Market Information
United States

Agrifood and Fish/Seafood Sector Profile
Mid-Atlantic - USA

January 2003

Canadian Embassy
501 Pennsylvania Avenue NW
Washington, DC 20001
Contact: Cynthia Stevenson, Business Development Officer
Tel.: (202) 682-7765
Fax: (202) 682-7619
E-mail: cynthia.stevenson@international.gc.ca
Internet: http://www.can-am.gc.ca

MARKET OVERVIEW

The Mid-Atlantic United States, comprising the states of Delaware, Maryland, eastern Pennsylvania, Virginia and the District of Columbia (Washington, D.C.), accounted for 9.4% of the total U.S. population and 9.8% of supermarket sales nationwide in 2001.

The area's proximity to Canada and its location within the United States is a major advantage; the Delaware Valley is within a day's drive of four of Canada's largest markets. The Mid-Atlantic food market region extends from Harrisburg, PA, to Norfolk, VA, on a north-south plane, and from Delaware to the Charlottesville area of Virginia on an east-west plane. Approximately 25.1 million people live in the Mid-Atlantic United States, and this population is projected to reach 26.4 million by 2005. Almost 50% reside in Pennsylvania, 30% in Virginia, 20% in Maryland, 3% in Delaware, and the remaining 2% in the District of Columbia. The Mid-Atlantic's four major food markets, which together posted sales exceeding $45 billion(1) in 2001, are:

Philadelphia. Located on the eastern border of Pennsylvania, two hours northeast of Washington, this food market area includes counties in nearby Delaware and New Jersey. Philadelphia has the highest median household wealth of the Mid-Atlantic market. Total food sales in 2001 were $15 billion in a market that has been described as the most competitive within the region. In contrast with the trend in other Mid-Atlantic markets, Philadelphia's top six retailers are supermarket chains. Drug store, convenience store and alternative formats do not play as great a role in this marketplace, which tends to be characterized by traditional neighbourhoods and established supermarkets;
Scranton-Harrisburg (Central Pennsylvania). Scranton is located in northeastern Pennsylvania in a largely rural region comprising small towns and cities; Harrisburg, the state capital of Pennsylvania, is more centrally located in the southern half of Pennsylvania. Harrisburg's fairly diverse economy benefits from the city's central location, which provides easy access to the rural area of central Pennsylvania and Pittsburgh to the west, as well as to the other Mid-Atlantic states. Total food sales in Central Pennsylvania in 2001 were $6.2 billion.
Baltimore-Washington. The cities of Baltimore, Maryland and Washington, D.C. are attractive locations for both retailers and manufacturers. The high education level of the population, combined with a greater disposable income, has helped to create a marketplace characterized by consumers who are willing to try new products, but who are also demanding and discriminating. Total food sales in this market in 2001 were $10.9 billion.
Richmond. The Richmond market area is attracting an increasingly affluent, middle-class population and has the highest predicted population growth rate (6.7%) of the four major Mid-Atlantic markets. Total food sales in 2001 were $12.9 billion for a population of 3.8 million.

The region's two major wholesale seafood markets are located in Philadelphia and Jessup, Maryland.

Market Trends

The market is dominated by supermarket and club chains that claimed over 93% of the region's $50.5-billion food business in 2001. While there have been no major changes in market share leadership over the past 12 months, sales were generally flat in a weakened regional economy. Nevertheless, a total of 75 new supermarket and club stores are scheduled to open here over the next 12-18 months.

In all stores in the region, there is a greater emphasis on perishables, home meal replacement (HMR) and natural/organic foods and wellness products. Kosher-certified products across all categories are increasingly in demand. HMR consumers are looking for chilled prepared food or value-added ingredients that can be prepared at home. While produce, deli, bakery and convenience foods are all growing categories, the category with strongest growth--natural/organics/wellness--continues to be supported in this region by the Natural Products Expo East, currently the fastest-growing food trade show in the country (see Promotional Events).

OPPORTUNITIES

In addition to being a huge regional industry, food is also a local business. The eight regions of the U.S., including the Mid-Atlantic region, differ in food preferences and in food buying trends. The Canadian exporter who has examined these differences can make use of them to test-market different products and sales strategies until winning combinations are found. Because of the enormous size of the U.S. marketplace, failure in one region will not necessarily prevent success in another.

Opportunities exist in seafood, value-added food categories, and in a variety of niche markets including private-label, food service, gourmet, ethnic and natural products.

To be successful in this price-conscious market, Canadian fish and seafood suppliers seeking distribution through local seafood wholesalers (the supply chain for 90% of product to food service and retail establishments in the region) must be able to:

deliver within 24-48 hours;
ensure consistent year-round supply;
ship approximately 45-225 kg (100-500 lbs) weekly (depending on the size of the wholesaler operation and the product ordered); and
offer attractive pricing.

