Food & Beverages
in Argentina
Premium quality + Expertise to meet global market needs
  The steady economic growth of highly-populated emerging markets combined
  with an...
I. Why Invest in Food  Beverages in Argentina?

    • A GLOBAL OPPORTUNITY. A key industry in the world         the bas...
II. Sector Structure and Performance
INDUSTRY STRUCTURE                                                                   ...
    ARCOR: Argentine Multinational with                             INDUSTRY SEGMENTS
    worldwide presenc...
belongs to the group of countries with the highest yields           Cepas Argentinas: consumer knowledge
in cor...
Food  Beverages:
    Unique Opportunities                                                                                 ...
“Wineries of Argentina” (Bodegas de Argentina) that         Public-private cooperation. The sector has achieved an

     The soft-drinks market is dominated by carbonated           Mineral and flavored wat...

Consumers around the globe are increasingly interested      Huge Potential. Argentina has the potential to eme...
Nutrifoods in the Spotlight: Berries

     Phytochemicals in brightly coloured fruits and vegetables      ,000 tons, of wh...

Argentina presents natural and competitive advantages
for the production of organic foods. Currently, both ...
III. Foundation for Success


     Technological assistance. The country has a wide         ...

Attracting the brightest minds. Argentina
presents an abundant flow of university graduates
in di...
IV. Main Challenges

     Industry players and government agencies face key
     challenges to sustain growth and consoli...
The information provided through this brochure does not constitute legal or professional advice whatsoever. ProsperAr (Age...
Argentina at a glance

     Country profile

     Official name                                                          ...
ProsperAr is Argentina’s National Investment Development Agency
                 Our mission is to develop direct foreign ...
To learn more about how investing in
FOOD  BEVERAGES in Argentina
can benefit you, please contact us:
Food & Beverages in Argentina
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Food & Beverages in Argentina


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Did you know that Argentina is the #1 exporter of natural honey, pears, lemon juice and soybean oil?
This publication will help you understand the Food & Beverage industry in Argentina, a leading economic sector in the country due to its available natural resources, experience and qualified human resources.
This document was produced by ProsperAr, Argentina´s Investment Development Agency.

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Food & Beverages in Argentina

  1. 1. INVESTMENT OPPORTUNITIES Food & Beverages in Argentina Premium quality + Expertise to meet global market needs
  2. 2. Highlights STRONG DRIVERS FOR DEMAND The steady economic growth of highly-populated emerging markets combined with an increase in the number of middle- and high-income consumers in these countries is changing the global food and beverage industry. These factors have led to a strong increase in the volume of demand and in the consumption of traditional and high-end value-added products. SOLID FOUNDATION FOR SUCCESS Argentina’s remarkable human and natural resources provide exceptional competitive advantages in foods and beverages, making the country a global food supplier. Committed to high-quality standards, product innovation and aggressive export strategies, the industry is prepared to meet the challenge of an increasingly larger and more sophisticated global demand. DIVERSE FIRM PROFILES AND PROFITABLE OPPORTUNITIES With over US$17 billion in food exports, Argentina’s food beverage sector has attracted some of the largest global players, as well as small entrepreneurial firms that have successfully built the capacity to take advantage of new opportunities. Along with the production of traditional food products, Argentine companies have broken into unique niches serving premium customers. OUTSTANDING SECTOR PERFORMANCE The food beverage sector in Argentina has a reputation for innovation and quality, combining exceptional natural resources with a technologically advanced agro-industry. Attracting significant foreign and local investments, production in the sector grew over 10% a year since 00.
