Required Report - public distribution

**Date:** 12/20/2005

**GAIN Report Number:** AR5038

AR5038

**Argentina**

**Food Processing Ingredients Sector**

**2005**

**Approved by:**

![](media/image1.wmf)Kari Rojas

U.S. Embassy

**Prepared by:**

Martha Melgarejo/ María Julia Balbi

**Report Highlights:**

The Argentine market of food ingredients of natural origin accounts for
\$120 million, of which imports are approximately 10 percent. Imported
food ingredients are usually those which are not manufactured locally.
There is a significant market for some U.S. food ingredients among local
producers of ingredients, who use them to manufacture high-value,
tailor-made food products.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Buenos Aires \[AR1\]

\[AR\]

Table of Contents

[INTRODUCTION 3](#introduction)

[SECTION I. MARKET SUMMARY 3](#section-i.-market-summary)

[SECTION II. ROAD MAP FOR MARKET ENTRY
6](#section-ii.-road-map-for-market-entry)

[A. Entry Strategy 6](#a.-entry-strategy)

[B. Market Structure 6](#b.-market-structure)

[C. Company Profiles (2004) 7](#c.-company-profiles-2004)

[D. Main Argentine F&B Companies by Product-Type
9](#d.-main-argentine-fb-companies-by-product-type)

[E. Sector Trends 14](#e.-sector-trends)

[SECTION III. COMPETITION 15](#section-iii.-competition)

[SECTION IV. BEST PRODUCT PROSPECTS
16](#section-iv.-best-product-prospects)

[SECTION V. USEFUL WEBSITES 16](#section-v.-useful-websites)

[SECTION VI. POST CONTACT AND ADDITIONAL INFORMATION
17](#section-vi.-post-contact-and-additional-information)

[ANNEX I. MAIN FOOD INGREDIENT IMPORTS 2004
18](#annex-i.-main-food-ingredient-imports-2004)

[ANNEX II. ORIGIN OF FOOD INGREDIENTS USED IN THE ARGENTINE MARKET
20](#annex-ii.-origin-of-food-ingredients-used-in-the-argentine-market)

# INTRODUCTION

During the past decade, the Argentine food and beverage industry (AF&BI)
underwent steep changes, which reflected the political and economic
development of the country. The most relevant changes were as follows:

-   Until 1999, food production and exports grew significantly. The
    economic indicators of 1999 were the most relevant during the period
    between 1994 and the beginning of 2004.

-   The convertibility plan, which pegged the Argentine peso to the
    dollar, strongly reduced the local production of many food
    ingredients, which were promptly substituted by imports. The
    Purchasing and Development Divisions of local food companies
    searched for domestic supply of inputs to minimize the impact in the
    final cost of the products. This worked for basic ingredients but
    other more complex ones, or those whose manufacturing was not
    feasible due to the small volumes demanded by the market, had to be
    imported.

-   After the economic crisis, followed by devaluation, of early 2002,
    the volume of imported food ingredients increased, fostered by a
    remarkable growth in food exports as a result of the competitiveness
    gained by Argentine companies. During the past few years, with a
    more stable economy, some positive indicators showing good prospects
    were:

    -   Launching of new products by food companies.

    -   Important investments in food processing machinery.

    -   Growing demand of technical staff for laboratories and
        production areas.

# SECTION I. MARKET SUMMARY

Food ingredients used in the manufacturing of foods and beverages (F&B)
vary according to their complexity, and the percentage of each
ingredient used in the formulation of the product may differ with
respect to its functionality. The most simple and widely used
ingredients in the AF&BI are: corn starch, natural sweeteners (such as
fructose) which substitute for sacarose, powdered milk, egg albumin, soy
protein, casein, gelatin, and fruit concentrates. Wheat and potato
starches are also used but to a lesser extent. Spices and herbs, and
their extracts, have more specific uses. There is local supply of
powdered milk, fructose, egg albumin, gelatin, casein, fruit pulp,
glucose, citrus essential oils, among others.

The confectionery, baking, sweet and salty premix, and beverage
industries demand the largest volume of food ingredients. Pet food
manufacturers also use food ingredients.

According to private sources, the Argentine market of food ingredients
of natural origin (excluding artificial ingredients of chemical origin)
accounts for \$120 million, of which imports are approximately 10
percent. Imported food ingredients are usually those which are not
manufactured locally, such as: cocoa, pectins, protein concentrates and
isolates, some spices, some food supplements, ginseng, and modified
starches, among others.

The following table illustrates F&B imports destined to the food
manufacturing industry, including natural and artificial ingredients:

Million \$

  -------------------------- --------------------------------------------
  Calendar Year              F&B imports for the food industry (incl.
                             natural and artificial ingredients)

  2000                       230

  2001                       187

  2002                       138

  2003                       203

  2004                       292

  2005                       350 (\*)
  -------------------------- --------------------------------------------

Source: Dirección Nacional de Alimentos (National Food Division),
Secretaría de Agricultura, Ganadería, Pesca y Alimentación (Secretariat
of Agriculture, Livestock, Fisheries, and Food - SAGPyA, in Spanish)

(\*) Estimated.

The AF&BI comprises approximately 25,000 manufacturing plants and total
sales are estimated at about \$35 billion.

The following information shows the behavior of the AF&BI during the
past decade:

1.  The Gross Domestic Product (GDP) of the AF&BI reached its highest
    level in 1998, then dropped to a minimum in 2002, and finally
    increased during 2004 to reach values very close to record levels.
    In 2005, the maximum GDP was exceeded, which means that the economy
    has not only recovered but is also expanding significantly.