Promotional Events

The Natural Products Expo East (http://www.naturalproductsexpo.com) held each fall in Washington, D.C., provides excellent business opportunities for established and new Canadian exporters. This show is for manufacturers of certified organic products (from fresh produce and dairy products to breads, cereals, meat and tea), natural foods, (e.g. natural gourmet and specialty food items, soya products, beverages, processed/packaged and frozen food), food supplements (e.g. vitamins, minerals, sports nutrition, homeopathic remedies and dietary items), personal-care products (natural, cruelty-free body-care products including cosmetics, hair care, pain relievers, massage oils and dental care), herbal remedies (e.g. aromatherapy, flower essences and herbal teas) and raw materials (e.g. raw materials and bulk ingredients to be used in vitamins, supplements, body-care products and herbal products) including certified organic raw materials.

KEY PARTICIPANTS

The major retail players in this region include Safeway, Shoppers/Metro, Giant Food, Acme Markets (in Philadelphia) and Ukrop's (in Richmond). On the manufacturing level, multinationals (primarily domestic manufacturers such as General Mills, Nabisco and Procter & Gamble) dominate the Mid-Atlantic food industry in almost every category. Therefore, it is essential for Canadian companies to research smaller, niche markets that may not be serviced well (or efficiently) by the giant firms. In contrast to the often slow, inefficient and impersonal marketing approach of the big companies, small manufacturers can be efficient and flexible, often responding faster to new opportunities in the market.

There are hundreds of Canadian food manufacturers actively doing business in the northeastern, southeastern or Mid-Atlantic states, including many who were small but tenacious players when they began exporting 10 or more years ago. Among them are:

A. Lassonde (http://www.lassonde.com);
Wong Wing Foods (http://www.wongwingfoods.com);
Yves Veggie Cuisine (http://www.yvesveggie.com);
Woolwich Dairy (http://www.woolwichdairy.com);
Thyme and Truffles (http://www.thymeandtruffles.com)
Siena Foods (http://www.sienafoods.com);
Nature's Path (http://www.naturespath.com);
Dare Foods (http://www.darefoods.com); and
Manoucher Foods (http://www.manoucher.com).

These companies' successes are documented on their Web sites. Canadians considering entering this market are encouraged to visit these Web sites to learn how other companies successfully entered the Mid-Atlantic and U.S. food markets.

PRIVATE- AND PUBLIC-SECTOR CUSTOMERS

There are many potential retail or food service outlets for Canadian food and beverages in this market. Private-label and food service sales eliminate much of the market cost associated with branding and promotion, and a number of Canadian producers are private-label suppliers to supermarkets and independents here. Many others do volume or bulk business with food service distributors, whose accounts include the hundreds of hotels and restaurants in the region.

Canadian food manufacturers who have already selected and researched the U.S. Mid-Atlantic states as an appropriate market for their products may contact the Business Development Officer at the Canadian Embassy to obtain a list of food and seafood distributor/wholesaler and broker profiles. As well, Canadian companies are encouraged to discuss their market strategy with the officer before making "cold" calls to prospective business partners.

Government Procurement Regulations

The rules governing the sale of non-U.S. foodstuffs to the federal and state governments are extremely complex and in general do not favour Canadian or foreign suppliers. For this reason, we recommend that Canadian suppliers seek expert legal advice before pursuing such contracts. For comprehensive information on selling to the U.S. government, visit http://www.can-am.gc.ca/sell2usgov. Exporters may also wish to consult http://www.statelocalgov.net/index.cfm for information on state and local governments.

Several U.S. government agencies have a statutory duty to inspect and/or regulate food sector imports. These agencies include the Food and Drug Administration (http://www.fda.gov), U.S. Department of Agriculture (http://www.usda.gov) and Bureau of Alcohol, Tobacco and Firearms (http://www.atf.treas.gov).