  3. 3. I. Why Invest in Food Beverages in Argentina? • A GLOBAL OPPORTUNITY. A key industry in the world the basis of technological improvements and economies economy, the global food and beverage (FB) market is of scale. The sector has seen important developments valued at approximately US$4 trillion with food sales in particular segments such as organic and functional accounting for 70% of the market. Overall demand is foods, where growth and innovation have resulted in driven mainly by the size of the world population, the the success of entrepreneurial initiatives. In the last degree of urbanization and rising income levels. The five years, the sector has adopted aggressive export spectacular growth of emerging markets will continue strategies, particularly targeted to reach beyond the to contribute to expansion in demand in the future. regional market. Simultaneous to this surge in volume, rising incomes will increase the consumption of higher quality food • INNOVATION. Technology will continue to play a key and food categories. These trends create a fast growing role in the sector’s dynamics. The huge scope for the export market for Argentina’s premium products, which application of biotechnology is expected to make a is reinforced by an attractive regional market and an contribution by providing nutritious foods to the growing expanding domestic demand. world population. Argentina’s natural resources are backed by the significant stock of professionals trained • WORLD LEADER. Argentina’s vast expanse of fertile in disciplines related to the food and beverage industry, arable land, high productivity levels and developed and over 10 firms dedicated to the development of agro-industrial capacity shapes the country’s enormous biotechnology in the area of food ingredients. potential as a global food supplier. With over US$17 billion in exports, Argentina is currently one of the • MAIN CHALLENGES. The current opportunity and world’s major food exporters. The Argentine food the sector’s success in recent years present important beverage sector is characterized by a combination of challenges to the Argentine food and beverage industry. leading firms -national and international- with global Among other actions, the sector and relevant government presence and a number of smaller innovative companies bodies will need to continue supporting the creation and taking advantage of unique niches in the market. internationalization of entrepreneurial firms, leveraging successfully the Argentine brand name and facilitating • COMPETITIVENESS. Being the main recipient of Foreign the application of technology to the sector’s processes Direct Investment (FDI) during the 1990s, the Argentine and products. food-processing sector has become highly competitive on
  4. 4. II. Sector Structure and Performance INDUSTRY STRUCTURE SECTOR PERFORMANCE A key sector. The FB sector is at the core of the Top performance. In 2007, FB exports amounted Argentine manufacturing industry. It is the country’s to US$17.8 billion—32% of total exports and 44% of largest manufacturing sector in both total sales and manufacturing exports. The sector contributes around 5% value-added (33.1% and 25% of the manufacturing to the country’s GDP and exhibited a compound annual sector, respectively). The sector’s performance is of vital growth rate of 10% between 2002 and 2007. The sector importance to the country’s sustainable growth trend accounts for 16% of the total expenditure on innovative through its contribution to the country’s exports, and activities and 8% of the total RD investments performed therefore trade surplus. in the manufacturing industry. Employing 30% of the manufacturing industry’s workforce, its output per Premium quality. Argentina has a significant employee grew 40% in the last five years. comparative and competitive advantage in food and beverages resulting from the combination of abundant Upgrading tradition. The FB sector has a long and varied natural resources and highly qualified tradition in Argentina, and has undergone important human resources, driving the development of world transformations during its history. Continuously class products. Argentine food and beverage products incorporating technological advances, the industry has are present around the globe, advancing the country’s become increasingly competitive. During the 1990s, the reputation for innovation and quality. Committed to high- food-processing industry was the prime destination of FDI quality health and environmental standards, the sector in the country, receiving US$9 billion. During that decade, is fully prepared to meet challenging and increasingly United States firms were the largest investors, accounting sophisticated consumer demands. for almost one-quarter of FDI, followed by Chilean, French, Brazilian, and Mexican firms. Beverage firms were Market. In addition to Argentine foremost firms– like the largest recipients of FDI, accounting for over 40% of Arcor, Aceitera General Deheza (AGD), La Serenísima, the total (mainly beer and non-alcoholic beverages). Refinerías de Maíz and Sancor, leading foreign multinationals have long-standing operations in Dynamism. Currently, the sector shows strong dynamism, Argentina– including Cargill, General Mills, Kraft Foods, recently reaching record production levels. Between 2002 Louis Dreyfus, Nestlé, Quickfood and Unilever. There are and 2007 production increased 63%. also a growing number of smaller firms, focused on high- end products, which are making their mark in a variety Profitable investments. The recent sustained of segments and niches. These entrepreneurial firms are growth drove profitability and attracted local and foreign taking advantage of profitable investment opportunities investments. During 2007, investment announcements arising in the premium products segment. in the sector reached US$774 millions, being the most relevant those by Coca-Cola (US$289 millions) and Cervecería Quilmes (US$109 millions) aimed at strengthening logistics, acquiring production technology and reducing environmental impact. Food Beverages Production Growth Food Beverages Exports Growth (in US$ milllions) (Phisical production index 1997 = 100) 17.8 10 0,000 17,77 1. 