Retail Foods - Manila - Philippines - 7-8-2019 PDF
Retail Foods - Manila - Philippines - 7-8-2019 PDF
Retail Foods - Manila - Philippines - 7-8-2019 PDF
Date: 7/8/2019
GAIN Report Number: 1913
Philippines
Retail Foods
Approved By:
Ryan Bedford
Prepared By:
Joycelyn Claridades Rubio
Report Highlights:
The Philippine food retail sector continues to grow, providing opportunities for increased exports of
U.S. high-value food and beverages. The food retail industry sold a record $47.4 billion in 2018,
and Post forecasts sales in 2019 at nearly $50 billion. Driven by rising incomes, a growing
population, and a strong preference for American brands, the Philippines imported $1.09 billion of
U.S. consumer-oriented products in 2018. Post expects U.S. exports in this sector to grow further in
2019, reaching an all-time high of $1.2 billion.
Market Fact Sheet: Philippines
With a population of 105.9 million and
decreasing farmlands, the Philippines is
dependent on food imports. In 2018,
Philippine imports of high-value food products
from the United States reached $1.09 billion,
making the United States the largest supplier
for high-value, consumer-oriented food and
beverage products. Post expects this to
continue in 2019, with exports forecast to grow
10 percent to $1.2 billion.
SWOT Analysis
Strength Weakness
The Philippines is a consumption-driven economy Philippine consumers can be highly price sensitive.
with a strong preference for U.S. food, beverage,
and ingredient products.
Opportunity Threat
A steadily growing middle-class means more U.S. exporters face competition from tariff-free
disposable income spent on high-value products. products from countries including New Zealand,
China, and Australia.
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I. Market Summary
Modern food retail markets such as supermarkets, hypermarkets, convenience stores, and warehouse
clubs have become essential, especially to those living in urban areas, as customers demand convenience
and flexibility. Modern markets are expanding in both urban and rural areas, and close to residential and
commercial communities. Modern retailers are usually cleaner, more comfortable, spacious, and well
maintained. Moreover, supermarkets offer a wider range of choices, including both perishable and non-
perishable goods. The traditional wet markets retain an advantage in fresh product, including meat and
seafood, and especially fresh fruits and vegetables.
Over the last five years, warehouse clubs have been expanding throughout the country, with their total
sales reaching a record $82 million in 2018. Represented by S&R Membership Shopping and Landers
Superstore, these two major warehouse clubs both opened new outlets in 2018. Aside from a wide
variety of food available, these stores also offer health and beauty products, home and outdoor items,
household appliances, toys and fashion, and pet supplies. Although these stores are similar in format and
size, Landers Superstore is deviating from the original warehouse club model as it also sells items in
smaller packs, like those found in supermarkets. This makes the store more accessible and affordable to
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customers who require packaged food products and for families living in condominiums with limited
storage. Both stores sell almost 90 percent U.S.-made and branded products.
Online grocery retailing is getting more popular in the Philippines. In 2018, this sector saw not only
grocery retailers starting to launch their own e-commerce, but also third party marketplaces such as
Lazada and Shopee introducing a dedicated platform for online grocery sales. Efficient service, speedy
delivery, and a wide assortment of products will be necessary for the continued growth of online grocery
retailing over the coming years.
Growing demand for gourmet and healthy foods, frozen foodstuff, ready-to-cook food, processed grocery
items, and other food ingredients for home meal replacement are trending among Philippine consumers.
As a country with a strong preference for U.S. brands, Post expects greater opportunities in the
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Philippines for U.S. high-value, consumer-oriented products in the coming years. With the growing
sophistication of the market brought by rising incomes, more U.S. products and brands will be
marketable.
2. Convenience Stores
Convenience stores in the Philippines are usually a chain of stores operated by one parent company.
Exporters who would like to supply to convenience stores are advised to appoint an importer/distributor.
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Importers/distributors who distribute to big retail stores also distribute to convenience stores or gas
marts. However, products for distribution in convenience stores and gas marts are basic necessities to
consumers; otherwise, fast turnover of the product is not guaranteed. Distributors must contact the head
offices of the convenience stores and offer to be a supplier. They may be distributors of
importers/distributors or distributors of large manufacturing firms.
3. Traditional Retail Markets (i.e. Mom and Pop and Wet Markets)
Exporters have difficulty entering the “Mom and Pop" stores since these markets mainly concentrate on
selling small packaged food items and essential household items on low margins. “Mom and Pop” stores
usually source their products from Supermarkets, Hypermarkets, or Warehouse Stores. Distributors of
local food manufacturers also supply to "Mom and Pop" stores.
