Required Report - public distribution

**Date:** 2005/3/1

**GAIN Report Number:** TW5004

T

5004

**Taiwan**

**Food Processing Ingredients Sector**

**Food Processing Sector**

**2005**

**Approved by:**

![](media/image1.wmf)Hoa Van Huynh, Director, ATO Taipei

American Institute in Taiwan

**Prepared by:**

Amy Hsueh Chang-Chien, Marketing Specialist

**Report Highlights:**

The total production value of Taiwan's food and beverage industry in
2004 amounted to NT\$440 billion (US\$14 billion), a 3.5 percent
increase from the previous year. Taiwan's WTO accession in 2002 and
resulting import tariff cuts provided imported goods, including food
ingredients, with new market opportunities.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Taipei ATO \[TW2\]

\[TW\]

**Taiwan Food Processing Sector 2005**

**Table of Content**

I. MARKET
SUMMARY.....................................................................................
Page 3 of 13

> A. Economic
> Situation...................................................................
> Page 3 of 13
>
> B. Taiwan Food Processing Industry
> ....................................... Page 3 OF 13

II\. ROAD MAP FOR MARKET ENTRY

A.  Entry
    Strategy..........................................................................
    Page 6 of 13

B.  Market Structure
    .....................................................................
    Page 6 of 13

C.  Company
    Profiles.....................................................................
    Page 7 of 13

> D. Sector Trends ..............................................
> ............................ Page 8 of 13

III\. COMPETITION
................................................................................................
Page 9 of 13

IV\. BEST PRODUCT PROSPECTS
.....................................................................
Page 11 of 13

V. POST CONTACT AND FURTHER INFORMATION
......................................Page 13 of 13

I. MARKET SUMMARY

A. Economic Situation

Taiwan has a dynamic, capitalist economy that continues to expand
annually. Taiwan's foreign exchange reserves are the world's second
largest, exceeded only by the PRC. In 2003, Taiwan's economy was hit
hard by the outbreak of Severe Acute Respiratory Syndrome (SARS).
However, the economy began turning around in the last quarter of 2003.
Taiwan economy rebounded to achieve a solid growth in 2004 with a GDP
growth of 5.9%, the highest since 1998. However, the cabinet-level
Council for Economic Planning and Development's forecast for 2005 annual
GDP growth was between 4.1% - 4.8% downwards, in response to an
anticipated slowdown in the world economy in 2005.

Taiwan became a full member of the World Trade Organization (WTO) in
2002. The lowering of tariff and non-tariff trade barriers for food and
agricultural products has provided improved market access for a wide
range of U.S. agricultural products including fresh produce, dairy
products, meat, seafood, and processed food products. Given Taiwan's
relatively small agricultural sector, Taiwan's dependence on imports is
expected to continue to grow. Taiwan's continued modernization, and
increased adoption of American and western food tastes make the country
an extremely attractive market for U.S. exporters.

+-----------------------------------+-----------------------------------+
|                                   | 2002 2003 2004                    |
+-----------------------------------+-----------------------------------+
| GNP: US\$ billion                 | 288.6 295.6 316.7                 |
|                                   |                                   |
| GNP: US\$ per person              | 12,884 13,139 13,995              |
|                                   |                                   |
| Average Disposable Income         | 28,084 25,947 N/A                 |
|                                   |                                   |
| US\$ per Household                | 24% 24% N/A                       |
|                                   |                                   |
| Food & Beverage Total Spend       | 34.75 33.98 31.92                 |
|                                   |                                   |
| (Angle Law)                       | -0.20 -0.28 1.62                  |
|                                   |                                   |
| Average Annual Exchange Rate      | 5.2 5.0 4.4                       |
|                                   |                                   |
| NT\$ to 1.00 US\$                 | 3.9 3.3 5.9                       |
|                                   |                                   |
| Consumer Price Index              |                                   |
|                                   |                                   |
| Unemployment Rate                 |                                   |
|                                   |                                   |
| Economic Growth Rate %            |                                   |
+-----------------------------------+-----------------------------------+

Source: Taiwan Directorate General of Budget, Accounting and Statistics.

