Market Information
United States

Overview of the Foodservice Sector in the Southeast United States

October 2005

The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information. This report is intended as a concise overview of the market for those interested in its potential and is not intended to provide in-depth analysis which may be required by the individual exporter. Although every effort has been made to ensure that the information is correct, Agriculture and Agri-Food Canada assumes no responsibility for its accuracy, reliability, or for any decisions arising from the information contained herein.

Please address any comments or suggestions you have on this report to: Bryan West – westb@agr.gc.ca

EXECUTIVE SUMMARY

The New South is proving to be a dynamic forward force for the United States’ foodservice industry with its thriving tourism sector and cruise line component. The Southeast states form a dynamic region, rich with ethnic diversity and a successful foodservice sector. With Florida’s foodservice operations driving the greatest growth in this region, the Southeast market represents 13% of the national foodservice market, valued at approximately US$62 billion in 2004.

The United States Southeast region, comprised of Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee, offers strong export opportunities to Canadian food companies. Canadian agri-food exports to this region totalled more than $1.65 billion in 2004, and represented 10% of the United States’ total Canadian agricultural imports.

The Southeast region has a consumer base of just over 52 million people, or about 18% of the total American population. Approximately 32% of persons living in the region are African American and 12% are Hispanic. Mississippi has the largest African American community representing more than 37% of the state’s population. Florida had the most significant percentage of Hispanic persons in 2004, making up 19% of the state’s population as compared to the American average of 13.8%.

Due to the Southeast region’s diverse ethnic makeup, the demand for authentic ethnic cuisine has a strong influence on the area’s foodservice sector. Consumer trends and tastes of this region also mirror many of those of the general American population. However, within the Southeast region there is a strong emphasis on addressing the needs of the region’s large urban Hispanic population.

Additional influences on the foodservice sector include health and wellness attitudes, the demand for personalization and service, away-from-home dining trends, and at-home meal solutions. Each of these factors impacts the commercial and non-commercial foodservice sectors. A variety of niche markets have been rapidly developing in the foodservice sector, such as quick casuals, upscale ethnic kitchens, and organic eateries, offering Canadian exporters diverse opportunities in this market.

An analysis of foodservice in the Southeast region would not be complete without a closer look at the area’s successful tourism industry. Almost 299 million people visited the seven Southeast states in 2004, with Florida remaining the number one tourism destination in the world. Special attention should also be paid to Mississippi’s casino/hotel establishments and Florida’s cruise line industry which had a US$5.3 billion impact on the region’s economy in 2003 alone.

QUICK FACTS

• The National Restaurant Association estimates that by 2010, total sales in the American restaurant industry will exceed US$577 billion.
• In 2003, the quick casual market was pegged at US$6 billion, growing 15-20% each year and is anticipated to double in the next five years to US$12 billion.
• 2005 full-service and limited service outlet sales will rise by more than US$15 billion or almost 3%. Final prices could increase by 3.5% due to increasing fuel prices, insurance rates, and labour expenses.
• National organic food sales are estimated at roughly US$10 billion. Since 1992, organic food sales have increased by more than 20% annually, and are expected to show strong growth for at least the next decade.
• The American ethnic food market is currently worth US$75 billion, and can be broken down into three major food categories: Hispanic, African American and Asian American.

Southeast Region

The Southeast region represents an important gateway to Central American and South American markets with states such as Florida and Mississippi acting as a springboard and trans-shipment point for exports destined for such regions. Many Canadian goods are exported to Florida and then trans-shipped to other international markets. In 2004, Florida was the largest importer of Canadian agri-food products with more than $487 million or 30% of the Southeast states' imports. Georgia ranked second with more than $433 million, followed by Tennessee at $309 million. Top Canadian exports to the Southeast region were beef, communion wafers, canola, whiskies, and mixes and prepared doughs.

Distinct trends exist in each of the Southeast states. Age, race, and income demographics vary from state to state and county to county. Florida, for example, has a large Hispanic community while the Southeast region as a whole has a stronger presence of African Americans than the national average. It is important to examine the impact these variations have on foodservice and consumption within each state.

• The Southeast region is a strong market for foodservice, having accounted for almost 13% of national foodservice sales in 2004.
• Opportunities are available across most Southeast foodservice operations including quick service, full service and quick casual restaurants, universities and colleges, cafés and juice bars, and health-care institutions.
• Prospects exist in the following areas: upscale ethnic foods, organic-certified foodservice ingredients and products, specialty seafood products, condiments, fresh "made-for-me" foods, home meal replacement products, natural or high quality beef, low carbohydrate desserts, juice bars, and exotic/healthy salad dressings.
• Florida, Georgia and North Carolina are leading growth in the region with population increases of 9%, 8% and 6% respectively, from 2000 to 2004. These states grew faster than the national average of 5% in the same period.

STATE OVERVIEWS

Alabama

This state’s southern hospitality and business incentives make it a good location to do business. Overall economic strength, diversity of industries, total capital investment and jobs per capita are a few of the positive indicators that made Alabama the top ranked state in 2004 for economic development, according to Site Selection magazine. These economic indicators support growth in other industries including Alabama’s foodservice sector.

More than 20 million people visited Alabama in 2004, spending US$7.3 billion; an 8% increase over 2003. Currently, there are approximately 8,900 restaurants and bars in Alabama. Restaurant sales are estimated to reach more than US$4.5 billion in 2005.

• The Alabama minority population includes African Americans (26%), Hispanics (2%), and Asians (0.8%).
• Alabama was ranked 42nd in the country for per capita income at US$26,276 in 2003. This was a solid increase of 3.6% for the year.
• In 2003, Alabama had a median household income of US$35,158.
• Alabama’s major cities are Birmingham with approximately 236,600 in population, followed by Montgomery with 200,100, and Mobile with 193,500.
• Alabama is ranked sixth for its number of foodservice outlets per capita in the Southeast region and holds approximately 8% of all eating and drinking establishments.
• There are currently four military bases in Alabama that annually contribute approximately US$4 billion to the state’s economy.