2.  The Monthly Industrial Estimate (MIE), created by the National
    Institute of Statistics and the Census (INDEC, in Spanish), shows
    the evolution of the food processing sector based on data from the
    leading local companies. The AF&BI grew from 96 to 103, i.e. about
    7.6 percent in 2004, compared to the previous year. In 2005, the
    1998 record value of 103 was exceeded. (Base 1997=100)

> According to the MIE during January-August 2005, compared with the
> same period of 2004, interannual variation of some sectors of the
> AF&BI shows significant growth, primarily due to sustained economic
> recovery. The following are some examples:

Beef 2.7%

#  Poultry and fish 25%

###  Dairy products 16.5%

Oils and meals 15.6%

Beverages 5%

3.  According to INDEC, during the first half of 2005, the average use
    of the local installed capacity of the AF&BI was about 73 percent,
    slightly below the 2004 value.

4.  The growth of investment is another significant indicator of
    confidence within the food processing sector. According to official
    statistics, imports of food processing machinery in 2005 accounted
    for \$80 million, similar to 2004.

> The investment of food processing machinery, during the first half of
> 2005, by product category is illustrated below:
>
> Fats and oils 35%

Fruit juices, wine and other alcoholic beverages 11.5%

###  Cereals and vegetables 8.5%

Cocoa and chocolate 6%

5.  Foreign Trade

    1.  During January-June 2005, AF&BI exports (\*) totaled about \$5.5
        billion, and 16 million metric tons. The oilseed industry
        accounted for 60 percent; the beef industry, 14 percent; the
        fish industry, 8 percent; the dairy industry, 5 percent; and the
        fruit and vegetable industry, 4 percent.

    2.  During the first half of 2005, F&B imports (\*) totaled about
        \$294 million, up approximately 10 percent compared to the same
        period of 2004, due to an increase in consumption and lower
        prices of imported products. Contrary to exports, which are
        concentrated in relatively few sectors, imports cover a wide
        range of products, such as:

> Cocoa and cocoa preparations 14%
>
> Various food preparations 11%
>
> Coffee, tea, and spices 10.5%
>
> Meat products, especially pork meat 9.5%

Edible fruits 8%

Preparations of meat, fish, and seafood 7%

(Source: INDEC)

(\*) All items related to F&B products, including consumer-ready foods,
intermediate products, and food ingredients.

3.  Origin of imports by value:

> Mercosur (Argentina, Brasil, Paraguay & Uruguay,
>
> with Chile, Bolivia, and Peru as associates) 59%

EU (European Union) 12%

ALADI (Latin American Integration Assn.) 11%

###  NAFTA (North American Free Trade Agreement) 7%

ASEAN (Assn. of Southeast Asian Nations) 4%

Other 7%

> (Source: FAS estimate based on data from Dirección Nacional de
> Alimentos, SAGPyA)

6.  Trends in the AF&BI

    1.  Modern technology in facilities, for the processing of both
        commodities and high-value foods.

    2.  Implementation of updated food quality and safety systems, even
        in small and medium-sized companies.

    3.  Very good storage, distribution, and logistical systems.

    4.  High share of the F&B sector in total Argentine exports.

    5.  High technical level in research and development, and quality
        control areas.

    6.  Expansion of foreign markets for high-value F&B.

7.  Opportunities and Challenges of U.S. Food Ingredients

  ----------------------------------- -----------------------------------
  ADVANTAGES                          CHALLENGES

  Wide variety of U.S. high-value     High cost incidence of U.S. food
  food ingredients and specific uses  ingredients in formulated foods.
  for each food application.          

  Higher competitiveness of U.S. food Strong competition of Brazilian
  ingredients compared to EU products products, which have lower costs,
  due to the high value of the euro   primarily due to the zero import
  vis-a-vis the dollar.               tariff for most food products among
                                      Mercosur member countries.

  Expansion of Argentine exports of   Domestic production of basic food
  high-value foods (mainly bakery and ingredients at lower costs.
  confectionery products), which will 
  demand higher volumes of food       
  ingredients.                        

  U.S. supply of concentrated juices  Competition from other markets,
  and herb extracts for the beverage  which are not tied to the euro,
  industry, which is expanding in     such as China.
  Argentina.                          
  ----------------------------------- -----------------------------------

# SECTION II. ROAD MAP FOR MARKET ENTRY

## A. Entry Strategy

There are various ways to introduce food ingredients into the local
market depending on the profile of the company and the food ingredient
involved. The following are a few recommendations to consider:

-   The presentation of the product to the food processing company may
    be done directly or through a distributor and/or representative.
    There are a few local and/or regional distributors who are very well
    known in the AF&BI. Another option is through a joint-venture.

-   It is necessary to identify the sector/s of the company where it is
    more convenient to present the food ingredient offered. This is
    extremely important for the product to be evaluated by the
    appropriate professionals. Larger companies usually have a Research
    and Development Division. Other smaller companies receive proposals
    of new ingredients through their Purchasing Division. If the
    ingredient is a novelty product, it is more convenient to present it
    to the Marketing Division.

-   Besides presenting the product to the industry, it can be
    simultaneously promoted in specialized magazines (focused on food,
    nutrition and health), at technical events (seminars, conferences,
    etc.), and/or trade shows.

## B. Market Structure 

![](media/image2.wmf)

There is a significant market for some U.S. food ingredients among local
producers of ingredients, who use them to manufacture high-value,
tailor-made food products through mixes, combinations of various
ingredients, etc. This system is very useful for both large and
medium/small-sized companies.