####### B. Taiwan Food Processing Industry

The total production value of the domestic food and beverage industry in
2004 amounted to NT\$440 billion (US\$14 billion), ranking it the fourth
largest among manufacturing industries island-wide, behind
electronic/electrical machinery, chemicals, and metal industries.
Projected annual growth for 2004 is 3.5 percent. Oriented primarily
towards domestic sales, the food industry consists of more than 6,000
manufacturing enterprises employing more than 110,000 persons. Food
production has declined since 1997 due to the outbreak of foot and mouth
disease in 1997 and SARS in early 2003 which had a ripple effect
throughout the food and agricultural sector and the overall slowdown in
Taiwan. Shortly afterward the economy began turning

around in response to recovery of the global economy. The food &
beverage production posted a 3.5 percent growth in 2003. It continued to
grow by 3.5% in 2004. Overall food exports grew approximately by 9.8%.
Frozen foods and condiments accounted for 77.77% of total Taiwan's food
exports in 2004. Although it is anticipated that the Taiwan economy will
slow down in 2005, the Food Industry and Development Institute
forecasted an annual growth rate of 3%-4% for Taiwan's food & beverage
processing industry for 2005.

![](media/image2.wmf)

According to U.S. statistics, Taiwan imported approximately US\$1,3
billion worth of US bulk agricultural commodities, \$291 million worth
of US intermediate food and agricultural products, \$33 million worth of
US edible fish & seafood products, and \$489 million worth of US
consumer-oriented products in 2004. Major ingredient categories that
offer opportunities for U.S. exporters include snack food and bakery
ingredients; gluten, starch, and dextrins, ingredients for functional
and health foods; ingredients for frozen prepared foods; ingredients for
high fiber food and low calorie food; soy products; and flavorings.

Although Taiwan's accession to the WTO in 2002 has benefited the
domestic food processing industry from the market liberalization.
However, at the same time imported finished food products have been
taking increased market share from domestically produced products since
the WTO accession and this trend is expected to continue. Taiwan's food
processing industry is facing a vigorous competition in the more open
environment. Taiwan's foreign investments in food processing have grown
tremendously in recent years. To take advantage of lower costs and to
expand their global markets, many of Taiwan's food processors establish
production facilities outside Taiwan. According to the Ministry of
Economic Affairs, as of 2004, Taiwan's food companies have invested
nearly US\$2 billion in the PRC and US\$515 million in other countries
(mainly Southeast Asia). However, the recent tendency is to relocate
processing facilities to Southeast Asia.

+----------------+--------+--------+----------------+-----------------+
| Table: Output  |        |        |                |                 |
| of Taiwan's    |        |        |                |                 |
| Food &         |        |        |                |                 |
| Agricultural   |        |        |                |                 |
| Industry       |        |        |                |                 |
| (NT\$Billion)  |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Sector         | 2003   | 2004   | Growth Rate    | Est. Growth     |
|                |        |        | 2003/2004      | Rate 2004/2005  |
+----------------+--------+--------+----------------+-----------------+
| #####          | 51.91  | 56.14  | 8.2%           | 8.5%            |
| # Slaughtering |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Dairy Products | 19.88  | 19.18  | -3.5%          | 3.0%            |
+----------------+--------+--------+----------------+-----------------+
| Canned Food    | 7.44   | 7.09   | -4.7%          | 2.0%            |
+----------------+--------+--------+----------------+-----------------+
| Frozen Foods   | 34.09  | 35.57  | 4.3%           | 3.0%            |
+----------------+--------+--------+----------------+-----------------+
| Dehydrated     | 2.60   | 2.34   | -9.8%          | -10%            |
| Foods          |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Preserved      | 5.62   | 6.10   | 8.5%           | 3.0%            |
| Foods          |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Sugar          | 5.65   | 5.79   | 2.4%           | 3.0%            |
| Confectionery  |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Bakery         | 17.24  | 16.64  | -3.52%         | 3.0%            |
| Products       |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Edible Oils &  | 19.92  | 20.94  | 5.1%           | 8.5%            |
| Fats           |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Grain Milling  | 26.32  | 29.54  | 12.2%          | 5.0%            |
+----------------+--------+--------+----------------+-----------------+
| Rice Milling   | 28.92  | 29.97  | 3.6%           | 3.0%            |
+----------------+--------+--------+----------------+-----------------+
| Sugar          | 6.43   | 6.05   | -5.9%          | -15.0%          |
| Production     |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Soy Sauce      | 4.89   | 4.18   | -14.4%         | 2.0%            |
+----------------+--------+--------+----------------+-----------------+
| Other          | 4.11   | 4.15   | 0.8%           | 5.0%            |
| Seasonings     |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Wine & Liquor  | 12.49  | 11.98  | -4.1%          | 2.0%            |
+----------------+--------+--------+----------------+-----------------+
| Malt Liquor    | 22.06  | 24.02  | 8.9%           | 3.5%            |
| and Malt       |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Non-alcoholic  | 43.12  | 41.05  | -4.8%          | 3.5%            |
| beverages      |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Noodle         | 10.75  | 11.01  | 2.4%           | 3.5%            |
| Production     |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Animal Feed    | 49.10  | 51.74  | 5.4%           | 5.0%            |
+----------------+--------+--------+----------------+-----------------+
| Tea Production | 1.90   | 1.96   | 3.0%           | -10%            |
+----------------+--------+--------+----------------+-----------------+
| Miscellaneous  | 50.48  | 54.21  | 7.4%           | 1.0%            |
| Foods          |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+
| TOTAL          | 4      | 4      | 3.5%           | 3.79%           |
|                | 24,942 | 39,446 |                |                 |
+----------------+--------+--------+----------------+-----------------+
| Source:        |        |        |                |                 |
| Department of  |        |        |                |                 |
| Statistics,    |        |        |                |                 |
| Ministry of    |        |        |                |                 |
| Economic       |        |        |                |                 |
| Affairs        |        |        |                |                 |
|                |        |        |                |                 |
| Food Industry  |        |        |                |                 |
| Research &     |        |        |                |                 |
| Development    |        |        |                |                 |
| Institute      |        |        |                |                 |
|                |        |        |                |                 |
| 2003. US\$1 =  |        |        |                |                 |
|                |        |        |                |                 |
|      NT\$33.98 |        |        |                |                 |
|                |        |        |                |                 |
| 2004. US\$1 =  |        |        |                |                 |
|                |        |        |                |                 |
|      NT\$31.92 |        |        |                |                 |
+----------------+--------+--------+----------------+-----------------+