Florida

Canada is Florida’s number one overall economic partner and source of inbound tourism. Florida’s diverse foodservice industry includes restaurant, hotel, cruise line, casino and theme park sectors. The state offers continuous growth and many opportunities for Canadian exporters. More than 77 million people visited Florida in 2004, spending US$57 billion; an 11% increase over 2003.

Canadian snowbirds (snowbirds are classified as people who spend 31 nights or more in a southern destination) are an integral segment of Florida’s tourism industry, with 73% choosing Florida as their annual destination. Snowbirds account for 30% of Canadians that visit the state. Approximately 220,000 Canadian snowbirds visited Florida in 2003; 59% stayed 60 nights or more, and over 20% spent 91 nights or more. Due to their lengthy visits, 62% of Canadian snowbirds own homes in the United States. Many Southeast retailers cater to this tourist segment by greatly advertising and selling Canadian brand agri-food products; for example, beer and tobacco to meet snowbird demand.

For the past three years, Florida has produced more jobs than any other state. Foodservice employment in the state exceeds 735,000. There are an estimated 39,055 restaurants and bars in Florida. Restaurant sales are expected to reach more than US$20 billion in 2005.

• Florida has a population of approximately 17.4 million and is expected to surpass New York as the third most populous state by 2020.
• Ethnic composition includes Hispanics (19.1%), African Americans (15.1%), and Asians (2%).
• Florida was ranked 25th in the country for per capita income at US$29,972 in 2003.
• In 2003, Florida had a median household income of US$39,871.
• Florida continued to be the largest importer of Canadian agri-food products in 2004 with more than $352 million or 30% of the Southeast states' imports.
• Florida’s major cities are Jacksonville with approximately 773,800 in population, followed by Miami with 376,800, and Tampa with 317,600.
• Florida is ranked second for its number of foodservice outlets per capita in the Southeast region and holds approximately 35% of all eating and drinking establishments.
• There are currently 23 military bases in Florida that annually contribute approximately US$44 billion to the state’s economy.

Georgia

Georgia holds the Southeast’s most extensive rail system, with 5,000 miles of track. The state also has ports in Savannah and Brunswick and a modern, 20,000 mile highway system. Atlanta’s Hartsfield International Airport is said to be the world’s busiest passenger airport, with approximately 2,000 daily flights all over the world. Several companies with worldwide headquarters in Georgia include Coca-Cola, CNN, and United Parcel Service (UPS).

More than 48 million people visited Georgia during 2004, spending US$15 billion; a 6% increase over 2003. There are an estimated 18,500 restaurants and bars in Georgia. Restaurant sales are estimated to reach more than US$11.5 billion in 2005; a 6% increase over 2004 and the largest increase among the Southeast states.

• Georgia was ranked 28th in the country for per capita income at US$29,259 in 2003.
• In 2003, Georgia had a median household income of US$42,742.
• The state was the second largest importer of Canadian agri-food products in 2004 with more than $280 million worth of imported goods.
• Georgia has the largest Asian population of the Southeast states at almost 3% of its total population.
• The major cities in the state are Atlanta with approximately 423,000 in population, followed by Augusta with 193,400 and Columbus with 185,700.
• Georgia is ranked fifth for its number of foodservice outlets per capita in the Southeast region and holds approximately 16% of all eating and drinking establishments.
• There are currently 13 military bases in Georgia that annually contribute approximately US$21 billion to the state’s economy.

Mississippi

More than 31 million people visited Mississippi during 2004, spending US$6 billion; a 7% increase over 2003. Gaming, hotels and restaurants are the most important sectors of the state’s tourism industry. Mississippi is home to 29 casinos/hotels. These establishments accounted for a total of US$435 million in food and beverage revenue in 2004. There are an estimated 5,400 restaurants and bars in Mississippi. Restaurant sales are estimated to reach more than US$2.8 billion in 2005.

• Ethnic composition includes African Americans (37.2%), the largest minority group in the state, followed by Hispanics (1.5%) and Asians (0.4%).
• Mississippi was ranked 50th in the country for per capita income at US$23,343 in 2003.
• In 2003, Mississippi had a median household income of US$32,466.
• The major cities in the state are Jackson with approximately 179,600 in population, followed by Gulfport with 71,800 and Biloxi with 49,000.
• Mississippi is ranked seventh for its number of foodservice outlets per capita in the Southeast region and holds approximately 5% of all eating and drinking establishments.
• There are currently seven military bases in Mississippi that annually contribute approximately US$1.4 billion to the state’s economy.

North Carolina

More than 49 million people visited North Carolina during 2004, spending US$13 billion; a 5% increase over 2003. Currently, there are an estimated 18,050 restaurants and bars in North Carolina. Restaurant sales are estimated to reach more than US$10.5 billion in 2005.

• North Carolina was the third largest importer of Canadian agri-food products in 2004 with $200 million worth of imports.
• The largest minority group are African Americans (21.2%), followed by Hispanics (6.1%), and Asians (1.7%).
• North Carolina was ranked 37th in the country for per capita income at US$28,301 in 2003.
• In 2003, North Carolina had a median household income of US$38,234.
• The major cities in the state are Charlotte with approximately 584,700 in population, followed by Raleigh with 316,800 and Greensboro with 229,100.
• North Carolina is ranked fourth for its number of foodservice outlets per capita in the Southeast region and holds approximately 16% of all eating and drinking establishments.
• There are currently six military bases in North Carolina that annually contribute approximately US$18 billion to the state’s economy.
• North Carolina has 49 colleges and universities, and 61 community colleges.

South Carolina

South Carolina has the second highest percentage of citizens working for internationally owned companies, after Hawaii. There are 29 Canadian firms operating in the state.

More than 30 million people visited South Carolina during 2004, spending US$6.5 billion; a 4% increase over 2003. There are an estimated 9,970 restaurants and bars in South Carolina. Restaurant sales are estimated to reach more than US$5.4 billion in 2005.

