By Philip Shull, SSGA technical adviser for India

There are many parallels between the U.S. coffee industry and India’s soy food industry. This includes the small-to-nil availability of domestic raw materials for processing.

Because of this, U.S. coffee imports are a great example of how imports of a raw material can make important contributions to a national economy.

The U.S. imports about $5 billion in coffee beans (at zero tariff) each year to supply the U.S. coffee industry. According to a report from the National Coffee Association of the USA, these imports have:

• Created a domestic coffee industry worth $225 billion to the U.S economy
• Provided almost 1.7 million jobs
• Paid $28 billion annually in taxes.

These jobs and taxes are in roasting, processing, distribution, sales, etc.

Even when comparing only the value of imports to the value of retail sales, the economic benefits to the U.S. economy are impressive:

• 2020 U.S. coffee imports – $5.7 billion (https://www.worldstopexports.com/coffee-imports-by-country/)
• 2020 U.S. retail coffee sales – $45 billion (https://www.ibisworld.com/industry-statistics/market-size/the-retail-market-for-coffee-united-states/)

Given the modern and growing soy food manufacturing industry in India and the rising demand for high quality protein, there is no reason why the Indian soy food sector could not make the same kind of contribution to the Indian economy that coffee makes to the U.S. economy.

Combined with the trade info on China that demonstrates how larger soy imports can result in record domestic production, these studies can assist Indian processors in their application for a modest TRQ for specialty soybeans.

Technically Speaking is an SSGA feature that includes news and information from SSGA’s IP technical advisers for North Asia (Alyson Segawa), Southeast Asia (Hoa Huynh), India (Philip Shull) and Europe (Eugene Philhower). Please reach out to them via email. They want to hear from SSGA members!

By Hoa Huynh, SSGA Technical Adviser for Southeast Asia

On Sept. 28, in cooperation with the American Chamber of Commerce Agribusiness Committee and Winrock Building Safe Agricultural Food Enterprise (B-SAFE) Project, USDA Foreign Agriculture Service Manila hosted a webinar on the Philippines trade and customs environment. 

A number of relevant topics were covered by professors of the University of the Philippines College of Law, as well as customs and trade officials from the Philippines Department of Finance and Department of Trade and Industry. In addition to a few representatives of U.S. agricultural cooperators, more than 120 local traders participated in the webinar. Major discussion topics included international trade arrangements, trade processes and documentation, import tariffs, current trade practices, and customs compliance issues and audits. 

A few observations:

• Importance of conformance of the country in meeting international standards: Conformance with international rules and norms becomes all the more important for Philippine companies involved in importing and exporting if they are to be able to better compete with peers in the region in light of RCEP (the Regional Comprehensive Economic Partnership is a free trade agreement among the Asia-Pacific nations) and potentially CPTPP (the Comprehensive and Progressive Agreement for Transpacific Partnership, also known as TPP11).
• Trade planning and customs compliance with a focus on preparing for customs audits: Tips on how to deal with the shift to a post-clearance audit system, which itself, is a positive move towards improved trade facilitation by relying on self-assessments rather than administrative assessments.  
• Watch out for proper record keeping to knowing the proper tariff classifications and way of computing valuations: Compliance is of tantamount importance to both importers and exporters. Preparing and familiarizing for Philippine customs audit system as a way of life in international trade. 
• A shipping agent commented on items that touched on a number of trade barriers in the form of NTMs (non-trade measures) and how some of these create an unequal playing field for exporters versus local players. For example, concerns over the very high penalty for typographical errors.  
• A number of questions and recommendations to customs on the Post-Clearance Audit, especially the possibility of using new technologies like blockchain to promote transparency and accuracy, and the use of trade profiles to eliminate evaluation subjectivity. 
• In addition, there were discussions on the idea of blanket import permits, specific tariff rates, classifications and reference values, a prospect of a U.S.-Philippines free trade agreement.  

In 2020, the Philippines was the ninth-largest market for U.S. agricultural products, which reached $3.2 billion including $59 million of soybeans and $847 million of soybean meal.  

Technically Speaking is an SSGA feature that includes news and information from SSGA’s IP technical advisers for North Asia (Alyson Segawa), Southeast Asia (Hoa Huynh), Europe (Eugene Philhower) and India (Philip Shull). Please reach out to them via email. They want to hear from SSGA members!