## C. Company Profiles (2004)

The following are some of the most important F&B companies in Argentina:

+------------------+-----------+----------+------------+--------------+
| Company          | Sales     | End-Use  | Production | Procurement  |
|                  |           | Channels | Location   | Channels     |
| (Product Types)  | (\$       |          |            |              |
|                  | Thousand) |          |            |              |
+------------------+-----------+----------+------------+--------------+
| Aceitera General | 1,220,000 | Retail   | San Luis   | Direct       |
| Deheza (edible   |           | and HRI  | (1)        |              |
| oils,            |           |          |            | Importers    |
| mayonnaise, soy  |           |          | Córdoba    |              |
| milk)            |           |          | (3)        |              |
+------------------+-----------+----------+------------+--------------+
| Molinos Río de   | 850,000   | Retail   | Buenos     | Direct       |
| la Plata (edible |           | and HRI  | Aires (7)  |              |
| oils, rice,      |           |          |            | Importers    |
| pasta, premixes, |           |          | San Luis   |              |
| breading,        |           |          | (1)        |              |
| margarine,       |           |          |            |              |
| frozen foods,    |           |          | Santa Fe   |              |
| meats)           |           |          | (2)        |              |
|                  |           |          |            |              |
|                  |           |          | Chaco (1)  |              |
+------------------+-----------+----------+------------+--------------+
| SanCor           | 420,000   | Retail   | 18 plants  | Direct       |
|                  |           | and HRI  |            |              |
| (milk, yoghurt,  |           |          |            | Importers    |
| "dulce de        |           |          |            |              |
| leche", butter,  |           |          |            |              |
| cheese)          |           |          |            |              |
+------------------+-----------+----------+------------+--------------+
| Mastellone       | 400,000   | Retail   | Buenos     | Direct       |
| (milk, "dulce de |           | and HRI  | Aires (4)  |              |
| leche", butter,  |           |          |            | Importers    |
| yoghurt, cheese) |           |          | San Luis   |              |
|                  |           |          | (1)        |              |
|                  |           |          |            |              |
|                  |           |          | Córdoba    |              |
|                  |           |          | (1)        |              |
+------------------+-----------+----------+------------+--------------+
| Arcor            | 400,000   | Retail   | 31 plants  | Direct       |
| (confectionery   |           | and HRI  | in         |              |
| pcts., baked     |           |          |            | Importers    |
| goods, canned    |           |          | Argentina  |              |
| vegetables,      |           |          |            |              |
| jams, chocolate  |           |          | Brasil     |              |
| pcts., premixes) |           |          |            |              |
|                  |           |          | Uruguay    |              |
+------------------+-----------+----------+------------+--------------+
| Química Estrella | 75,000    | Retail   |            | Direct       |
| (rice, dried     |           | and HRI  |            |              |
| foods)           |           |          |            | Importers    |
+------------------+-----------+----------+------------+--------------+
| Quickfood        | 170,000   | Retail   | Buenos     | Direct       |
| (chilled cuts,   |           | and HRI  | Aires (3)  |              |
| frozen cuts,     |           |          |            | Importers    |
| beef patties,    |           |          | Santa Fe   |              |
| frozen cooked    |           |          | (1)        |              |
| beef)            |           |          |            |              |
|                  |           |          | San Luis   |              |
|                  |           |          | (1)        |              |
|                  |           |          |            |              |
|                  |           |          | Uruguay    |              |
|                  |           |          | (1)        |              |
+------------------+-----------+----------+------------+--------------+
| Lagomarsino      | 100,000   | Retail   | 8 plants   | Direct       |
| (wheat flour,    |           | and HRI  |            |              |
| bakery and       |           |          |            | Importers    |
| premixes for     |           |          |            |              |
| cakes and bread) |           |          |            |              |
+------------------+-----------+----------+------------+--------------+
| Molinos Fénix    | 11,000    | Retail   | 3 plants   | Direct       |
| (wheat flour)    |           | and HRI  |            |              |
|                  |           |          |            | Importers    |
+------------------+-----------+----------+------------+--------------+
| Molinos Semino   | 25,000    | Retail   | 2 plants   | Direct       |
| (wheat flour,    |           | and HRI  |            |              |
| gluten and       |           |          |            | Importers    |
| starch)          |           |          |            |              |
+------------------+-----------+----------+------------+--------------+
| Orieta (jams,    | 11,000    | Retail   | 2 plants   | Direct       |
| solid jams,      |           | and HRI  |            |              |
| confectionery    |           |          |            | Importers    |
| pcts., solid jam |           |          |            |              |
| milk, raisins)   |           |          |            |              |
+------------------+-----------+----------+------------+--------------+

> Source: Comisión Nacional de Valores.

## D. Main Argentine F&B Companies by Product-Type 

#  DAIRY PRODUCTS

+---------------+-------------------------+---------------------------+
| COMPANY       | Main activity           | Location (Provinces)      |
+---------------+-------------------------+---------------------------+
| SanCor Coop.  | Butter, milk, powdered  | Santa Fe, Córdoba, Buenos |
| Ltda.         | milk, cheese, cream,    | Aires                     |
|               |                         |                           |
|               | yogurt                  |                           |
+---------------+-------------------------+---------------------------+
| Mastellone    | Butter, milk, powdered  | Buenos Aires, San Luis    |
| Hnos./        | milk, cheese, cream,    |                           |
|               |                         |                           |
| La Serenísima | yogurt, dessert         |                           |
+---------------+-------------------------+---------------------------+
| Nestlé        | Powdered milk,          | Córdoba, Santa Fe, Buenos |
| Argentina     | concentrated milk,      | Aires                     |
| S.A.          | infant formula,         |                           |
|               | fortified milk, ice     |                           |
|               | cream                   |                           |
+---------------+-------------------------+---------------------------+
| Molfino - La  | Milk, cheese, cream     | Córdoba, Santa Fe.        |
| Paulina       |                         |                           |
+---------------+-------------------------+---------------------------+
| La Salamandra | Dairy artisan products  | Buenos Aires              |
+---------------+-------------------------+---------------------------+
| Williner      | Milk, cheese, butter    | Santa Fe                  |
+---------------+-------------------------+---------------------------+
| Kasdorf       | Baby food               | Buenos Aires              |
+---------------+-------------------------+---------------------------+
| Milkaut       | Milk, butter, cheese,   | Santa Fe, Buenos Aires,   |
|               | yogurt, whey protein,   | San Luis, La Rioja        |
|               | milk protein            |                           |
+---------------+-------------------------+---------------------------+