• The largest minority groups are African Americans (28.9%), followed by Hispanics (3%) and Asians (1.1%).
• South Carolina was ranked 43rd in the country for per capita income at US$26,138 in 2003.
• In 2003, South Carolina had a median household income of US$38,467.
• South Carolina’s major cities are Columbia with approximately 117,400 residents, followed by North Charleston with 81,600, and Charleston with 71,800.
• South Carolina has the most foodservice outlets per capita in the Southeast region and holds approximately 9% of all eating and drinking establishments.
• There are currently eight military bases in South Carolina that annually contribute approximately US$7.3 billion to the state’s economy.

Tennessee

More than 43 million people visited Tennessee during 2004, spending US$11 billion; a 4% increase over 2003. Popular attractions include Memphis, Dollywood and Nashville. Currently, there are an estimated 12,760 restaurants and bars in Tennessee. Restaurant sales are estimated to be over US$7.2 billion in 2005.

• The largest minority groups are African Americans (16.3%), followed by Hispanics (2.9%) and Asians (1.3%).
• Tennessee was ranked 34th in the country for per capita income at US$28,565 in 2003.
• In 2003, Tennessee had a median household income of US$38,247.
• The major cities in the state are Memphis with approximately 646,000 in population, followed by Nashville with 544,800 and Knoxville with 173,300.
• Tennessee is ranked third for its number of foodservice outlets per capita in the Southeast region with approximately 11% of all eating and drinking establishments.
• Memphis is a major centre for Canadian National’s (CN) subsidiary railroad, Illinois-Central.
• There are currently six military bases in Alabama that annually contribute approximately US$16.7 billion to the state’s economy.

Key Metropolitan Areas

Among the fastest growing cities in the Southeast region, 14 have populations over 100,000 that are steadily increasing. Florida has the most cities with populations over 100,000, including Port St. Lucie, Cape Coral, Miramar, Jacksonville, Miami, Orlando, Coral Springs and Pembroke Pines. Other growing cities in the region include Atlanta, Georgia; Mobile, Alabama; Raleigh, Durham and Greensboro, North Carolina; and Memphis, Tennessee.

For the purpose of this report, a closer look at five metropolitan areas follows. Each of these areas show signs of strength in population growth, economic health, and business climate. These selected areas also represent strong opportunities for Canadian agri-food exporters.

*All estimates in US dollars.

Atlanta-Sandy Springs-Marietta

Atlanta, Georgia is the second largest urban area of the Southeast region and the ninth largest metropolitan area in the country. The city’s population is projected to reach 5,046,200 by 2012; an 11% increase over 2004.

Major attractions include the CNN Center, Six Flags Over Georgia, the Augusta National Golf Course and four professional sports venues serviced by ARAMARK, Levy Restaurants, and MGR Food Services, a Levy Restaurants partner.

• Atlanta is home to 13 Fortune 500 and 24 Fortune 1000 headquarters. There are approximately 120,000 business establishments, 5,000 of which are manufacturing facilities.
• Foodservice related companies located in Atlanta include Arby’s headquarters, Del Monte Foods’ regional distribution centre, and Schneider National’s regional logistics centre.
• Hartsfield Atlanta International Airport is the busiest airport in the world, serving 75 million passengers annually with over 1,200 flights each day.
• Atlanta has 44 colleges and universities with more than 190,000 students.
• There are 61 acute care hospitals, specialty care hospitals and long-term care facilities in the metropolitan area.

Cape Coral-Fort Myers

Cape Coral-Fort-Myers is a growing retirement and tourist destination located on the Gulf of Mexico; approximately 21,000 people move to the area each year. This metropolitan area includes Fort Meyers, Cape Coral, Bonita Springs, Fort Meyers Beach and Sanibel, Florida. The area’s population is projected to reach 648,400 by 2012; a 24% increase over 2004.

Major attractions include several casinos and cruise lines, as well as two professional sports venues.

The Milken Institute named Cape Coral-Fort Myers "2004 best performing city in the nation" for job creation, and Forbes Magazine ranked Cape Coral-Fort-Myers second among the top 150 American cities for job growth in 2005.

• There are approximately 14,200 business establishments located in the urban area, 500 of which are manufacturing facilities. Cape Coral is also home to Heinz North America’s frozen foods and snack manufacturing facilities.
• Southwest Florida International Airport serves over 5 million passengers annually.
• Cape Coral-Fort-Myers has 12 colleges and universities with more than 26,500 students.
• There are seven hospitals in the metropolitan area.

Charlotte-Gastonia-Concord

Charlotte is 37th largest metropolitan area in the country. The area’s population is projected to reach 2,846,900 by 2012; a 23% increase over 2004. This urban area includes Charlotte, Gastonia, Concord Kannapolis, Mathews, and Monroe in North Carolina, as well as nearby communities in South Carolina.

Major attractions include Paramount's Carowinds amusement park, the Quail Hollow Club, Lowe's Motor Speedway, and four professional sports venues serviced by Levy Restaurants and Stadium Food & Beverage Inc.

• Charlotte is home to seven Fortune 500 headquarters, and 306 Fortune 500 companies have placed one or more facilities within the area. There are approximately 25,000 business establishments, 2,300 of which are manufacturing facilities.
• Foodservice related companies in the Charlotte area include the Altria Group (Kraft Foods), Aramark Sports and Entertainment, Campbell Soup, Hershey’s Ice Cream, Frito-Lay, Sara Lee, and Yum Brands.
• Charlotte-Douglas International Airport serves over 12 million passengers annually with over 550 flights each day.
• Charlotte’s metropolitan area has 35 colleges and universities with more than 150,000 students.
• There are 36 acute care hospitals, specialty care hospitals and long-term care facilities in the Charlotte area.