KEY CONTACTS

Canadian Contacts

Agriculture and Agri-Food Canada
Sir John Carling Building
930 Carling Ave.
Ottawa, ON K1A 0C5
Contact: Brenda Jack, International Market Development Officer
Tel.: (613) 759-1589
Fax: (613) 759-7505
E-mail: jackb@em.agr.ca
Internet: http://ats.agr.ca

Canadian Food Inspection Agency (CFIA)
59 Camelot Dr.
Nepean, ON K1A 0Y9
Tel.: (613) 225-2342
Fax: (613) 228-6653
E-mail: cfiamaster@em.agr.ca
Internet: http://www.cfia-acia.agr.ca

Department of Foreign Affairs and International Trade
125 Sussex Dr.
Ottawa, ON K1A 0G2
Internet: http://www.dfait-maeci.gc.ca

United States Business Development Division
Contact: Dan Mrkich, Trade Commissioner, Agrifood
Tel.: (613) 944-6903
Fax: (613) 944-9119
E-mail: dan.mrkich@dfait-maeci.gc.ca

Fisheries and Oceans Canada
200 Kent St.
13th Floor, Station 13228
Ottawa, ON K1A 0E6
Tel.: (613) 993-0999
Fax: (613) 990-1866
E-mail: info@dfo-mpo.gc.ca
Internet: http://www.ncr.dfo.ca/index.htm

Mid-Atlantic United States Contacts

Food Distributors International
201 Park Washington Court
Falls Church, VA 22046-4521
Tel.: (703) 532-9400
Fax: (703) 538-4673
Internet: http://www.fdi.org

Note: Formerly the National American Wholesale Grocers Association and the International Food Service Distributors Association

U.S. Department of Agriculture (USDA)
14th St. and Independence Ave. SW
Washington, DC 20250
Tel.: (202) 720-2791
Internet: http://www.usda.gov

Food Safety and Inspection Service (FSIS)
Tel.: (202) 720-7025
Fax: (202) 205-0158
Internet: http://www.fsis.usda.gov

U.S. Department of Health and Human Services
Food and Drug Administration (FDA)
5600 Fishers Lane
Rockville, MD 20857
Tel.: 1-888-463-6332
Fax: (301) 443-0335
Internet: http://www.fda.gov

Other U.S. Contacts

National Association for Retail Merchandising Services
PO Box 906
Plover, WI 54467-0906
Tel.: (715) 342-0948
Fax: (715) 342-1943
Internet: http://www.narms.com

Specialty Food Distributors and Manufacturers Association
401 North Michigan Ave., Suite 2200
Chicago, IL 60611
Tel.: (312) 644-6610
Fax: (312) 527-6783
E-mail: sfdma@sba.com
Internet: http://www.specialtyfoods.org

BIBLIOGRAPHY

Best-Met Publishing. Food Trade News, Market Study Issue, June 2002.

------. Food World, Market Study Issue, June 2002.

USEFUL INTERNET SITES

Food Industry Online Resources and Publications

Beverage World:
http://www.beverageworld.com

Chain Store Guide:
http://www.csgis.com

Food Channel Newsletter:
http://www.foodchannel.com

Food Processing Magazine:
http://www.foodprocessing.com

Food World & Food Trade News:
http://www.best-met.com

Frozen Food Age Magazine:
http://www.frozenfoodage.com

Gourmet News:
http://gourmetnews.com

iTrade Network-Seafood:
http://www.seafood.com

Nation's Restaurant News:
http://www.nrn.com

Natural Foods Merchandiser:
http://www.newhope.com

Onesource.com:
http://www.onesource.com

Progressive Grocer:
http://www.progressivegrocer.com

Specialty Food News:
http://www.foodinstitute.com

Supermarket Business:
http://www.supermarketbusiness.com

Supermarket News:
http://www.supermarketnews.com

Supermarket Strategic Alert:
http://www.supermarketalert.com

The Manufacturing Confectioner/The Candy Buyer's Directory:
http://www.gomc.com

Thomas Food and Beverage Market Place:
http://www.tfir.com

World Food and Beverage Report:
http://www.foodtrends.com

Government On-line Resources

Agriculture Canada:
http://ats.agr.ca/info/mkinfo-e.htm

Canada Business Services Centres:
http://www.cbsc.org

Canadian Embassy, Washington, D.C.:
http://www.canadianembassy.org

Department of Foreign Affairs and International Trade, U.S. Bureau:
http://www.can-am.gc.ca

Department of Foreign Affairs and International Trade - Selling to the U.S. Government for Canadians:
http://www.can-am.gc.ca/sell2usgov

Export Development Corporation:
http://www.edc-see.ca

ExportSource:
http://exportsource.gc.ca

InfoExport:
http://www.infoexport.gc.ca

Strategis:
http://strategis.ic.gc.ca

U.S. National Marine Fisheries Service. Fisheries Statistics and Economics Division:
http://www.nmfs.noaa.gov

1. All monetary amounts are expressed in Canadian dollars, unless otherwise indicated. The conversion rate to Canadian dollars is based on IDD Information Services, Tradeline, March 2002.

Date Modified: 2004-08-30

Important Notices

Agrifood and Fish/Seafood Sector Profile Mid-Atlantic - USA