10 118.8 1,9 10 1,000 107. 1,07 110 10,88 9, 100 9.1 10,000 7, 90 8.1 80 ,000 00 00 00 00 00 007 00 00 00 00 00 007 Source: National Institute of Statistics and Census (INDEC) Source: National Institute of Statistics and Census (INDEC)
  5. 5. C A SE S TU DY ARCOR: Argentine Multinational with INDUSTRY SEGMENTS worldwide presence in the food beverages industry The food beverage industry processes agriculture, livestock and fishing products into food and drinks for humans or animals, and includes the production of various intermediate products that are not directly food. The industry is traditionally classified into the following five groups: meat, fish, fruit, vegetables, oils and fats; dairy products; grain mill products and prepared animal feeds; other food products; and beverages. The country’s most important segment is production, processing and preservation of meat, fish, fruit, vegetables, oils and fats with sales of US$25 billion and exports of US$15 billion. China, Spain, and the Netherlands are the main export destinations. Employment in this segment accounts for 35% of the sector’s total workforce. Arcor is an extraordinary example of an Argentine firm with international presence and a culture of permanent Vegetable Oils. These products are one of Argentina’s innovation, investment and the creation of competitive main export products. The oils are based on the abundant advantages. Specialized in the production of candies, offer of oilseeds, among which soybean stands out. cookies, chocolates, ice creams and other food products, Argentina is the world leader in vegetable oils: the leading its wide offering reaches every consumer segment and producer and exporter of sunflower oil, first exporter is in permanent expansion, with over 100 new products and third producer of soybean oil and second exporter of developed each year. Founded in 191, Arcor is the peanut oil. The sector uses state-of-the-art technologies, largest candy producer in the world. Arcor’s 1 industrial producing at competitive costs and reaching world- plants (0 in Argentina, in Brazil, in Chile, 1 in Mexico class quality levels. Among other, the main players in and 1 in Peru) produce 1,00 different products. The this segment are AGD, Cargill, Industrias de Maíz and company employs 0,000 people and has total sales of Refinerías de Maíz. Increasing investments over the past US$1.8 billion of which US$10 million were exports to five years led to an important expansion in production and 10 countries. Arcor has developed strategic alliances consolidated these firms’ roles as world players. with partners such as Bimbo (forming Mundo Dulce to produce chocolates and candies in Mexico) and Danone Cereals and mill products. This product category (establishing Bagley Latinoamerica, the biggest cookie is Argentina’s fifth main export, exhibiting the highest producing firm in South America). The permanent search export growth rates between 2002 and 2007 (198%). for new opportunities and markets led Arcor to enter Exports exceeded US$700 million in 2007. Argentina the ice cream market in 00, reinforcing the reputation of their chocolate lines. Additionally they have Sales in FB by Segment (2007) strengthened their production of sauces, canned foods, solid sweets, dessert mixes, jams, jellies and dressings through its acquisition of Benvenuto, a traditional leader in the production of these goods. Traditionally, Arcor has used its well-gained reputation and brands to expand its lines and reach. The company guarantees the quality of its products and complies with the most demanding international norms. Source: National Institute of Statistics and Census (INDEC)
  6. 6. CASE STUDY belongs to the group of countries with the highest yields Cepas Argentinas: consumer knowledge in corn and wheat. Currently 138 firms operate in the and permanent innovation milling industry, and develop high quality products to supply both the internal and export markets. Corn Cepas Argentinas is a business group specialized in the processing produces a wide array of products that are production and distribution of foods and beverages. directly consumed or serve as inputs for other industries, With a turnover of US$10 million and exports of US$ such as oil, flours, yeast, starch, sweeteners and gluten, million, the company has managed to position its brands among many others. Wheat and corn processing has (such as Dr. Lemon, El Noble Repulgue, Fernet Lusera, advanced towards a more diversified product offering, Giacomo, Le Vignoble, Pronto, and Terma) as leaders with higher levels of differentiation and innovation. For in their respective categories. Cepas Argentinas is the instance, fortified flours with minerals and