SNACK FOODS (FLAVORED AND SWEET SNACKS AND NUTS)

+----------------+-----------------------+----------------------------+
| Pepsico        | Flavored snacks, oat  | Buenos Aires               |
| Elaboradora    | flakes, cereal bars,  |                            |
| Argentina de   | flakes (potato,       |                            |
| Cereales SRL   | carrot), foie gras    |                            |
+----------------+-----------------------+----------------------------+
| Georgalos      | Candied peanuts**,**  |                            |
| Hnos.          | cereal bars, nougats, |                            |
|                | and other             |                            |
|                | confectionery         |                            |
|                | products              |                            |
+----------------+-----------------------+----------------------------+
| Golden Peanut  | #                     | Córdoba                    |
| Argentina S.A. | Confectionery peanuts |                            |
+----------------+-----------------------+----------------------------+
| Olega          | #                     | Córdoba                    |
| S.A.C.I.I.A. y | Confectionery peanuts |                            |
| F.             |                       |                            |
+----------------+-----------------------+----------------------------+
| Cotagro Coop.  | #                     | Córdoba                    |
| Agropecuaria   | Confectionery peanuts |                            |
| Ltda.          |                       |                            |
|                | By-products           |                            |
|                |                       |                            |
|                | Seeds                 |                            |
+----------------+-----------------------+----------------------------+
| Gastaldi Hnos. | #                     | Córdoba                    |
|                | Confectionery peanuts |                            |
|                |                       |                            |
|                | Wheat mill products   |                            |
|                | and by-products       |                            |
+----------------+-----------------------+----------------------------+
| Nutrasun       | Sunflower seeds       | Buenos Aires               |
+----------------+-----------------------+----------------------------+
| La Delicia     | Chocolates, cereals   | Buenos Aires               |
| Felipe Fort    | and fruit bars        |                            |
| S.A            |                       |                            |
+----------------+-----------------------+----------------------------+
| Laso S.A.      | Cereal bars,          | Buenos Aires               |
|                |                       |                            |
|                | granola bars, corn    | Chubut                     |
|                | flakes, frosted       |                            |
|                | flakes, puffed        |                            |
|                | cereals, chocolate,   |                            |
|                | fruits, cookies,      |                            |
|                | fried potatoes and    |                            |
|                | sweet potatoes        |                            |
+----------------+-----------------------+----------------------------+

> PREPARED FRUITS AND VEGETABLES; OILSEED PRODUCTS; SAUCES; AND FROZEN,
> CANNED AND DRIED PRODUCTS

+----------------+-----------------------+----------------------------+
| # Farm Frites  | Frozen fried potatos  | Buenos Aires               |
+----------------+-----------------------+----------------------------+
| Mc Cain        | 170,000 MT/year       | Buenos Aires               |
| Argentina S.A. | Frozen potatoes       |                            |
|                |                       |                            |
| (67% market    |                       |                            |
| share)         |                       |                            |
+----------------+-----------------------+----------------------------+
| Molinos Río de | Frozen vegetables     | Buenos Aires               |
| la Plata       |                       |                            |
+----------------+-----------------------+----------------------------+
| Benvenuto      | Jams, fruit           | Mendoza                    |
| S.A.C.I.       | preserves,            |                            |
|                | marmalades, fresh     | Buenos Aires               |
|                | fruits and            |                            |
|                | vegetables, pulses,   | Río Negro                  |
|                |                       |                            |
|                | concentrated fruit    |                            |
|                | pulp, tomato paste,   |                            |
|                | sauces, preserved     |                            |
|                | fish                  |                            |
+----------------+-----------------------+----------------------------+
| # Molto        | 1,500 MT/year of      | Mendoza                    |
|                | dried vegetables      |                            |
|                |                       | San Juan                   |
|                | 400 MT/day of fresh   |                            |
|                | tomatoes              |                            |
|                |                       |                            |
|                | 6 million units of    |                            |
|                | processed tomatoes,   |                            |
|                | 25 million units of   |                            |
|                | fruit cans (on an     |                            |
|                | annual basis)         |                            |
|                |                       |                            |
|                | Dehydrated            |                            |
|                | vegetables,           |                            |
|                | concentrated fruit    |                            |
|                | pulp, canned fruits   |                            |
|                | and vegetables        |                            |
+----------------+-----------------------+----------------------------+
| Canaille -     | Canned fruits,        | Mendoza                    |
| Redcap         | tomatoes and other    |                            |
|                | vegetables, jams,     | Buenos Aires               |
|                | marmalades            |                            |
+----------------+-----------------------+----------------------------+
| Industrias     | Canned fruits and     | Catamarca                  |
| Alimenticias   | vegetables            |                            |
| Argentinas/    |                       | Mendoza                    |
| ALCO           |                       |                            |
|                |                       | Buenos Aires               |
+----------------+-----------------------+----------------------------+
| Orieta/        | Annual sales: \$10    |                            |
|                | million               |                            |
| Goy Widmer y   |                       |                            |
| Cía. S.A.      | 4,500 MT/year of      |                            |
|                | confectionery         |                            |
|                | products              |                            |
|                |                       |                            |
|                | Jams, solid jams,     |                            |
|                | "dulce de leche",     |                            |
|                | raisins               |                            |
+----------------+-----------------------+----------------------------+
| Dánica S.A.    | Margarine,            | Buenos Aires               |
|                | mayonnaise,           |                            |
|                |                       | San Luis                   |
|                | sauces, bakery        |                            |
|                | products              |                            |
+----------------+-----------------------+----------------------------+
| Bestfoods/     | Ketchup, mayonnaise,  | Buenos Aires               |
|                | sauces, mustard       |                            |
| Unilever       |                       | La Rioja                   |
+----------------+-----------------------+----------------------------+