  ---------------------------------- ------------------------------------
  Advantage                          Challenges

  Taiwan officially entered the WTO  Competition from Australia, New
  in January 2002, providing new     Zealand, Japan, China, Korea, SE
  opportunities for a wide range of  Asia, and the European Union
  U.S. agricultural products         

  U.S. food products enjoy a good    
  reputation.                        

  Taiwanese consumers are            
  increasingly affluent and open to  
  Western food products              
  ---------------------------------- ------------------------------------

SECTION II. ROAD MAP FOR MARKET ENTRY

A. Entry Strategy

Most imported food ingredients enter Taiwan through local importers.
U.S. food ingredient suppliers should concentrate on establishing their
business relationships with a reliable and efficient importer and
distributor, who in turn will sell the imports to these food processors.
Large food processors like Uni-President have their own
purchasing/importing division to handle ingredient imports directly.
U.S. suppliers should initially contact the R&D, as well as
purchasing/importing divisions of these large food manufacturers,
especially for new-to-market ingredients. A listing of contacts for
Taiwan's major food processors is available from the ATO Taipei Office
upon request. On the other hand, a visit to Taiwan is an excellent way
to establish meaningful relationships with potential buyers. As many
importers and food processors rely heavily upon subjective factors, U.S.
suppliers are encouraged to bring product samples to Taiwan.

Another way to approach potential Taiwan food ingredient buyers is to
participate in trade shows. Following are two major trade events that
ATO Taipei recommends for U.S. food ingredient exporters:

\(a\) Taipei International Food Show -- Annually in June

This event is organized by the Taiwan External Trade Development Council
(TAITRA). It is the largest and most popular food show in Taiwan with
excellent access to local food importers, manufacturers, and
wholesalers. The show attracts over 55,000 visitors including traders
and retailers. The show has a total of 1,500 3x3 meter booths including
several international exhibitor booths.

\(b\) Taipei International Bakery Show -- Biannually in March

This is a trade event for the bakery and food processing industries in
Taiwan. Attended by over 30,000 importers and industry representatives,
the show is a prime venue at which to introduce, sample, and negotiate
sales of food ingredients and food service products.

B. Market Structure

Taiwan's food manufacturers purchase from local importers, distributors,
and wholesalers. However, the current tendency is to increase the volume
of direct imports. Taiwan's WTO accession in 2002 and resulting import
tariff cuts have provided imported goods with new market opportunities.

