Fresh From Florida How to Export to Asia

Ag Export Webinar

Top Markets for Florida Exports

Live Trees & Plants: Singapore, Japan, Taiwan

Vegetables: Japan, South Korea, Vietnam

Fruits & Nuts: Japan, South Korea, Taiwan

East Asia

Japan, Taiwan, Hong Kong, and

South Korea

Japan • Foreign countries have a prime opportunity to ship their products to Japan

because every sector of the fresh food industry was affected in 2011.

• Japan is the highest importer of Florida fruits and vegetables.

• Products and ingredients which promise improved health are favored by Japanese consumers.

US Exports to Japan (2014)

FAIRS Export Certificate Japan Exporter Guide Labeling Requirements

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$3.41

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$0.89 $0.74

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$2.50

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Cereals

Meat

Oil Seed

Fruit and Nuts

Seafood

Japan

• Top Florida exports to Japan: Edibles Fruits & Nuts ($39 million), Prepared Fruit & Vegetables ($11 million), and Beverages/Vinegar ($3 million)

• Vegetables such as broccoli, tomatoes and sprouts, as well as hybrids which offer health benefits, provide an opportunity for the industry.

• Sales for bagged vegetables and lettuce leaves have boomed across chained retail channels.

South Korea • The United States is the chief exporter to Korea, supplying a range of products with

corn, meat, hides, soybeans, milling wheat, and cotton among the major items.

• Grapefruit is gaining popularity in South Korea and is perceived to be a premium alternative to oranges. It is a main ingredient in fruit juices and is the favorite juice of the foodservice industry.

– Grapefruit is exclusively imported, and the US is responsible for 93% of the imported grapefruit. Florida grapefruit exports to South Korea are high and growing.

FL Grapefruit Exports to South Korea

•US-Korea Free Trade Agreement •Import Regulations & Standards •South Korea Organic Food Market Guide •South Korea Livestock Market Guide

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Taiwan

• Taiwan’s economy experienced real GDP growth of 3.7% in 2014 and is expected to have growth of 3.5% in 2015.

• The nation has reduced tariffs and trade barriers and has strengthened intellectual property rights, making trade stronger.

• Taiwan’s economy is also improving due to plans to establish 5 free economic zones to give additional benefits to investors and to reform its employment laws to entice more international businessmen.

• Taiwan specializes in developing high value-added products like organic food and flowers.

Taiwan • The US is the most important trade partner for Taiwan for imported fruits,

vegetables, and nuts, and the US is ranked the top supplier for most fresh commodity imports.

• Taiwan has the highest per capita intake of fruit in the world

• Import Regulations & Standards

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$5.64

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Beverages and Vinegar

Seafood

Fruit and Nuts

Edible Preps

Meat

FL Exports to Taiwan (2014)

China Market Overview • During 2014, China food import reached USD 123 billion, nearly doubling

the export value. 2014 sales of consumer commodities reached USD $4,267 billion.

• 2014 total export value to China/HK reached USD 32.72 billion

• The U.S. is the 2nd largest trading partner of China, with year-on-year growth of 5.4%

US Exports to China (2014)

$15.26

$1.76 $1.72 $1.15

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Oil Seed

Cereals

Residues and Wastes

Seafood

Meat

Top Florida Exports to China

• Top Florida exports to China: Fish ($21 million), Prepared Fruit & Vegetables ($19 million), Prepared Meat & Fish ($6 million).

• Meat, seafood, dairy, fruit, and vegetable products have less competition, a much higher margin than grocery items, and are preferred by local traders.

• Various premium imported foods are now widely available in the Chinese market and enjoy good sales performance.

• Chinese FTA with Australia & Korea- dairy products, beverages, snacks, condiments etc. will immediately enjoy a price advantage over U.S. items by 15% - 30% casting challenges on U.S. suppliers.

Chinese Consumer Preferences

• Packaged food continues to project healthy current value growth in 2014. Sales are benefiting from consumers’ willingness to trade-up to premium products in areas such as baby food, dairy, chocolate, confectionery, oils and fats.

