Voluntary Report - public distribution

**Date:** 11/14/2005

**GAIN Report Number:** C15007

C15007

**Caribbean Basin**

**HRI Food Service Sector**

**Get Onboard: North American Cruise Opportunities**

**2005**

**Approved by:**

![](media/image1.wmf)Omar Gonzalez, Agricultural Marketing Specialist

Caribbean Basin ATO

**Prepared by:**

Marilyn Bailey and Kay Logan

**Report Highlights:**

This is an updated report of the Get Onboard: North American Cruise
Opportunities 2001 report.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Miami \[C11\]

\[C1\]

This report was prepared by the Caribbean Basin Agricultural Trade
Office, Miami in conjunction with the Office of Agricultural Affairs,
U.S. Embassy, Ottawa.

In 2004, North American cruise lines spent approximately \$905 million
on food and beverage purchases in the United States. Cruise line food
and beverage purchases are rising as rapidly as the number of cruise
line passengers. In 2004, there were over 8.1 million passenger
embarkations at U.S. ports, a nearly 14 percent increase from 2003.
Market opportunities exist for food and beverage products that remain
fresh for the duration of a cruise, meet the unique packaging and
disposal requirements, and differentiate themselves from current onboard
offerings.

**Black Tie Optional: The Changing Demographics of Cruise Passengers**

Cruises, once enjoyed predominately by people of older generations and
the leisure class, are increasingly becoming mainstream vacation options
for families and couples and singles of all ages. Cruises are valued for
their level of quality and service, their wide range of activities, and
their unique experience. The average cruise passenger satisfaction rate
is at ninety percent or higher, varying slightly for each cruise line.
Despite the increase of cruise passengers in the past five years, the
industry has barely tapped its potential (just 16 percent of the U.S.
population has taken a cruise). The industry anticipates a 10 to 20
percent growth in cruise passengers over the next 3 to 5 years.

During 2004, the North American cruise industry added eight cruise
ships. Over the next two years, an additional 20 to 30 ships will be
added to the cruise fleets to meet the increasing growth of cruise
passengers. Fleet expansion includes larger and more innovative
amenity-filled vessels. Onboard amenities designed to attract new
passengers include the following: Internet cafes, coffee houses,
karaoke, pool parties, spa services, baby sitting, sports and fitness
activities and children's activities, in addition to the more
traditional night clubs, casinos, dancing, and shopping. Since onboard
dining is an integral part of the overall cruise experience, cruise
lines are offering more international flavors, spa cuisines, Michelin-
style cuisines, children's meals, and are catering to dietary and health
preferences. Wine tasting, cooking classes, and other decadent events
such as pastry chef competitions are frequently becoming onboard
features.

**Are Your Products Seaworthy?**

In a competitive industry where a "late delivery" means that the ship
has already left the port, where packaging materials remain onboard
until reaching a port of call, where a chef is not able to run to the
corner store to pick up last minute items or products to replace others
that may have gone bad, dependability, quality and freshness take on an
added meaning.

Considerations for product suitability for the cruise industry include
the following: the supplier's dependability in timing of delivery and
ability to deliver large quantities; quality and consistency of the
product and the manufacturing facility; the product's ability to stay
fresh for the duration of the cruise; price; disposal of product waste
and packaging; products that will differentiate one cruise ship from
another. Additional concerns include ease of training staff to use the
product and suppliers that provide in-house training on product use.

Cruise lines load 95 to100 percent of their food needs at their port of
debarkation. While they cannot wait for late shipments, they require
suppliers that guarantee on-time delivery. Additionally, while the
average cruise is six and a half days long, foods that will remain fresh
for the entire cruise are a must. Food deliveries to the ships while en
route are usually limited to highly perishable products such as fresh
produce and herbs.

Cruise lines must obey strict regulations on disposal of waste products.
Cruise lines are allowed to incinerate certain waste products, while the
remaining waste products must be carried onboard until reaching a
disposal center. Therefore, cruise lines prefer food and beverage
products with limited waste or packaging. For example, pre-cooked bacon
with little grease waste developed for the U.S. Navy is frequently being
used in commercial cruise lines. As the cruise industry blossoms, cruise
ships are searching for ways to differentiate themselves to attract
passengers. Food products can be used to provide this distinction. For
example, cuisine from a well-known Miami restaurant, "Joe's Stone Crabs"
is featured on one cruise line.

