Required Report - public distribution

**Date:** 11/2/2005

**GAIN Report Number:** CO5021

CO5021

**Colombia**

**Retail Food Sector**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)David J. Mergen

U.S. Embassy

**Prepared by:**

Alicia de Jacobs

Alicia de Jacobs, Marketing Specialist

**Report Highlights:**

Colombia is our largest export market for food and agricultural products
in Central and South America. In 2004, the U.S. supplied 33.9 percent,
\$726.05 million, of the total Colombian imports of food and
agricultural products. The Colombian GDP grew 3.96% in 2004. The
supermarket sector is expanding and a wider offering of imported
value-added food products are being displayed. The U.S.-Colombia free
trade agreement, currently being negotiated, will increase bilateral
trade.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Bogota \[CO1\]

\[CO\]

Executive Summary

In 2004, total Colombian food and agricultural imports were \$2.1
billion of which the United States accounted for 33.9 percent or
\$726.05 million of the total, making Colombia our largest export market
in Central and South America. The economy was brighter in 2004 compared
to previous years. The GDP grew 3.96 percent in 2004 and it is estimated
to grow 4 to 5 percent in 2005, with growth of 4.6 percent in the first
three quarters of the year. Domestic demand and household consumption
have had steady increases during the last three years. The remarkably
young population, 70 percent of which lives in urban areas, has new
tastes and preferences and is more health-conscious and selective. With
rising participation of women in the workforce and greater use of fast
food restaurants, demand for new high-value products is increasing.
Economic realities and current consumer trends indicate that buying
decisions are increasingly based on quality and price. There is a
general perception that U.S. products are of good quality and value. The
importance of Colombia as a market will expand even more under the
bilateral free trade agreement currently being negotiated.

The supermarket sector in Colombia is one of the most modern in Latin
America, with estimated sales of \$6.0 billion in 2004, of which 36% or
\$2.2 billion were food products. Despite significant growth, fierce
competition is a steady characteristic of the Colombia's retail sector.
Consumers have benefited from the "price war" among competitors. The
sector is consolidating a massive structural change initiated in recent
years. Strategic alliances, such as Carulla-Vivero, took place in a
frantic effort to modernize and capture market share. World-class
hypermarkets, such as Makro and Carrefour, made their first incursions
into the country in 1998 and continue to expand. Carrefour' s marketing
strategies led it to a larger market share and a strong position in the
industry. This hypermarket will open five to seven new stores in 2006.
Carrefour has purchased 35% of the stocks held by the Grupo Santodomingo
and 10% of those owned by the Spanish company Sigla, ending up with a
100% ownership of the chain in Colombia. Other significant acquisitions,
such as the purchase of 28 percent of Carulla by the U.S. based New
Bridge, and of 28.6% of Exito by Casino (a French enterprise) have
reshaped the sector. Exito bought the Cadenalco group, as well as
Comfamiliar chain, the last chain targets the lower income population.
Olimpica in turn, purchased the Febor chain (former Central Bank
employees fund). Furthermore, the arrival of French giant Carrefour and
Holland retailer Makro in Colombia, as well as the sustained strength of
local players such as Exito, Carulla, Alkosto, Olimpica, Colsubsidio and
Cafam, have unleashed a wave of concentration in 50 percent of the
retail market. On the other hand, convenience stores are a new sales
venue and are expanding in the form of Gas Marts. As a result, supply
channels have been rapidly streamlined, and end-users are increasingly
establishing contacts abroad. Colombian importers are constantly seeking
alternatives to reduce high costs. The new retail market structure in
Colombia and the production-consumer chain has forced
distributors/suppliers to switch from being passive to active agents.

Despite rapid modernization in the retail sector, traditional Mom and
Pop stores continue to consolidate as one of the most important
distribution channels in the country. They have a 70% share of the
market. This is because the hyper/supermarkets do not offer services,
such as credit, small-quantity sales of bulk products, and a proximity
that appeals to the vast number of middle and lower-income consumers.
Likewise, they are expanding in a format of mini-markets that are
effectively competing with supermarkets.

Several factors have a negative impact on the market: 1. As a member of
the Andean Community, Colombia imposes a variable import duty system on
more than 140 product categories, resulting in high and unpredictable
duties. 2. Restrictive import licensing (import ban) is a major barrier
for poultry leg quarters. 3. Despite GOC efforts, artificially
low-priced contraband produces unfair competition and disrupts sales of
legally imported products, and 4. Internal conflict continues to hinder
economic growth.

