Voluntary Report - public distribution

**Date:** 8/16/2004

**GAIN Report Number:** C14014

C14014

**Caribbean Basin**

**HRI Food Service Sector**

**British Virgin Island**

**2004**

**Approved by:**

![](media/image1.wmf)Paul Hoffman, Director

Caribbean Basin ATO

**Prepared by:**

Nicole Smith, Agricultural Marketing Assistant

**Report Highlights:**

The market for food and beverage products in the British Virgin Islands
was worth approximately U.S. \$16 million in 2002. Known as \"Nature\'s
Little Secret\" for its many islands, cays, and rolling hills, the BVI
is a popular tourist destination. Forty-five percent of this small
economy is dependent on tourism, and as 78 percent of tourists to the
islands are from the United States, a large market for U.S. food and
beverage products exists on the island. The United States is the
island's main supplier of food and beverage products accounting for 83
percent of imports.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Miami \[C11\]

\[C1\]

Section I. Market Summary

Country Snapshot "Nature's Little Secret"

The British Virgin Islands (BVI), part of the Leeward Island chain, are
located in the Caribbean Sea about 50 miles east of Puerto Rico. Known
as "Nature's Little Secret," 16 inhabited and more than 20 uninhabited
islands consist largely of rolling green hills and white sandy beaches
and have a total area of 59 square miles. The total population is around
21,730 (2003 est.). The capital of BVI, Road Town, is located on the
island of Tortola, which lies just 8 miles east of St. Thomas in the
U.S. Virgin Islands. Tortola is the largest island at 21 square miles,
and serves as the center for commerce and government. Apart from
Tortola, the main inhabited islands of the BVI are Virgin Gorda at 8
square miles, Anegada at 15 square miles and Jost Van Dyke with 3.4
square miles. BVI also consists of a number of privately owned islands,
several of which serve as vacation resorts.

Each of the islands can be easily accessed from one another, and from
the U.S. Virgin Islands, by inter-island flights, small boats, and
regular ferry service. The islands have several ports, including Port
Purcell and West End in Tortola, St. Thomas Bay in Virgin Gorda and
Great Harbor in Jost Van Dyke. No direct flights are available to the
islands from the mainland United States, Europe, or South America, yet
inter-island flights are accessible from the three airports located on
the islands. The largest airport, the Terrence B. Lettsome Airport, is
located on Beef Island, situated on the east end of Tortola. At this
airport, several airlines offer flights to San Juan, Puerto Rico, St.
Thomas, U.S. Virgin Islands, and a number of other Caribbean
destinations. Two smaller airports, located on Virgin Gorda and Anegada,
offer flights to the Beef Island airport as well as charter flights to
other points throughout the Caribbean.

The BVI has long been a British Dependent Territory, and remains so
today. The United Kingdom governs over a significant portion of the
islands, including the territory's external affairs, defense, internal
security, and the administration of the courts. A governor, appointed by
the British crown, controls these areas of responsibility. The territory
does have some autonomy, as it is responsible for its own internal
self-government and is governed by a democratically elected Parliament
and Cabinet. BVI is an associate member of both the Organization of
Eastern Caribbean States (OECS) and the Caribbean Community and Common
Market (CARICOM). Membership in these organizations ease trade between
member Caribbean nations by offering duty-free access, facilitating
bilateral and multilateral co-operation, and allowing goods, services,
people and capital to move throughout the Caribbean nation members
without tariffs and restrictions.

The BVI economy is largely based on tourism, which generated
approximately 45% of national income for the country in 2003. Due to
close ties to the U.S. economy, tourism on the islands suffered in 2002
because of the U.S. economic slump after the events of 9/11, yet has
increased since then. Apart from tourism, livestock raising is the most
important agricultural industry on the islands. Poor soils limit the
islands' ability to produce its own food, which results in most foods
being imported. Yet despite the islands' poor soils, the BVI do produce
and export some agricultural goods, including rum, fresh fish, and some
fruits. Less than two percent of the economy is based on agriculture,
and the rest is comprised of the service sector, mainly the offshore
banking industry.