**C. Company Profiles**

**Major Taiwan Food Manufacturers**

+-----------------+----------------+-------+------------+-------------+
| **Company**     | **Product      | **Sa  | **         | **          |
|                 | Types**        | les** | Production | Procurement |
|                 |                |       | Loc        | Channels**  |
|                 |                | **(   | ation(s)** |             |
|                 |                | US\$M |            |             |
|                 |                | il)** |            |             |
|                 |                |       |            |             |
|                 |                | **2   |            |             |
|                 |                | 003** |            |             |
+-----------------+----------------+-------+------------+-------------+
| Uni-President   | condiments,    | 1,189 | Taiwan,    | Direct,     |
| Group           | health foods,  |       | China, SE  | importer,   |
|                 | baked          |       | Asia       | wholesaler, |
|                 | products,      |       |            | agent,      |
|                 | confectionery, |       |            | farmers     |
|                 | dairy, meat,   |       |            |             |
|                 | frozen         |       |            |             |
|                 | prepared       |       |            |             |
|                 | foods,         |       |            |             |
|                 | beverages,     |       |            |             |
|                 | organic foods, |       |            |             |
|                 | and pet food   |       |            |             |
+-----------------+----------------+-------+------------+-------------+
| Taiwan Sugar    | Sugar, edible  | 938   | Taiwan     | Direct,     |
| Corp.           | oil, milk,     |       |            | importer,   |
|                 | fruit juices,  |       |            | wholesaler, |
|                 | yeast          |       |            | agent,      |
|                 | products,      |       |            | farmers     |
|                 | health foods   |       |            |             |
+-----------------+----------------+-------+------------+-------------+
| Great Wall      | Edible oil,    | 473   | Taiwan,    | Direct,     |
| Group           | wheat flour,   |       | China,     | importer,   |
|                 | chicken        |       | Hong Kong, | wholesaler, |
|                 | products,      |       | Vietnam,   | agent,      |
|                 | frozen foods,  |       | Ph         | farmers     |
|                 | canned         |       | ilippines, |             |
|                 | desserts, soft |       | Ph         |             |
|                 | drinks, and    |       | ilippines, |             |
|                 | animal feed    |       | Malaysia   |             |
+-----------------+----------------+-------+------------+-------------+
| Charoen         | Processed      | 362   | Taiwan,    | Direct,     |
| Pokphand        | meats and      |       | U.S.       | importer,   |
| Enterprise      | poultry meats  |       | Mexico,    | wholesaler, |
|                 |                |       | Turkey,    | agent,      |
|                 |                |       | EU, Asia   | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Vedan           | MSG, instant   | 329   | Taiwan,    | Direct,     |
| Enterprise      | noodles,       |       | China,     | importer,   |
| Corp.           | beverages,     |       | Vietnam    | wholesaler, |
|                 | honey, starch, |       |            | agent,      |
|                 | health foods   |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Weichuan Food   | Juices, soft   | 319   | Taiwan,    | Direct,     |
|                 | drinks,        |       | China,     | importer,   |
|                 | condiments,    |       | Thailand   | wholesaler, |
|                 | dairy products |       |            | agent,      |
|                 |                |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| TTET Union      | Regular        | 268   | Taiwan     | Direct,     |
| Corp.           | Soybean Meal,  |       |            | importer,   |
|                 | High-Protein   |       |            | wholesaler, |
|                 | Soybean Meal,  |       |            | agent,      |
|                 | Soybean        |       |            | farmers     |
|                 | Flakes,        |       |            |             |
|                 | Soybean Oil,   |       |            |             |
|                 | Canola Oil,    |       |            |             |
|                 | Deep Fry Oil,  |       |            |             |
|                 | Selected       |       |            |             |
|                 | Soybean,       |       |            |             |
|                 | Lecithin, etc. |       |            |             |
+-----------------+----------------+-------+------------+-------------+
| Fwusow Industry | Pet foods,     | 162   | Taiwan,    | Direct,     |
| Co. Ltd         | animal feeds,  |       | China      | importer,   |
|                 | cereal         |       |            | wholesaler, |
|                 | products,      |       |            | agent,      |
|                 | edible oil,    |       |            | farmers     |
|                 | vegetable      |       |            |             |
|                 | protein        |       |            |             |
|                 | products       |       |            |             |
+-----------------+----------------+-------+------------+-------------+
| Quaker          | Milk powder,   | 161   | Taiwan,    | Direct,     |
|                 | cereal         |       | China      | importer,   |
|                 | products,      |       |            | wholesaler, |
|                 | edible oil,    |       |            | agent,      |
|                 | ginseng        |       |            | farmers     |
|                 | products       |       |            |             |
+-----------------+----------------+-------+------------+-------------+
| Tay Shan        | Edible oil,    | 151   | Taiwan,    | Direct,     |
| Enterprise      | beverages,     |       | China      | importer,   |
|                 | feeds          |       |            | wholesaler, |
|                 |                |       |            | agent,      |
|                 |                |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Lian Hua Food   | Nuts, potato   | 100   | Taiwan,    | Direct,     |
|                 | chips and      |       | China      | importer,   |
|                 | other snack    |       |            | wholesaler, |
|                 | foods, jam     |       |            | agent,      |
|                 |                |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Hsin Tung Yang  | Processed meat | 71    | Taiwan     | Direct,     |
| Foods Co. Ltd   | and seafood,   |       |            | importer,   |
|                 | Taiwanese      |       |            | wholesaler, |
|                 | desserts       |       |            | agent,      |
|                 |                |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Gallant Ocean   | Processed      | 58    | Taiwan,    | Direct      |
| Seafood, Inc.   | seafood        |       | China,     |             |
|                 |                |       | S.E. Asia  |             |
+-----------------+----------------+-------+------------+-------------+
| Hey Song        | Carbonated     | 122   | Taiwan,    | Direct,     |
|                 | beverages      |       | China      | importer,   |
|                 |                |       |            | wholesaler, |
|                 |                |       |            | agent,      |
|                 |                |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Lian Hwa Foods  | Processed      | 100   | Taiwan,    | Direct,     |
| Corp            | seaweed, nuts, |       | China      | importer,   |
|                 | potato chips   |       |            | wholesaler, |
|                 |                |       |            | agent,      |
|                 |                |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Central Union   | Edible oil,    | 138   | Taiwan     | Direct,     |
| Oil Corp        | soybean meal   |       |            | importer,   |
|                 | and other      |       |            | wholesaler, |
|                 | soybean        |       |            | agent,      |
|                 | products       |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| Laurel          | Frozen         | N/A   | Taiwan,    | Direct,     |
| Enterprises     | prepared foods |       | China      | importer,   |
| Corp.           |                |       |            | wholesaler, |
|                 |                |       |            | agent,      |
|                 |                |       |            | farmers     |
+-----------------+----------------+-------+------------+-------------+
| I-Mei Foods     | Snack foods,   | N/A   | Taiwan, SE | Direct,     |
| Co., Ltd.       | candy, baked   |       | Asia       | importer,   |
|                 | products,      |       |            | wholesaler, |
|                 | dairy, juices, |       |            | agent,      |
|                 | HMR,           |       |            | farmers     |
|                 | non-alcoholic  |       |            |             |
|                 | beverages      |       |            |             |
+-----------------+----------------+-------+------------+-------------+