• Due to growing health consciousness, a growing number of consumers are spending more heavily on healthier and more nutritious packaged food or products that aid weight loss, such as: meal replacement, yogurt, and breakfast cereals.

• There has been a huge surge in demand for ready meals and convenient products such as instant soup. Chilled ready meals saw 13% current value growth in 2014 over the previous year, while instant soup grew by 16%.

• Dairy accounted for 21% of overall value sales in packaged food in East China in 2014 and also saw a strong current value growth of 13% in the year.

• Nutritionally weak American foods such as candy bars, cake, and potato chips are not consumed frequently. Cheese is also unpopular.

E-Commerce

• E-commerce market size in China has reached $2.04 trillion

• By 2020 the middle-class in China will reach 280 million, and it is predicted that this group will be the drawing power of online shopping with tripled consumption of USD $350 per month.

• In 2014 there were over 380 million online shoppers with a growth of 21.7%. Young adults, white collars, & women constitute the majority of consumers.

• Largest e-commerce operators: Tmall (50.1%), Jindong (22.4%), and Suning Yiguo (4.9%)

Labeling & Required Documents • A Chinese label is compulsory for the Customs Clearance in China.

– Label needs to be registered with CIQ

• Both retail and bulk packages now need to have Chinese labels on.

• Latest regulation requires nutrition factsheet to be translated as well including percentage info.

• Gain Reports

– Dairy Products

– Fresh Fruit Market in North China

The health certificate the most crucial for clearance at Customs in China. For different products, different certificates are required.

• Dairy- U.S. companies must obtain a certificate from USDA for dairy and any other items containing dairy ingredients

• Seafood- A certificate from USDC is needed for any fish and seafood products exported to China.

• Plant and Plant originated- Phytosanitary certificate from USDA is required for any unprocessed plant or plant-originated products

Required Documents

• Company provides label for registration in China. All ingredients must comply with

national standards. • U.S. company provides relevant documents for the shipment to the importer.

Contract, invoice, packing list, bill of lading, certificate of origin, certificate of health.

• Shipment arrives at the port. Grocery items are delivered to importer’s warehouse, chilled/frozen ones go to Customs’ designated warehouse.

• Importer provides label to the Customs and applies for clearance. • Start the formal clearance procedure. Customs evaluates the pricing of the goods. • Stick the Chinese label to the product. Each individual item needs a Chinese label. • Clearance finishes and commodity inspection starts. Commodity inspection takes

about 20 – 30 days. • Issue the inspection certificate. Eligible for sales in retail/foodservice channel

Southeast Asia

Bangladesh, Cambodia, Laos, Myanmar (Burma), Thailand, Vietnam, Sri Lanka, Malaysia, Indonesia, Singapore, Philippines, East Timor, Brunei, and Christmas Island.

Southeast Asia Market Overview • Fast-growing, urbanizing, and rich populations.

• Overall spending is 84% higher in Asia-Pacific than in Western Europe.

• Demand for meat, dairy and fruit has been particularly strong. Consumer expenditure on meat has increased by 131% in real terms since 1990 and spending on milk, cheese and eggs by 159%.

• Other key consumer--oriented exports included prepared food, fresh fruit, and tree nuts.

Southeast Asia Market Overview

• U.S. agricultural exports to Southeast Asia have experienced extremely rapid growth in recent years and in 2014 they climbed to a record $11.5 billion.

• Consumer market growth in this area will be driven by a combination of factors including population growth, urbanization, prudent fiscal policies, tourism, increasing global trade linkages and natural resources.

• Dairy is the product that has seen the sharpest increase in U.S. exports.

• Nearly 20% of U.S. dairy exports went to Southeast Asia in FY 2014, and four of the top 10 U.S. markets for dairy products were in this region (Philippines, Vietnam, Indonesia and Malaysia).

• Sri Lanka Exporter Guide

• Vietnam Exporter Guide

Singapore • Largest market for Florida live trees and plants.

• It is the richest nation in Asia and is one of the most open and competitive markets in the world.

• Ranked 1st in the world on the ease of doing business index.

– US-Singapore Free Trade Agreement

• Florida sends a large quantity of US orange and grapefruit juice exports to Singapore and is responsible for most of the US’s grapefruit exports to Singapore.