Despite its political ties to the United Kingdom, the BVI has been
closely related to the U.S. economy for many years. Proximity has also
resulted in the creation of very close economic and cultural ties to
both Puerto Rico and the U.S. Virgin Islands. The U.S. dollar serves as
the currency in BVI.

Market Overview

The market for food and beverage products in the BVI was worth
approximately U.S. \$16 million in 2002. Almost all of the foodstuffs
used in the BVI must be imported, as relatively no agriculture is grown
on the islands, and little is manufactured. The United States is the
islands' main supplier of food and beverage products accounting for 83
percent of imports. Proximity plays a role in this advantage, as the BVI
has long had close ties to both the U.S. Virgin Islands and Puerto Rico.
The high quality and competitive prices of U.S. products also
contributes to the U.S.'s leading market share.

Although the U.S. has a clear majority of the BVI food and beverage
market, the nation does import some products from other trading
partners. The second largest trading partner is the United Kingdom and
Canada, each which provide about 3% of imports to the islands. Barbados,
St. Maarten, and St. Martin each provide approximately 1% to the island.
Other trading partners include other Caribbean and South American
countries, including Colombia, Dominica, and St. Vincent & the
Grenadines, although these amounts are small in comparison to the amount
of imports from the US. The amount of domestic food products has
remained negligible over the past five years.

![](media/image2.wmf)

Source: FAS' Global Agricultural Trade System using data from the United
Nations Statistical Office

The U.S. food and beverage exports to the BVI are clearly a much higher
percentage than all other trading partners combined. Also, U.S. food and
beverage exports to the islands have been increasing steadily since
1999. The United States' ability to adapt to the island's food needs,
offering high quality food products at relatively low prices, has
enabled this increasing trend. Other main trading partners have
experienced relatively no change over the last years.

![](media/image3.wmf) ![](media/image4.wmf)

Source: BVI Development Planning Unit

Tourism and HRI

The amount of food imports to the island is highly dependent on tourism.
The tourism industry plays a key role in the BVI, accounting for 45% of
the local economy in 2002. All of the islands of the BVI attract a large
number of tourists each year, and the BVI economy is based largely on
these foreign visitors. One quarter of all BVI residents are employed by
some aspect of the tourism sector. The main islands, Tortola, Virgin
Gorda, and Anegada, have a mix of local residents and tourists, while
some of the smaller islands are available for private tourist functions
and have a much smaller local population.

BVI tourism is unique compared to other Caribbean destinations because
of the number of tourists that arrive and vacation on yachts. From
1997-2001, visitors arriving in the BVI by boat, not including cruise
ship passengers, have outnumbered those arriving by air. The nearly
forty islands, rocks, and cays of the BVI, along with easily navigable
waters, white sandy beaches, warm trade winds, and laid back culture,
have encouraged the growth of sailing in the BVI. The country is world
renowned for its yachting industry, and has been dubbed the "Sailing
Capital of the Caribbean." Due to the increasing numbers of yacht
vacationers in the BVI, the yachting and yacht provisioning industries
have become key aspects of the BVI tourism economy and HRI sector. The
number of visitors brought to the islands via cruise ships has also been
steadily increasing.

![](media/image5.wmf)

Source: Caribbean Cellars 2004 Product Expo

![](media/image6.wmf)

While the BVI receives visitors from almost every corner of the world,
U.S. tourists overwhelmingly represent the majority of visitors to the
islands. Because of the close economic ties to the U.S., the number of
overall tourists decreased with the 2002 U.S. economic slump, but has
since been increasing steadily. A strong market exists among tourists
for U.S. food products, as most American tourists prefer U.S. food
products. Besides the U.S., visitors to the BVI also come from Europe
and other Caribbean nations, including the U.S. Virgin Islands and
Puerto Rico.