By Eugene Philhower, SSGA Technical Adviser for Europe 

As the light at the end of the COVID tunnel appears ahead for many of us, a key question is: Will consumers return to previous food choices, patterns and preferences? Or has there been a fundamental shift with the post–COVID world being an opportunity for a new and more sustainable food system?   

The pandemic has exposed the vulnerabilities and weaker links in the system, but overall, the agro-food sector has been resilient and has responded to the challenge without widespread panic, supply disruptions and significant food shortages. It seems unlikely that a seismic shift has occurred and that pre-pandemic trends and patterns will return. Where we go is really determined by where we have been.    

The European Union’s “Farm to Fork Strategy” describes the collective vision to develop a fair, healthy and environmentally sound food system. EU policy makers see the strategy as a roadmap to improving consumer health and the environment while encouraging entities along the food value chain – from producers to processors and retailers – to make sustainability one of their key business objectives.  

In order to determine the overall level of public awareness and knowledge of the current food system and consumers’ willingness to change, last year, the European Commission’s Director-General for Health and Food Safety sponsored a Eurobarometer survey, which aimed to determine what factors influence consumer food buying and eating habits and to find out what sustainability means. The survey took place in August and September 2020 and was published in December.   

Consumers were asked, “What are the characteristics of sustainable foods?” The top three responses were: nutritious and healthy, little or no pesticides, and affordability.   

When asked, “What factors influence their food purchases?” the top three responses were: taste, food safety and cost.  

Rephrasing the question to, “Will you buy a more sustainably produced food?” the answer seemed to be “Sure, if it tastes good and is cheaper.” 

These results may confound policy makers but do give insights to businesses operating along the value chain.   

Sustainable for many really means using less to get more with a focus on inputs like water and energy and not necessarily the nutritional aspect of the final product. This suggests that a continued effort to educate and inform consumers is critical. Little or no pesticide is closer but still not there, as organic does not equal sustainable but does reflect some level of consumer awareness of production practices.  For businesses, the products need to taste good and be reasonably priced.    

What does this mean for SSGA?  

There are some key assumptions on food trends that are important for SSGA members and our efforts to market and promote U.S. Identity Preserved products in the European Union.  

The demand for plant protein will continue to increase. This reflects the continuing preference for healthy and nutritious food.  With some limits – particularly by country – consumers will want new and innovative foods in their diets. Peeling back the layers of sustainability, back–to–the–farm traceability – a strong component of the U.S. Identity Preserved system – will continue to appeal to food manufacturers and retails.  

The strengths of the U.S. IP system – meaning the quality of our products and the reliability of the marketing infrastructure and system – remain our strongest marketing points. We need to raise awareness all along the value chain, make those business contacts and continue our efforts in the really not so new future.  

The “Special Eurobarometer 505: Making our food fit for the future – Citizens expectations” report has a great deal more information of interest and can be found online here. 

Technically Speaking is an SSGA feature that includes news and information from SSGA’s technical advisers for North Asia (Alyson Segawa), Southeast Asia (Hoa Huynh) and Europe (Eugene Philhower). Please reach out to them via email. They want to hear from SSGA members! 

By Alyson Segawa and Eugene Philhower, SSGA Technical Advisers

The European Union Farm to Fork strategy, which is to be implemented in 2031, aims to make food systems more “fair, healthy, and environmentally-friendly” by attempting to minimize the environmental impact of the food chain in the EU, reduce waste, and improve dietary standards. The EU Biodiversity Strategy for 2030 calls for the “protection of nature and reversing the degradation of ecosystems.” Both of these environmental sustainability measures are key components of the European Green Deal, which aims to make Europe climate-neutral by 2050.

The EU Farm to Fork initiative identifies the role of agricultural production in sustainability and requires the reduction of pesticide use by 50%, reduction of fertilizer use by 20%, and the decrease of antimicrobial use for livestock by 50%. It also decreases the amount of farmland in production by as much as 10% and calls for the transition of up to 25% of farmland into organic production.

