The American Food Reality

JAN-FEB 2018|BY ALEXANDRA LOLI

The U.S. food industry is growing at a stable rate. Driven by increasing multinationality and changing eating and lifestyle habits, the market’s momentum is characterized by striking product diversity and new product flavors, trends that work in favor of Greek F&B companies. Business Partners’ Thought Leaders discuss key factors such as product adaptation, positioning, regulatory compliance, product data and cybersecurity, and the support available to Greek export businesses looking to successfully enter or increase their presence in the U.S. market.

The American Food Market in Translation

JOHN MOYSOGLOU, INTERNATIONAL TRADE / TRADEUSA LEAD, AMERICAN-HELLENIC CHAMBER OF COMMERCE

Specialty food sales at retail grew to $99.7 billion in 2016, a 15.4% jump since 2014, driven by product innovations and wider availability of specialty foods through mass-market outlets. Sales through foodservice outlets grew at a faster clip—13.7% to hit $27.7 billion—as U.S. consumers continue to make more away-from-home meal purchases.

Mainstream retailers such as Kroger, Costco, and Target account for more than four-fifths of sales as these chains have expanded their presence in specialty foods significantly. But sales of specialty foods appear promising across channels: Growth among mainstream, natural food, and specialty food stores has been relatively equal from 2014 to 2016, at about 15%, with specialty food stores enjoying a slight edge.

Large manufacturers will decentralize their production to meet consumers’ fragmented tastes and preferences. This development will allow small as well as new companies to leverage their specialization in food processing to gain market shares through producing artisanal products that offer higher nutritional value and incorporate traditional preparation technics.

Putting the growth of the specialty food industry under the scope of the total food and beverage market and comparing it to the Greek food and beverage products, we could safely conclude that there is a positive momentum. This momentum is mainly expressed by 71% of the American consumers—whose evolving behavior leans towards pursuing balanced health—having the Mediterranean Diet among their top preferences. The modern American consumer’s profile is further composed by a blend of generational characteristics deriving from the combined cohorts’ attributes and the evolving decision drivers they are keen to aspire; where food experience and safety complement health and wellness, affecting their food purchase decisions and eating habits.

TradeUSA, the International Trade Department of the American-Hellenic Chamber of Commerce in Greece, has developed a well calibrated supporting mechanism to facilitate trade and exports towards the United States market while also supporting Greek companies in their quest to successfully position their products in that market. TradeUSA’s expertise spans from FDA regulatory compliance and market and consumer trends to customized trade delegations and specialized educational seminars.

Over the next three years, TradeUSA’s strategy will be further focused on making Greek companies “market ready” to penetrate the U.S. market. Its comprehensive strategy includes an educational platform, market-oriented specialized sessions, and trade and networking events, all aiming to better equip Greek companies to prepare a business strategy that fits their products portfolio, allowing them to reach new markets in the U.S. Food Industry.

US Food Disruption = Greek Opportunity

PHIL KAFARAKIS, PRESIDENT, SPECIALTY FOOD ASSOCIATION

It’s not surprising to say that Americans are huge consumers—of everything! Right now, consumers are looking at food and food-sourcing differently than they have traditionally. They’re experimenting more and becoming more educated about nutrition and international flavors. Many have embraced world cuisines that focus on healthier living and fresher ingredients. The Mediterranean diet in particular has become a big deal in the U.S. —with Greek cuisine leading the way.

In recent years, the American consumer has embraced Greek cuisine as part of a healthy diet. It’s not unusual to find Greek restaurants in most areas of the country, and dishes such as moussaka, tzatziki, and souvlaki (or slightly altered versions of these dishes) appear on menus in many American restaurants. Home cooks regularly use feta, filo pastry, and many of the spices and nuts that you’d find in the typical Greek kitchen, as well as Greek yogurt and olive oil. Americans are curious and willing to try new things, and that means the market is wide open to Greek foods.

Consumers are changing the U.S. marketplace and expanding not just what they buy, but how and where they shop. It’s not just the incredible growth in online distribution; many retail outlets that were never regarded as food channels now offer food in their inventory, so there are more outlets to sell to—just one of the reasons that it’s easier now for what we call specialty foods to become very successful.

Today’s American consumers have a clear preference for specialty, local, creative, healthier, and non-mass-produced products. This is a profound change from the highly processed foods that we’re known for and that got our Big Food companies so big in the first place.

Many very large companies are stumbling and losing market share these days. They spent the last decade focusing on building their brands in ways that appealed to their shareholders and retailers. What they missed were all the signs of the burgeoning consumer interest in food innovation and healthier diets. They missed the mark with consumers and are now paying the price for that.