Source: Caribbean Cellars 2004 Product Expo

Tourist arrivals in the BVI are not evenly distributed among the
islands. Tortola has three areas of entry for visitors, Beef Island
Airport, Road Town, and West End, and this island receives a clear
majority of visitor arrivals, 436,433 in 2001. Virgin Gorda and Jost Van
Dyke also attract a number of visitors, 59,706 and 38,580 in 2001,
respectively. Tourism to the smaller islands differs by island; for
example, Anegada received 492 visitors in 2001.

Upon arrival in the BVI, tourists have a number of accommodation options
available. Each of the larger islands, as well as most of the smaller
islands, has a selection of hotels. Thirteen of BVI's sixteen inhabited
islands have accommodations. The BVI's room capacity totals 1,331 hotel
rooms spread across 46 properties, and approximately 497 rooms in the
106 small inns, guesthouses, and villas (BVI Tourist Board). Hotels &
resorts constitute 70 percent of the nation's accommodations followed by
small inns and villas with 25 percent. The BVI also has two campgrounds,
which constitute the remaining 5 percent of accommodations on the
islands. The majority of accommodations are located on Tortola, with 25
hotels and around 40 guesthouses and villas, and Virgin Gorda, with 11
hotels and 25 villas and guesthouses. Anegada has three small hotels and
several small villas, and the remainder of the accommodations are spread
throughout the smaller islands of the BVI, such as Jost Van Dyke, Cooper
Island, Guana Island, and Necker Island.

While hotels, villas, and inns are one main source of housing tourists
in the BVI, a greater number of overnight visitors spend their nights on
chartered boats. As outlined above, the number of tourists arriving to
the islands by boat has surpassed the number arriving by air in recent
years. Visitors arriving on the island via yachts tend to rely solely on
the yachts for accommodations during their vacations rather than
spending nights in on island accommodations. In 2001, the number of
visitors staying on chartered boats outnumbered the amount of visitors
staying in hotels and visitors staying in rented/owned accommodations
combined.

![](media/image7.wmf)

Source: FAS' Global Agricultural Trade System using data from the United
Nations Statistical Office

While the number of overnight visitors staying in hotels remained nearly
constant over this five-year period, the number of chartered boat
arrivals has continued to increase over time. The increase of yacht
vacationers has brought about changes to the tourism and HRI sectors as
well. Tourists staying in hotels typically dine in the hotels'
restaurants or local restaurants, and those staying in the smaller
villas and inns may visit local restaurants or cook their own meals
within the accommodation. Yachting vacationers have several dining
options; visitors may eat all meals on the yacht or may go ashore to eat
at local and/or hotel restaurants. Companies geared towards provisioning
for these chartered boats are increasing in number on the island, and
retailers and wholesalers are now also marketing their services to this
type of vacationer.

Guests of all types take advantage of the variety of restaurants on the
island. Roughly 250 restaurants are in business in the BVI, as well as
many smaller beach bars. Many of the larger hotels have restaurants
targeting hotel guests, and the remainder are independently owned
restaurants on Tortola and Virgin Gorda that serve the local population
as well as tourists.

+-----------------------------------+----------------------------------+
| **Advantages**                    | **Challenges**                   |
+-----------------------------------+----------------------------------+
| U.S. tourists represent 78        | Importers and hotels usually     |
| percent of total tourists         | purchase food products in small  |
| visiting the BVI.                 | volumes.                         |
+-----------------------------------+----------------------------------+
| BVI has been importing most of    | Significant changes exist        |
| its food needs due to the small   | between high and low tourist     |
| local agricultural sector.        | seasons.                         |
+-----------------------------------+----------------------------------+
| The United States leads the food  |                                  |
| and beverage market.              |                                  |
+-----------------------------------+----------------------------------+
| Local consumers are knowledgeable | ###                              |
| about U.S. brand-name products    |                                  |
| mainly because of cable TV.       |                                  |
+-----------------------------------+----------------------------------+

