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Ecuador: U.S. Made’s in the Shade
By Susana Sanchez
Ecuador may be a small
country, but its 12 million consumers have a big appetite for a
variety of new U.S. prepared food products. Leading the list:
barbecue sauce, prepared spaghetti sauce and salad dressings. As
Ecuador’s economy improves and more women enter the
workplace, the demand for convenience food, often with an
international flavor, is expanding rapidly.
This small, equatorial nation expects to maintain a 2.5- to 3-percent growth rate over the next few years. A gross domestic product of $20 billion in 1997 supported a per capita income of $1,670.
U.S. products already have fans lined up, thanks to the considerable exposure to U.S. culture through cable television and movies. This also makes adaptations of products or packaging to local tastes unnecessary as consumers equate quality with U.S. brand names.
Note that principal U.S. competitors enjoy duty-free access to the Ecuadorean market through regional trade agreements. Armed with that advantage, Chile now holds about 28 percent market share, followed by Colombia with 14 percent.
The United States garners a modest 6 percent of the market. A lack of preferential access might help explain why market share is so low.
Prepared Foods Span All Retail Sectors
Most imported prepared foods are sold in Ecuador’s two major food store chains: Supermaxi and Mi Comisariato. Each chain has more than 20 outlets, dispersed throughout the country but concentrated in Quito and Guayaquil.
Guayaquil, Ecuador’s largest city, is home to even more supermarket chains where consumers can browse a variety of international products. Mostly frequented by middle- and upper-income classes and expatriates, their prices are higher than local or street markets, but convenience and hygiene advantages offset the costs.
The large retail food stores have essentially two distribution systems: warehouses in Miami, which purchase and ship to Ecuador, and independent importers in-country who sell to smaller stores and markets as well as to the supermarkets. These independents also distribute to upscale hotels, restaurants and country clubs. Markups range from 10 to 20 percent at each distribution step.
Local and street markets abound in lower-income neighborhoods. They stock a complete range of both imported and domestic products. (And, incidentally, they are also the main suppliers of unofficial goods sold at a cheaper price.)
The imported retail foods range from
being comparably priced with domestic products to being 20
percent higher.
Promotions Effective
Ecuadorian consumers appreciate labeling and advertising in Spanish, especially on products newly introduced to the market.
Full-aisle displays in supermarkets and free sampling are proven methods to promote new products. Other significant marketing activities include giveaways and raffles.
Ecuadorians tend to choose colorful packages with catchy designs. Small sizes sell well at local markets; larger portions do better at supermarkets.
Packaging and Labeling Regulations
Ecuadorian regulations for packaging prepared foods follow those established by the United Nations and the World Health Organization. Package size must accurately represent the quantity of product inside.
Imports may be labeled in a foreign language, but must have a clear visual indication of what the product is and what it is used for.
Required on the label:
__________________________
The author is an agricultural marketing assistant with the
Office of Agricultural Affairs in Quito, Ecuador. Tel.: (593-2)
529-088; Fax: (593-2) 506-283.
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