The Chilean Food and Beverage Industry at the FMI Show
Chicago, May 2007
Chile’s food and beverage industries are unique because the country has been blessed with rich natural resources and a diversity of environmental and climatic conditions. Although Chile is known today as the largest exporter of fresh fruit of the Southern Hemisphere, Chilean agriculture covers a wide range of activities such as the cultivation of annual crops, cattle ranching, dairy farming, vegetable production and organic farming.
Chile has as well a flourishing and competitive food industry that processes and exports food products and beverages as diverse as canned, dehydrated and frozen fruits and vegetables, wine, fruit juices, fruit pulps, olive oil, pork, lamb, poultry, beef, as well as a variety of dairy products. All of these products reach the most demanding markets in America, Europe and Asia.
A solid economic foundation, a high-technology based industry, and a sound environment, play a fundamental role in the development and growth of Chilean agriculture and the food industry.
This Web page provides information on the various sectors, trade associations and industries that will be displaying their products at the FMI Show in Chicago, in May of 2007. We invite you to visit our Pavilion and enjoy the sounds, colors and flavors of Chile.
Chile: a Reliable Partner
During the past decades, Chile has implemented important economic reforms which have laid the foundations for a long term and stable economic growth. As a result, Chile now has an open and stable economy that thrives on trade and investment. Over the past 15 years, annual growth has averaged 5.7%, while per capita income has more than doubled. In 2006, per capita income was valued at $8,875 at the current exchange rate ($ 13,190 on a PPP basis), representing the highest value in Latin America. Inflation has been slashedfrom 27.3 percent in 1990 to 2.6 percent in 2006.
Chile’s long-standing commitment to free trade has crystallized in a growing web of trade agreements, notably with Bolivia, Brunei, Canada, Central America, China, Colombia, Cuba, Ecuador, EFTA, the European Union, MERCOSUR, India, Japan, Mexico, New Zealand, Panama, Peru, Singapore, South Korea, the United States and Venezuela. These agreements provide Chilean companies with free access to markets, encompassing some 3.8 billion consumers -representing a GDP of US $ 40,800 billion dollars- and turning it into a natural gateway to Latin America and the Asia-Pacific region.
The FTA between Chile and the United States, which entered into force in January 2004, set up a free trade area without exceptions in a maximum period of 12 years. 2007 represents the fourth year that the agreement has been in place, and 96% of the bilateral trade already enjoys complete duty free access. The successful implementation of the FTA has spurred a remarkable increase of 150% in bilateral trade during the first three years of the agreement, benefiting both countries.
The integration of Chile into world markets has also been facilitated by a unilateral liberalization of its trade tariffs. In effect, the country today has a flat tariff of 6% without discrimination. However, the effective average trade tariff is just 1.5% as a consequence of the important free trade agreements that are in place.
Trade is the engine of Chilean growth. The growing momentum of the Chilean economy is borne out in its 27th place ranking, out of a total of 125 countries, in the 2006-2007 Global Competitiveness Report published by the World Economic Forum. Chile is not only ranked as the most competitive nation in Latin America, but is also placed ahead of 13 of the 25 countries in the European Union. Likewise, Chile ranks as the world's 11th freest economy according to the 2007 Index of Economic Freedom published by the Heritage Foundation, index which measures and ranks 161 countries (also representing the highest rank amongst the Latin American countries).
Chile: Nature at its Best
The geographical isolation of Chile –together with its unique climatic and environmental conditions— allows the country’s food production areas to be free from most pests and diseases that plague other food producing countries.
Chile, located in the Latin American Southern Cone, can be described as an ecological “island”. While the Atacama desert –about 1,000 miles long— protects the northern part of the country, the Andes mountain range creates an imposing natural barrier to the East, as the cold waters of the Pacific Ocean do to the West and the giant Antarctic ice fields to the South, providing natural isolation against foreign pests and diseases. This isolation provides Chile with major phytosanitary and zoosanitary advantages over other food producers.
Furthermore, most Chilean food is produced under the influence of a Mediterranean climate. Winters are relatively wet and mild, and summers are hot and dry. Also, during the production season, temperature fluctuates widely between day and night. These changes in temperature and humidity between winter and summer –as well as between night and day— limit the spread of plant and animal diseases. These variations also bring about distinctive and natural flavors, aromas and colors that enhance the quality of Chilean products.
Chile: a World Class Food Producer and Exporter
The food industry – which combines fruits, salmon, wines, processed foods, meats and other marine products - is one of the most dynamic sectors of the Chilean economy. It represents around 24% of the Gross Domestic Product (GDP) and it is the second most important exporting sector.
The Chilean food system as such, employs more than one million people, representing around 20% of the country’s economically active population.It is expected that, by the year 2030, the GDP generated by the food sector will account for more than 35% of Chile’s GDP and one out of three workers will have jobs within this sector.
In 2005, total food exports amounted to more than $8 billion dollars, accounting for around 21% of total Chilean exports. Within this total, fresh fruits represent 24% of exports; cultivated salmon 22%; processed foods 15%; other sea products 12%; wine 11%; meats 7% and other food products 9%.
According to the Food and Agriculture Organization of the United Nations (FAO), Chile’s food exports have grown at an average annual rate of approximately 10% over the past 10 years. This ranks Chile as the fastest growing food exporting country. Today, Chile ranks 17th amongst the world’s leading food exporting countries, supplying more than 150 countries around the globe with fresh and processed foods, and beverages. If Chilean exports of food and beverages continue to expand at similar growth rates, by the year 2010, Chile could rank number 9 amongst the world’s food exporting countries.
Thus, it should be hardly surprising to find out that Chile is ranked as:
1st World exporter of table grapes
1st Southern Hemisphere exporter of apples
1st World exporter of plums
1st Southern Hemisphere exporter of peaches and nectarines
1st Southern Hemisphere exporter of pears
2nd World exporter of kiwis
1st Southern Hemisphere exporter of blueberries
3rd World exporter of raspberries
1st World exporter of dehydrated bell peppers
1st Southern Hemisphere exporter of tomato paste
1st World exporter of dehydrated apples
1st Southern Hemisphere exporter of raisins, prunes, nuts and almonds
1st Southern Hemisphere exporter of frozen raspberries and strawberries
2nd Southern Hemisphere exporter of apple and grape juice
2nd Southern Hemisphere exporter of canned peaches
2nd World exporter of salmon
5th World exporter of wine