Source: Taiwan Commonwealth Magazine

ATO/Taipei research

D. Sector Trends

The following market trends will continue to drive the ways in which
food processors are marketing their products.

\(1\) Taiwan's population is aging. The elderly (age 65 and above)
currently make up 9.2 percent of the island's population and are
increasing rapidly. According to research by Taiwan Food Industry
Research and Development Institute, products with low sugar, low salt,
natural, high calcium are most popular among Taiwan's elderly people.

\(2\) Consumers in Taiwan are becoming increasingly health and diet
conscious. Low-fat and health foods are surging in popularity.
Functional and organic foods are becoming popular. Local food processors
are increasingly looking to promote the nutritional and health nature of
their products and are seeking out natural food additives and food
ingredients with health benefit for local processing.

\(3\) Taiwanese dine outside the home with much greater frequency than
most westerners. The high propensity to dine out is driven by a
combination of factors:

> Small size of apartments
>
> High female participation in the labor force
>
> A high level of disposable income
>
> Restaurant availability

Percentage Dinning Out Expenditure of Total Food & Beverage Expenditure
per household

  ------------- ------- ------- ------- ------- ------- ------- ------- -------
  Year          1996    1997    1998    1999    2000    2001    2002    2003

                24.6%   25.8%   27.2%   28.1%   29.0%   29.6%   29.8%   31.0%
  ------------- ------- ------- ------- ------- ------- ------- ------- -------

Source: Food Industry Research and Development Institute

\(4\) Taiwan's food retail sector is growing rapidly. According to a
FIRDI report, Taiwan, next to Japan, leads all other countries around
the world in terms of the number of convenience stores per capita. With
a population of 23 million people, there is one convenience store for
every 3,000 people in Taiwan. Also, Taiwan leads all other Asian
countries, with one hypermarket store for every 229 thousand people.
Currently, there is one supermarket store for every 20,000 people in
Taiwan.