Taking advantage of the big guys’ inattention, small emerging brands—innovative, fleet of foot, and totally focused on what consumers want—have crept onto the scene. They began making big inroads through small steps, impacting the market that big brands used to dominate through sheer scale and hefty advertising. Specialty foods in the American market make up $127 billion of the $890 billion total food market—that’s more than 14%—and looks to grow to 20% in relatively short order. Many successful suppliers of specialty foods are importing products into the U.S. from countries such as Greece.

The pressure on American Big Food is only going to continue. The specialty food movement— directly addressing consumers’ deep desire to eat healthily and know where the product is coming from, while simultaneously being engaged in the experience and even connecting with a social cause—is already turning the food business upside down.

This is a great time to come into the U.S. marketplace, especially if your products are aligned with consumers’ desire for innovation, healthier choices, intense flavors, and foods with a real story behind them. That sounds like Greek cuisine, doesn’t it?

How to Achieve Cyber Resilience in Seven Steps

COSTAS VOULGARIS, FINANCIAL LINES AND CASUALTY MANAGER, AIG GREECE

Cyber security is one of the most prominent risks companies are facing today. In Greece the need for cyber insurance is growing quickly as companies look for ways to protect their assets, employees and customers from this specific risk category. This is led by increasing numbers of cyber-attacks, the high costs associated with them, and the provisions of the new General Data Protection Regulation (GDPR), which will come into force in May 2018. It is important to note that the U.S. already has a strong regulatory framework around personal data in place—similar to what the EU wants to achieve with GDPR—so companies looking to do business in the U.S. should be aware that there is zero tolerance for mistakes.

So what can Greek companies do to prepare themselves to face a cyber-attack? Only proactive prevention and quick reaction can make a company cyber-resilient. Here are the seven steps that companies should follow:

Step 1: System hygiene – Establish a proactive and systematic process for managing standard systems hygiene. This is the first and the most critical step to protecting your organization from infiltration by hackers, as 80% of attacks can be prevented at this stage.

Step 2: Develop a plan – Create a cross-functional team of senior management executives to plan for cyber security events and different types of attacks.

Step 3: Map out risk profile – Study cyber patterns and attack modes to develop a tailored approach to protecting company assets. If needed, ask for the help of a cyber-security expert in order to determine the types of attacks the company is most vulnerable to.

Step 4: Assess and measure – Focus on rough figures, not precise estimates, and avoid analysis paralysis. No one can know for certain, ahead of an event, how much damage a successful data breach will cause in terms of lost revenue, reputational harm or stock price declines. All that is needed in order to put together a risk mitigation strategy is a rough estimate.

Step 5: Mitigate Risk – Invest in risk mitigation measures to protect those assets most at risk.

Step 6: Cyber Insurance – Obtain cyber insurance to provide contingent capital and specialized assistance in the event of an attack. It is important to realize that cyber-attacks cannot be fully mitigated. Cyber insurance can provide critical capital and expert assistance when a cyber-security event occurs and can cover risks such as expenses, damages, regulatory fines, business interruption, reputation and extortion. Such multilayer support is even more critical for companies operating abroad.

Step 7 Get started – A rough plan is okay. Becoming resilient to cyber risk starts with a single step.

These steps can help companies increase their cyber resilience and better position themselves to quickly recover from a successful cyber-attack. AIG Greece is an insurance company with technical expertise and know-how to cover online risks. CyberEdge is not just an insurance product; it is a sophisticated Risk Management solution that combines traditional insurance compensation, new services that can help modern companies navigate the cyber crisis, and a 24/7 global support hotline. With proven know-how in both risk-taking and claims handling, AIG is fully committed to offering innovative insurance solutions tailored to the needs of Greek businesses.

Navigating U.S. FDA Regulations: A Guide for Greek Exporters

DAVID LENNARZ, VICE PRESIDENT AND CO-FOUNDER, REGISTRAR CORP

The United States food and beverage industry holds lucrative potential for Greek exporters. According to Export.gov, the U.S. is one of the leading markets for Greek agricultural products, with exports valuing $412.4 million in 2016. To secure a foothold in this promising market, exporters should first take the following steps to ensure compliance with the extensive regulations of the U.S. Food and Drug Administration (FDA).

Register with FDA

Each facility that manufactures, processes, packs, or stores food for consumption in the U.S. is required to register with the FDA. Registrations must be renewed during the fourth quarter of each even-numbered year (i.e. 2016, 2018, 2020). Since they are located outside of the United States, Greek facilities are also required to designate a U.S. agent who must reside in the U.S. and be available for 24-hour contact.

Label Your Products Properly

Labeling mistakes are one of the leading causes of detention. An exporting firm should ensure their products’ labeling is compliant before attempting to ship to the United States. The FDA’s comprehensive labeling requirements address aspects such as the design of the nutrition facts label, which nutrients must be listed, and how ingredients must be listed.