CONFECTIONERY PRODUCTS

+----------------+-----------------------+----------------------------+
| # Arcor        | Candy, chocolate      | Buenos Aires               |
|                | products, *alfajores* |                            |
|                | (traditional          | Córdoba                    |
|                | Argentine cookies)    |                            |
|                |                       | Brasil                     |
+----------------+-----------------------+----------------------------+
| Cadbury        | Candy, chewing gum,   | Buenos Aires               |
| St             | chocolate products,   |                            |
| ani/Terrabusi/ | *alfajores*, cereal   |                            |
| Adams          | bars                  |                            |
+----------------+-----------------------+----------------------------+
| # Nestlé       | Candy, *alfajores*,   | Buenos Aires               |
|                | chocolate products    |                            |
+----------------+-----------------------+----------------------------+
| Bonafide       | Candy, chocolate      | Buenos Aires               |
|                | products, chewing gum |                            |
+----------------+-----------------------+----------------------------+
| Bombonería     | Chocolate products,   | Buenos Aires               |
| Elite S.A      | candy                 |                            |
+----------------+-----------------------+----------------------------+
| Kraft Food     | Chocolate products,   | Buenos Aires               |
| Argentina S.A  | *alfajores*, candy    |                            |
+----------------+-----------------------+----------------------------+
| La Delicia     | Candy, cereal bars,   | Buenos Aires               |
| Felipe Fort    | chocolate products    |                            |
| S.A            |                       |                            |
+----------------+-----------------------+----------------------------+
| Lheritier      | Candy, nougats,       | Buenos Aires               |
| Argentina S.A  | cereals bars          |                            |
+----------------+-----------------------+----------------------------+
| Productos Lipo | Candy                 | Buenos Aires               |
| S.A            |                       |                            |
+----------------+-----------------------+----------------------------+
| Fortunato      | Candy, chocolate      | Buenos Aires               |
| Arrufat        | products**,**         |                            |
|                | nougats, *alfajores*  |                            |
+----------------+-----------------------+----------------------------+

BAKED GOODS

+----------------+-----------------------+----------------------------+
| # Arcor/Bagley | Crakers, cookies      | Buenos Aires               |
|                |                       |                            |
|                |                       | Córdoba                    |
+----------------+-----------------------+----------------------------+
| Kraft Foods    | Crackers, cookies     | Buenos Aires               |
+----------------+-----------------------+----------------------------+
| La Salteña     | Bread, fresh dough    | Buenos Aires               |
+----------------+-----------------------+----------------------------+
| Bimbo          | Bread, cakes          | Buenos Aires               |
| Argentina      |                       |                            |
+----------------+-----------------------+----------------------------+
| Fargo          | Bread, cakes          | Buenos Aires               |
+----------------+-----------------------+----------------------------+

BEVERAGES (INCLUDING ALCOHOL)

+----------------+-----------------------+----------------------------+
| # SAVA Gancia  | Herbal beverages,     | San Luis                   |
|                | liquors               |                            |
|                |                       | Buenos Aires               |
+----------------+-----------------------+----------------------------+
| Miscellaneous  | Wine, sparkling wine  | Mendoza                    |
| wineries       |                       |                            |
|                |                       | San Juan                   |
|                |                       |                            |
|                |                       | Salta                      |
|                |                       |                            |
|                |                       | Catamarca                  |
|                |                       |                            |
|                |                       | La Rioja                   |
|                |                       |                            |
|                |                       | Río Negro                  |
+----------------+-----------------------+----------------------------+
| Quilmes,       | Beer                  | Buenos Aires               |
| Budweiser,     |                       |                            |
| Heineken       |                       | Santa Fe                   |
|                |                       |                            |
|                |                       | Córdoba                    |
+----------------+-----------------------+----------------------------+
| Coca Cola      | Soft drinks,          |                            |
|                | beverages with juices |                            |
+----------------+-----------------------+----------------------------+
| # Pepsi Cola   | Soft drinks,          |                            |
|                | beverages with juices |                            |
+----------------+-----------------------+----------------------------+
| Danone         | Mineral water,        | Buenos Aires               |
|                | flavored water        |                            |
|                |                       | Mendoza                    |
+----------------+-----------------------+----------------------------+

DRIED FOODS AND CONDIMENTS (canned soups, dry mixes, pasta, pet food,
seasonings)

+----------------+-----------------------+----------------------------+
| # Kraft        | Dry sweet mixes:      | Buenos Aires               |
|                | cakes, gelatin,       |                            |
|                | pudding.              |                            |
|                |                       |                            |
|                | Dry pasta             |                            |
+----------------+-----------------------+----------------------------+
| Bestfood       | Soup dry mixes.       | Buenos Aires               |
| (Unilever)     |                       |                            |
|                | Cube boullions.       |                            |
|                |                       |                            |
|                | Seasoning powder      |                            |
+----------------+-----------------------+----------------------------+
| Molinos Río de | Dry pasta             | Buenos Aires               |
| la Plata       |                       |                            |
|                | Dry mixes: cakes,     | San Luis                   |
|                | gelatin, puddings,    |                            |
|                | ice cream, ñoquis,    |                            |
|                | cheese bread, soy     |                            |
|                | patties.              |                            |
+----------------+-----------------------+----------------------------+
| Nestlé         | Pet foods             | Buenos Aires               |
|                |                       |                            |
|                | Canned soups, dry     |                            |
|                | mixes, pasta          |                            |
+----------------+-----------------------+----------------------------+
| Masterfoods    | Pet foods             | Buenos Aires               |
| Argentina Ltd  |                       |                            |
+----------------+-----------------------+----------------------------+
| La Virginia    | Spices, seasonings    | Buenos Aires, Santa Fe     |
+----------------+-----------------------+----------------------------+
| Alicante       | Spices, seasonings    | Buenos Aires               |
+----------------+-----------------------+----------------------------+