Miami-Hialeah-Fort Lauderdale

Miami, Florida is the sixth largest metropolitan area in the United States and its population is projected to reach 6,518,100 by 2012; a 24% increase over 2004. This urban area includes Miami, Hialeah, Kendall, Pembroke Pines, Hollywood, Miramar and Fort Lauderdale, Florida.

The tourism industry is Miami’s number one money maker, with more than 11 million visitors injecting US$13.5 billion into the local economy each year. About one third of these visitors come from Latin America. Fort Lauderdale is also a world famous port of call for the yachting industry and home to the world’s largest boat show.

Major attractions include over 135 kilometres of coastline and beaches, the Homestead Miami Speedway, approximately 80 golf courses, 500 tennis clubs, and four professional sports venues serviced by the Boston Culinary Group and Levy Restaurants.

There are approximately 84,000 business establishments located in the metropolitan area. Foodservice related company headquarters located in Miami include that of Kraft Latin America, Southern Wine & Spirits, Netuno USA, and Burger King.

• Miami International Airport has the third largest international passenger traffic in the United States, serving 30 million passengers annually with over 600 flights each day. Fort Lauderdale-Hollywood International Airport serves 15 million passengers annually with over 700 flights each day.
• The Miami-Fort Lauderdale area has 31 colleges and universities with more than 150,000 students.
• There are approximately 111 acute care hospitals, specialty care hospitals and long-term care facilities in the Miami-Fort Lauderdale area.

Raleigh-Durham-Chapel Hill

Raleigh is the 57th largest city in the United States and the ninth fastest growing American city since 2000. The metropolitan area’s population is projected to reach 1,569,175 by 2012; a 15% increase over 2004. This urban area includes Raleigh, Durham, Chapel Hill, Carey, Smithfield and Garner, North Carolina.

Major attractions include 21 golf courses and professional and college sports venues.

• Forbes magazine declared Raleigh-Durham-Chapel Hill the second "Most Educated City" and second "Best Place for Business in the United States" in 2004.
• Raleigh’s metropolitan area is home to 23 Fortune 1000 headquarters. Foodservice related companies located in this area include the Golden Corral restaurant chain, Boddie-Noell restaurant franchises, and a ConAgra manufacturing facility.
• Raleigh-Durham International Airport serves 8.5 million passengers annually with over 220 flights each day.
• Raleigh has 12 main colleges and universities with approximately 108,000 students.
• There are 16 acute care hospitals, specialty care hospitals and long-term care facilities in the metropolitan area.

THE FOODSERVICE SECTOR

The National Restaurant Association estimates that annual sales will reach US$476 billion nationwide, with 12.2 million employees and 900,000 locations in 2005. This will represent the 14th consecutive year of real growth, with a projected 4.9% increase in total restaurant industry sales from 2004. Restaurants and bars are the primary contributors having earned US$280 billion in sales in 2004.

The Southeast region’s foodservice industry continues to face the same challenges as in other parts of the country. Hot issues include rising business costs, higher food prices, and natural disasters. However, since the 2001 recession, the Southeast region has rebounded better than any other in the United States reporting large increases in visitors to the area, hotel stays, and food away-from-home sales. The Southeast states currently hold 12.5% of the nation’s eating and drinking establishments, and accounted for approximately US$62 billion or 13% of national foodservice sales in 2004.

Commercial Sector

Due to similar culturally diverse areas throughout the United States, the Southeast region’s commercial foodservice sector is generally quite comparable to that of the entire country, catering to major consumer trends and tastes that are prevalent across the nation. More specifically, the Southeast and South Central regions are most alike, sharing many of the same retailers, restaurant chains and food outlets. Both regions house consumers with similar demographics and buying behaviour.

Commercial foodservice providers account for nearly 80% of away-from-home expenditures. Favourable conditions helping the growth of the foodservice industry include the narrowing gap between the price of eating out and at home, and the rising number of dual-earner households. Unfavourable conditions hindering the growth of the foodservice industry include rapidly rising fuel costs and concerns for food safety bumping up commodity costs.

Current trends within the commercial foodservice sector include companies developing a variety of restaurants to satisfy consumer preferences, fast-food outlets redesigning their menus to offer selections similar to those available at quick casual restaurants, and restaurants and food retailers competing to meet the needs of quick causal diners with home meal replacement products. Companies are also attempting to associate their food products with popular health-oriented brands in order to tap into the trend toward healthier eating.

For more detailed information on the Southeast region’s commercial foodservice sector consult the South Central region’s foodservice report www.ats.agr.ca/us/4017_e.htm.

Quick Casual

Quick casual chains are heating up the Southeast market at a rapid pace. Such restaurants offer full-service quality food in a quick-service format with a greater variety of menu offerings than fast-food outlets. These restaurants are especially popular with baby boomers, although they tend to be more expensive than quick-service establishments. However, baby boomers, who no longer have the financial costs of raising a family, view these restaurants as having good value.

Florida holds the majority of quick casual chains in the Southeast region; however, independent quick casuals in the region add to the overall competitiveness within the sector.

• Nuevo Latino restaurant chains are a rapidly growing Latin American quick-casual market niche.
• Increasingly popular cooking techniques and offerings include flame-roasted and fruit-wood smoked foods, as well as the option of building "personal combination meals".
• Custom-made sandwich sales are increasing at a pace of 15% annually compared with hamburgers at 3%. These sandwiches are made with fresh and specialty ingredients which matches the demand for convenient and fresh foods.
• Many quick casual restaurants have become known for a limited selection of dishes, such as bourbon-baked beans, fresh-cut seasoned fries, and Hawaiian barbeque or seafood appetizers.

Full Service

With the gap in price between dining at home and dining out gradually decreasing and consumers enjoying increased disposable incomes, people are taking up more opportunities to diversify their food palette with the convenience of personalized service. Full service restaurants are also exploring new culinary recipes to satisfy the consumer demand for fresh and authentic food choices.