Similar to the “mom and pop stores,” wet markets are challenging for exporters because most imported
products available in wet markets only include fresh fruits such as apples, table grapes, and oranges that
are sourced from local wholesalers and distributors. Limited varieties of imported canned fruits and
vegetables are occasionally available, as during Christmas and Chinese New Year. Retailers in wet
markets occupy stalls that average to 4-6 square meters. Wet markets are not expected to become a
significant retailer of imported food beyond fresh fruits and vegetables. Traditionally, wet markets are
the main source of fresh produce and meat.
Contact the USDA Foreign Agricultural Service (FAS) Office in Manila for clarification on specific
questions. FAS Manila contact information is provided at the end of this report.
Once U.S. companies have acquired the necessary background information, they may consider attending
or visiting one of the Philippines’ major local trade shows. These shows serve as a springboard into the
market, helping U.S. companies meet and establish new trade contacts and at the same time gauge
Philippine consumer product interests. Although the Philippines has small shows compared with other
Southeast Asian countries, Post strongly suggests that an aspiring supplier consider attending the
following shows:
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Food and Drinks Asia Specialty food, delicatessen, Manila
September 5-8, 2019 confectionery, beverages, beers,
http://www.foodanddrinksasia.com.ph wines & spirits
Asia Food Expo Food processing, packaging and Manila
September 11-14, 2019 handling machinery, equipment and
http://www.afex.com.ph/ technology
U.S. exporters can also contact their respective U.S. State Regional Trade Groups (SRTG), Commodity
Cooperator Group, and state Department of Agriculture to obtain additional support.
State Regional Trade Groups (SRTG) are non-profit trade development organizations that help U.S.
food producers and processors to enter overseas markets. They are funded by USDA/FAS and private
industry. They carry out promotional activities to increase exports of U.S. high-value food and
agricultural products. For more information, contact the SRTG responsible for your state:
https://www.fas.usda.gov/state-regional-trade-groups
C. Market Structure
The Philippines’ food retail
market in 2018 was valued at
$47.4 billion, and is forecast to
reach nearly $50 billion in 2019.
Filipino households spend more
than half of their budget on
essentials including food.
Purchases of food and non-
alcoholic beverages comprised
almost 40 percent of total
household expenditures in 2018.
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Robinsons Supermarket
(Supermarket, Express and 500+ Nationwide www.robinsonssupermarket.com.ph
Convenience stores)
Rustans Supermarket*
(Supermarket, Express and 75 Nationwide https://rustansfresh.com
Neighborhood stores)
S&R Membership Shopping 17 Nationwide http://www.snrshopping.com/
Manila &
Landers Superstore 5 https://www.landers.ph/
Cebu
Phil. Seven Corp (7-Eleven) 2,573 Nationwide www.7-eleven.com.ph
* Note: Now under Robinsons Retail
Three supermarket chains dominate the Philippines’ food retailing, but only account for 20 percent of
total sales, with much of the rest comprising traditional food retailers. Supervalue (SM) is the market
leader, followed by PureGold and Robinsons. Other Supermarket chains include Metro Retail, Super8,
WalterMart, AllDay Supermarket, and the warehouse clubs S&R Membership Shopping and Landers
Superstore.
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III. Competition
The United States is the largest supplier at sixteen percent (16%) market share, followed by Indonesia
(11%), China and New Zealand (9%), Thailand and Singapore (7%), and Australia (5%). Total imports of
consumer-oriented food grew annually by an average of 10-15% over the last five years.
While domestically produced items account for about 80 percent of the total food supply with the balance
being imported, food retailers remain very optimistic concerning the competitiveness of imported
products. Although most imported items cost more than locally produced ones, U.S. products still remain
very popular and have great appeal to Philippine consumers. U.S. products are perceived to have
superior quality compared to imports from other countries.
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Products in the market with good sales potential
Processed products: health food, mainstream grocery, snack foods etc.
Dried and Processed Fruit: cranberries, raisins, prunes, wild berries
Nuts: Almonds, peanuts, pecans, pistachios, walnuts
Fish and Seafood: cod, pollack, salmon, scallops and other fish products
Fresh Fruit and Vegetables: apples, grapefruit, pears, potatoes, table grapes
Meat: special cuts of beef and pork products.
Dairy: gourmet cheese products, yoghurt, ice cream
Drinks: craft beer, spirits, wine
Food Ingredients
FAS Manila publishes other market and commodity reports available through the Global Agricultural
Information Network (GAIN) at https://www.fas.usda.gov/data/search.
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