Competitiveness is a necessary condition for reaping the benefits of a given EPA.  For many ACP producers, accessing the EU market is an intimidating and unrealistic expectation, despite the duty-free quota-free arrangement secured by the EPA.  Challenges include meeting the high standards for agricultural products and competing with like products on the supermarket shelf.  In this piece, Amanda Hilligas shows how with the right knowledge and an innovative approach, exporters in Southern Africa have successfully penetrated the US market.  TNI hopes the article will help stimulate debate on what meaningful measures ACP producers can take to access the EU market.
 
The US specialty food market is valued at more than US$40 billion per year, and is growing rapidly.  While taking the step to export to the US is a big one for small to medium sized processed food companies from Southern Africa, producers can achieve success by focusing on a niche and capturing a small part of this growing market.
 
Africa is becoming a surprise source for brokers, importers, distributors, and retailers because the continent is presenting itself in new and sophisticated ways. Examples include spicy kosher sea salt, tuna medallions with lemon and balsamic oil splashes, and vanilla paste for baking. Discerning gourmet food consumers can discover unique rooibos jam flavours from South Africa, fiery hot chili sauce from Malawi, and specialty sugars from Mauritius.
 
While there are significant opportunities for trade between Southern Africa and the US in processed foods, there are also challenges. Companies need to understand the market, select the right importer and distributor, and be prepared to spend money to be successful. Southern African companies face challenges in their proximity to the US market, the lack of familiarity and stigma US buyers have about African products, and regulatory obstacles to trade in Southern Africa.
 
Reaz Gunga knows the overwhelming potential of his unique gourmet food products in the US market.  He recently participated in the National Fancy Food Show in New York City in June 2009 as part of a USAID-funded “Taste of Africa Pavilion” that brought together exciting gourmet food producing companies from across the African continent. The Africa Pavilion featured more than 35 companies funded by the West and Southern Africa Trade Hub (SATH) at the premier national gourmet food show in the US.
 
SATH’s Trade Competitiveness Project – managed by CARANA Corporation – sponsored part of the Taste of Africa Pavilion to promote new exports to the US. The Pavilion featured Southern African companies from Swaziland, Zambia, Mauritius, and South Africa. Since July 2007, participating companies have received millions of dollars in new orders, which has resulted in a surge of US-bound containers of African food products.
 
Gunga’s company, Labourdonnais, produces natural fruit pastes and jams from the Indian Ocean island of Mauritius. His booth at the Fancy Food Show in July 2007 generated so much interest that Labourdonnais products were featured in the New York Times and have generated interest from big-name US gourmet food retailers.
 
Gunga has been working closely with the Gaborone, Botswana-based Trade Hub on preparation for the New York Show, and meeting the marketing, packaging and regulatory requirements for the US market.  While the African company has faced challenges related to the recession, Gunga says he remains confident that he can penetrate the US market which will mean new employment and will support his recent costly factory upgrades that meet US regulatory requirements and standards.
 
Gunga is not alone in his successful entry into the US market with the assistance of SATH.  Several other agro-processing companies from Southern Africa fared well at the Fancy Food show with targeted matchmaking and support.
 
Swaziland-based Eswatini Kitchen produces a range of jams, marmalades, chutneys, sauces, and atchars naturally made with no preservatives, added colours or flavours.  New orders make a significant difference to the mainly female local producers and farmers, who rely on the company as a source of income. Eswatini started as an income generating project to provide employment to disadvantaged rural women in Swaziland.  With new orders in hand as a result of the Fancy Food Show, Eswatini claims that they are “changing lives through trade.”
 
Despite the challenges, companies like those profiled above prove that achieving exports into the multi-billion dollar US gourmet food market are possible, with targeted marketing and networking. While making plans to export to the US gourmet food market is a big step,  the Southern Africa Trade Hub is assisting these successful  Southern African companies achieve their goals of appearing on the shelves of high-end American supermarkets.
 
Additional information on the Southern Africa Trade Hub
 
The Southern Africa Trade Hub works in the processed and specialty food sector, fostering market linkages and networking, assisting companies meet the regulatory and labelling requirements for the U.S. market, fostering investment in processed food companies, and facilitating new trade deals for Southern African companies.

The USAID-funded Trade Hub in Gaborone is one of the four Trade Hubs in Africa that implements USAID’s African Global Competitiveness Initiative (AGCI).  The Trade Competitiveness Project at the Hub – which fosters links between African producers and US buyers – works specifically to make African products more competitive in the global marketplace.

One of the core functions of the Hub’s support program for processed food companies is to improve market knowledge, skills and abilities of private sector enterprises to trade. This is driven by US policy objectives of the African Growth and Opportunity Act (AGOA), a tariff preference program allowing the duty-free entry of goods into the US market.  Southern African producers enjoy a cost savings and a competitive edge because of tariff preferences under AGOA.

Amanda Hilligas is Senior Manager for the Africa Region of the CARANA Corporation.

See www.tasteafricanow.com for more information.

by Amanda Hilligas