![](media/image3.wmf)

\(5\) Taiwan's consumers are becoming more sophisticated. Two income
families as well as single unit households are replacing the traditional
extended family. For the food industry this is creating a demand for
more "Western-style" food items, as well as an emphasis on pre-cooked
and convenience foods and snacks.

III\. COMPETITION

In 2004, Taiwan imported nearly US\$8.9 billion of food and agricultural
products from many different sources, of which US\$2.6 billion (30%) was
imported from the United States. The United States was the number one
agricultural supplier to Taiwan, followed by Australia (7%), and Japan
(7%). Australia dominates the beef and mutton markets. Japan dominates
the swine skin and biscuit markets and is very competitive in other
consumer ready food products. New Zealand ranks as the top supplier of
dairy products.

While maintaining its position as a substantial supplier of bulk
commodities, such as soybeans and products (55%), corn (95%), and wheat
(87%), the Untied States supplies 96% of turkey meat, 56% of fresh &
frozen pork and products; 40% of vegetable & products; and 17% of fruits
and products. The United States is the top supplier of most varieties of
imported fresh fruits: apples (51% or US\$45,575,300), table grapes (56%
or US\$12,965,900), grapefruits (81% and US\$3,215,200), oranges (66%,
or US\$3,848,000), cherries (73%, or US\$32,099,400), peaches (81%, or
33,567,500), and plums (64%, or US\$4,862,100). \*\* Figures inside
parentheses represent U.S. market share of total imports.