Section II. Road Map for Market Entry

A.  Entry Strategy

The HRI sector in the BVI obtains the majority of its food and beverages
from local wholesalers-importers and retailers. The main wholesale
companies in the BVI are located in Tortola, and several of these
companies have offices and retail outlets in Virgin Gorda. The smaller
islands get their food products, usually by ferry, from one of the two
larger islands. Because of small volumes, the best way for the HRI
sector to obtain imported food products is through a local importer, as
these companies usually wholesale and also distribute.

It is common for local importers and retailers to run out of certain
food products. For this reason, a small but increasing number of hotels
and restaurants are importing from wholesalers in the U.S. Virgin
Islands, which are becoming a key supplier of the BVI market. These
wholesalers are able to provide the high quality U.S. products desired,
with low cost shipping methods, and can often provide the smaller
quantities required in the BVI.

To successfully enter the BVI HRI sector, U.S. exporters should first
contact the hotel management and/or restaurant owners and chefs.
Usually, if the restaurant is interested in the product, they will
request product literature and samples. Afterwards, they will likely ask
the supplier to work through their food importer or distributor, whether
local or through the U.S.V.I., as quantities desired are often too low
to permit direct importation.

B.  Market Structure

Local importers, who import the majority of the sector's food needs from
the U.S., represent a large portion of the food distribution to the BVI
HRI sector. Hotels and restaurants may also get foodstuffs from
supermarkets and smaller retail outlets. Wholesalers in the U.S.V.I. are
becoming more frequently used and are significant competition for the
local wholesalers.

*Product Flows for Imported Products:*

####### 

C. Sub-Sector Profiles

1\. Hotels and Resorts

+----------------------+---------------+-------+-----------------------+
| ######### Name       | #####         | **Ro  | #####                 |
|                      | #### Location | oms** | #### Purchasing Agent |
+----------------------+---------------+-------+-----------------------+
| Long Bay Beach       | Tortola       | 150   | []{.mark}             |
| Resort               |               |       |                       |
+----------------------+---------------+-------+-----------------------+
| Prospect Reef Resort | Tortola       | 137   | Local Importer        |
+----------------------+---------------+-------+-----------------------+
| The Sugar Mill       | Tortola       | 24    | Local Importer and    |
|                      |               |       |                       |
|                      |               |       | U.S.V.I. Wholesaler   |
+----------------------+---------------+-------+-----------------------+
| Little Dix Bay Hotel | Virgin Gorda  | 97    | U.S.V.I. Whoelsaler   |
+----------------------+---------------+-------+-----------------------+
| Nail Bay Resort      | Virgin Gorda  | 40    | Local Importer        |
+----------------------+---------------+-------+-----------------------+
| Briars Creek Estate  | Virgin Gorda  | 33    | []{.mark}             |
+----------------------+---------------+-------+-----------------------+
| Anegada Reef Hotel   | Anegada       | 26    | Local Importer        |
+----------------------+---------------+-------+-----------------------+
| Neptune's Treasure   | Anegada       | 9     | Local Importer        |
+----------------------+---------------+-------+-----------------------+

The above list constitutes only a sample of the hotels, resorts, villas,
and guesthouses located on the three largest islands of the BVI. It is
difficult to cite an average size of the hotels in the BVI, as
accommodations range from two-person guest villas to resorts with 150
rooms and everything in between. The larger resorts, as well as many of
the smaller hotels and some of the villas, have restaurants that serve
hotel guests, other island guests and locals. Both local and
international cuisines are served in most hotels.

2\. Restaurants

BVI has a relatively large number of independent restaurants; hundreds
of restaurants are located in Tortola, and there are roughly twenty-two
in Virgin Gorda. These restaurants, located outside of guest
accommodations, cater to both the local and tourist populations. All
types of cuisines are available through these restaurants, but popular
foods are West Indian, U.S., and international. The smaller islands do
not have independent restaurants; most are located within hotels and
other accommodations. There are no fast food chains located in the BVI.