Unskilled labor and high turnover rates are major concerns of the cruise
line industry. Products that require little training to prepare and
serve are extremely attractive. For example, a coffee maker that
produces latte, Cuban coffee or cappuccino at the press of a button is
much more attractive than a machine that requires the operator to
measure inputs and learn how to prepare the different products. In-house
training provided by the food/beverage supplier is important. Cruise
lines are often more receptive to products for which training in food
preparation is provided. Examples of training include: portion control
(e.g. teaching the kitchen staff how to resourcefully cut a roast in
order to increase the number of servings) and food safety.

For the most part, North American cruises lines source their food and
beverage products from the United States. Ship chandlers/distributors
consolidate container loads of products for delivery to the ships. For
departure from a non-U.S. port (e.g. Canada and Mexico), containers are
sent in-transit from the U.S. to an international port for en route
pickup. In this manner, products are not considered exports and
therefore only require U.S. documentation.

The Caribbean is the most popular cruise route for North American cruise
lines, accounting for 43 percent of cruise destinations. Other popular
destinations include Alaska, Hawaii, New England, Quebec City, Mexico
and Panama. The Vancouver, British Columbia to Alaska route has also
become very popular in recent years. About half of the cruises departing
the United States leave from Florida ports. Other popular U.S. ports
include New York, Seattle, Los Angeles, and San Francisco.

**Getting Onboard: Entry Strategy**

A U.S. company must be able to clearly demonstrate the competitive
advantage of their product(s). For example, a company must consider the
following: What services distinguish the new supplier and product from
competitor suppliers and products in the market? How much money will the
new product save the cruise line over the product they are currently
using? What packaging waste advantages does the product offer?

U.S. suppliers can introduce their product(s) directly to the **cruise
line purchaser** or to a **ship chandler, distributor or broker**, who
will then in turn make product presentations to the cruise line
purchaser. The **purchasing managers** or the **directors of food and
beverage operations** of cruise lines are the key decision makers when
it comes to buying food and beverage products, although they will often
consult with the chef and hotel operations staff before making a final
decision. Ship chandlers and distributors are companies that purchase,
consolidate, and deliver goods directly to the port of debarkation.
Brokers deliver products to the ship chandler or distributors rather
than directly to the cruise lines.

The term ship chandler refers to a company that provides a number of
services to one or more cruise line, including procuring all supplies,
developing menus and even providing personnel management. If a cruise
line has a ship chandler, the majority of the products will be sourced
through a chandler rather than directly by a cruise line. Distributors
who supply food and beverage products for more than just the cruise line
sector also supply products directly to the cruise lines that do not
work with a chandler. In addition, brokers, who are manufacturers'
representatives, will source products for ship chandlers and
distributors. The cruise line purchasers, ship chandlers, and large
distributors are all genuinely open to, and interested in new products
and encourage product presentations.

Joe Copeland, Vice President of Program and International Sales at Smart
& Final/Henry Lee, a major ship chandler/distributor, suggested the
following procedure for introducing a new product: *Take a cruise. Look
in the kitchen and find out which competitor products the cruise line is
using and how they are using it. Ask questions. Find out the advantages
and disadvantages of the product. Find out what could make the product
more attractive. Then ask your company, "Can you modify your product to
incorporate their needs? What advantages does your product offer? Can
you clearly demonstrate the advantages to them?" If so, prepare your
presentation and begin knocking on the doors of the cruise line
purchasers and ship chandlers.*

**Charting the Course: The Bidding Process**

The majority of the food and beverage products purchased by cruise lines
enter through a somewhat complex bidding process. **Bidders** are **ship
chandlers, distributors and brokers**.

The bidders are typically bidding on a product delivery price to the
port of debarkation, not the price of the item. The price for most
products is negotiated directly between the cruise line purchaser and
the manufacturer, prior to the bidding process. However, sometimes the
cruise line will not specify a specific brand in their bid. In this
case, the price of the item is actually determined in the bid itself.
For example, if a cruise line needs a particular seafood product and a
price has not yet been determined with a seafood distributor, the
seafood distributors and brokers will bid on the price of that item.

The contract year for most dry goods and alcoholic beverages begins in
the fall, which coincides with the beginning of the main cruise season.
Non-dry good bids are offered throughout the year. Most contracts are
for one year, although they may vary from six months to two years.
Produce is bid at product cost plus a service fee since pricing varies
dramatically throughout the year. Cruise lines audit the produce
supplier to check that prices charged reflect actual costs. For example,
a cruise line may bid out their meat contract in January, poultry in
February, produce in March, and seafood in April. The ship chandlers or
bidders usually specialize in one of these product categories, although
some of the larger suppliers such as Sysco and Walton & Post
increasingly offer a wider range of products. Sysco, for example, owns
two of the largest produce suppliers for the cruise industry.