+-------------------+-----------+------+------------------------------+
| **Product         | **Total   | *    | **Major Supply Sources and   |
| Category**        | Import    | *U.S | Market Share**               |
|                   | Value     | Ma   |                              |
|                   | 2004 (US  | rket |                              |
|                   | 1,000)**  | Sha  |                              |
|                   |           | re** |                              |
+-------------------+-----------+------+------------------------------+
| Total Food-Agr    | 8,862,033 | 30%  | Australia (7%), Japan (7%),  |
| Imports           |           |      | China (6%), Malaysia (6%),   |
|                   |           |      | Thailand (5%), Brazil (5%),  |
|                   |           |      | New Zealand (4%), Indonesia  |
|                   |           |      | (4%), Canada (3%)            |
+-------------------+-----------+------+------------------------------+
| ####              |           |      |                              |
| # Animal Products |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Beef \*\*         | 221,858   | 1.4% | New Zealand (52%), Australia |
| Fresh             |           |      | (45%)                        |
| /Frozen/Processed |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Pork,             | 53,208    | 56%  | Canada (38%)                 |
| Fresh             |           |      |                              |
| /Frozen/Processed |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Turkey Meat       | 18,398    | 96%  | Nil                          |
+-------------------+-----------+------+------------------------------+
| **Fish &          |           |      |                              |
| Seafood**         |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Salmon            | 28,458    | 1.4% | Norway (40%), Canada (27%),  |
|                   |           |      | Chile (17%), Japan (8%)      |
+-------------------+-----------+------+------------------------------+
| Lobster           | 40,602    | 30%  | Australia (46%)              |
+-------------------+-----------+------+------------------------------+
| Fish Roe\*        | 1,436     | 42%  | Japan (43%), Canada (7%)     |
+-------------------+-----------+------+------------------------------+
| Surimi\*          | 22,210    | 22%  | India (40%), Thailand (31%)  |
+-------------------+-----------+------+------------------------------+
| ###               | 366,373   | 3%   | New Zealand (37%), Australia |
| ## Dairy Products |           |      | (28%), Netherlands (8%),     |
|                   |           |      | Denmark (6%), France (7%),   |
|                   |           |      | Ireland (3%)                 |
+-------------------+-----------+------+------------------------------+
| ##### Cheese      | 49,032    | 10%  | Australia (37%), New Zealand |
|                   |           |      | (36%)                        |
+-------------------+-----------+------+------------------------------+
| ##### Powder Milk | 253,751   | 0.3% | New Zealand (37%), Australia |
|                   |           |      | (30%), Netherlands (10%),    |
|                   |           |      | Denmark (8%)                 |
+-------------------+-----------+------+------------------------------+
| #                 |           |      |                              |
| #### Horticulture |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Fruits & Products | 101,872   | 17%  | China (24%),Thailand (11%),  |
|                   |           |      | Iran (7%), Vietnam (7%), S.  |
|                   |           |      | Africa (2%), Japan (2%)      |
+-------------------+-----------+------+------------------------------+
| Apples, Fresh     | 90,119    | 51%  | Japan (17%), Chile (16%)     |
+-------------------+-----------+------+------------------------------+
| Table Grape,      | 23,144    | 56%  | Chile (31%)                  |
| Fresh             |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Cherries, Fresh   | 44,035    | 73%  | Chili (10%), New Zealand     |
|                   |           |      | (8%), Canada (7%)            |
+-------------------+-----------+------+------------------------------+
| Grapefruits,      | 3,964     | 81%  | South Africa (16%)           |
| Fresh             |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Plum, Fresh       | 7,592     | 64%  | Chile (27%)                  |
+-------------------+-----------+------+------------------------------+
| Peaches, Fresh    | 41,480    | 81%  | Chile (11%), Australia (5%)  |
+-------------------+-----------+------+------------------------------+
| Oranges, Fresh    | 5,792     | 66%  | South Africa (19%)           |
+-------------------+-----------+------+------------------------------+
| **Vegetable &     | 184,107   | 40%  | Thailand (12%), China (12%). |
| Products**        |           |      | Vietnam (6%)                 |
+-------------------+-----------+------+------------------------------+
| Potatoes, Fresh,  | 58,373    | 57%  | Canada (11%), Netherlands    |
| Frozen, Processed |           |      | (9%)                         |
+-------------------+-----------+------+------------------------------+
| Celery            | 2,130     | 100% | \-                           |
+-------------------+-----------+------+------------------------------+
| Onions, fresh     | 6,620     | 81%  | New Zealand (12)             |
+-------------------+-----------+------+------------------------------+
| Broccoli,         | 7,908     | 83%  | China (12%), Australia (4%)  |
| fresh/frozen      |           |      |                              |
+-------------------+-----------+------+------------------------------+
| **Tree Nuts**     |           |      |                              |
+-------------------+-----------+------+------------------------------+
| ##### Almond \*   | 11,341    | 95%  | China (5%)                   |
+-------------------+-----------+------+------------------------------+
| ##### Walnut \*   | 4,419     | 68%  | China (16%), India (16%)     |
+-------------------+-----------+------+------------------------------+
| # Beverage        |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Apple Juice       | 2,248     | 8%   | China (72%)                  |
+-------------------+-----------+------+------------------------------+
| Grapefruit Juice  | 1,280     | 14%  | Israel (44%), Japan (39%)    |
+-------------------+-----------+------+------------------------------+
| Grape Juice       | 4,839     | 31%  | Spain (32%), Italy (22%)     |
+-------------------+-----------+------+------------------------------+
| ####              |           |      |                              |
| # Processed Foods |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Sunflower Oil     | 16,366    | 3%   | Argentina (89%)              |
+-------------------+-----------+------+------------------------------+
| Pre Mix & Dough\* | 4,665     | 61%  | Japan (21%), Australia (4%), |
|                   |           |      | Germany (3%)                 |
+-------------------+-----------+------+------------------------------+
| Soups & Broths\*  | 5,482     | 18%  | China (51%), Japan (16%),    |
|                   |           |      | New Zealand (10%)            |
| Powder/Solid      |           |      |                              |
+-------------------+-----------+------+------------------------------+
| Canned Corn \*    | 22,537    | 79%  | Thailand (19%), New Zealand  |
|                   |           |      | (2%)                         |
+-------------------+-----------+------+------------------------------+

Source: Council of Agriculture

> \* 2003 data
>
> \*\* Taiwan tentatively banned U.S. beef imports due to concerns about
> BSE.
>
> **IV. Best Product Prospects**

*Ingredients for frozen dough* -- The Taiwan bakery product market has
been growing steadily at an average rate of 5-10 percent annually. To
increase market share in the bakery market which is estimated at US\$700
million annually, many of Taiwan's leading food manufacturers are
expanding their product lines to produce frozen dough. These
manufacturers previously only supply dough products to their own retail
stores exclusively. However, as frozen dough has become a trend in
Taiwan, these companies plan to expand their services to other
traditional bakeries. They import and purchase food ingredients as raw
materials for producing frozen dough. U.S. suppliers should contact
these manufacturers directly.