The outlook for 2005 is excellent. Additional factors are expected to
contribute to further expansion of the retail food market: market
leaders are investing in construction of new modern shopping centers in
which super/hypermarkets and cinemas are the cardinal points; sales
areas range between 6,000 and 12,000 sq meters, offer a complete variety
of products and fulfill the increasing demand for one-stop shopping.
Investment also includes state of the art technology, tailored logistics
to save consumers time and money, remodeling and improvement of service
areas. Total investment will be nearly \$172 million reinforcing the
growth of the sector in the last three years. The target now is to reach
low-income consumers: the aggregate of low income population has quite a
large budget to spend in massive consumption products, which are less
sensitive to family earning declines.

Colombia and the United States are currently negotiating a bilateral
free trade agreement, with the goal of implementing the agreement in
January 2007. The trade agreement is expected to provide a major boost
to the Colombian economy and imports of food products from the U.S.

# 

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# Market Overview

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# Colombian Food Production

![](media/image10.wmf)

![](media/image11.wmf)

2002-2003 Food and Agricultural Imports from the U.S.

+------------------+-------+-------+----------------+-------+-------+
| **PRODUCT**      | **2   | **2   | **PRODUCT**    | **2   | **2   |
|                  | 002** | 003** |                | 002** | 003** |
+------------------+-------+-------+----------------+-------+-------+
|                  | **U   |       |                | **U   |       |
|                  | S\$** |       |                | S\$** |       |
|                  |       |       |                |       |       |
|                  | *     |       |                | *     |       |
|                  | *MILL |       |                | *MILL |       |
|                  | ION** |       |                | ION** |       |
+------------------+-------+-------+----------------+-------+-------+
| Meat and Edible  | 7.9   | 4.2   | Gums, Resins,  | 5.4   | 6.6   |
| Meat Offals      |       |       | Other          |       |       |
|                  |       |       | Vegetable      |       |       |
|                  |       |       | Saps/ Extracts |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Fish, Shellfish, | 0.7   | 0.4   | Vegetable      | 0.4   | 0.5   |
| Mollusks         |       |       | Planting       |       |       |
|                  |       |       | Materials      |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Dairy Products,  | 1.0   | 1.2   | Animal or      | 16.9  | 16.3  |
| Eggs, Honey      |       |       | Vegetable Fats |       |       |
|                  |       |       | and Oils       |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Products of      | 3.1   | 2.8   | Preparations   | 12.1  | 12.8  |
| Animal Origin    |       |       | of Meat and    |       |       |
| and other Animal |       |       | Fish           |       |       |
| Products         |       |       |                |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Live Trees and   | 3.6   | 3.0   | Sugars and     | 3.5   | 3.0   |
| Plants, Bulbs,   |       |       | Confectionery  |       |       |
| Roots            |       |       | Products       |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Edible           | 1.7   | 1.6   | Cocoa and      | 2.5   | 1.9   |
| Vegetables and   |       |       | Cocoa          |       |       |
| Tubers           |       |       | Preparations   |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Edible Fruits    | 8.0   | 7.9   | Cereal         | 12.9  | 2.8   |
| and Nuts, Citrus |       |       | Preparations,  |       |       |
| Fruits           |       |       | Flour,         |       |       |
|                  |       |       | Starches,      |       |       |
|                  |       |       | Milk, Bakery   |       |       |
|                  |       |       | products.      |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Coffee, Tea, and | 0.1   | 0.2   | Preparations   | 5.9   | 3.7   |
| Spices           |       |       | of Vegetables, |       |       |
|                  |       |       | Fruits         |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Grains           | 327.0 | 323.6 | Miscellaneous  | 16.0  | 15.6  |
|                  |       |       | Edible         |       |       |
|                  |       |       | Preparations   |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Milling Industry | 0.3   | 0.3   | Beverages,     | 1.0   | 0.6   |
| Products, Malt,  |       |       | Spirits and    |       |       |
| Starches         |       |       | Vinegar        |       |       |
+------------------+-------+-------+----------------+-------+-------+
| Oilseeds, Other  | 53.9  | 35.9  | Residues and   | 32.9  | 40.1  |
| Grains           |       |       | Waste from     |       |       |
|                  |       |       | Food           |       |       |
|                  |       |       | Industries     |       |       |
|                  |       |       | /Prepared      |       |       |
|                  |       |       | By-Products    |       |       |
+------------------+-------+-------+----------------+-------+-------+

Source: DIAN (Revenue and Customs Agency).

