Greg Seminara, Export Solutions

The state of California ranks as the world’s 8th largest economy, larger than India or Russia.
USA population expanded by  40 million people since 2000, an increase equivalent to the size of Canada.
Americans are spenders by nature, with 85 % of the population able to regularly purchase supermarket brands. All international companies export to the USA ,but per capita sales levels are usually very small relative to potential. Export Solutions believes that many international brands would see a higher return on investment through efforts to build a stronger franchise in the USA versus waiting for “BRIC dreams to come true”.

Global Marketplace
Americans are spoiled with an overwhelming assortment of food options. An average USA supermarket stocks more than 40,000 unique items in a 48,000 square foot store. Shelves showcase products from around the world. During one week, a typical family would enjoy a mix of Italian, Mexican, and Asian food to supplement meals based upon meat, vegetables, and potatoes. American cuisine has assimilated into International cuisine reflecting the rich heritage of ethnic diversity. This creates an open gateway for brands from every continent. Americans are receptive to new and emerging flavors which is a significant point of difference versus BRIC markets which tend to remain glued to  traditional eating habits and choices.

13 Different Trade Channels
USA retail business exceeds 1.3 trillion dollars, through 13 unique trade channels. Each USA trade channel maintains a unique set of buying practices and selling experts. 40,000 supermarkets account for
half of the food business, followed by 4,100 Supercenters (primarily Walmart), and 1,500 high volume Club stores. Gourmet food stores such as Whole Foods and  ethnic supermarkets represent core outlets for international brands. Sales via the internet is an emerging, high growth, channel offering visibility and availability. Homesick expatriate’s and food enthusiast’s now discover hard to find products instantly online versus the historical approach of hauling overweight suitcases from trips overseas. Foodservice is an enormous channel, but focused on commodity products produced in the USA.

Three Phase Approach: Crawl,Walk, Run
Too many international brands are misaligned with a focus to sell to Walmart or even Kroger before they have established a meaningful track record with other retailers. A key insight is a finely tuned strategy focused on winning with a few high potential, trend setting retailers prior to approaching the “Giants”. Normally, we recommend initial focus on ethnic and gourmet retailers such as Whole Foods and Fresh Market. After success, consider expansion to upscale supermarket chains such as Wegman’s and Harris Teeter. Phase III  should provide a track record and investment base to approach mass retailers such as Walmart,Kroger, and Safeway.

        Good USA Chains for International Brands

Retailer     Sales ( billions $)   Stores
Meijer25    265
Wakefern/Shop Rite  18 365
Whole Foods 18     510
Giant Eagle   11     216
Wegmans   11     111
Harris Teeter   8     260
Sprouts 6      370    
Fresh Market  1.8      159
World Market   1.0      242
Kings    .5       19

Who is Your Food Broker ?
Food brokers dominate sales through the USA supermarket channel. Brokers provide critical mass and local relationships. Services include key account sales, category analysis, trade marketing, and essential retail coverage. Store level representation is mandatory to insure compliance with headquarter authorized plans. Brokers range in size from the massive “Big 3” which feature more than 10,000 employees each to smaller specialists focused against one retailer. Export Solutions database tracks over 500 food brokers covering all markets and channels. Leading USA importers partner with brokers to provide the local expertise and store merchandising services required to succeed.

Calibrate Expectations to Investment
Imagine approaching Carrefour,Metro, or Tesco with a new brand with  “net, net pricing” and limited marketing support. The USA market is no different with a menu of account specific programs required to build your brand. If you don’t invest, you will always be anchored to niche status at best. Retailers such as Costco with their demo programs and Shop Rite retain good reputations for delivering incremental cases for your trade spending.

Success Stories: Barilla,Bonne Maman, and Walkers Shortbread
Case studies exist for international brands to successfully develop the USA market.
Barilla is the USA’s leading pasta brand. Success strategy included building a USA factory to offer competitive pricing, highlighting their Italian heritage, and alignment with a leading USA food broker.
Bonne Maman andWalker’s trajectory followed patient paths. Both brands built a base in the upscale retail sectors, before moving mainstream to mass availability. A core message was the ability to upgrade category sales and profits with a  high quality, premium option. Both companies invest in having USA based sales managers versus managing via remote control from Europe. Other European brands have developed massive businesses through unique programs dedicated to Costco.

USA Business – Next Level Strategies
European brands frequently hire Export Solutions to provide insights on taking their current USA business to the “next level “. Our sales oriented approach involves market analysis,”lessons learned” and recommendations of sensible options to grow your business. Suggestions normally include laser focus on brand building at high potential customers plus best route to market partners( importers/brokers) by trade channel. The USA still offers tremendous growth opportunities for many international brands. USA success requires the same formula as BRIC markets. Higher levels of investment may be required to win in the USA. However, market dynamics
are more transparent  than BRIC countries and USA purchasing power ranks among the highest in the world.   Contact Greg Seminara  for more information on taking your USA business to the next level.