PREPARED MEALS (\"ready to eat\" mixed ingredients; retail, and food
services meals and entrees)

+----------------+-----------------------+----------------------------+
| Industrias     | Pizzas                | Buenos Aires               |
| Alimenticias   |                       |                            |
| Argentinas     | Production: 420,000   |                            |
|                | pizzas/shift          |                            |
|                |                       |                            |
|                | Storage capacity:     |                            |
|                | 150,000 units         |                            |
+----------------+-----------------------+----------------------------+
| SAVA - Gancia  | *Empanadas*           | Buenos Aires               |
|                | (traditional          |                            |
|                | Argentine appetizer), |                            |
|                |                       |                            |
|                | dried filled pasta    |                            |
+----------------+-----------------------+----------------------------+
| Molinos Río de | Frozen meals          | Buenos Aires               |
| la Plata       |                       |                            |
+----------------+-----------------------+----------------------------+
| Bestfood       | Soups                 | Buenos Aires               |
| Unilever       |                       |                            |
+----------------+-----------------------+----------------------------+
| Compañía de    | Frozen precooked      | Buenos Aires               |
| Alimentos      | bakery                |                            |
| Fargo          |                       |                            |
+----------------+-----------------------+----------------------------+
| Corporación    | Risotto, tomato paste | Buenos Aires               |
| General de     |                       |                            |
| Alimentos S.A  |                       |                            |
|                |                       |                            |
| Grupo Estrella |                       |                            |
+----------------+-----------------------+----------------------------+

SPECIALIZED FOOD INGREDIENTS (additives, preservatives, thickeners,
sweeteners)

The following are local manufacturers of food ingredients who account
for the largest share of imported food ingredients in Argentina:

+----------------+----------------------+-----------------------------+
| Saporiti Hnos  | Thickeners,          | [www.saporiti.com.ar](h     |
|                | sweeteners, flavors, | ttp://www.saporiti.com.ar/) |
|                | stabilizers,         |                             |
|                | emulsifiers, colors, |                             |
|                | preservatives,       |                             |
|                | cacao,               |                             |
|                |                      |                             |
|                | food ingredients     |                             |
+----------------+----------------------+-----------------------------+
| Gelfix         | Thickeners,          | [www.gelfix.c               |
|                | sweeteners, flavors, | om](http://www.gelfix.com/) |
|                | stabilizers,         |                             |
|                | emulsifiers, colors, |                             |
|                | preservatives,       |                             |
|                | cacao, dried fruits, |                             |
+----------------+----------------------+-----------------------------+
| Granotec       | Emulsifiers,         | [www.granotec.com           |
| Alimentos      | antioxidants,        | ](http://www.granotec.com/) |
|                | stabilizers,         |                             |
|                | hydrocolloids,       |                             |
|                | preservatives,       |                             |
|                | sweeteners,          |                             |
|                | proteins, enzymes,   |                             |
|                | food ingredients.    |                             |
+----------------+----------------------+-----------------------------+
| Farmesa        | Stabilizers,         | [www.farmesa.com.ar](       |
|                | emulsifiers,         | http://www.farmesa.com.ar/) |
|                | flavors, salts for   |                             |
|                | meat products, soy   |                             |
|                | protein, food        |                             |
|                | ingredients, natural |                             |
|                | colors,              |                             |
+----------------+----------------------+-----------------------------+
| El Bahiense    | Stabilizers,         | [www.elbahiense.com](       |
|                | emulsifiers,         | http://www.elbahiense.com/) |
|                | preservatives,       |                             |
|                | cacao, wheat gluten, |                             |
|                | dextrins, food       |                             |
|                | ingredients.         |                             |
+----------------+----------------------+-----------------------------+
| O.V specias    | Functional           | [www.ovespecias.com.ar](htt |
|                | ingredients,         | p://www.ovespecias.com.ar/) |
|                | emulsifiers          |                             |
+----------------+----------------------+-----------------------------+
| Adama Food     | Citrates, citric     | [www.adama.                 |
| Ingredients    | acid, enzymes,       | com](http://www.adama.com/) |
|                | lactates, milk       |                             |
|                | proteins, whey       |                             |
|                | proteins, soy        |                             |
|                | proteins, food       |                             |
|                | ingredients.         |                             |
+----------------+----------------------+-----------------------------+
| Cordis         | Functional           | [www.cordis.com.ar]         |
|                | ingredients,         | (http://www.cordis.com.ar/) |
|                | preservatives,       |                             |
|                | emulsifiers,         |                             |
|                | proteins, cacao,     |                             |
|                | stabilizers          |                             |
+----------------+----------------------+-----------------------------+
| Alpha          | Emulsifiers, ice     |                             |
| emulsionantes  | cream ingredients    |                             |
+----------------+----------------------+-----------------------------+
| Duas Rodas     | Ice cream additives; | [www.duasrodas.com]         |
| Industrial     | condiments, food     | (http://www.duasrodas.com/) |
|                | ingredients          |                             |
+----------------+----------------------+-----------------------------+
| Alvarez Hnos   | Spices, seasonings   | <Al                         |
|                | tailor made.         | cala_general@ciudad.com.ar> |
+----------------+----------------------+-----------------------------+
| Siviar         | Vegetal concentrates | [www.siviar.com.ar]         |
|                | for beverages and    | (http://www.siviar.com.ar/) |
|                | soft drink emulsions |                             |
+----------------+----------------------+-----------------------------+
| Taxonera       | Food ingredients for | [www.taxonera.com           |
| S.C.A.         | bakery, ice cream    | ](http://www.taxonera.com/) |
|                | and pastry           |                             |
+----------------+----------------------+-----------------------------+

## E. Sector Trends

Argentina is a primary food producing country. Its diverse geography and
various climates allow it to produce a wide variety of food products, of
which many are exported throughout the world.