# Main U.S. Food Products Imported -2004

+------------+-------------------------------------------------+-------+
| **HS**     | **Products**                                    | ##    |
|            |                                                 | ##### |
| **Des      |                                                 | # US\ |
| cription** |                                                 | $ Mil |
|            |                                                 | lions |
+------------+-------------------------------------------------+-------+
| 02         | Pork, fresh or frozen, offals, pig and poultry  | 4.1   |
|            | fat                                             |       |
+------------+-------------------------------------------------+-------+
| 04         | Dairy, eggs, honey, whey, cheese and curd       | 1.2   |
+------------+-------------------------------------------------+-------+
| 07         | Vegetable                                       | 1.5   |
+------------+-------------------------------------------------+-------+
| 08         | Edible fruits and nuts                          | 8.0   |
+------------+-------------------------------------------------+-------+
| 09         | Spices, coffee and tea                          | 0.2   |
+------------+-------------------------------------------------+-------+
| 15         | Fats and oils                                   | 16.0  |
+------------+-------------------------------------------------+-------+
| 16         | Prepared meat, fish, deboned chicken            | 4.5   |
+------------+-------------------------------------------------+-------+
| 17         | Sugars                                          | 4.0   |
+------------+-------------------------------------------------+-------+
| 18         | Cocoa, chocolate bars,                          | 1.3   |
+------------+-------------------------------------------------+-------+
| 19         | Baking related products                         | 3.8   |
+------------+-------------------------------------------------+-------+
| 20         | Preserved foods                                 | 4.8   |
+------------+-------------------------------------------------+-------+
| 21         | Miscellaneous foods                             | 4.1   |
+------------+-------------------------------------------------+-------+
| 22         | Beverages                                       | 0.9   |
+------------+-------------------------------------------------+-------+

Source: Ministry of Industry, Foreign Trade and Tourism

# Market Situation for Retail Food Products

![](media/image12.wmf)

![](media/image13.wmf)

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# Distribution Channels

# Market structural changes in the retail sector

# 

+-----------------------+----------------------------------------------+
| Structural changes    | Arrival of international competitors.        |
| and consolidation are |                                              |
| occurring rapidly     | Alliances, mergers and acquisitions.         |
|                       |                                              |
|                       | New business paradigms.                      |
|                       |                                              |
|                       | Changing consumer lifestyles.                |
+-----------------------+----------------------------------------------+
| International         | Hypermarkets Makro and Carrefour have        |
| competitors have      | brought in new formats, forcing the local    |
| shaken the market     | market to adjust and become more competitive |
|                       | and creative. Competition among big retail   |
|                       | players is cutthroat.                        |
+-----------------------+----------------------------------------------+
| Foreign alliances are | Alliances such as Carulla-New Bridge,        |
| reshaping the market  | Crunch-Frito Lay, Unilever-Varela- Disa-Best |
|                       | Foods, Noel-Bimbo-Danone, Exito              |
|                       | Cadenalco-Casino, among others, have given   |
|                       | new dimensions to major players, i.e.,       |
|                       | know-how, bargaining power, market           |
|                       | distribution network and capital leverage.   |
+-----------------------+----------------------------------------------+
| In-house alliances,   | Chain stores have strengthened their         |
| mergers and           | negotiating and market-position leverage     |
| acquisitions to       | through strong vertical integration.         |
| become more           |                                              |
| competitive           |                                              |
+-----------------------+----------------------------------------------+
| New paradigms for     | Core businesses, category management and     |
| businesses            | private labels.                              |
|                       |                                              |
|                       | Internet, telemarketing and supermarket      |
|                       | home-delivery.                               |
|                       |                                              |
|                       | Direct purchases a must.                     |
|                       |                                              |
|                       | Gas Marts making their presence felt in the  |
|                       | market.                                      |
+-----------------------+----------------------------------------------+
| Changing shopping     | Better-informed and more demanding           |
| habits and patterns   | consumers.                                   |
|                       |                                              |
|                       | Consumers expanding their food consumption   |
|                       | experience.                                  |
|                       |                                              |
|                       | Consumers choose hypermarkets for precooked, |
|                       | pre-packaged, and frozen products.           |
|                       |                                              |
|                       | More consumers shop at supermarkets, and     |
|                       | less at wet markets.                         |
|                       |                                              |
|                       | One to three visits per month to the         |
|                       | supermarket for a wide variety of            |
|                       | high-quality and safe food products at low   |
|                       | prices, supplemented by several trips to     |
|                       | mom'n pop and specialty shops for daily      |
|                       | products.                                    |
+-----------------------+----------------------------------------------+
| Geographical          | Concept of exclusive regional influence has  |
| expansion             | been eliminated.                             |
+-----------------------+----------------------------------------------+
| New markets niche     | Rural areas are being explored as a new      |
|                       | market niche for mass consumption products.  |
|                       | The goal is to move markets closer to rural  |
|                       | consumers and open rural-to-urban direct     |
|                       | marketing as an alternative to traditional   |
|                       | channels.                                    |
+-----------------------+----------------------------------------------+