• Full service restaurant sales are expected to reach US$164.8 billion in 2005; a 5% increase over 2004, or real growth rate of 2.2%.
• Fish and seafood remain the top choice for baby boomers, with shrimp being America’s most popular seafood.
• New Asian cuisine including Vietnamese, Malaysian and Indonesian foods are also growing trends, as the minority population evolves in the Southeast region.
• Beef remains in high demand, especially premium beef including Kobe beef, 100% certified Angus or Hereford, veal, organic meats, and preservative-free sausages.
• Fine-dining establishments are adding birds such as duck, capons, Guinea hen, pheasants, quail, and ostrich into their menus for today’s more sophisticated diner.
• Home meal replacement is a major trend that full service restaurants may cater more to in the future. Some establishments currently offer "drive-up and takeaway" service, allowing consumers to phone in their order ahead of time and then have their meal delivered to their car upon arrival.

Hotels

The travel and leisure industry has rebounded much faster in the Southeast region than in any other part of the country since the economic recession in 2001. Currently, 16.4% of the annual US$41.2 billion travel expenditure is allocated to eating and drinking. The trends at resorts, hotels and conference centers echo the overall food trends at restaurants as consumers are looking for smaller portions, and quick, healthy, and fresh foods.

• Florida is the biggest market which saw almost 77 million visitors and US$57 billion in total tourism spending in 2004. This represents a 10% increase in the number of visitors and an 8.5% increase in the economic impact that tourism had since 2001.
• Florida is the most popular destination in the United States and is the tourism leader in the Southeast region, followed by North Carolina and Georgia.

Cruise Lines

The cruise market holds enormous potential for Canadian exporters. The Southeast states benefit greatly from cruise ship passengers’ purchases, especially food and beverages. The economic impacts of this industry are concentrated in Florida where direct purchases by passengers and crew amounted to US$4.6 billion in 2003. The entire Southeast region saw US$5.3 billion in direct spending that year. Moving forward, the Southeast states may experience increased business and direct spending due to recent hurricane damage to alternative ports in the neighbouring South Central region.

Passengers on today’s cruise ships can choose from a wide variety of dining experiences. Cruise lines usually offer as many as ten restaurants aboard each ship, each with a different atmosphere and cuisine. They also feature other dining options such as bistros, pizzerias, coffee shops, buffets, and poolside barbecues. Many concessions are open 24 hours a day.

In 2004, cruise ships in the Southeast region set sail at full occupancy, with the most popular time to travel between January and March. Ports across the United States accounted for approximately 80% of worldwide cruise embarkations that year.

• Nearly 4.7 million passengers embarked at Florida ports in 2003. These ports, including Miami, Tampa, Manatee, Port Everglades and Port Canaveral, account for almost 70% of all embarkations in the country.
• Miami had a 28% share of the United States’ cruise market in 2003, followed by Port Everglades with 17%, Port Canaveral with 15% and Tampa with 6%.
• Tampa has the fastest growing port, and experienced approximately 28% growth over 2003.
• Other ports in the Southeast region include Fort Lauderdale, West Palm Beach, Jacksonville and Orlando, Florida; Mobile, Alabama; and Wilmington, North Carolina.
• There were approximately 210 ships deployed in the North American cruise industry in 2004. On average, a cruise ship carries 2,000 passengers and 950 crew members.

*All estimates in US dollars.

Non-Commercial Sector

In 2004, national non-commercial food sales stood at US$35.3 billion dollars (excluding military). The non-commercial food service sector has shown slow growth as it continues to adjust to changing food demands and stricter food regulations among other factors. Changing customer eating habits have profoundly affected several sectors, as employees are demanding that workplaces provide quick, healthy and fresh food choices.

Note: All food products in schools must be domestically produced. The United States Department of Agriculture forbids foreign countries to export food products to United States schools (kindergarten to grade 12).

Colleges and Universities

Post-secondary foodservice providers are becoming increasingly sensitive to college student demands for authentic ethnic foods, vegan/vegetarian foods, healthy options, and organic/sustainable foods. Campus convenience stores are becoming "hybrid" operations that offer partially prepared meals and flexible lifestyle menus, and create a selection of food service outlets on each campus, and more flexible meal plans.

• There are more than 500 colleges and universities in the Southeast region, most of which have contract operated foodservice.
• There are almost two million students attending colleges and universities in the Southeast region.
• The country’s post-secondary school foodservice segment is estimated to grow from US$9 billion in 2002 to US$13 billion by 2010; a 44% increase.

Hospitals

The aging baby boomer population has increased demand for quality healthcare services, including foodservice. The buffet-style foodservice is now taking on more of a bistro, quick and casual feel.

• In 2004, foodservice sales were estimated at US$11.5 billion.
• Only one in five hospitals outsource to private foodservice providers, such as Sodexho USA and Aramark. The remaining are independent, hospital-run operations.
• More than 68% of meals are being served to individuals other than patients, including employees and visitors.

Military

The military is a major contributor to the economy in the Southeast region with an annual economic impact of approximately US$112 billion. The federal government plans to consolidate a large number of smaller military bases and save money; however, the Southeast is the only region in the country that will actually see growth in employment.

Although some bases will be closed and others will experience realignments, the Southeast states will receive almost 16,000 new jobs overall. Mississippi is the only state in the region that will see a small employment loss, accounting for 420 jobs. Georgia will gain 7,420 new military and civilian positions during the restructuring.

NICHE MARKETS

Demand for menu expansion in many Southeast region restaurants mirrors the growing cultural diversity of the area. Currently worth US$75 billion, the American ethnic food market has grown from US$53 billion in 2002, which is reflective of increasing national ethnic diversity. In 2002, the composition of the ethnic food market by cuisine and sales broke down into three major categories: Hispanic, African American, and Asian American foods.