A recent USDA Economic Research Service (ERS) analysis indicates that the European Commission’s Farm to Fork and Biodiversity Strategy initiatives to reduce use of chemical inputs may increase food prices in the EU as production costs increase and output is decreased. Restrictions on agricultural inputs in the EU would also harm the EU’s competitiveness in global markets. However, the USDA ERS analysis evaluates three separate possible scenarios of the adaption of Farm to Fork: “EU-only, middle (adoption by some countries, and including explicit EU trade restrictions against non-adopters), and global adoption.”

Sustainability measures incorporated in Farm to Fork could also impact trade with the United States. The premium IP food ingredient industry should continue to monitor Farm to Fork developments as perspective on its implementation is still evolving.

Through Farm to Fork, the EU aspires to be a global model for sustainability and to promote Farm to Fork standards worldwide through its trade policies. While it is too early to determine the extent that Form to Fork measures will be adopted outside the EU, Farm to Fork will likely influence the EU trading landscape and EU regulations will be monitored with regard to their impact on international trade.

Technically Speaking is an SSGA feature that includes news and information from SSGA’s technical advisers for North Asia (Alyson Segawa), Southeast Asia (Hoa Huynh) and Europe (Eugene Philhower). Please reach out to them via email. They want to hear from SSGA members!

By Eugene Philhower, SSGA Technical Adviser, Europe

There is little doubt that the on-going pandemic has challenged the global agro-food sector in many ways. While there are some obvious weaknesses in the global supply chain, the sector generally has proven to be resilient – from farm-level production through transportation and processing, to retailers and consumers. For the most part, food has remained available, and there is little evidence of any longer-term negative impacts on critical foods supplies.

Nevertheless, food activists and policy wonks are rightfully calling for a re-examination of the global food system. As I have written before, the long global supply chains will be questioned, and there will be new attention and preferences for local production.

But what are the other trends and changes that can be expected, and how can and should SSGA respond? Recent surveys and reports coming out of Europe highlight some of the real opportunities for the identity-preserved (IP) products promoted by the SSGA.

In the United States and Western Europe, the consumption of alternative meat/plant protein products continues to grow rapidly. When asked about their motivation, consumers often cite “improving health” as the primary reason, with environment and animal welfare also raised as important considerations.

As we know, food is important part of our culture. What we eat and when and how we consumer food reflect the overall culture that we live in, and these cultural ties are difficult to change. Therefore, it is reasonable to assume that the products need to adapt to the culture and not vice versa. This is reinforced by some recent survey results about plant-based protein products and their acceptance on different national and subnational markets in Europe.

Western Europe is already the largest market for vegetarian and vegan foods in the world. Overall sales are higher in the United States, but the percent of plant protein products are higher in Europe at 12% in UK, 11% in Netherlands and Belgium, about 9% in Germany and less than 4% in France.

In the UK, 23% of new foods products introduced in 2019 were vegan. In the future, 54% of Brits are expected to eat less meat, 61% for health reasons, while 48% think eating less meat will lessen impact on the environment. But half the Brits think plant protein is more expensive and that the ingredient list is too complicated and too long, while 31% think plant protein is “too processed.”  When asked what meat product they miss, 41% responded with the “Sunday roast,” the traditional Sunday afternoon family meal of roast beef and potatoes. Meanwhile, 32% will miss bacon and sausage, more staples of the British diet.

Without a doubt, Germany leads the way in new vegan products. The vegan food market was estimated at almost $2 billion in 2018. A consumer survey by Proveg International reported that two-thirds of the population plan to reduce their meat consumption in the future, and 8% consider themselves vegetarians. The vegetarians consider this a lifestyle choice and not a diet. The motivation is similar to the UK with health and wellness as the prime reason, with the environment and animal welfare close behind. Long considered a meat-loving culture, there is strong demand for meat and dairy substitute.

So what does this mean for SSGA and our members interested in exporting products to Europe?

For one thing, demand for tofu and tempeh are expected to double in the next five years. The perception is that plant protein products are “expensive,” so price remains an important consideration.  Labeling and product claims are important, and the ingredient lists should be shorter and less-processed. Finally, one size does not fit all of the market, so efforts need to be targeted and adjusted for local taste and preferences.

Technically Speaking is an SSGA feature that includes news and information from SSGA’s technical advisers for North Asia, Southeast Asia and Europe.