugal is consistently outcompeted by countries with an
average GDP of $45.3B;
–– In consideration of the above: Portugal, with $199B GDP,
outcompetes countries with an average GDP of $143.5B; and
–– Portugal exports in similar volumes to countries with a much
higher average GDP of $925.4B (IMF 2015).
How do Portuguese SMEs develop sector, subsector, and product

category exports to keep up with competitors from countries with
much higher GDPs that export in similar volumes? How do SMEs
avoid the mistakes of those that outcompete Portugal but fail
to make a significant contribution to GDP? How do SMEs avoid
the mistakes of those who have attempted to enter and grow in
the US market and failed? How do SMEs establish themselves as
leaders within Portugal, Europe, and the world? In short, what role
do Portuguese SMEs play in transitioning from the “sick man of
Europe” to the industry and regional leaders featured in AICEP’s
promotional videos (Economist 2007)? As the primary drivers of
job growth and innovation, these questions determine the future
of Portuguese SMEs, export development and growth, and the
agrifoods industry’s continued contribution to GDP.

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• 165

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THE US MARKET FOR FOOD

& DELI AND OPPORTUNITIES

Produced by Marq Consulting Group and CH Academy

Section 1 introduces the report, report parties, and

Section 2 assesses US import competition, top

THE US MARKET FOR FOOD & DELI

8 • USA NEXT CHALLENGE

THE US MARKET FOR FOOD & DELI

10 • USA NEXT CHALLENGE

Figure 2.1 – Top Ten Countries Exporting Baked Volume One: 26

Figure 2.2 – US Baked Goods Imports Market Volume One: 26

Figure 2.3 – Top Ten Countries Exporting Baked Volume Two: 5

Figure 2.4 – Top Ten Countries Exporting Baked

Figure 2.5 – Top Ten Countries Exporting Baked

Figure 2.6 – Top Ten Countries Exporting

Figure 2.7 – US Preserved Meat Imports Market

Figure 2.8 – Top Ten Countries Exporting

Figure 2.9 – Top Ten Countries Exporting

Figure 2.10 – Top Ten Countries Exporting

Figure 2.11 – Top Countries Exporting Cured Ham

Figure 2.12 – US Cured Ham Market Value

THE US MARKET FOR FOOD & DELI

Figure 2.15 – Top Countries Exporting Cured Ham Volume Two: 8

Figure 2.16 – Top Ten Countries Exporting Cheese Volume One: 35

Figure 2.17 – US Cheese Imports Market Value Volume One: 35

Figure 2.18 – Top Ten Countries Exporting Cheese Volume Two: 9

Figure 2.19 – Top Ten Countries Exporting Cheese Volume Two: 9

Figure 2.20 – Top Ten Countries Exporting Cheese Volume Two: 9

Figure 2.21 – Top Ten Countries Exporting Pure Volume One: 38

Figure 2.22 – US Pure Olive Oil Imports Market Volume One: 38

Figure 2.23 – Top Ten Countries Exporting Pure Volume Two: 10

Figure 2.24 – Top Ten Countries Exporting Pure Volume Two: 10

Figure 2.25 – Top Ten Countries Exporting Pure Volume Two: 10

Figure 2.26 – Top Ten Countries Exporting Volume One: 40

Figure 2.27 – US Chocolate Imports Market Value Volume One: 41

Figure 2.28 – Top Ten Countries Exporting Volume Two: 11

Figure 2.29 – Top Ten Countries Exporting Volume Two: 11

Figure 2.30 – Top Ten Countries Exporting Volume Two: 11

Figure 2.31 – Top Ten Countries Exporting Jam to Volume One: 43

Figure 2.32 – US Jam Imports Market Value Volume One: 43

12 • USA NEXT CHALLENGE

Figure 2.34 – Top Ten Countries Exporting Jam to Volume Two: 12

Figure 2.35 – Top Ten Countries Exporting Jam to Volume Two: 12

Figure 2.36 – Top Ten Countries Exporting Volume One: 47

Figure 2.37 – US Processed Fish Imports Market Volume One: 47

Figure 2.38 – Top Ten Countries Exporting Volume Two: 13

Figure 2.39 – Top Ten Countries Exporting Volume Two: 13

Figure 2.40 – Top Ten Countries Exporting Volume Two: 13

Figure 2.41 – Top Ten Countries Exporting TSB to Volume One: 49

Figure 2.42 – US TSB Imports Market Value Volume One: 49

Figure 2.43 – Top Ten Countries Exporting TSB to Volume Two: 14

Figure 2.44 – Top Ten Countries Exporting TSB to Volume Two: 14

Figure 2.45 – Top Ten Countries Exporting TSB to Volume Two: 14

Figure 2.46 – Top Ten Countries Exporting OFYP to Volume One: 51

Figure 2.47 – US OFYP Imports Market Value Volume One: 51

Figure 2.48 – Top Ten Countries Exporting OFYP to Volume Two: 15

Figure 2.49 – Top Ten Countries Exporting OFYP to Volume Two: 15

Figure 2.50 – Top Ten Countries Exporting OFYP to Volume Two: 15

THE US MARKET FOR FOOD & DELI

Table 2.1 – Portugal’s Competitors in the US Volume One: 35

Table 2.2 – Portugal’s Competitors in the US Volume One: 38

Table 3.1 – Average Subsector Export / Wholesale Volume One: 62

Table 5.1 - Select US Baked Goods Product Volume One: 63