The American Market: What Opportunities for Quebec Exporters?

During the unfolding of the ZENiTH program, the Group Export is taking an in-depth look at several markets. Audrey-Ève Néron, Senior Export Advisor at the Group Export, examines for you the market portraits produced by Altios, partner of the United States cohort, for a foray into this market where many opportunities are to be seized.
 

THE UNITED STATES, A GIANT MARKET

With a population of around 330 million, a median annual income of US $ 68,000 (as opposed to US $ 57,000 in Quebec in 2019) and the highest average spending on agri-food products in the world, reaching US $ 2 970 annually per capita, the United States is a prime export destination. Rightly so, since approximately 71% of Quebec's agri-food exports are destined to the American market, reaching a value of nearly 6 billion CAD in 2019. Not to mention the current exchange rate which also favors exports from Canada to the United States.

The opportunities for Quebec companies are multiplying as a growing share of the American basket is attributable to foreign products. While Canada is the main supplier of the United States for meats, fish, grains, oils and prepared meals (sauces and soups included), an average annual growth rate of 6% is observed since 2007 for imports of agri-food products of all kinds.
 

PRODUCTS ANALYZED BY CONSUMERS

While American consumers demand variety and quality in the foods they consume, Nutrition Facts tables are used to qualify products. The first elements analyzed are the salt / sodium content and calories, followed by the protein content, then the fat content, more specifically saturated fats. Sugar levels, especially added sugar, are another significant information sought after by American consumers.

Our southern neighbors are also attaching increasing importance to product claims. The most popular, the kosher claim, generates, by itself, annual sales of nearly 15 million USD. In addition, the United States is by far the world's largest market for organic products. As a matter of fact, Americans consume, in proportion, 10% more organic products than Canadians.

Moreover, over the past year, several claims have experienced significant growth including GMO claims (+ 25.8%), Antibiotic claims (+ 15.1%), Gluten free (+ 12.6%), Organic claims ( + 9.8%), Dairy claims (+ 5.3%).
 

PLAY YOUR CARDS RIGHT

Entering the US market cannot be improvised overnight. Many steps and several costs are to be expected :

  • samples for brokers, distributor sales representatives and others;
  • prospecting efforts by salespeople;
  • commissions paid to the broker (if applicable);
  • participation in trade shows;
  • listing fees which vary according to the supermarket chain's policy;
  • discounts and promotional offers to the distributor;
  • coupons;
  • marketing program aimed at consumers;
  • presentation and promotion of the product in store;
  • etc.

Obviously, these fees vary widely depending on the type of product, distributor, brand and a number of other factors. Several companies also favor the private label market to avoid the efforts and costs associated with brand awareness and promotion. This avenue is not without interest for exporters who want to carve out a niche in the American market.

Some companies will also choose an approach with local and regional chains. More accessible for exporting SMEs, they make it possible to obtain a first anchor point in the United States and to carry out a test phase, which can constitute an excellent learning opportunity, in addition to having a feedback from the market on the products. Note that a local supply point is often required by these local retailers.

Finally, it should be noted that the online sales of agri-food products is experiencing a strong growth in the United States. Between 2017 and 2024, a 25% increase in revenues for e-commerce food websites in the United States is forecasted. Many exporting companies wish to take advantage of this trend, since online sales make it possible to test the market, to target specific clienteles and to grant simplified access to an interesting pool of consumers.

By getting to know a market, it becomes easier to find your niche and seize the opportunities. The ZENiTH program offered buy the Group Export, in collaboration with the National Bank, FCC and Fonds de solidarité FTQ, is made possible thanks to the financial contribution of the ministère de l'Agriculture, des Pêcheries et de l'Alimentation du Québec and of Agriculture and Agri-Food Canada, under the Canadian Agricultural Partnership.