The increased diversity of demographics in the Southeast region is being echoed in more global menus, as dishes from different ethnicities make their way into mainstream consumption patterns of sophisticated American consumers. Consumer preferences are changing the face of the restaurant industry and Canadian exporters have demonstrated the ability to deliver many products that are in demand in the Southeast region. New restaurants and menus are incorporating:

• Nuevo Latino cuisine
• Comfort foods
• Tapas foods (i.e. Spanish appetizers served in Spanish-styled bars/restaurants)
• Organic-certified foods
• Noodle shops
• Live sushi bars

Hispanic

The Hispanic consumer segment is the largest growing ethnic minority in the United States, making up approximately 13% of the population and the largest ethnic food market in the country. By 2012, it is estimated that this segment will account for nearly one out of every five Americans, with an estimated 50 million Hispanics living in the United States.

This market includes foods from the 27 Latin American countries, Spain and Portugal. Nuevo Latino cuisine is Latin dishes made with an American twist. Some recent product trends include ceviche, curtido, pupusas, paella, fabada, tapas, slow-roasting dishes, dulce de lèche, tres lèches, plaintains, cherimoya fruit, pico de gallo, and Mateus wines. Popular flavours also include lemon Cajun, chipotle, mesquite, and chimichuri.

Popular Latin themed restaurants in the Southeast region include Churromania pastry and beverage outlets, and the Baja Fresh Mexican Grill.

African American

The African American consumer market has the highest level of purchasing power among ethnic groups in the United States, valued at over US$645 billion in 2002. This consumer segment is made up of several sub groups including native born African Americans, and immigrants from a variety of Caribbean and African countries. African Americans currently account for 12% of the American population.

This market includes foods from many countries, such as Cuba, Dominican Republic, Puerto Rico, Jamaica, Guatemala, Costa Rica, and El Salvador. Cocina criolla is Puerto Rican cuisine which has become very popular in the United States. Recent product trends include jericalla, picos bread, sautéed or slow-cooked dishes, croquetas, empanadas, pastelitos, bocaditos, maduros, congri, piraguas, gizzadas, root vegetables, avocado, pumpkin, onions, yautias, bacalaitos, cornmeal, fish soup, caldo gallego soup, and preserves. Key flavours include sofrito sauce, jerk, mojo, guava, mango, coconut, and papaya.

Asian American

Asian Americans currently make up 4.2% of the United States population, and can be broken down into several sub groups including Chinese, Japanese, Vietnamese, Korean, Filipino, Thai, Cambodian, Indian, and Malaysian consumers. The largest Asian population segment is Chinese Americans. This group has grown nearly 50% between 1990 and 2000.

Product trends in Asian food include artisan sake, Asian barbecue, spring rolls, edamame, Kobe, panko, prawns, squid, octopus, clams, raw foods, cabbage rolls, gourmet noodles and toppings, furikake rice seasonings, dumplings, dim sum, and hot and sour soup. Popular flavours and ingredients include soy, peanut sauce, hoisin, wasabi, miso and cardamom.

Other Trends

Several other trends are occurring in the Southeast region which may yield opportunities for Canadian exporters. The trends in artisan and specialty cheeses include an increased consumption of Paneer, Chevre, Crottin de Chavignol, Chevrefeuille, Roquefort, Manchego, Perail, Ricotta and Feta. There is an increase in demand for exotic teas with emphasis on Asian varieties including green, chai, herbal, yerba mate, rooibos, oolong, bubble, organic, iced, and decaffeinated tea. Other popular beverages include specialty coffees, ice wine, sparkling wine, flavoured and sparkling water, and sport beverages.

CONSUMER BEHAVIOUR

It is estimated that by 2010, the number of foodservice transactions in the United States will surpass the 2004 total by 3 billion. The nation's 900,000 restaurants are predicted to generate US$475 billion worth of sales in 2005. One of the main factors is the diminishing gap between the price of dining out and cooking at home. There is only a 25% difference in price between purchasing an average meal in a restaurant and buying the ingredients to prepare the same meal at home.

Consumers are also more experimental. Ethnic cuisines are not just sought out by persons from ethnic groups, but by many other Americans as well. Choice of products and foodservice outlets are also directed by health and wellness concerns, personalization and service expectations, and away-from-home and at-home needs.

Health and Wellness

Health and sustainability continue to dominate consumption trends, causing restaurant owners to shift their starchy menus to leaner, protein-based dishes. The demand for vegetables, chicken, meats, fish, antipasto meats, cheese and olive oil continue to increase rapidly as people attempt to improve and maintain healthy, low-carbohydrate diets.

Opportunities

• Introduce healthier alternatives for children’s menus
• Demonstrate food safety on product packaging and in foodoutlets
• Offer help for consumers to make informed choices: portion size, nutritional value, caloric intake, balanced diets, and smart cooking techniques
• Offer fresh, natural, organic and wellness products in retail outlets and restaurants
• Healthy finger foods such as sushi and tapas

Personalization and Service

Personalization and quality foodservice are deciding factors in consumer choices. The demand for individual solutions will increase brand loyalty. Restaurants that offer separate weekday and weekend selections will meet the needs of consumers who need practical solutions on weekdays and who prefer premium quality dining on weekends.

Opportunities

• Offer consumers a way to customize food purchases according to their personal tastes
• Allow consumers to customize menus to meet their nutritional requirements
• Let customers know exactly where to find their favourite products
• Satisfy the consumer demand for restaurant quality in at-home products
• Satisfy the "indulgence factor" of consumers in restaurants and at home

Away-From-Home Dining

Almost half of total American food expenditure in 2003 was spent on food away from home. The main reasons consumers eat away from home are to relax and be sociable, to save the time of cooking, and to celebrate special occasions. Quality family time is another strong motivating factor to dine out.

Spending on weekdays in the away-from-home sector is growing rapidly. With long commutes being the norm for most, many have little time for preparing meals on weekdays. Consumers are also looking for on-the-go meal replacements to eat at the office or in the car. Retailers should try to meet the needs of consumers who have unpredictable meal times.