By January 1, 2020, most food manufacturers will need to comply with updated labeling rules that were introduced in 2016. Meeting these requirements may be time-consuming. As such, we urge exporters to work toward compliance now.

Comply with Food Safety Requirements

Export.gov states that processed fruits and vegetables and seafood were among the top Greek exports to the U.S. in 2016. Facilities that produce certain canned fruits and vegetables packaged in hermetically sealed containers are required to obtain a Food Canning Establishment (FCE) registration in addition to their FDA food facility registration and must file scheduled process information for every container type and size of each of these products they produce.

FDA also requires seafood and juice manufacturers to develop and implement Hazard Analysis and Critical Control Points (HACCP) Plans consisting of an analysis of food safety hazards that are reasonably likely to occur and the critical control points for those hazards.

Most other facilities are covered under the Food Safety Modernization Act (FSMA) Preventive Controls Rules, which require development and implementation of a written Food Safety Plan. These plans differ from HACCP and are based upon Hazard Analysis and Risk-based Preventive Control (HARPC) standards.

Among other requirements, Food Safety Plans should detail an analysis of known or reasonably foreseeable food safety hazards, as well as preventive controls for these hazards.

Submit Prior Notice

When products are properly labeled and ready to ship, the exporter must submit prior notice to the FDA before the shipment arrives in the United States. The submission timeline for prior notice depends upon the shipment’s method of transportation.

FDA regulations can be complicated. Before shipping to the U.S., an exporter should ensure they familiarize themselves with the above requirements to avoid preventable penalties from non-compliance.

Registrar Corp, an FDA consulting firm, partners with the American-Hellenic Chamber of Commerce (AmCham) in Greece to offer exporters local assistance with FDA food and beverage regulations. Contact greece@registrarcorp.com or (+30) 210-699-3559 ext. 25 for assistance.

Yoleni’s Journey from the Greek to the U.S. Food Market and its Export Advice for Small Greek Producers

NIKOLAOS PIPAS, CEO, YOLENI’S

Yoleni’s, the leading Greek delicatessen, is an e-commerce retailer promoting exclusively Greek fine food products in the European and U.S. markets.

The mission of the founding team is to promote quality Greek artisanal products by showcasing their producers, places of origin and history, both in Greece and abroad. Today, Yoleni’s brings more than 1,200 locally crafted products from 180 distinguished countryside producers, supporting more than 1,400 families in the Greek countryside. Its first flagship store is located in the center of Athens at Kolonaki. This shop offers visitors the opportunity to explore authentic Greek gastronomy through numerous dine in and shopping experiences. In 2015, Yoleni’s was awarded the Hellenic Entrepreneurship Award, which provided significant resources to help the company grow. In early 2018, the first Yoleni’s store in the U.S. will be launched in Providence, Rhode Island.

Following in Yoleni’s footsteps, Greek producers have to realize that extroversion is the only way to ensure their future. Their potential success in the international market is bound to help defeat the crisis and bolster

Greek rural economy.

Commitment to quality and sustainability is the only way to succeed in the international markets. Certified products in modern and elegant packaging with a touch of the past, made using traditional methods of production and natural ingredients of recognized nutritional value are the keys to increasing demand. By all means, we must demonstrate that Greek food and beverage products are staples of the internationally acclaimed Mediterranean diet and that they are a key part of Greek cultural heritage.

Greek food producers need to also take advantage of the aggressively marketed “Greek Mediterranean” origin, which is hugely popular in the United States; consider the fact that the owner of the Chobani yogurt corporation—who is a Kurd, not a Greek—marketed his Greek-style yogurt as staple of wellness! This success story brought the Greek brand out of years of misery, away from the outdated tzatziki, moussaka and tsolias symbols. As we speak, the market momentum created in the U.S. market is in favor of quality Greek products, not least due to the trend of healthier eating habits. Now is the time to seize the opportunity which, when accompanied by quality, can make another success story.

Recently, we even saw Morgan Stanley acquire Korres cosmetics, also to create a huge hospitality and wellness complex in Manhattan, NYC with a taste of Greece.

The food and beverage industry is by far the largest retail category worldwide and the only one not yet disrupted by digital. The upcoming shift towards online channels of distribution creates unique opportunities for Greek food brands. The rapid increase—about 25% y/y—of online sales of grocery products supports the viability of e-food operations. The recent acquisition of Whole Foods by Amazon undoubtedly shows the way forward.

In conclusion, producers need to ensure that their products carry the superior characteristics of certified quality and origin (PDO, PGI, TSG), that they are produced using traditional methods, and that they are competitively marketed in a way that will allow them to be placed on shelves internationally, highlighting Greece’s gastronomic wealth.

