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Frozen sweet corn and mixed vegetables.

The U.S. frozen vegetable industry offers a good example of an export success story. During the past 15 years, U.S. frozen vegetable exports rose 13 percent each year to further strengthen the U.S. position as the world's major supplier. In 1992, U.S. frozen vegetable exports totaled $262 million or nearly 30 percent of global exports excluding intra-EC trade. Frozen corn and mixed vegetables are among the top U.S. performers, having achieved double-digit export sales growth in recent years.

Rising exports of frozen sweet corn and mixed vegetables are largely due to domestic industry strengths coupled with growing global sales opportunities and industry marketing programs in the major overseas markets. In 1992, U.S. exports of frozen sweet corn were $49 million, and are projected to reach $80 million by the late 1990s. With respect to frozen mixed vegetables, U.S. exports are expected to rise from $41 million to about $90 million by the end of this decade.

Frozen corn and mixed vegetables are among the largest frozen vegetable items exported. In 1992, their export value was exceeded only by frozen french fry sales ($137 million), which are tied to the booming fast food industry. |The story on french fry exports was covered in the March 1992 issue of "Agricultural Trade Highlights."~ From 1978 to 1992, frozen corn exports rose from $11 million (21,000 tons) to $49 million (62,000 tons) -- a yearly increase of 11 percent in sales earnings. Although trade data on frozen mixed vegetables is less extensive, a similar success story is emerging. In 1989, U.S. frozen mixed vegetable shipments totaled 26,000 tons valued at $28 million. By 1992, exports had grown to 38,000 tons or $41 million. This translates to a 13 percent growth in earnings each year.

Major Export Markets and the Consumer Trends Driving Sales

In 1992, 62 percent of U.S. frozen corn exports were shipped to Japan. The other major markets were Australia, Hong Kong, the EC, Taiwan, Mexico and Canada. Accounting for only 3 percent of U.S. exports as recently as 1988, shipments to Hong Kong, Taiwan and Mexico combined now account for 15 percent of total sales. U.S. suppliers have successfully captured a commanding share of the trade in major overseas markets. In Japan and Taiwan, for example, 74 and 96 percent of all imports are supplied by the United States. Frozen corn is exported for sale to the food service industry and the retail market in several forms: on the cob, cut, cream-style or blended with other vegetables.

One third of U.S. frozen mixed vegetable exports ended up in Japan's restaurants and grocery carts, and another 29 percent were shipped to the Bahamas and Bermuda. Hong Kong and Canada accounted for another 8 and 7 percent, respectively. The EC, Switzerland, Singapore, Korea, Saudi Arabia and Mexico are other important markets. The Bahamas and Bermuda were responsible for half the sales growth since 1989, where most of the product appeared on tourist menus.

U.S. companies currently export mainly plain (without seasonings or sauces) mixed vegetable combinations and salads customized to local tastes. Green Giant |R~ has done especially well in Japan with its "Hot Salad Mix" as a side dish or entree at home. Adapted from Green Giant's |R~ American Mixtures product line, the Tokyo Economic Journal recently identified this salad as "one of the hottest new frozen products in the Japanese market."

New consumer trends in the major export markets are creating global opportunities for new sales. Rising incomes and changing lifestyles are creating a demand for greater convenience and healthier foods. U.S. frozen vegetable suppliers are well positioned to profit from these trends because their products are both nutritious and fast and easy to prepare.

With more people eating out in the major overseas markets, restaurant sales are booming. Fast food chains like Kentucky Fried Chicken, Church's Fried Chicken and Lotteria offer U.S. cob corn as a side dish to customers in Japan, Australia, Taiwan, Korea and other countries. Compared to fresh vegetables, frozen mixed vegetable packs offer several advantages to restaurants. In countries with high or rapidly-rising labor costs like Japan, Australia, Taiwan or Korea, restaurants are less likely to employ staff to buy, wash and prepare fresh vegetables on a daily basis, if frequent deliveries of frozen vegetables pre-packed in convenient, single-serve portions can be arranged. A little freezer space is all that is required.

The number of supermarkets and convenience stores that have a frozen foods section is steadily rising in all of the Asian Pacific Rim countries. In Taiwan, for example, the number of supermarkets rose from 55 in 1985 to more than 300 in 1991. During the past four years, 7-Eleven added 260 stores for a total of 680 stores in 1992. This growing exposure to modern retail stores fuels a demand among middle and upper-income shoppers for convenience foods and a growing interest in frozen foods.