vitamins first exporter of concentrated grape juice in the country resulting from important RD investments have external through Le Vignoble. With Bacardi-Martini as an inter- markets as their main destination national partner, is responsible for the marketing and distribution of its products. The company has also market- Meat, fish, fruits and vegetables. Cattle meat ing and distribution agreements for Cinzano and Campari production is on its highest level and the value of meat products, which include the distribution, marketing and, exports grew at an annual average rate of 35% between in some cases, the production of these international 2003 and 2006. Fish exports increased 14% and fruits and brands. In addition, Cepas Argentinas is in charge of the vegetables expanded 17% during the same period. distribution of Bodegas Bianchi’s wines. The company owns five industrial plants (including plants for the Dairy Products. Sales in the dairy sector currently production of non-alcoholic and alcoholic herbal based exceed US$4 billion. This sector exports over 15% of its beverages, alcoholic beverages, grape concentrated juice, production, with practically no imports. The main export stuffed pasta and fresh and frozen empanadas) and two destinations are Brazil and Algeria. This sector has seen distribution centers. A distinctive aspect is the company a significant recovery recently, managing to surpass devotion to the continuous development of new products its record production levels exhibited in 1998, with and markets. cheese and milk growing at annual rates of 9% and 12%, respectively since 2002. Cepas strongly believes that the driving forces of its business are the value of its brands and its knowledge of Beverages. The beverage segment has exhibited the consumers’ needs. One of the company’s distinguishing most dynamic behavior in terms of production volumes: features is its ability to detect and generate new product its output volume grew 86% between 2002 and 2007. The categories that are supported by significant investments performance of some products, such as mineral waters, in RD. Cepas Argentinas is known for its outstand- flavored waters and sports drinks stand out as particularly ing performance in brand image-building, endorsed by attractive. continuous investment in advertising and promotion. As a result of this business vision, the group ranks among the first fast moving consumer goods companies in Argentina. Exports in FB by Segment (2007) Traditionally, the group’s exports were almost exclusively focused on concentrated grape juice. In 00 Cepas Ar- gentinas decided to focus its efforts on the development of beverage and food brands abroad. This decision has already produced encouraging results. Besides neighbor- ing countries such as Uruguay and Paraguay, which have always been supplied by the company, Cepas Argentinas already exports products to an important number of countries, including Australia, U.S., Canada, Italy, Japan, Source: National Institute of Statistics and Census (INDEC) Netherlands, Spain, U.K., among others. 7
  7. 7. Food Beverages: Unique Opportunities Wine Exports Growth The sustained increase in income levels in Argentina 0 million liters US$ millions 00 0 during recent years fostered the return of premium food 00 00 and beverage brands to center stage in the marketplace. 0 0 in millions liters in US$ millions This domestic development is reinforced by a growing 00 00 0 global segment of middle- and high-income consumers. 10 00 In addition to these general trends, other factors such 100 10 as the rise of female participation in the labor force and 0 100 0 a growing number of health-conscious consumers have 0 0 created profitable investment opportunities. 1997 1998 1999 000 001 00 00 00 00 00 007 Source: National Viticulture Institute (INV) WINES The combination of soils, climates, altitudes and Canada, Brazil and Russia the main destinations (together topographies in Argentina provide excellent agro- representing over half of the exports). The most exported ecological conditions for the elaboration of different variety corresponds to Malbec, the flagship wine for types of grape and wine. Our wines are positioned among Argentina. The five main wine exporters are Esmeralda the best in the world, certified by important international (Catena Zapata), La Agrícola (Zuccardi), Norton, Peñaflor awards. These endorsements have positively driven the (Trapiche and Las Moras) and Trivento. international demand for Argentine wines. Significant investments. Both local and foreign Growing demand and production. With a production investment–mainly from the U.S., Chile, France, Spain of 1,00 million liters in 007, Argentina is the world’s and Italy–have made possible the spectacular expansion fifth major wine-producing country. Close to 80% of this of productive capacity. During the past decade, the rampant production is intended for the domestic market, sector received over US$1 billion in investments from which has become increasingly sophisticated over the beverage companies and investment funds. These last years. Argentina’s domestic market–the seventh investments have resulted in improved quality and largest wine market in the world–offers an important consistency, matching international standards. Cutting- stimulus for local production. There are currently over edge technology similar to the one used by other major 700 wineries operating in the country, 70% of them in producing