FL Citrus Exports to Singapore

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Grapefruit

Indonesia

• Indonesia is the most populous Southeast Asian country and is the largest market in the region for U.S. agricultural exports, which totaled $3 billion in FY 2014.

• Bali has the highest number of food service outlets and there are many market opportunities to sell to hotel and restaurant providers. The trade, hotel and restaurant sector contributed 14.33 percent of GDP in 2013, the third largest contributor to GDP.

• The Government of Indonesia strictly regulates imported food products, such as beef and horticultural goods.

• There is strong demand for western products in Indonesia, particularly as more people associate them with quality, consistent availability, and healthy lifestyles.

• Indonesia Exporter Guide • Retail Food Report • Food Service GAIN Report includes labeling information

Top Asian Retailers

• Jasons Market Place- Singapore, Taiwan, and Hong Kong (known as Market Place by Jasons in latter)

• Aeon- Japan’s largest retailer

• Ito-Yokado- Japan and China

• Daiei- one of the largest supermarket chains in Japan

Obtaining a Phytosanitary Certificate

• Prior to obtaining a phytosanitary certificate, you need to determine the eligibility requirements for the destination (state or country). You can do this by contacting your local FDACS Division of Plant Industry district plant inspector. You can find their contact information at www.freshfromflorida.com/Divisions-Offices/Plant-Industry/Bureaus-and-Services/Office-Locations.

• To obtain a phytosanitary certificate, you must first establish an account in the USDA Phytosanitary Certificate Issuance Tracking System (PCIT). The PCIT system is used for submitting applications for both state and federal Phytosanitary Certificates. To set up an account, go to the “Welcome to PCIT” website - https://pcit.aphis.usda.gov/pcit/ and click on the “New to this site?” button. You will be prompted on how to establish the account.

• Once you establish an account with in the PCIT system, you will need to submit an application for a phytosanitary certificate. On the Welcome to PCIT website, click on the option for “Create Application without Template”. This will take you into the application process.

Obtaining a Phytosanitary Certificate Continued

• Click on the appropriate certificate type. This will likely be a PPQ Form 577 (federal phytosanitary certificate for foreign destinations) or a state certificate (for other destinations in U.S. states and territories).

• Input the appropriate information in the “General, Export and Shipping, Commodities and Attachments” sections. After entering the information, click on the “Submit Application” button and the application will be sent to the inspector office that you selected.

• Upon receipt of the application, the local inspector will contact you to set up a date and time to inspect and certify your plants or plants products.

• The inspector will provide a phytosanitary certificate to you when the plants/products pass the inspection. The certificate is normally valid for 30 days after the inspection date and the original should accompany the shipment.

• If you have any questions or need additional information, be sure to contact your FDACS DPI inspector for assistance and guidance.

Obtaining a Phytosanitary Certificate Important Notes

• There are a variety of certification programs available for shipping agricultural products to Asian countries.

• Many Asian countries require import permits for their importers to bring in USA and in some specific cases, Florida agricultural products.

• It is important to plan as far in advance as possible in the event there are additional inspection requirements that may need to be met and allow for obtaining any specific documentation:

– Field Testing

– Seed testing

– Fruit inspections

– Import Permit

• Be sure to contact the local Division of Plant Industry inspector if you are considering shipping plant type agricultural to Asia with as much lead time as possible.

Training and Services

The Florida SBDC Network has more than 40 offices from Pensacola to Key West to serve the needs of Florida’s business community. The Florida SBDC Network is nationally accredited by the Association of SBDCs.

The FSBDCN has developed the knowledge and resources to assist small business owners in

developing and executing international trade strategies. Through one-on-one consulting, training and workshops, customized research, and access to a network of trade professionals, we provide clients with the tools to successfully and profitably navigate the world of international trade.

Here are a few of our services: • Farming for Profit: Growing Your Bottom Line • Succession Planning for Family Farms • International Trade: The Basics • International Trade Certificate Program (6 sessions) • Custom International Market Demand Research • NO COST One-on-One consulting

https://www.sbdc.unf.edu/

SUSTA

The Southern U.S. Trade Association is a regional trade group of the U.S.D.A. It was created to assist U.S. companies based in the Southern U.S. and Puerto Rico in promoting their U.S. produced agricultural commodities.