**The Economic Groups in the Food Industry**

Successful Alliances, Mergers and Acquisitions

**The \"Antioqueno Conglomerate\" Example**

National de Chocolates Total portfolio amounts to USD 440.4 million of
which 74% (USD 325.9 million) is concentrated in the Food Industry

> \*Colcafe \*Doria \*Compañia \*Compañia \*Dulces de \*Zenu
>
> \*La Bastilla \*Comarrico Nacional de de Galletas Colombia S.A. \*Rica
> Rondo
>
> Chocolates NOEL CR S.A. \*Suizo
>
> \*Hermo
>
> \*Cunit

**Advantages for U.S. Companies and Products**

  -----------------------------------------------------------------------
  The Colombian supermarket industry is one of the most modern and
  sophisticated in Latin America.

  Colombia ranks third in the list of 11 emerging countries included in
  the index of "Global Development Retail sales". Among others are Chile,
  Mexico, Russia, Venezuela and China

  Locally established multinational firms are taking advantage of their
  brand names to position new imported products.

  There is a general perception that U.S. products are of good quality
  and value. Many Colombians have traveled and studied abroad and have
  developed a taste for U.S. products.

  The readjustment of the retail market is paving the way for the " new
  retail market structure" in Colombia. The mini market format is a new
  and strong competitor of "Mon and Pop" stores and hyper/supermarkets.

  Major retailers have had a great expansion in the last few years. The
  trend is to continue geographical expansion. They are now present in
  major Colombian cities. The market share of hyper/supermarkets is 60%.
  They have lost some ground but continue to grow in number and square
  meters. They are increasingly offering imported food products.

  Hyper/supermarkets continue to consolidate as one of the most important
  distribution channels in the country. Many chains have gained greater
  negotiation power with manufacturers, giving them access to continuous
  price promotions and marketing activities.

  Gas Mart stores are readjusting their line of products. Besides snack
  foods, candy, soft drinks, ready-to-heat and ready-to-eat products,
  dairy products and cereals, they are focusing on fast food sales. Good
  market potential for new products. Imported products represent less
  than 10% of total products.

  Nearly 60% of the Colombian population is under 30 years of age and has
  been exposed to changing lifestyles. The remarkably young population,
  70 percent of which lives in urban areas, has new tastes and
  preferences and is more health-conscious. With rising female
  participation in the workforce and more fast food outlets, demand for
  new high-value products is increasing.

  Upscale and middle-income Colombian families are eating out more
  frequently, at least twice a month, devoting 24% of food spending for
  meals away from home. Fast food restaurants stand out as winners in the
  last three years.

  Information and technology have become strong tools for food marketing.
  The uniform product code and scanners at point of sales have been
  fundamental to collaborative planning, forecasting and replenishment
  aimed at increasing profitability and stock control.

  On line services are becoming popular. Retail leaders have renewed the
  online sales service with last e-business technology. This service is
  offered both domestically and abroad and covers around 90 percent of
  Colombian municipalities. Nearly 30 percent of customers are
  foreigners.

  A Voluntary Good Conduct Business Code was signed by industrial
  associations, suppliers, producers, hyper/supermarkets and other
  retailers, aimed at establishing fair and well-defined trading rules.
  It is a self-regulatory code that tends to avoid all existing
  complaints about unfair purchasing/ advertising/pricing practices and,
  discriminatory policies.
  -----------------------------------------------------------------------

# Challenges to U.S. Companies and Products

  -----------------------------------------------------------------------
  Consumption of processed food is low, according to international
  standards and highly sensitive to price. A relatively new trend in
  Colombia is an increasingly strong demand for gourmet products and a
  growing popularity of wine, which reflects a change in lifestyle.

  Importers demand competitive prices, good quality and consistent supply
  availability.

  Category management practices by stores, including charging slotting
  fees for products, are overhead costs to be expected. 60% of price
  discounts are mostly absorbed by the supplier.

  The shift from essential to high-quality foods continuous. A good
  number of consumers opt to trade down to less expensive options of
  basic products due to economic difficulties. Consequently,
  manufacturers have made great efforts in launching low-priced products
  and offering price promotions for well-known products. A surplus of
  ordinary low-priced food products coexists with a shortage of
  high-quality food products. Colombians are now selective shoppers.