countries is now available in Argentina, and the province of Mendoza, and the wine industry directly the country boasts an immense offering of high quality employs more than ,000 people. products at competitive prices. The growth of the wine industry has also promoted the development of wine- Global presence. The rise of Argentine wine exports has tourism, attracting an increasing number of tourists and been driven not only by a strong increase in volume, but driving significant investments. by a significant increase in value. In the last 17 years, while the volume exported of wines and must increased Alliances associations. Sector participants are seven-fold, the value of wine exports multiplied by organized in several associations and initiatives. over 0 times. In 007, export volumes increased 0% Beginning in the early 1900s, the Argentine Viticulture ( million hectoliters), with a 0% increase in export Association and The Mendoza Chamber of Winemakers value, reaching US$ millions. Wines account for first addressed the needs of an emerging group of 7% of this amount, with the remainder corresponding producers interested in global exposure. The two to musts and sparkling wines. The industry goal to organizations were independently responsible for reach US$900 million exported by 011 is expected maintaining quality standards, establishing prices and to be met well in advance. Last year, Argentine wines accounting for the needs of member companies. In reached 11 countries, being the U.S., United Kingdom, August 001, the two organizations united to form 8
  8. 8. “Wineries of Argentina” (Bodegas de Argentina) that Public-private cooperation. The sector has achieved an represents grape and fine wine producers accounting for important level of public-private coordination, which 80% of exports in the industry. resulted in the Strategic Plan Viticultural Argentina 00 that sets global action strategies and goals for Companies associated with “Wineries of Argentina” both domestic and external markets. The Argentine account for almost 0% of the local table wine market Viticultural Corporation is the public-private entity and almost 80% of the local fine wine market. In addition gathering the major institutions in the sector, with the to provincial representation, “Wineries of Argentina” mandate to manage and coordinate the implementation supports national efforts to regulate wine production and of the Strategic Plan. The main overseeing public body its market on behalf of the government. This association is the National Viticulture Institute (INV), a government participated in MERCOSUR negotiations with member organization empowered to control all aspects of the countries to develop commercial regulations for the growing and production aspects of the industry. In wine industry in each country which went into effect in addition to drawing-up major rules and regulations, the 199. Today, the organization continues to participate in institute runs a large laboratory for quality control of periodic MERCOSUR meetings. Argentina’s Winegrowing export wine. The INV also elaborates industry statistics. Association -now part of “Wineries of Argentina”- is a collection of exporters whose aim is the promotion of their members’ products in the export market. 9
  9. 9. SOFT DRINKS AND FLAVORED WATERS The soft-drinks market is dominated by carbonated Mineral and flavored waters. Mineral water drinks, followed by flavored waters and mineral waters. consumption has recovered since the slump in 00, and Volumes of carbonated drinks experienced a significant the sector recently accounted for 1% of the soft-drink fall in 00 but have regained momentum since then, market, with sales reaching US$80 million. In 00, with domestic market sales reaching .7 million the average domestic per capita consumption was hectoliters in 00. There are more than 00 new brands liters–similar to other countries in the region but well in the market, although the sector remains dominated by below more developed markets such as France (11 the product ranges of Coca-Cola and Pepsi (subsidiaries liters) or Germany (7 liters). Coca-Cola of Argentina is of Mexico’s Coca-Cola Femsa and U.S.-based PepsiCo). one of the major players in the sector. Recently, there has also been a huge growth in flavored mineral waters, Rapidly growing product segments. Mineral water, which aim to compete with diet sodas. In 00 sales of flavored waters and sports and energy drinks stand flavored waters grew by % and this growth trend is out as attractive and rapidly growing segments. likely to continue. The combination of rising incomes and increasingly health-conscious consumers are driving demand. It is Sports and energy drinks. Growth rates in the sports expected that sustained increases in real incomes should and energy drinks (111% growth in 007) segment is continue to drive sales at the high end of the hot drinks attracting new investments. Specifically, the isotonic market, such as cappuccino, specialty teas and flavored beverage market is also growing fast (7% in 007), “gourmet” yerba mate. with PepsiCo (U.S.) as the leader with its Gatorade brand, accounting for 9% of the market. 10