Opportunities

• Present unique and premium dining on weekends
• Offer away-from-home breakfast products and menus
• Offer restaurant quality products to the non-commercial sector
• Create healthier school lunch box solutions

At-Home Meal Solutions

Restaurant quality is the new trend in at-home meals. Chef or restaurant-branded products imply credibility. Consumers are looking for ingredients and home meal replacements to replicate the experience of dining out. Families are the most time conscious consumers and need ways to alleviate time pressured stress.

Opportunities

• Offer quick-and-easy meals at home
• Prepare easy to carry "car food"
• Offer premium meal ingredients for at-home consumption
• Offer restaurant quality food to take home at specialty retailers/markets

Competitive Environment

Canada has long been the number one exporter of meats, processed fruits and vegetables, grain mill products, bakery goods, sugar and confectionary, and fats and oils to the United States. This has given Canadian food a distinct advantage over international competitors, however, Canadian exporters will face intense competition from small to medium-sized local and national food manufacturers that typically operate on a regional level. There is also the presence of large multinational manufacturers such as Danone and Nestle, which entered the Southeast market through acquiring smaller producers.

American Competition

Major competitors for Canadian exporters in this market are other American states. The Southeast states hold a significant agricultural sector that meets both local and export market needs. North Carolina is the largest producer of tobacco and sweet potatoes in the country. South Carolina’s main products are peaches, tomatoes and strawberries. Alabama is best known as a producer of sweet potatoes, peanuts, livestock and catfish. Peaches, pecans and tobacco production are an important segment of Georgia's economy, while Florida is a major producer of oranges, sugarcane and tomatoes. Top commodities produced in Mississippi include cotton, soybeans and rice.

International Competition

The top countries exporting agri-food and seafood into the United States are Canada, Mexico, Chile, France, Italy and China. The main imports originating from these countries are as follows.

• Mexico: edible vegetables, alcoholic beverages, edible fruits and nuts, beer and tomato products
• Chile: edible fruits and nuts, fresh grapes, shellfish, peaches, and alcoholic beverages
• France: wine, brandy, vodka, sparkling wine, and dairy products including cheese
• Italy: wine, olive oil, prepared cereal and flour, dairy products, and cheese
• China: prepared vegetables and fruit, seed oils, edible fruits and nuts, citrus fruit, and tea

Canadian Position

Canadian companies will find several opportunities in the foodservice sector considering that roughly four cents out of every dollar spent by Southeast consumers on imported food flows back to Canada. The changing demographics of age and ethnicity, depending on the specific area in Southeast, make it wise for exporters to conduct thorough consumer analysis.

• In 2004, Canada exported over $1.65 billion of agriculture and agri-food products to the Southeast United States, an increase of approximately 12% over 2003.
• Florida is the largest Southeast customer for Canadian agri-food exports with a 30% share, followed by Georgia (26%), Tennessee (19%), North Carolina (12%), South Carolina (9%), Alabama (2%) and Mississippi (2%).
• Leading Canadian agri-food exports to the Southeast region in 2004 included beef (15.8%), communion wafers (4.6%), canola (4.4%), whiskies (4.4%), mixes and prepared doughs (3.9%), and potatoes; prepared, preserved (3.4%).
• It is estimated that Canada’s agri-food and seafood exports to the United States will be up 2.9% in 2005 over 2004.

Canada has strong potential to capture a part of the organic, natural and nutraceutical food market that is rapidly growing in the United States. The North American market for organic products is reporting the highest growth worldwide. Retail food and foodservice companies based in the Southeast include Whole Foods Market, Wild Oats, Earth Fare, and United Natural Foods. These companies distribute many Canadian products including frozen foods, seafood, fresh meat, cheese, bacon, and canola oil.

Canadian organic producers planning to enter the Southeast market must receive the USDA National Organic Program accreditation.

Food Distribution

The Southeast region is headquarters for some of the largest food distributors in North America. To arrange distribution in the Southeast, the manufacturer has three options at their disposal: manufacturer direct to the food outlet, manufacturer to merchant wholesaler to food outlet, or manufacturer to distributor to retailer to food outlet.

The majority of exporters (75-80%) choose to ship their product directly to the retailer’s warehouse. The advantage of this channel is expediency over shipping to distributors/wholesalers without the excessive transportation and labour costs of shipping directly to the store.

SYSCO, with sales of US$28 billion, is the largest food distributor in the United States. Other substantial broadline distributors serving the Southeast region include Ahold’s, Inland Seafood, Poseidon Enterprises, Southern Foods, Wholesale Food Service, Thomas & Howard, US Food Service, Merchants Distributors, United Natural Foods, and the Performance Food Group.

EXPORT LOGISTICS

Agriculture and Agri-Food Canada’s partners in Team Canada Inc have compiled information for those interested in exporting to the United States. The information is presented in a comprehensive guide to interested Canadian exporters at exportsource.gc.ca.

Case studies on exporting to the Southeast region are also available. These are under the heading, "Case Studies of Successful Export into the US Southeast and Southwest".

Free and Secure Trade (FAST) is a completely paperless cargo release mechanism put into place to reduce Customs information requirements and has dedicated lanes at major crossings for participants. The program is designed to streamline the commercial processes for clearance by offering expedited clearance to carriers and importers enrolled in Customs Trade Partnership Against Terrorism (C-TPAT) or Canada’s Partner’s in Protection (PIP).

Website
www.cbsa-asfc.gc.ca/import/fast/menu-e.html#information

FAST into Canada
fast-expres@ccra-adrc.gc.ca

FAST into the United States
industry.partnership@customs.treasdhs.gov

OTHER REFERENCE MATERIAL 

PROMOTIONAL EVENTS

Trade shows represent one of the most important ways of entering the lucrative and competitive United States food and beverage market. Export-ready companies can learn about market and product trends, check out their competitors, and meet prospective customers at trade shows. At key shows, the Canadian government organizes official Canadian food pavilions, which exporters are invited to join. The Government also organizes several expositions and other trade promotion events to help introduce Canadian food and beverage exporters to the U.S. market. For more information, contact the Agri-food Trade Service office nearest to you.