Most restaurants do not import food products directly. They buy all of
their food needs from local or U.S.V.I. wholesalers. A very small
percentage of products are occasionally bought from local producers.
Local products usually include vegetables and seafood.

3\. Institutional

Institutions in the BVI play a minimal role in food imports. The nation
has one hospital, located in Tortola, and several schools which all buy
their food products mainly from local manufacturers and producers. Items
can be purchased less expensively and at lower quantities by using local
wholesalers.

### Section III. Competition

Competition for food and beverage products is led by the United States,
which supplies most of the nation's total needs. The high quality and
competitive prices of U.S. food products aids in forming the market for
U.S. goods in BVI, along with the proximity of and close ties between
BVI and the U.S. Virgin Islands and Puerto Rico. All of these factors
give U.S. food and beverage exporters an advantageous position. The
biggest competitors are France, which supplies a large amount of
alcoholic beverages to the BVI through St. Martin, the U.K., Canada and
other Caribbean countries such as St. Maarten, Barbados, Trinidad &
Tobago and St. Vincent and the Grenadines. In the cases of the Caribbean
competitors, proximity plays the main role.

The following products and countries compete with U.S. products:

-   **Beef:** Argentina, France (via St. Martin)

-   **Pork:** Brazil

-   **Fresh Produce:** St. Vincent & The Grenadines

-   **Seafood:** Local producers

-   **Dairy Products:** France (via St. Martin)

-   **Alcoholic Beverages:** France, Australia, Chile

-   **Non-Alcoholic Beverages:** Canada, Trinidad and Tobago, Dominica

-   **Bottled Water:** Scotland, UK, local producers

-   **Bakery Ingredients:** Canada, UK

The product competition with other nations varies among categories. The
United States dominates the market in the categories shown in the
following table. U.S. food products comprise more than eighty percent of
the market share for fresh/chilled/frozen red meats, poultry meats,
sugars/sweeteners/beverage bases, fresh vegetables, fruit & vegetable
juices, and vegetable oils.

+--------------------------+-------+---------------------------+------+
| ## Top 10                |       |                           |      |
| U.S. Food Products in BV |       |                           |      |
| I Import Market for 2003 |       |                           |      |
+--------------------------+-------+---------------------------+------+
| **U.S. High Value Food   | **M   | **U.S. High Value Food    | **Ma |
| Product**                | arket | Product**                 | rket |
|                          | Sh    |                           | Sha  |
|                          | are** |                           | re** |
+--------------------------+-------+---------------------------+------+
| Red Meats                | 100%  | Vegetable Oils            | 80%  |
| (Fresh/Chilled/Frozen)   |       |                           |      |
+--------------------------+-------+---------------------------+------+
| Poultry Meats            | 100%  | Wine and Beer             | 46%  |
+--------------------------+-------+---------------------------+------+
| Sugars, Sweeteners, &    | 100%  | Rice                      | 37%  |
| Beverage Bases           |       |                           |      |
+--------------------------+-------+---------------------------+------+
| Fresh Vegetables         | 99%   | Red Meats                 | 21%  |
|                          |       | (Prepared/Preserved)      |      |
+--------------------------+-------+---------------------------+------+
| Fruit & Vegetable Juices | 92%   | Snack Foods (Excl. Nuts)  | 15%  |
+--------------------------+-------+---------------------------+------+

###### Source: UN Trade Data

###### **Section IV. Best Prospects**

##### 

##### A. Products Present in the Market Which Have Good Sales Potential

Almost all U.S. goods are present on the islands, and due to cable
television via satellite from the United States, the BVIslanders are
exposed to new products. All U.S. products have good sales potential in
the BVI.