  10. 10. NUTRIFOODS Consumers around the globe are increasingly interested Huge Potential. Argentina has the potential to emerge in the health benefits of particular foods, and look as a leading world supplier in this attractive market. beyond the basic nutritional benefits for food with The impressive growth rates observed in the local disease preventing and health enhancing properties. FB industry and its propensity towards innovation A more widespread understanding of how diet affects constitutes an important stimulus for the development diseases, rising health-care costs and an aging and attraction of local suppliers. Several domestic population have created a market for functional foods firms are present in the bioactive food ingredients and natural health products. According to market industry and in that of food ingredients based on statistics, the global functional food and nutraceutical bioprocesses. The local market for bio-produced market is growing at a rate that is outpacing that of the food ingredients is estimated at over US$100 million. traditional processed food market. . Some current developments include incorporating functional ingredients into food products, such as probiotic bacterial cultures; prebiotics (e.g. fructo- oligosaccharides) from corn; bioactives concentrated from berries and flax; and novel fibres from pulses. 11
  11. 11. Nutrifoods in the Spotlight: Berries Phytochemicals in brightly coloured fruits and vegetables ,000 tons, of which 90% is exported, mainly to the U.S. are suggested to be the bioactive compounds associated The local manufacturing industry is becoming increasingly with reduced risk of cardiovascular disease and cancer. aware of the properties and potential of berries. More Berry crops such as blueberries and cranberries have and more blueberries and cranberries are processed into high concentrations of these compounds, apart from jams, jellies, drinks (especially teas), concentrates, purees, important vitamins and minerals. U.S. Department juices and syrups, pie fillings, dairy products and sauces. of Agriculture (USDA) studies rank the blueberry as They are canned and frozen in both retail and wholesale the most important contributor of antioxidants, and packs. Fresh, frozen and dried berries are used in bakery highlighted its antibiotics effects. products, nutrition bars, trail and snack mixes, cereals and muesli. Berry extracts are used as coloring and flavoring In the last decade, the Argentine production of berries agents, and dried concentrated extracts are being packed (comprising today ,000 hectares) increased greatly, into capsules for sale as natural health products. peaking at ,000 tons and employing 70,000 people. Its development has been mainly fostered by the rampant Berries Exports (in tons) increase in exports which grew at an average rate of % 00/0 8 during the last decade. Between 00 and 007 exports 00/0 1,8 grew %, reaching almost US$0 millions. Estimations 00/0 ,800 suggest that exports of berries will reach 1,000 tons in 00/07 ,99 008, an increment of 9%. Strawberries occupy the first 007/08 8,800 place with 0,000 tons, followed by the rapidly growing 008/09P 1,000 production of blueberries. Blueberry production reached Source: Argentine Chamber of Blueberries and other Berries Producers (CAPAB) 1
  12. 12. ORGANIC FOODS Argentina presents natural and competitive advantages for the production of organic foods. Currently, both the production and exports (98% of total production) of organic products is increasing strongly. This performance is based mainly on the opportunity of exporting fresh products by taking advantage of the counter-season with respect to the Northern hemisphere added to the confidence on Argentina’s organic product certification acquired via its renowned and consolidated normative and control systems. Last year, the surface allocated to organic cattle increased 17% (reaching million hectares) and the one dedicated to organic food grew by 9% (1,000 hectares). Global presence. Exports of organic products increased significantly and during 007 reached 118 billion tons. Since its beginning, the activity’s main destination has been the E.U., accounting for 7% of total exports. However, the U.S., presently accounting for 1%, has been increasing its demand. Among these exports, processed products stand out: they represented almost 0,000 tons and grew 0% last year. Since 199, Argentina presents a specific regulatory framework for organic vegetable production, which was completed in 199 with the framework for animal organic production. This early regulation allowed Argentina to be among the first in Latin America to receive authorization to export to the E.U. Domestic consumption, although still small, is rapidly increasing, especially that of vegetables which currently represent 0% of domestic consumption. Organic Foods in the Spotlight: Premium Vegetables An avid market for varied and high-quality vegetables regard, the “Argentine food: A Natural Choice” seal in the Northern hemisphere fostered the exports of constitutes an important strategy aimed at strengthening premium products, such as asparagus, cols and endives. its presence in these export markets. Fresh asparagus Argentina is currently experiencing a significant growth reached exports of US$0,000, with endives and cols in its exports, due to its work in cultivation technologies also registering important increases. The main markets and post-sown innovations. Several firms are increasingly for these products are the U.S., Spain, France, Germany, aiming at a product differentiation strategy. In this Switzerland, the Netherlands and neighboring countries. 1
