1. Changing Global Markets for High-Value Foods Anita Regmi ERS/USDA “Global Markets for High-Value Food” Workshop Waugh Auditorium, ERS/USDA, February 14, 2003

2. Global Food Market is Changing Income Growth Urbanization Improved Transportation Trade Liberalization

3. Food Share of Consumer Expenditure Declines With Income Percent Share of retail packaged food Source: Euromonitor, 2002. 14% 24% 37% 45% 17% 30% 46% 50%

4. Developed Countries Dominate Processed Food Retail Sales... Share of 2001 Retail Sale Value But, Developing Markets Account for Over Three- Fourths of 2001 Population... Source: Euromonitor, 2002 Includes 53 major countries.

5. Developing Countries Also Make Bigger Changes on All Food Items With Change in Income Percent change in consumption with 1% change in income Food as share of total budget0.720.590.32 Share of food budget Cereals0.540.400.20 Meat0.770.630.34 Dairy0.800.650.35 Fruit & Vegetables0.610.490.26 Beverage & Tobacco1.180.810.42 Source: Seale & Regmi, 2002. LowMiddleHigh

6. Developed Country Retail Food Markets are Large Source: Euromonitor, 2002

7. But Developing Country Retail Food Markets Grow Faster Source: Euromonitor, 2002 Growth in per capita retail sales of packaged food 1996-20012001-2005 HHMLMLHHMLML

8. Middle-Income Countries Top Growth in Retail Sales of Processed Food Percent growth Per capitaTotal retailPer capitaTotal retail 1996-20012001-2005 Bulgaria179.5178.0Vietnam9.611.2 Romania40.440.0China8.99.6 Vietnam17.018.8Indonesia6.17.8 Indonesia15.316.9Romania7.26.8 Poland14.3 South Korea5.76.8 Hungary14.314.0Turkey5.06.6 Brazil11.613.3Saudi Arabia3.46.3 Mexico11.413.2Thailand5.36.1 Ukraine13.612.6India3.76.0 Colombia7.79.5Morocco4.15.7 China8.49.2Philippines2.85.1 Source: Euromonitor, 2002 Percent growth

9. Discussion A major shift in increased food sales towards developing countries is highly likely in the next decade. But developed countries will remain a big and changing market. Changed preferences in developed and developing markets are driving changes in the food supply chain. What are the implications of changed preferences, and the ever-evolving supply chain on food producers and food trade?