##### B. Products Not Present in Significant Quantities but Which Have Good Sales Potential

-   "Healthy products"

##### C. Products Not Present Because They Face Significant Barriers

> The BVI is an importing country, and depends heavily on its imports.
> Therefore, there are no food products which are restricted from entry.

Goods below are produced locally, yet on such a small scale that they
are still heavily imported:

-   Seafood

-   Water

-   Locally grown types of vegetables

###### **Section V. Import Regulations** 

Importers are required to obtain an import permit from the Department of
Agriculture for the importation of produce, including a phytosanitary
certificate. Customs duties rates range from 5-20% on some imports. Some
food products are duty free, and others are marked with a dollar value
duty. The table below outlines some of the duties placed on goods
imported into the BVI.

  -------------------------------------------- --------------------------
  Top 10 U.S. Food Products in BVI Import      
  Market for 2003                              

  **U.S. High Value Food Product**             **Import Duty**

  Beef, fresh and fresh                        5%

  Chicken, frozen                              Free

  Milk, whole                                  5%

  Butter                                       Free

  Cheese                                       5%

  Produce                                      5%

  Breakfast Cereals                            10%

  Juice                                        10%

  Beer, malt                                   U.S. \$1.10 per gal.

  Wine                                         U.S. \$1.20 per gal.
  -------------------------------------------- --------------------------

> Sources: BVI Customs Departments

###### 

###### **Section VI. Contact Information**

###### 

A. For more information on the British Virgin Islands and a list of
importers for your U.S. product, please contact:

**Caribbean Basin Agricultural Trade Office**

**Foreign Agricultural Service**

**United States Department of Agriculture**

909 SE 1^st^ Ave., Suite 720

Miami, FL 33131

Phone: (305) 536-5300

Fax: (305) 536-7577

E-mail: <cbato@cbato.net>

Paul Hoffman, Director

E-mail: <cbato@cbato.net>

Omar González, Deputy Director

E-mail: <omar@cbato.net>

Graciella Juelle, Marketing Assistant

E-mail: <grace@cbato.net>

Please visit our website for more reports and information on The British
Virgin Islands and other Caribbean Islands:

[http://www.cbato.fas.usda.gov](http://www.cbato.fas.usda.gov/), click
on "U.S. Exporters"

**B. Other Sources of Information on The British Virgin Islands:**

BVI Chamber of Commerce and Hotel Association

PO Box 376, Road Town\
James Frett Building\
Tortola, British Virgin Islands

Tel: (284) 494-3514\
Fax: (284) 494-6179

BVI Customs Department

Tel: (284) 494-3475

BVI Ports Authority\
Port Purcell\
P.O Box 4, Road Town\
Tortola, British Virgin Islands\
Tel: (284) 494-3435

Fax: (284) 494-2642

BVI Tourist Board

Caribbean Office

P.O. Box 134

Road Town, Tortola, BVI

Tel: 284-494-3134

Fax: 284-494-3866

email: <bvitor@bvitouristboard.com>

Department of Agriculture

Paraquita Bay

Road Town, Tortola

British Virgin Islands

Tel: (284) 495-2532

Fax: (284) 495-1269

Department of Information and Public Relations\
Government Central Administration Building\
33 Admin Drive\
Road Town, Tortola\
British Virgin Islands

Tel: (284) 468-3701, ex. 2139\
Fax: (284) 494-6877\
Email: <gis@bvigovernment.org>

Development Planning Unit\
BVI Government\
Central Administration Complex\
Wickhams Cay 1\
Road Town, Tortola\
British Virgin Islands

Office of the Comptroller of Customs

Road Town, Tortola

British Virgin Islands

Tel: (284) 494-3475

Fax: (284) 494-6906

Contact: Mr. V. Hodge

Trade and Investment

Central Administration Complex, West Wing, 1st Floor

Tel: (284) 494-3701 ext. 2008\
Fax: (284) 494 5676\
Email: <trade@bvigovernment.org>