  13. 13. III. Foundation for Success RESEARCH AND DEVELOPMENT Technological assistance. The country has a wide (FONCYT) has supported 120 research projects in array of scientific and technical institutions dedicated the area of food technology between 1996 and 2004, to upgrading and assisting the FB industry. One of the with average grants of US$50,000. Another relevant most renowned national industrial research centers, the public initiative, the Argentine Technological Fund National Institute for Industrial Technology (INTI), has (FONTAR), sponsored the FB industry with more than a whole division dedicated to food production. Within US$13 million during the 2003-2006 period. this division, four different areas are explored: Meat, Diary products, Fruits and Vegetables, and Cereals and Oilseeds. This center conducts valuable research GROWING BIOTECH INTEGRATION applied to the production, processing, packaging and commercialization of existing products as well as Biotechnology applications. More than 10 product development and upgrading. biotechnological firms in the country research and produce food ingredients for the FB industry, with Research capabilities. The National Council for total sales bordering US$60 million. Among the main Scientific and Technical Research (CONICET) has users of these ingredients, five companies stand out. many research institutions devoted to the FB industry. Three of them are domestically-owned–Alimentaria These include the Research and Development Institute San Luis, Arcor and Georgalos–, and the other two– in Food Cryogenic technology (CIDCA), the Center Industrias de Maíz and Refinerías de Maíz–have been for Lactobacillus (CERELA), the Industrial Lactology acquired by global food companies. Two leading firms Institute (INLAIN), and the Research and Development in the dairy sector (SanCor and La Serenísima-Danone) Center in Industrial Fermentations (CINDEFI). have recently launched their probiotic milk lines by incorporating Lactobacillus and Bifidobacterium Funds for science and technology. The National strains that, as probiotic species, favor the intestinal Fund for Scientific and Technological Research microbacterial ecosystem. 1
  14. 14. LOCAL SKILLS AND TALENT Attracting the brightest minds. Argentina presents an abundant flow of university graduates in diverse disciplines related to the food beverage industry. The federal government, through its Ministry of Education, included “Food Engineering” and “Bachelor in Science and Technology of Foods” as priority disciplines. Students in those fields can enjoy specially tailored scholarships aimed at increasing the stock of educated professionals to meet a rising sector demand. Two main associations, the Argentine Association of Food Technologists (AATA) and the Argentine Association of Food Industry Engineers (AAIIA) represent industry professionals. NATURAL RESOURCES Entrepreneurship. The FB sector has seen a Naturally rich. Argentina is one of the most number of entrepreneurial firms penetrate attractive geographically varied and resource rich territories niches. This is due to a large extent to the fact in the world. It is the second largest country in Latin that Argentina offers a pool of young, motivated America and the eighth in the world. Along with its and talented entrepreneurs. More than 65,000 2.8 million square kilometers Argentina is endowed undergraduate and 4,600 graduate students from 103 with extraordinary fertile agriculture lands - almost universities across the country enter the labor market 32 million hectares of arable land- perfectly fitted for each year and the country ranks tenth in the Global agriculture and cattle production, and rich fisheries. Entrepreneurship Monitor (2007) and counts with These resources endow Argentina with a remarkable world-class business schools. potential as a global food supplier. 1
  15. 15. IV. Main Challenges Industry players and government agencies face key challenges to sustain growth and consolidate the sector’s competitiveness. In themselves, these challenges present attractive opportunities for the industry and Argentina. • Support the creation and internalization of entrepreneurial companies: the current scenario presents outstanding opportunities for innovative companies capable of developing differentiated products for the world market. Encouraging the creation of companies with a strong export focus to further develop niche markets is a public sector priority. • Facilitating the application of technology: the industry will benefit greatly from a closer integration between the FB sector and knowledge- intensive activities such as biotechnology. The widespread use of technology across the productive process has the potential to increase efficiency and improve the quality and nutritional properties of food production. • Leverage the Argentine brand name: a closer identification should be achieved between local products and Argentina’s prestige as a global food supplier. Progressively, Argentina’s reputation for quality food and the export market penetration of local products should reinforce each other, taking advantage of mutual synergies. OUR CHALLENGES ARE YOUR OPPORTUNITIES. SOURCES: The trends, data and figures included in this material were elaborated by ProsperAr on the basis of: National Institute of Statistics and Census; Center of Studies for Production (CEP); Argentine Chamber of Blueberries and other Berries Producers (CAPAB); SAGPYA; National Viticulture Institute (INV); Bisang, Gutman, Lavarello, Sztulwark and Diaz (comp.) “Biotecnología y desarrollo. Un modelo para armar”, UNGS-Prometeo, Buenos Aires, 00; National Fund for Sci- entific and Technological Research (FONCYT); Argentine Technological Fund (FONTAR); “World Consumer Goods and Retail Outlook”, The Economist Intelligence Unit; and “Global Food, Beverage and Tobacco. Industry Profile”, Datamonitor, 00. 1