  Consumer prices for food and beverage have declined more than total
  consumer price index. "Price War" among retailers has become a
  permanent tool to maintain market share and increase sales.

  Colombian consumers are now either time-constraint consumers who seek
  good quality and essential products, or "cherry pickers" who are after
  sales and discount products. The excesses of the "price war" have
  become a burden to suppliers.

  U.S. products will have to assure high quality, reasonable price and
  good service to meet increasing competition from other foreign
  products. Category management practices by stores, including charging
  slotting fees for products, are overhead costs to be expected.

  Alliances with European chains stores, such as Casino and Danone, have
  intensified competition. The presence of Makro and Carrefour has
  brought in a wide selection of high-quality, competitively priced
  foreign products to the market.

  Investment in new outlets continues as part of the effort to penetrate
  regional markets and attract unattended consumers.

  Market leaders are investing in construction of modern shopping centers
  in which super/hypermarkets and cinemas are the cardinal points.
  Investment also includes state of the art technology, logistics,
  remodeling and improving service areas.

  Private brands are expanding rapidly though still incipient and
  limited. They represent 2.5% of total sales. Private brand margins are
  higher than other brand margins (20.4%). Similarly, private brand
  prices are 25.6% lower than third party prices. Colombia and Argentina
  are the countries with the fastest growth in the store-brand products
  category (30%) in Latin America.

  Wholesalers usually work with a markup varying from 15 to 20 percent.
  Profits margins for consumer goods may reach 20 to 30 percent. However
  these margins have been fallen.

  The limited cold storage transportation network is still a limiting
  factor for the future development of the food sector. Total cold
  storage capacity owned by the public and private sectors is estimated
  at 175,000 cubic feet.

  Besides the basic duty, the Andean community assesses a variable duty
  on 13 basic commodity groups and related products. This system results
  in high and varying duties for a number of products, including pet
  food, poultry and cheese.

  Other non-tariff barriers to imported products are import licensing and
  sanitary (beef and poultry) restrictions.

  Some trade agreements with U.S. competitors make several U.S. products
  less competitive, such as zero import duties on wine and temperate
  fruits from Chile and soybeans from Paraguay. A temporary 15% duty has
  been levied on Chilean apples.

  The Colombian government has changed investment policy to attract new
  foreign investors. Joint ventures, franchising and licensing agreements
  are increasing in number and value.

  The import proces still has many layers. However, the GOC has
  introduced key modifications to simplify the paperwork significantly.
  Furthermore, as of June 2004, the import declaration form was
  eliminated but other requirements remain. Import/export procedures and
  customs clearances have become almost virtual. Documents are to be
  submitted through electronic or magnetic media. Nonetheless,
  registration of new products with INVIMA can sometimes take a long
  time.

  Despite GOC efforts, artificially low-priced contraband products still
  produce a climate of unfair competition and disrupt sales of legally
  imported products.
  -----------------------------------------------------------------------

**Illustrative Import Duties for Food Products**

  --------------------------------------- ---------------- ---------------
  **Products**                            **Basic Duty %** **Basic Plus
                                                           Variable %\***

  Pet Food                                20               22

  Powdered Milk/Cheese                    20               50

  Wine/Beer                               20               none

  Fruits/Vegetables                       15               none

  Raw Coffee, Tea and Spices              10               none
  --------------------------------------- ---------------- ---------------

\*As of October 31^st^, 2005

**Market Entry Strategy**

General guidance to access the Colombian food market, enhance
competitive sales position of food products in Colombia and introduce
new products:

**Market Entry Strategy**

**Importers and Distributors**

# Illustrative List of Main Importers and Distributors

+----------------+-----------------+---+----------------+----------------+
| **Importer**   | **Product**     |   | **Importer**   | **Product**    |
+----------------+-----------------+---+----------------+----------------+
| Effem Colombia | Pet food,       |   | Quala          | Meat,          |
|                | confectionary   |   |                | vegetables     |
+----------------+-----------------+---+----------------+----------------+
| Provyser       | Processed       |   | Frito Lay      | Food           |
|                | inputs for fast |   |                | preparations,  |
|                | food            |   |                | seasonings,    |
|                |                 |   |                | cereals        |
+----------------+-----------------+---+----------------+----------------+
| Frutcom S.A.   | Fresh fruits    |   | Ancla y Viento | Seafood        |
+----------------+-----------------+---+----------------+----------------+
| Imporfenix     | Fresh fruit     |   | Procaps        | Juices,        |
|                |                 |   |                | vegetables,    |
|                |                 |   |                | vegetable oils |
+----------------+-----------------+---+----------------+----------------+
| Globalim       | Juices, Kosher  |   | Congrupo       | Pop corn,      |
|                | food products   |   |                | sauces,        |
|                |                 |   |                | cheeses,       |
|                |                 |   |                | vinager,       |
|                |                 |   |                | ketchup        |
+----------------+-----------------+---+----------------+----------------+
| Pacific        | Fish fillets,   |   | Rica Rondo     | Sausages,      |
| Seafood        | crustaceans     |   |                | meat/poultry   |
|                |                 |   |                | offal          |
|                | Ginger.         |   |                |                |
+----------------+-----------------+---+----------------+----------------+
| Comestibles    | Canned food     |   | Nabisco Royal, | Peanuts,       |
| Alfa           | products        |   | Inc.           | sweets,        |
|                |                 |   |                | biscuits,      |
|                |                 |   |                | pastry         |
+----------------+-----------------+---+----------------+----------------+
| Pesquera       | Seafood         |   | Fedco          | Line of        |
| Jaramillo      |                 |   |                | processed food |
|                |                 |   |                | products,      |
|                |                 |   |                | canola oils    |
+----------------+-----------------+---+----------------+----------------+
| DISNACO        | Beer            |   | Productos      | Juices         |
|                | (Budweiser),    |   | Naturales de   |                |
|                | Gatorade        |   | Cajica         |                |
+----------------+-----------------+---+----------------+----------------+
| Co             | Fresh and       |   | Graffith de    | Broths,        |
| mercializadora | frozen          |   | Colombia       | vegetables,    |
| Nacional de    | vegetables      |   |                | spices         |
| Alimentos      |                 |   |                |                |
+----------------+-----------------+---+----------------+----------------+
| Agrodex        | Cheese,         |   | Colanta        | Juices, frozen |
|                | poultry/turkey  |   |                | meat           |
|                | preparations,   |   |                |                |
|                | spices,         |   |                |                |
+----------------+-----------------+---+----------------+----------------+
| Franchise      | Cheese, sweet,  |   | Suizo          | Pork/chicken   |
| Systems de     | ham, juices,    |   |                | meat           |
| Colombia       | dry vegetables  |   |                |                |
+----------------+-----------------+---+----------------+----------------+
| Promesa de     | Breakfast       |   | Comestibles    | Pork and       |
| Colombia       | cereals         |   | Dan            | poultry meat,  |
|                |                 |   |                | frozen         |
+----------------+-----------------+---+----------------+----------------+
| Dislicores     | Wine, liquor    |   | Dicermex       | Wine, liquors, |
|                |                 |   |                | food products  |
+----------------+-----------------+---+----------------+----------------+