Longer commuting distances and growing numbers of women in the work force throughout East Asia, Southeast Asia, Europe and many other countries increases the demand for home-cooked meals that are easy and simple to prepare. One indicator of this trend is the growing number of refrigerators and microwaves in homes. Frozen vegetables are precooked and are especially well suited to microwave cooking. This form of cooking eliminates soggy, overcooked vegetables because it requires less water.

Domestic Industry Strengths Provide the Competitive Edge

A fundamental strength of U.S. vegetable packers is geographic diversity and the ability to expand acreage for export markets. Vegetables are grown throughout the country with concentrations in the Western and northern Midwest states. Geographic diversity reduces the possibility of weather-related supply disruptions. A reliable supply is also ensured by the shear magnitude of domestic production. Worldwide production of sweet corn is roughly 1.45 million tons, 72 percent of which is grown in the United States. Since 1980, U.S. sweet corn exports as a percentage of total domestic production has grown from 9 to 21 percent, and there is ample room for further expansion.

Another strength of the U.S. industry lies in its superior production, sorting and packaging technologies. For decades, U.S. land grant universities, farmer cooperatives and private companies have worked jointly to develop new vegetable varieties, cultivation methods, harvesting equipment and processing techniques. These efforts are aimed at improving the color, texture, flavor, nutrition and freezing characteristics of vegetables. A few EC countries and Canada are the only competitors which come close to matching the diversity and quality of U.S. frozen vegetables.

Finally, product innovation is a U.S. industry strength. A superior ability to develop and introduce new products rapidly helps ensure excellent prospects for future exports. While product innovation in the canning industry is mostly limited to the development of new varieties and cut shapes, the U.S. frozen vegetable industry has begun a revolutionary phase of new product creation. With respect to frozen corn, the introduction of a new super sweet variety and "petite" cobs have created new sales opportunities, both at home and abroad. In the case of frozen mixed vegetables, new combinations are introduced each year for use as either side dishes or stir fry and salad entrees.

U.S. packers are now combining frozen mixed vegetables with new flavorings, pastas, puff pastry, sauces and soup mixtures in convenient polybags for sale to U.S. restaurants and supermarkets. FLAV|center dot~R|center dot~PAC |R~, a brand owned by NORPAC Foods, Inc., recently launched its new Grand Classics line of single and mixed vegetable side dishes. These products, like "Creamy Dill Scandinavian Medley" and "Cheddar Broccoli Normandy," were inspired by different international cuisines. Vegetable Stir Fry, another of FLAV|center dot~R|center dot~PAC |R~ product lines, offers tremendous versatility for quick, easily prepared entrees when combined with rice, noodles or tortillas and served vegetarian style or with beef, pork or seafood.

Green Giant |R~, a brand owned by the Pillsbury Company, recently also launched two new frozen product lines for the U.S. market. Create a Stir! and International Mixtures. Both feature high-quality vegetable mixtures and include ready-to-use sauces in a pouch for added convenience. There are six products in the International Mixture line including "French Style Garlic Dijon" and "Japanese Style Teriyaki."

While these new products target the U.S. market, U.S. companies are now devoting more resources to develop and market new products for several overseas markets. For the past few years, U.S. suppliers have organized recipe contests and hired local chefs to develop new products, conducted promotional campaigns, and worked closely with trading companies and local distributors to increase food service and retail sales. This growing attention to overseas markets is expected to further boost U.S. frozen vegetable exports.

Final Comment

With the gradual decline in domestic frozen vegetable sales during the past few years, export markets have played an increasingly important role in driving industry sales growth. The current rush under way to bring new value-added, frozen mixed vegetable lines on the market is impressive. The industry expects these new value-added blends, stir fries, salads and soups will boost sales, increase profits and create jobs for the U.S. vegetable industry.

Ernest Carter, Trade & Marketing Analyst, USDA's Foreign Agricultural Service (FAS).
COPYRIGHT 1993 Frozen Food Digest, Inc.
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Title Annotation:international trade
Publication:Frozen Food Digest
Date:Oct 1, 1993
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