  16. 16. The information provided through this brochure does not constitute legal or professional advice whatsoever. ProsperAr (Agencia Nacional de Desarrollo de Inversiones) reserves the right to revise, amend, alter or delete the information provided herein at any time, but shall not be responsible for or liable in respect of any such revisions, amendments, alterations or deletions. Photos: Photos: Argentinean Tourist Board, Stock Exchange and Pampa Gourmet. 17
  17. 17. Argentina at a glance Country profile Official name República Argentina Capital city Buenos Aires Main cities Córdoba, La Plata, Mar del Plata, Mendoza, Rosario Surface area .7 million square kilometers Population 0. million inhabitants Population growth 1.0% per year Adult literacy rate 98% Life expectancy at birth 7 years GDP per capita (PPP) US$ 1,1 Currency Argentine peso ($) Form of government Federal Presidential Republic Political division autonomous provinces and the Autonomous City of Buenos Aires Time zone GMT-0:00 Official language Spanish Main Economic Indicators 00 00 00 00 007 008 GDP growth rate (annual %) 8.8% 9.0% 9.% 8.% 8.7% 7.0% GDP (PPP) (millions of US$) ,99 7,01 19,8 9,70 ,10 7,80 GDP (millions of US$) 18,078 1,18 181,97 1,88 0,8 8,0 Exports of goods and services (millions of US$) ,9 9,8 7,0 ,7 ,088 8,08 Imports of goods and services (millions of US$) 18,87 7,90 ,99 1,10 , 7,9 Balance of trade of goods and services (millions of US$) 1,1 11,9 1,08 1,7 1,7 1,11 Trade surplus (% of GDP) 1.% 7.8% .% .% .9% .% Current account surplus (% of GDP) .% .1% .9% .% .7% .% Primary fiscal surplus (% of GDP) .% .9% .7% .% .% .1% Gross capital formation (% of GDP, constant prices) 1.% 17.7% 19.8% 1.% .% .0% Gross national savings (% of GDP, current prices) 19.% 0.% .7% .% .% .7%E Foreign direct investment (millions of US$) 1, ,1 , ,7 ,7 7,979 Exchange rate ($/US$) .9 .9 .9 .07 .1 .1 Foreign reserves (millions of US$) 1,119 19, 8,077 ,07 ,17 ,8 Unemployment rate (% of EAP) 17.% 1.% 11.% 10.% 8.% 7.9% Source: ProsperAr based on data provided by the Argentine National Institute of Statistics and Census, the Central Bank’s Market Expectations Survey (REM), the International Monetary Fund and the United Nations Conference on Trade and Development (as of April 0, 009). 18
  18. 18. ProsperAr is Argentina’s National Investment Development Agency Our mission is to develop direct foreign and domestic investment to contribute to Argentina’s competitiveness and sustainable development. ProsperAr’s four main objectives are: Provide services to investors ProsperAr provides investors with personalized professional services throughout the investment process, from initial advisory services to investment facilitation and aftercare. The Agency’s team assesses on investment projects, responds to queries from investors and provides key business information. Leveraging the Agency’s cooperative relationships with different government bodies, ProsperAr’s integral services offer investors a unified one-stop support system. Attract and generate investment ProsperAr works in the promotion, attraction and expansion of both domestic and foreign investment. We identify investment and innovation opportunities in high growth sectors, communicating them to national and overseas investors through international missions, conferences, meetings and publications. We work to build relationships that enable multinational companies to take advantage of local, regional and global opportunities. We also encourage domestic firms to expand and develop their businesses. Boost the Investment Environment ProsperAr works to strengthen Argentina’s investment environment. We interact with local and multinational companies, as well as potential investors, identifying and removing possible obstacles to doing business in Argentina. Through active dialogue with the private sector, and in coordination with other government departments, we advocate for the formulation of policies and programs to optimize the investment and innovation environment. Promote the internationalization of local companies ProsperAr promotes the growth and internationalization of Argentine firms. Fostering local vocation for innovation and entrepreneurship and promoting overall competitiveness are key aspects of the Agency’s strategy. Two programs “Entreprenuer Development” and “Pioneers” are in place to strengthen local companies’ critical capacities in different growth phases. ProsperAr also assists international companies to invest in and/or work with their local counterparts to form global joint ventures. ProsperAr is your strategic partner to invest and prosper in Argentina. What ProsperAr can do for you: Provide timely and relevant information on business sectors and geographical locations in Argentina. Help identify investment and innovation opportunities in strategic sectors. Troubleshoot red tape and obstacles; facilitate the investment process and doing business in Argentina. Assist in building partnerships between foreign investors and local companies. 19
  19. 19. To learn more about how investing in FOOD BEVERAGES in Argentina can benefit you, please contact us: +54 11 4328 9510