# Market structure and sub-sector profile

##  Hypermarkets and Supermarkets

+------------------+------------------+-----+----------+--------------+
| **Name of        | **Ownership**    | *   | **Lo     | **Type of    |
| Retailer / Type  |                  | *\# | cation** | Purchasing   |
| of Retail        |                  | of  |          | Agent(s)**   |
| Outlet**         |                  | Out |          |              |
|                  |                  | let |          |              |
|                  |                  | s** |          |              |
+------------------+------------------+-----+----------+--------------+
| Hypermarkets     |                  |     |          |              |
+------------------+------------------+-----+----------+--------------+
| Carrefour        | 100 % France     | 18  | Bogota,  | Importer/    |
|                  |                  |     | Cali,    | direct /     |
|                  | In 2003 Santo    |     | Pereira, |              |
|                  | Domingo Group    |     | M        | local        |
|                  | sold 35% and     |     | edellín, |              |
|                  | Sigla 10% of     |     | Ibague,  |              |
|                  | their shares\*.  |     | Barr     |              |
|                  |                  |     | anquilla |              |
+------------------+------------------+-----+----------+--------------+
| Alkosto          | 100% Local       | 6   | Bogota,  | Importer/    |
|                  |                  |     | Villav   | direct /     |
|                  |                  |     | icencio, |              |
|                  |                  |     | Pasto,   | local /      |
|                  |                  |     | Ipiales  | producers /  |
|                  |                  |     |          | distributors |
+------------------+------------------+-----+----------+--------------+
| Makro of         | 57% Holland      | 8   | Bogota,  | Importer/    |
| Colombia         |                  |     | Cali     | direct /     |
|                  | 43% Antioqueno   |     | P        |              |
|                  | Group            |     | ereira,M | local /      |
|                  |                  |     | edellin, | producers /  |
|                  |                  |     | Barra    | distributors |
|                  |                  |     | nquilla, |              |
|                  |                  |     | Ibague   |              |
+------------------+------------------+-----+----------+--------------+
| Almacenes Éxito  | 25 % Casino --   | 92  | M        | Importer/    |
|                  | France           |     | edellin, | direct /     |
| Ley, Pomona      |                  |     | Bogota,  |              |
|                  | 4% JP Morgan     |     | Cali,    | local /      |
|                  |                  |     |          | producers /  |
|                  | 11% GDR/ADR      |     | Other    | distributors |
|                  |                  |     | Main     |              |
|                  | Giant Fonciere   |     | Cities   |              |
|                  | France           |     |          |              |
+------------------+------------------+-----+----------+--------------+
| Carulla 82       | 25% New          | 153 | Main     | Importer/    |
|                  | Bridge-USA       |     | Cities   | direct /     |
| Vivero 15        |                  |     |          |              |
|                  |                  |     |          | Local /      |
| Surtimax 21      |                  |     |          | producers /  |
|                  |                  |     |          | distributors |
| Merquefacil 35   |                  |     |          |              |
+------------------+------------------+-----+----------+--------------+
| Supertiendas     | 100% Local       | 90  | Mai      | Im           |
| Olimpica         |                  |     | n/Middle | porter/local |
|                  |                  |     | Cities   |              |
|                  |                  |     |          | producers /  |
|                  |                  |     |          | distributors |
+------------------+------------------+-----+----------+--------------+
| Cacharreria La   | 100% Local       | 19  | Cali,    | Importer/    |
| 14               |                  |     | Pereira. | direct /     |
|                  |                  |     | Ma       |              |
|                  |                  |     | nizales, | local /      |
|                  |                  |     | Buen     | producers /  |
|                  |                  |     | aventura | distributors |
+------------------+------------------+-----+----------+--------------+
| Colsub           | 100% Local       | 20  | Regional | Local        |
| sidio1/Privately |                  |     | Bogota   | producers/   |
| subsidized       |                  |     |          | distributors |
+------------------+------------------+-----+----------+--------------+
| Cafam/ Privately | 100% Local       | 42  | Regional | Local        |
| subsidized       |                  |     | Bogota   | producers/   |
|                  |                  |     |          | distributors |
+------------------+------------------+-----+----------+--------------+

###### Hyper/Supermarkets Food Sales and Population by Region

![](media/image14.jpeg){width="4.743700787401575in"
height="4.426377952755906in"}

  -------------- -------------- ---------------- --------------- --------------
  **Region**     **Food Sales % **Supermarkets   **Traditional   **Population
                 Share**        Volume Sales %   Volume Sales %  (1,000)**
                                Share**          Share**         

  Central        30.2           31.4             25.3            9,036
  Colombia                                                       

  Northern       18.6           13.4             26.5            9,409
  Atlantic Coast                                                 

  Southwestern   16.7           16.9             17.2            7,369
  Coast                                                          

  Northern       13.9           15.9             12.1            5,570
  Antioquia                                                      

  Eastern Region 11.6           12.8             10.5            5,574

  Central Coffee 9.0            9.7              8.3             4,981
  Region                                                         
  -------------- -------------- ---------------- --------------- --------------

**Hypermarkets**

**Hypermarket / Supermarket Sales Supermarkets**

US\$ Millions

  ------------------------------------ --------------- -------------------
  **Store**                            **Total Sales** **Food Sales**

  HYPERMARKETS                                         

  Almacenes Éxito S.A.                 1,065           686

  Carrefour                            347             226

  Makro of Colombia                    150             102

  Alkosto/Corbeta                      **140**         **56**

  **SUPERMARKETS**                                     

  Carulla-Vivero                       539             419

  Olimpica                             487             346

  Cacharreria La 14                    313             218

  Colsubsidio                          131             55

  Cafam                                168             95

  Surtimax                             68              34

  **TOTAL**                            **4,701**       **2,960**
  ------------------------------------ --------------- -------------------

## Mom'n Pop / Traditional Markets

## Gas Marts

**Typical Product Lines**

**Colombian Gas Marts**

  ------------------- ------------ ------------- ---------- -------------- ---------------
                      **Bogota**   **Duitama**   **Cali**   **Medellin**   **Cartagena**

  Tiger Market --     17                         3          4              1
  ESSO\*                                                                   