## Basic Foods

Argentina produces the following foods with little or no processing:

-   Of vegetable origin: grains and oilseeds in large volumes (large oil
    processing capacity), and fruits, vegetables, aromatic herbs,
    spices, olives, etc.

-   Of animal origin: primarily, bovine, ovine, and caprine meat, and
    poultry. In addition, some specialty products for which there is an
    increasing international demand for gourmet markets, such as snail,
    frog, iguana, and llama meat. The local dairy sector is large and
    very competitive.

These two groups of food products follow the trends listed below:

-   Specialized products (name of origin)

-   Safe products, produced under traceability standards

-   Organic products (olive oil, herbs, etc.)

-   Regional products (Andean potatoes, amaranth, chia, etc.)

## Processed Foods

The following trends have been noticed in processed foods:

-   Healthy products

-   Sugar-free products, or with a low content of sugar

-   Low-fat/calorie foods

-   Consumer-ready foods

-   Low-cost foods.

## 

## 

## 

## 

## General Trends in the Food and Beverage Industry

The growth of the Argentine food manufacturing industry has focused on
export competitive expansion and on the development of novelty products.
The following are the most important trends in this sector:

-   Consolidation of medium and small-sized companies, which produce
    regional specialty foods in smaller volumes but with a higher value,
    such as: marmalades, preserves, dried fruits and nuts, olive oil,
    pickles, specialty meats, etc. Many of these undertakings are
    connected with tourism "roads", such as the "wine road", the "olive
    road", among others, which tourists can visit. They can also
    participate in the harvest process.

-   Launching of functional foods, such as fiber, omega 3 and
    phytosterol-added milk (all imported food ingredients). The recent
    interest in these types of products follows a growing international
    trend.

-   Beverage diversification: flavored beverages, such as water with
    herb extracts, have become very popular to the detriment of
    conventional soft drinks. Demand for imported energy drinks has
    increased considerably.

-   Larger beer supply, with new microbrewery beers and increased
    consumption of conventional beer.

-   High-quality varietal and sparkling wines, which meet international
    quality standards.

-   Permanent launching of novelty dairy by-products, such as cheese and
    yogurt, to supply both the domestic and export markets.

-   Expansion of herb infusions as a healthy option. Raw materials for
    their production are both local and imported.

-   Increased production of commodities such as oils, grains, meat and
    dairy products, as a consequence of export expansion.

-   AF&BI´s focus on the industrialization of commodities as a means of
    increasing income, which will demand food ingredients that are not
    produced locally, either at the present time or in the near future,
    because of limited volumes needed (artificial sweeteners, special
    thickeners and stabilizers, nutritional ingredients).

-   Expansion of facilities to other regions, primarily, South America
    and, in some cases, to countries such as Ukraine and China, by some
    multinational companies.

-   Interest of the Argentine confectionery industry in markets in
    Central America and the United States, among others.

-   The baking industry is growing and developing novelty products.

# SECTION III. COMPETITION

-   Food ingredients used in the AF&BI are primarily manufactured
    locally. Those that are unavailable in the local market are
    imported, such as cocoa from Brazil. Specialty food ingredients are
    imported mainly from the United States, Europe, and China. Products
    from Europe are less competitive due to the high-value of the euro
    compared to the dollar.

# 

# 

# SECTION IV. BEST PRODUCT PROSPECTS

Best prospects for imported food ingredients are in the following food
industries:

-   Bakery

-   Confectionery

-   Condiments, seasonings, and spices

-   Dairy

-   Non-alcoholic beverages

-   Snack foods

-   Dry/dehydrated products

-   Consumer-ready foods

-   Sauces

# SECTION V. USEFUL WEBSITES

[www.cipa.org.ar](http://www.cipa.org.ar/) Cámara de Industriales de
Productos Alimenticios

(Food Industry Chamber)

> Provides information on food processors.

[www.copal.com.ar](http://www.copal.com.ar/) Coordinadora de las
Industrias de Productos Alimenticios

(Food Industry Coordinating Agency)

> Provides information on F&B processors, and their chambers.

[www.alimentosargentinos.gov.ar](http://www.alimentosargentinos.gov.ar/)
Dirección Nacional de Alimentos, Secretaría de Agricultura, Ganadería,
Pesca y Alimentos

(National Food Division, Secretariat of Agriculture,

Livestock, Fisheries, and Food)

> Provides official F&B import, export, and production statistics, and
> regulations.

[www.cil.org.ar](http://www.cil.org.ar/) Centro de la Industria Lechera

(Dairy Industry Chamber)

Provides dairy statistics.

[www.cafgda.com.ar](http://www.cafgda.com.ar/) Cámara de Fructosa,
Almidones, Glucosas, Derivados y Afines

> (Chamber of Fructose, Starches, Glucose, and By-Products)
>
> Provides statistics and company contact information.

[www.anmat.gov.ar](http://www.anmat.gov.ar/) Administración Nacional de
Medicamentos, Alimentos y Tecnología Médica

> (National Administration of Drugs, Food, and Medical Technology)
>
> Regulates processed food products which are prepared for direct human
> consumption, health supplements, and both alcoholic and non-alcoholic
> beverages, with the exception of wine)

# SECTION VI. POST CONTACT AND ADDITIONAL INFORMATION

Office of Agricultural Affairs

U.S. Embassy, Buenos Aires

Avda. Colombia 4300

C1425GMN Buenos Aires, Argentina

Phone: 54-11-5777-4844

Fax: 54-11-5777-4216

E-mail: <agbuenosaires@usda.gov>

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

# ANNEX I. MAIN FOOD INGREDIENT IMPORTS 2004

  -------- ---------------------------------- ----------- ------------ -----------
  **HTS    **Product Description**            **MT**      **Thousand   **\$/MT**
  Code**                                                  \$ FOB**     