**Expanding the Fleet: The Industry Consolidates**

In addition to the increasing growth in passengers, the cruise line
industry is following the global trend of consolidating. The largest
four cruise lines, Carnival Cruise Lines, Royal Caribbean Cruise Line
Limited, Norwegian Cruise Line and Princess Cruise Line, account for 85
percent of the North American cruise industry food sales. Carnival now
owns Cunard Line Limited, Holland America Line, Costa Crociere Spa,
Costa Cruises, and Windstar. Almost all food-purchasing contracts are
for the entire Carnival group. Some smaller cruise lines are reportedly
discussing grouping together for a greater purchasing power.

Ship chandlers are consolidating as well. Apollo Ship Chandlers, Inc. is
the largest U.S. company that solely supplies the cruise line industry.
Other ship chandlers distribute to additional areas in the food service
sector such as hotels, restaurants and institutions. These distributors,
such as Cheney Brothers Food Service, Smart & Final/Henry Lee, and SYSCO
are rapidly expanding their product lines and distribution centers to
more fully supply the food service industry nationally and
internationally.

**Take Part in a Show: Major Cruise Line Trade Shows and Conferences:**

The Marine Hotel Association Conference and Trade Show is the only show
that concentrates solely on food and food equipment and the cruise line
purchasers of these items. It is held at the end of April every year,
usually in Florida. Approximately every third year the exhibit moves to
the west coast. For more information, visit their web site at
[http://mhaweb.org](http://mhaweb.org/).

The Seatrade Shipping Convention is the grand exhibition for the cruise
line industry. It covers everything from shipbuilding, to on board
dry-cleaning services, to tourist board exhibitors hoping to entice
cruise lines to use their country as a destination. Food companies
usually represent a small percentage of the exhibitors. The convention
is the first week of March in Miami Beach, Florida. For more information
concerning the convention, visit their web site at
[www.cruiseshipping.net](http://www.cruiseshipping.net/)[.]{.underline}
For cruise line news, listings and links, visit Seatrade's web site at
[www.cruise-community.com](http://www.cruise-community.com/)[.]{.underline}
Additionally, porthole is a cruise magazine for both businesses and
consumers. Visit their website at
[www.porthole.com](http://www.porthole.com/).

**Forget Your Semaphone Flags: Contact Chandlers and Purchasing
Managers**

**Chandlers (ship chandlers, distributors and brokers):**

A-ONE-A Produce & Provisions, Inc. - Distributor

1351 NW 22^nd^ Street

Pompano Beach, FL 33069

Tel: (954) 917-7272 Fax: (954) 917-8864

Type of products: Fresh fruits & vegetables, dairy products

Currently supplies: most major cruise lines, directly and through ship
chandlers

Contact: Oscar Sotolongo, Director, Cruise Ship/Export, email:
<oscars@aonea.com>

Apollo Ship Chandlers, Inc. - Ship Chandler

1775 NW 70^th^ Avenue

Miami, FL 33126

Tel: (305) 774-7550 Fax: (305) 702-0349

Type of products: full line food, beverage and other products

Currently supplies: Celebrity, Renaissance, Discovery Cruise Lines, and
others

Contacts: Joes Vila, Purchasing Manager for Food Department, email:
<josev@apolloships.com> Manuel Barcala, Purchasing Manager for Beverage
Department, email:[manolo@apolloships.com]{.underline}

Allstate Food Marketing, Inc. - Food Broker

4494 N. John Young Parkway

Orlando, FL 32804

Tel: (407) 296-2911 Fax: (407) 296-4511

Type of products: full line food, beverage and other products

Currently supplies: a variety of cruise lines through many distributors

Contact: Paul Haire, President, <phaire@afm-fla.com>

Bob Rowe Sales - Food Broker

P.O. Box 640616F, Uleta Branch

Miami, Florida 33164

Tel: (305) 947-9966 Fax: (305) 947-5526

Type of products: full line food, beverages and other products

Currently supplies: a variety of cruise lines through many distributors

Contact: Bob Rowe, CEO, email: <bobrowesales@net.com>

Steve Schultz, President

Carib Basin Food Sales Inc. - Broker

9620-D Boca Gardens Circle North

Boca Raton, FL 33496

Tel: (561) 487-2176 Fax: (561) 482-5362

Type of products: bacon, ham, pepperoni, salami, mortadella, poultry,
and fresh pack tomatoes