SUSTA Region

Market Access Programs

• Brand Promotion

– Direct financial assistance of up to $300,000 per year

– Promotes your brand internationally

– Graduation requirement

• International Marketing Program

– Events managed by activity managers

– Subsidized trade mission/event participation

– Business “match-making”

– Chefs/interpreters provided as necessary

Brand Promotion

• Reimburses up to 50% of some international marketing and promotion expenses. Examples:

– Eligible tradeshows

• Exhibit costs

• Travel to international shows

– In-store demonstrations and displays

– Promotional items

– Required label/packaging changes

• Requests of $2,500 - $300,000 – First year applicants with no export experience – maximum request of $25,000

– First year applicants with prior export experience – maximum request of $50,000

Brand Promotion • Eligibility requirements

– Be “small” per Small Business Administration guidelines, or be a farm cooperative

– Export a product that is at least 50% U.S. agricultural origin by weight

– Have sufficient uninterrupted supply for international buyers

– Market a product under a brand name

– Label the product as "Product of the USA" or "Made in the USA"

• May use “Fresh From Florida” or “From Florida USA”

• Pre-Qualification form

• Application information – North American Industrial Classification System Code

– Dun & Bradstreet number

– Total sales figures

– Brand names/products

– Country information

– Must provide tax returns

• $250 application fee

• Upon approval, 6% administrative charge of amount requested

Apply Annually for Brand Promotion

International Marketing Program

• Trade missions (inbound and outbound)

• Trade shows

• In-store promotions

• Market research

• Trade seminars

• Hotel and restaurant promotions

• Marketing campaigns

• Long-term initiatives

International Marketing Program

• Create a profile on SUSTA website

• Pre-Qualification form

• Select an event from SUSTA Events page

• Register for the event online

• No graduation requirement

www.susta.org

1) Sign into MySUSTA to access 2016 Pre-qualification

2) Complete 2 page Pre-qualification form

3) Once application has been processed and if approved, you can start registering for 2016 events

Success!

Florida Company Makes Sales at SIAL China 2014 In May 2014, representatives from a St. Petersburg, Florida-based company traveled to Shanghai to participate in the annual SIAL China trade show. The Southern United States Trade Association (SUSTA) sponsored this activity through the International Marketing Program. At the event, this Florida company introduced four new products including dry groceries such as pastas, canned products, condiments, and non-alcoholic beverages. The company booked $100,000 in sales at the event, and future sales as a result of the show are expected to be $1,000,000 over the next 12 months. They were also able to sign export purchase orders as a result of this event, and expect to secure eight new international distributorships. Through SUSTA’s Market Access Program (MAP) Brand Promotion, this company also received reimbursements for some expenses associated with this activity.

Upcoming Events in Asia

• 2015 Seafood Exposition Asia – Wanchai, Hong Kong

– 08-Sep-15 to 10-Sep-15

• 2015 Hong Kong, Taiwan Outbound Trade Mission – Hong Kong

– 26-Oct-15 to 27-Oct-15

– Taipei and Taichung, Taiwan

– 28-Oct-15 to 29-Oct-15

• 2015 Food Hotel China – Shanghai, China

– 11-Nov-15 to 13-Nov-15

Upcoming Events in Asia

• 2016 FOODEX Japan – Tokyo, Japan

– 8-Mar-16 to 11-Mar-16

• 2016 Food Hotel Asia – Changi, Singapore

– 12-Apr-16 to 15-Apr-16

• 2016 SIAL China – Shanghai, China

– 05-May-16 to 07-May-16

Questions?

Florida Department of Agriculture and Consumer Services

Marisol Alvares Marisol.Alvares@FreshFromFlorida.com

Whitney Lett Whitney.Lett@FreshFromFlorida.com

Steve Hildebrandt Steve.Hildebrandt@FreshFromFlorida.com

FSBDC at the University of North Florida

Katie Arroyo

karroyo@unf.edu

www.sbdc.unf.edu