  0201     Meat of bovine animals, fresh or   1,702.80    1,415.49     831.27
           chilled                                                     

  0203     Meat of swine, fresh, chilled or   11,724.67   19,341.38    1,649.63
           frozen                                                      

  0209     Pig fat, free of lean meat, and    4,820.97    2,631.82     545.91
           poultry fat, not rendered                                   

  0401     Milk and cream, not concentrated   22,006.64   3,564.48     161.97
           nor containing added sugar or                               
           other sweetening                                            

  0713     Dried leguminous vegetables, split 4,790.51    2,158.16     450.51

  1006     Rice                               4,674.74    1,475.62     315.66

  1108     Starches; inulin                   3,067.28    1,491.13     486.14

  1502     Fats of bovine animals, sheep or   12,003.77   4,460.02     371.55
           goats                                                       

  1513     Coconut, palm kernel, and almond   2,606.32    2,027.88     778.06
           oil, and fractions                                          

  1516     Vegetable fats and oils and their  3,540.35    3,632.93     1,026.15
           fractions, partly or wholly                                 
           hydrogenated                                                

  1517     Margarine, edible mixtures or      1,908.90    2,657.42     1,392.12
           preparations of animal or                                   
           vegetable fats or oils                                      

  1604     Prepared or preserved fish; caviar 5,466.43    7,131.73     1,304.64
           and caviar substitutes prepared                             
           from fish eggs                                              

  1701     Cane or beet sugar and chemically  4,935.41    944.46       191.36
           pure sucrose, in solid form                                 

  1702     Other sugars, including chemically 1,688.18    1,611.92     954.83
           pure in solid form; sugar syrup                             
           not containing flavorings or                                
           colors                                                      

  1704     Sugar confectionery, not           4,475.30    6,758.04     1,510.07
           containing cocoa                                            

  1803     Cocoa paste, whether or not        4,244.51    9,237.34     2,176.31
           defatted                                                    

  1804     Cocoa butter, fat, and oil         3,640.54    11,181.23    3,071.31

  1805     Cocoa powder, not containing added 4,409.26    7,659.92     1,737.23
           sugar or other sweetening matter                            

  1806     Chocolate and other food           3,315.16    7,964.04     2,402.31
           preparations containing cocoa                               

  1905     Bread, pastry, cakes, biscuits,    2,133.69    2,538.88     1,189.90
           and other bakers´ wares, whether                            
           or not containing cocoa                                     

  2002     Tomatoes, prepared or preserved    2,736.67    1,471.99     537.88

  2005     Other vegetables and leguminous    2,551.37    1,639.90     642.75
           vegetables, prepared or preserved,                          
           not frozen                                                  

  2008     Fruit that have been prepared of   7,209.21    7,647.79     1,060.84
           preserved by freezing, by packing                           
           (including containing added sugar,                          
           other sweetening, or alcohol)                               

  2009     Fruit juice not fermented, and not 3,350.74    2,563.93     765.18
           containing alcohol, with added                              
           sugar or other sweetening                                   

  2101     Extracts, essences and             2,054.73    6,345.72     3,088.35
           concentrates of coffee, tea or                              
           mate, and preparations with these                           
           products                                                    

  2102     Yeasts, prepared baking powders    1,849.17    2,815.51     1,522.58

  2106     Food preparations not elsewhere    3,869.88    14,732.67    3,807.01
           specified or included                                       

  2202     Waters, including mineral waters,  2,903.20    1,505.40     518.53
           aerated waters, flavored waters,                            
           and other non-alcoholic beverages,                          
           containing added sugar or other                             
           sweetening                                                  

  2208     Undenatured ethyl alcohol of an    2,601.16    5,637.11     2,167.16
           alcoholic strengh by volume of                              
           less than 80%, brandy, liquor, and                          
           other spirits                                               

  2302     Residues of cereals and leguminous 7,637.36    227.52       29.79
           plants                                                      
  -------- ---------------------------------- ----------- ------------ -----------

Source: Dirección Nacional de Alimentos (National Food Division), SAGPyA

# ANNEX II. ORIGIN OF FOOD INGREDIENTS USED IN THE ARGENTINE MARKET

  --------------- ---------------------------- ---------------- --------------
  **Product       **Product name**             **Manufactured   **Imported**
  category**                                   locally**        

  Acids           Oleic acid                                    X

                  Steric acid                                   X

  Albumins        Albuminal substances         X                X

                  Egg albumin                  X                

  Extracts        Coffee extract                                X

                  Fish extract                 X                

                  Meat extract                 X                X

                  Tea extract                                   X

                  Herb extracts                X                

  Starches        Corn starch                  X                X

                  Potato starch                                 X

                  Wheat starch                 X                

  Fruits          Dehydrated fruits            X                

                  Dried fruits                                  X

                  Nuts                         X                X

  Miscellaneous   Casein                                        X

                  Chocolate                                     X

                  Cocoa powder                                  X

                  Condiments                   X                X

                  Dextrins                     X                X

                  Essential oils               X                X

                  Food supplements             X                X

                  Fructose                     X                X

                  Fruit pulp                   X                

                  Gelatin                      X                

                  Ginseng                                       X

                  Glucose                      X                X

                  Glues                                         X

                  Herbs                        X                X

                  Lactose                      X                

                  Milk powder                  X                

                  Milk substitutes             X                

                  Pectic substances                             X

                  Potato flakes                X                X

                  Protein concentrates         X                X

                  Protein isolates             X                X

                  Spices                       X                X

                  Sugar substitutes                             X
                  (sweeteners)                                  

                  Vanilla                      X                X

                  Wheat gluten                 X                

                  Whey                         X                X

                  Yeast                        X                X
  --------------- ---------------------------- ---------------- --------------

Source: Data provided by private sources.