*\* Dried Fruits &Tree Nuts -* Dried fruits and nuts (mainly almonds,
and walnuts) are very popular as ingredients used in baking. The US
currently dominates these categories with over 80% of the market share.
Constant communication with the baking industry technical seminars and
trade shows is essential to grow in this category.

*\* Ingredients for frozen prepared foods* -- Taiwan's frozen food
production covers frozen seafood, frozen meats, frozen vegetables, and
frozen prepared foods. Total production was estimated at US\$1.1 billion
in 2004. Currently, frozen prepared foods have the best prospects for
growth in this category. Main ingredients used in frozen prepared foods
include surimi, wheat flour, rice, fish and seafood, frozen fruits &
vegetables, meat & poultry meats, and more.

*\* Fresh/Frozen Beef* -- The primary competitor is Australia, whose
advantage is customer-perceived comparable/acceptable quality at a low
price. To optimize opportunities for US beef, suppliers need to match
market needs for special meat cut types.

*\*Ingredients for functional and health foods* -- The market for health
and functional foods is estimated at US\$750 million and is growing.
With the increase in the standard of living and the current focus on
eating healthy, natural ingredients in this category have the best
prospects.

\* *Pork* -- Pork is a market where the domestic producers have many
competitive advantages. Although most of the food processors currently
use domestic Taiwanese pork for some or all of their needs, there are
growth opportunities for U.S. pork that meets local food processors'
needs.

*\* Poultry* -- The U.S. has been dominating the imported turkey meat
market in Taiwan, accounting for almost 99% of total imports. Taiwan's
WTO accession in 2002 and the resulting market liberalization for
chicken meat has provided U.S. exporters with good opportunities in this
category.

*\*100% Fruit Juice Concentrates* -- Due to a rise in greater health
consciousness, consumption patterns for soft drinks have changed
dramatically in recent years with natural fruit juices and water gaining
consumer acceptance. Taiwan, with a semi-tropical environment, is a
major producer of many forms of fruits. Taiwan food processors use
domestic fresh fruits to produce natural juices to fill some of the
market demand. At the same time, they import 100% juice concentrates to
produce other fruit juices and these are becoming popular in the retail
market. Fruit concentrates have seen good potential for growth in
Taiwan.

\* *Fish and Seafood* -- The major U.S. export items to Taiwan in this
category included lobster, surimi (mainly pollock and cod), cod, fish
roe, salmon, scallops, sea cucumber, oyster, and abalone. Taiwan
imported US\$307 million worth of fish and seafood in 2003. Australia
was the largest supplier with a 12% market share, followed by Thailand
(11%), and the United States (10%). Taiwan's lunch box market is
expanding quickly. All of Taiwan's convenience stores continue to make
efforts to develop and market lunch boxes and dinners. Consequently,
shrimps (\<10 cm in length), fish fillets, and small whole fish like
sand dab particularly have good opportunities in Taiwan.

*\*Wheat flour/bakery pre-mixes* -- Taiwan's liberalization of wheat
flour imports has created opportunities for wheat flour/bakery pre-mix
imports. Many Taiwan food processors are seeking wheat flour varieties
to meet local demand.

\**Dairy Products* -- Although the import volume is large, it is
dominated by New Zealand (37%) and Australia (26%). The U.S. supplies
nearly 3% of the market. The cheese and curd category is growing
quickly, and the U.S. share, although small, is actually growing faster
than the larger competitors, meaning that those U.S. dairy products
currently coming into the market are finding faster acceptance than
those of competitors.

\**Ingredients for Concentrated Soups* -- The market for instant soups,
including dehydrated soups and canned soups, is estimated at US\$80
million. Due to convenience in preparation, these instant soups are
becoming popular in the retail market, especially among Taiwan's working
women and housewives. It is anticipated that instant concentrated
soups/broths will become a trend in the food service sector in Taiwan.

**Section V. Post Contact and Further Information**

Mailing Address

Agricultural Trade Office

Department of State

4170 AIT Taipei

Washington, D.C. 20521-4170

Street Address:

ATO Taipei

American Institute in Taiwan

Room 704, 7^th^ Floor

136 Renai Road, Section 3

Taipei, Taiwan

Phone: (886-2) 2705-6536

Fax: (886-2) 2706-4885

E-mail: <ato@mail.ait.org.tw>; ATOTaipei@usda.gov

Web Site: http://www.ait.org.tw/ait/AGR/ato.htm