Website: ats.agr.ca/region/home-e.htm

2005 National Conference
The Healthcare Food Service Conference
June 12-15
Sheraton New Orleans
New Orleans, LA
Website: www.ashfsa.org

2005 Florida Restaurant Show
September 9-11, 2005
Orange County Convention Center
Orlando, FL
Contact: Ron Mathews
Tel: (203) 840-5556
Fax: (203) 840-9556
Email: rmathews@reedexpo.com
Website: www.fraexpo.com

2006 National Gourmet Food Show
January 20-23
Dallas, Texas
Dallas Market Center--First Floor of the World Trade Center Bldg.
Contact number: 1-800-DAL-MKTS
Email: dmc@dallasmarketcenter.com
Website: www.dallasmarketcenter.com

CANADIAN GOVERNMENT AGENCIES

Agriculture and Agri-Food Canada (AAFC)
International Markets Bureau
930 Carling Ave.
Ottawa, ON K1A OC5
Contact: Brent Wilson, Senior International Market Development Officer
Tel.: (613) 694-2394
Fax: (613) 759-7506
Email: wilsonb@agr.gc.ca
Website: www.agr.gc.ca

Canadian Consulate General
Laura Aune
St. Paul Place, Suite 1700
750 North St. Paul Street
Dallas, TX 75201
Tel.: 214-922-9812 (x3357)
Fax : 214-922-9815
Email: laura.aune@dfait-maeci.gc.ca

Canadian Food Inspection Agency (CFIA)
59 Camelot Dr.
Ottawa, ON K1A 0Y9
Tel.: (613) 225-2342
Fax: (613) 228-6125
Email: cfiamaster@inspection.gc.ca
Website: www.cfia-acia.agr.ca

International Trade Canada (ITCan)
125 Sussex Dr.
Ottawa, ON K1A 0G2
Website: www.itcan-cican.gc.ca

International Business Opportunities Centre (IBOC)
Tel.: (613) 944-6000
Fax: (613) 996-2635
Email: iboc@dfait-maeci.gc.ca
Website: www.iboc.gc.ca

United States Business Development Division (NUB)
Contact: Dan Mrkich, Trade Commissioner
Tel.: (613) 995-0759
Fax: (613) 944-9119
Email: dan.mrkich@dfait-maeci.gc.ca

Export Development Canada (EDC)
151 O'Connor St.
Ottawa, ON K1A 1K3
Tel.: (800) 850-9626 or (613) 598-2500
Fax: (613) 237-2690
Email: export@edc4.edc.ca
Website: www.edc.ca

CANADIAN FOOD INDUSTRY ASSOCIATIONS

Quebec Agri-Food Export Club
200 MacDonald Street, Suite 102
St. Jean-sur-Richelieu, PQ J3B 8J6
Telephone: ( 514) 349-1521
Facsimile: (514) 349-6923
Website: www.profil-cdi.qc.ca

Food Beverage Canada
17311 - 1023rd Avenue, suite 201
Edmonton, AB T5S 1E5
Telephone: (780) 486-9679 or 1-800-493-9767
Facsimile: (780) 486-0985
Website: www.foodbeveragecanada.com

Alliance of Manufacturers and Exporters of Canada
75 International Boulevard, Suite 400
Toronto, ON M9W 6L9
Telephone: (416) 798-8000
Facsimile: (416) 798-8050
Website: www.palantir.ca/the-alliance/default.html

Canadian Food Exporters Association
885 Don Mills Road, Suite 301
Don Mills, ON M3C 1V9
Telephone: (416) 445-3747 or 1-888-227-8848
Facsimile: (416) 510-8044

US Government Agencies

US Department of Agriculture (USDA)
14th Street and Independence Avenue SW
Washington, DC 20250
Tel.: (202) 720-2791
Website: www.usda.gov

Note: All USDA offices are accessible from the main telephone number.

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

US Food and Drug Administration (FDA)
Dallas District Office
4040 North Central Expressway, Suite 300
Dallas, TX 75204-3145
Contact: Maria Velasco, Public Affairs Specialist
Tel.: (214) 253-5205
Fax: (214) 253-5318
Email: mvelasco@ora.fda.gov
Website: www.fda.gov

Embassy of the United States of America
490 Sussex Dr.
Ottawa, ON K1N 1G8
Tel.: (613) 238-5335
Fax: (613) 688-3082
Website: www.usembassycanada.gov

Commercial Service
Tel.: (613) 688-5217
Fax: (613) 238-5999
Email: ottawa.office.box@mail.doc.gov
Website: www.buyusa.gov/canada/en

US FOOD INDUSTRY ASSOCIATIONS

Food Marketing Institute
655 15th Street NW
Washington, DC 20005
Tel.: (202) 452-8444
Fax: (202) 429-4519
Email: fmi@fmi.org
Website: www.fmi.org 

ASMC International
58 Meadowbrook Lane, #100
Unionville, ON L3R 2N9
Tel.: (905) 477-4644
Fax: (905) 477-9580

National Restaurant Association
1200 17th Street NW
Washington, DC 20036
Tel.: (202) 331-5900
Fax: (202) 331-2429
Website: www.restaurant.org

USEFUL INTERNET SITES

Canada's International Trade Centres
(Export counselling and publications for Canadian exporters) 
www.strategis.ic.gc.ca/epic/internet/initc-cci.nsf/en/Home

ExportSource
exportsource.ca

Food and Agricultural Organization of the UN
www.fao.org

Food and Service News
(For coverage on the Southwestern foodservice industry) 
www.restaurantville.com

US International Trade Administration 
www.ita.doc.gov

Southeast Foodservice News
www.sfsn.com

Foreign Affairs Canada (FAC) 
www.fac-aec.gc.ca

InfoExport 
www.infoexport.gc.ca

Stat-USA 
www.stat-usa.gov

US Department of Commerce 
www.commerce.gov

Food Marketing Institute
List of Industry Resources
www.fmi.org/facts_figs/resourcelist.htm