The Key Factors for Successful Exports to the U.S. Market

DIMITRIOS KARAVASILIS, FOUNDER AND MANAGING DIRECTOR, DK CONSULTANTS

Consumer culture is undoubtedly influenced by the expats and immigrants who live in a country. This means that among the products consumed in a country, there are foreign products as well that are not produced in that country but which have to be imported from elsewhere. In the American food market, there is a steady growing trend towards the consumption of Mediterranean products and more specifically Greek products, which are favored due to their health benefits despite the fact that such products are produced by other countries as well.

Leaving aside the nutritional benefits, another important factor to the success of food products exported to the U.S. is that they provide new flavor suggestions and the American market is willing to try them out.

On the other hand, exporting a product to foreign markets without making any adaptations—in terms of size, packaging, promoted usage, etc.—to ensure it complies not only with regulatory requirements but also with cultural and consumer preferences is the main reason why companies with great products fail to export successfully.

An example of a successfully exported product is Greek feta, which has gained a large share of the consumers in the U.S. market. In Greece, feta is consumed on a daily basis and accompanies almost every main dish and salad, and it is the key ingredient in most savory Greek pies as well. In the U.S., however, feta is consumed only in salads, usually in the form of small cubes. Therefore, exporters of feta cheese from Greece have to observe the trend and offer packaged and pre-cut cubes of feta cheese ready to be added to salads for consumption, and this serving suggestion should also be depicted on the packaging, so that consumers choose the product.

Another Greek product that is widely accepted in the US market is olives. As in the case of feta, so too olives need to be marketed according to the habits and preferences of the target market. In the U.S. market, olives are consumed either sliced or stuffed and are primarily eaten in dishes such as pizza or used in drinks such as the martini. Consequently, potential exporters of olives must adapt the preparation, packaging and presentation of their product to those habits.

Many companies around the world aspire to export their products—and in particular food products—to foreign markets, but they often ignore the key factors that determine whether their products are accepted there. Research into the habits as well as into the general lifestyle of the target audience should be a primary objective as it provides crucial information for developing a successful product adaptation strategy. To sum up, one of the key factors for successful exports is listening and observing!

GS1: Innovation Through Implementation of Global Standards

DIMITRIOS CHRISTOU, DIRECTOR, MARKET DEVELOPMENT, GS1 ASSOCIATION GREECE

At GS1, our passion for delivering the best results, our integrity, our collaborative team spirit, and our encouragement of inspirational leadership are at the center of our global organization as we work together to transform the way we work and live.

We are a community that exists for the greater good of the industries and people we serve. We are a trusted advisor for our members and other stakeholders. We are neutral and not-for-profit. We are user-driven and governed. We are global and local. We are inclusive and collaborative.

Global standards

While we are first and foremost known as a global standards body providing a system of unique numbers to identify goods, services, assets and locations, we must also become known for helping our members use identification and standards to rapidly solve business challenges.

Global services

The world is an interconnected network of societies, and especially the digital world, where there are no borders. More and more often, companies are structured to operate in this same borderless fashion. An internal project called “The Big Picture” is now underway to adapt GS1’s portfolio to reflect this new reality and make the necessary changes to the organizational culture. GS1 will be transformed to better respond to today’s global business landscape.

Building the largest trusted source of data

The GS1 Cloud is GS1’s first portfolio adaptation. We have seen an increasing need for e-tailers, retailers and brands to provide transparent and accurate product information to consumers who demand a seamless e-commerce shopping experience. However, trusted data and a more efficient B2C data exchange infrastructure are needed to make this possible. The GS1 Cloud intends to fix this problem. Our single, open GS1 Cloud platform aspires to be the largest trusted source of product information in the world. Thanks to this transformative initiative, consumers will soon be able to get the right product data, resulting in increased satisfaction and trust. At the same time, companies will gain cost savings and operational efficiency by simplifying how product information is sourced. In the words of Miguel Lopera, our President and CEO: “The GS1 Cloud is a fundamental element of our future GS1 vision. It is a single, global platform for services that will be provided by GS1 MOs. The GS1 Cloud will be the largest source of trusted product information in the world—a database for hundreds of millions of GTINs and consumer-facing product information. Simply stated, it will be the ‘Google Maps’ for product data.”

Multi-sector contributions

The contributions that GS1 teams have in the world every day on every continent are too many to list. In retail and in transport and logistics, GS1’s complete range of services and solutions are powering efforts to ensure visibility, traceability, safety and sustainability, both in the physical world and on the internet. In healthcare, GS1 is making excellent progress in deploying its standards in hospitals. In addition, GS1 is working with new sectors such as technical industries and humanitarian logistics.

GS1 is a neutral, not-for-profit organization that develops and maintains the most widely used global standards for efficient business communication. Find out more at www.gs1.org
& www.gs1greece.org

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