Currently supplies: a variety of cruise lines through ship chandlers and
distributors

Contacts: Jim Mancuso, Owner, and Mindy Mancuso, Office Manager, email:
[mancuso@caribbasin.com]{.underline}

Cheney Brothers Food Service - Distributor

One Cheney Way

Riviera Beach, FL 33404

Tel: (561) 845-4700 ext.186 Fax: (561) 845-4717

Type of products: full line of food, beverage and other products

Currently supplies: all major cruise lines

Contact: David Kissel, Manager, Cruise Ship Sales, email:
[dkissel@cheneybrothers.com]{.underline}

Corman Ship Supplies - Ship Chandler

501 NE 183^rd^ Street

Miami, FL 33179

Tel: (305) 651-1150 Fax: (305) 651-3497

Type of product: dairy products

Currently supplies: a variety of cruise lines

Contacts: Jimmy Gomez, General Manager, email:
<jimmygomez@cormanshipsupplies.com>

Raul Geurrero, Director of Sales, email:
[raulgeurrero@cormanshipsupplies.com]{.underline}

Essex Exports, Inc. - Distributor

550 SW. 12^th^ Avenue

Deerfield Beach, FL 33442

\(954\) 698-9333 Fax: (954) 698-6766

Type of products: frozen seafood

Currently supplies: several cruise lines through ship chandlers and
distributors

Contact: Francis Mahfood, Vice President, email: <kmessex@netrox.net>

Excel Food Distribution Co. - Distributor

9151 NW 97^th^ Terrace

Medley, FL 33178

Tel: (305) 884-5112 Fax: (305) 884-5161

Type of products: beef, veal, poultry, seafood

Currently supplies: most major cruise lines

Contact: Jerry DeLaLuz, Cruise Sales, email:
[Jerry_DeLaLuz@cargill.com]{.underline}

FAB Marketing - Alcohol Broker

7154 N. University Drive, Suite 205

Tamarac, FL 33321

Tel: (954) 722-6222 Fax: (954) 726-1406

Type of products: wines, spirits and confectionary

Currently supplies: most major cruise lines through ship chandlers

Contact: Bob Syner, Director, email: <fabwinespirit@aol.com>

Smart & Final/Henry Lee - Distributor

3301 NW 125^th^ St.

Miami, FL 33167

Tel: (305) 685-5851 Fax: (305) 681-7752

Type of products: full line food, beverage and other products

Currently supplies: most major cruise lines

Contact: Joe Copeland, VP of Program and International Sales, email:

SYSCO Food Services of South Florida - Distributor

555 NE 185^th^ Street

Miami, FL 33179

Tel: (305) 770-5474 Fax: (305) 652-6013

Types of products: full line food, beverage and other products

Currently supplies: most major cruise lines

Contact: Harry Roberts, Director of Cruise Sales, email:
<Roberts.Harry.R016@sysco.com>

**Cruiseline Purchasing Managers**

American Classic Voyages

Manfred Seifert, Director, Food Operations

Tel: (305) 774-7550

Carnival Cruise Lines

David Mizer, Staff V.P. Purchasing

Tel: (305) 599-2600

Celebrity Cruises, Inc.

Contact Apollo Ship Chandlers, Inc. (listed above)

Costa Cruises

Contact Carnival Cruise Lines (listed above)

Costa Crociere Spacontact Carnival Cruise Lines (listed above)

Crystal Cruises

Dietmar Wertanzl, Sr. V.P. Hotel Operations

Tel: (310) 785-9300

Cunard Line Limited

Contact Carnival Cruise Lines (listed above)

Delta Queen Steamboat Co. & Coastal Voyages

Homer Ellis, Director of Purchasing or Frank Grabosky, Purchasing
Manager

Tel: (504) 586-0631

Disney Cruise Line

Carl Robie, Purchasing & Logistics Manager

Tel: (407) 566-3592

Holland American Line

Contact Carnival Cruise Lines (listed above)

Lindblad Expeditions

Gary Hull, Purchasing Manager

Tel: (206) 382-9593

Meridien Ship Managers/Sea Escape Cruises

Al Courtney, V.P. Passenger Operations

Tel: (954) 453-3380

Norwegian Cruise Line

George Castillo, Purchasing Manager, Food & Beverage

Tel: (954) 436-4000

Princess Cruises

Jonathan Wilson, Manager, Food Production or Eugene Marino, Director
Purchasing & Logistics

Tel: (661) 753-2230

Radisson Seven Sea Cruises

Ed Degan, Director of Purchasing

Tel: (954) 776-6123

Renaissance Cruises, Inc.

