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Guatemala’s Cool Dessert Craze: A Growing U.S. Opportunity
By Suzanne E. Heinen
Standing in front of a
supermarket freezer in Guatemala, U.S. visitors might see some
familiar names staring back at them from the baked goods section:
Sara Lee, Mrs. Smith and Pepperidge Farm, to name a few.
That’s because U.S. refrigerated desserts dominate the
export market in their product category.
For biscuits and cookies, the competition is a little tougher–but U.S. exporters are making progress there, too.
A Sweet Market for U.S. Exporters
Guatemala has a major sweet tooth for baked snacks like cookies, cakes, pies and biscuits. Not only do Guatemalans consume over 11,000 metric tons of these foods annually; their consumption of sweet snacks rose 24 percent between 1997 and 1998. During that same year, imports of U.S. products went up by nearly $500,000, a 28-percent increase. And they are expected to rise again in 1999.
Smart Cookies Know the Competition
U.S. dessert companies may rule the Guatemalan freezer, but U.S. exports of dry cookies lag behind those of Guatemala’s Latin American neighbors: Costa Rica, El Salvador and Mexico. U.S. biscuits do beat Chile, Brazil, the United Kingdom and other international competitors.
All exporters are getting more opportunities, however, thanks to a growing middle class in Guatemala, and an easing of import restrictions five years ago.
Cold Desserts Are Hot for U.S. Exports
Frozen bakery products, the most profitable snack for U.S. exporters, are usually sold in supermarkets located in the high-income residential areas around Guatemala City and, to a lesser degree, in the middle class sectors.
Middle and upper income families, like consumers in the United States, enjoy the convenience of these products.
But there is another reason why refrigerated bakery products from the United States do so well in this country–advertising!
Many consumers in Guatemala enjoy access to U.S. cable television, taking in advertisements for pies, cakes and sweets originally intended to lure U.S. consumers. Guatemalan baked goods producers–and exporters from other countries--can, of course, compete by advertising on local television stations, but that’s an expensive option.
Having Your Cake and Freezing it, Too
Special problems attend the refrigerated dessert market. Supermarkets have an unfortunate tendency to withhold orders until they are out of stock and often lack the refrigeration to keep extra stock. This means they buy only what will last two weeks on the shelf.
Distributors, too, are short on space to store extra product, resulting in further "down time" when there is no merchandise on the shelf.
Thus, one of the Guatemalan consumers’ main complaints about U.S. desserts is that the supply is inconsistent. A similar problem plagues the imported cookie and biscuit market.
Another issue: delays between the time a product is brought into port and the time it is unloaded. A shortage of refrigerated warehouse space also causes losses after unloading. Investment in infrastructure and training in better handling procedures would reduce spoilage–and enhance opportunity.
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The author is a counselor with the FAS Office of Agricultural
Affairs at the American Embassy in Guatemala City, Guatemala.
Tel.: (502) 331-1541 Ext. 300, 301,302; Fax: (502) 331-8293;
E-mail: agatt@guate.net
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