John-Paul Brigneti, Director, Purchasing

Tel: (954) 463-0982

Royal Caribbean Cruises

David Ruiz, Director, Hotel Purchasing

Tel: (305) 539-6000

Royal Caribbean International

Rudy Sodamin, Director, Culinary Development

Tel: (305) 539-6000

Silversea Cruises, Ltd.

Henrik Kjaer, Director, Purchasing

Tel: (954) 522-4477

Windstar Cruises

Contact Carnival Cruise Lines (listed above)

**Websites of Major Cruise Lines:**

Abercrombie & Kent, Ltd. [www.abercrombiekent.com]{.underline}

American Classic Voyages [www.amcv.com]{.underline}

Captain Cook Cruises [www.captaincookcruises.com.au]{.underline}

Carnival Cruises [www.carnival.com]{.underline}

Celebrity Cruises [www.celebrity-cruises.com]{.underline}

Costa Cruises [www.costacruises.com]{.underline}

Cruise West [www.cruisewest.com]{.underline}

Crystal Cruises [www.crystalcruises.com]{.underline}

Cunard Line [www.cunard.com]{.underline}

Delta Queen Steamboat Co.

& Coastal Voyages [www.deltaqueen.com]{.underline}

Discovery Cruise Line [www.discoverycruiseline.com]{.underline}

Disney Cruise Line
[http://disneycruise.disney.go.com/disneycruiseline/index]{.underline}

First European Cruises [www.first-european.com]{.underline}

Great Lakes Cruise Company [www.greatlakescruising.com]{.underline}

Holland America Line [www.hollandamerica.com]{.underline}

Lindblad Expeditions [www.expeditions.com]{.underline}

Maris Freighter Cruises [www.freightercruises.com]{.underline}

Meridian Ship Managers/
[www.meridiancruisesntours.com/specials.shtml]{.underline}

Sea Escape Cruises [www.seaescape.com]{.underline}

Norwegian Cruise Line [www.ncl.com]{.underline}

Orient Line [www.orientlines.com]{.underline}

Peter Deilmann Ocean Cruises[www.deilmann-cruises.com]{.underline}

Princess Cruises [www.princesscruises.com]{.underline}

Radisson Seven Seas Cruises [www.rssc.com]{.underline}

Regal Cruises [www.regalcruises.com]{.underline}

Renaissance Cruises [www.renaissancecruises.com]{.underline}

Royal Caribbean Cruises, Ltd [www.royalcarib.com]{.underline}

Seabourn Cruise Line [www.seabourn.com]{.underline}

Silversea Cruises [www.silverseacruises.com]{.underline}

Star Clippers [www.starclippers.com]{.underline}

Sun Cruises [http://asiatravel.com/suncruises]{.underline}

Swan Hellinic [www.swanhellenic.com]{.underline}

Temptress Adventure Cruises [www.temptresscruises.com]{.underline}

Uniworld [www.uniworldcruises.com]{.underline}

Viking River Cruises [www.vikingrivers.com]{.underline}

Windstar Cruises
[www.windstarcruises.com](http://www.windstarcruises.com/)

**For more information, please contact:**

**Caribbean Basin Agricultural Trade Office**

**Foreign Agricultural Service**

**United States Department of Agriculture**

909 SE 1^st^ Ave., Suite 720

Miami, FL 33131

Phone: (305) 536-5300

Fax: (305) 536-7577

E-mail: <cbato@cbato.net>

Website: [http://www.cbato.fas.usda.gov](http://www.cbato.fas.usda.gov/)

Paul Hoffman, Director

E-mail: <paul@cbato.net>

Omar González, Deputy Director

E-mail: <omar@cbato.net>

Graciela Juelle, Marketing Specialist

E-mail: <grace@cbato.net>

# Office of Agricultural Affairs

U.S. Embassy

Ottawa, Canada

Phone: (613) 688-5267

Fax: (613) 688-3124

E-mail: <agottawa@usda.gov>

Marylyn Bailey, Agricultural Marketing Specialist

E-mail: <marylyn.bailey@usda.gov>