  On the Run --       2                                                    
  MOBIL\*                                                                  

  Select - SHELL      14           1                                       

  Star Mart - TEXACO  17                         2          1              
  ------------------- ------------ ------------- ---------- -------------- ---------------

*\*Merged in 2001*

## Wet Markets

**COMPETITION, CONSUMER- READY FOOD**

Colombia is a strong competitor in the production of:

  -------------------------------- --------------------------------------
  **Product**                      **Company**

  Dairy Products                   Nestle, Colanta, Alpina, Parmalat,
                                   Purace

  Breakfast Cereals                Kellogg's, Nestle, Quaker

  Snacks                           Frito Lay- Margarita, Savoy Brands,
                                   Yupi, Kraft Foods, Nabisco Royal

  Baked Foods                      Levapan, Bimbo, Ramo, Comapan

  Confectionery                    Nacional de Chocolates, Colombina,
                                   Noel, Chicle Adams, Comestibles Italo,
                                   Dulces de Colombia

  Oils and Margarines              Grasas S.A., Unilever, Lloreda,
                                   Acegrasas, Gravetal

  Dry Mixes for Sauces,            Unilever-Disa-Best Foods, California,
  Mayonnaise, Ketchup, Mustard,    La Constancia, El Rey, Productora de
  Jellies, and Condiments          jugos, Frutos del campo, La Coruña

  Poultry feed Products and Pet    Solla, Ralston Purina, Finca,
  Food                             Contegral, Italcol, Nestle Pet care.
  -------------------------------- --------------------------------------

![](media/image15.wmf){width="3.2736220472440944in"
height="2.9598425196850395in"}![](media/image16.wmf){width="3.222834645669291in"
height="1.905511811023622in"}

# Best Product Prospects

There is significant space for new alternatives in ...

**Food Products Ranked by Sales**

  ----------------------- ----------------------- -----------------------
  1\. Snacks              12\. Chocolate          23\. Mayonnaise

  2 Milk drinks           13 Pastry               25\. Beer

  3\. Cooking oils        14\. Cake               26 Jellies

  4\. Biscuits / cookies  15\. Powdered drinks    27\. Pet food

  5\. Long shelf-life     16\. Margarine          28\. Precooked foods
  milk                                            

  6\. Packaged bread      17\. Pureed baby food   29\. Flavored milks

  7\. Candies             18\. Desserts           30\. Cream of milk

  8\. Cheese              19\. Broths             31\. Frozen products

  9\. Powdered milk       20\. Tomato sauce       32\. Milk modifiers

  10\. Bubble gum         21.Precooked corn       33\. Coffee
                          powdered                

  11\. Sugar              22\. Milk modifiers     34 Juices
  ----------------------- ----------------------- -----------------------

# Related Reports

+-----------+----------------------------------------------+----------+
| **Report  | #### Report Name                             | **Date** |
| No.**     |                                              |          |
+-----------+----------------------------------------------+----------+
| CO4007    | Wine and Liquor                              | 6-02-04  |
+-----------+----------------------------------------------+----------+
| CO4011    | Retail                                       | 9-15-04  |
+-----------+----------------------------------------------+----------+
| CO4017    | Bakery Premixes                              | 12-30-04 |
+-----------+----------------------------------------------+----------+
| CO-5003   | Oilseeds and Products                        | 02-01-05 |
+-----------+----------------------------------------------+----------+
| CO-5005   | Grain and Feed                               | 03-10-05 |
+-----------+----------------------------------------------+----------+
| CO-5006   | HRI                                          | 03-01-06 |
+-----------+----------------------------------------------+----------+
| CO-5007   | Sugar                                        | 04-10-05 |
+-----------+----------------------------------------------+----------+
| CO-5010   | Coffee                                       | 05-15-05 |
+-----------+----------------------------------------------+----------+
| CO-5015   | Fairs                                        | 07-29-05 |
+-----------+----------------------------------------------+----------+
| CO-5016   | Fairs Export Certificates                    | 08-31-05 |
+-----------+----------------------------------------------+----------+
| CO-5020   | Rice Update                                  | 10-04-05 |
+-----------+----------------------------------------------+----------+

For further information, visit the FAS home page at
[http://www.fas.usda.gov](http://www.fas.usda.gov/).

# Post Contact Information

**Office of Agricultural Affairs**

**U.S. Embassy, Bogota, Colombia**

Calle 22D Bis, No. 47-51

Apartado 3831

Bogota, Colombia

**David Mergen**

Agricultural Attaché

U.S. Mailing Address:

U.S. Embassy - Bogota

Agr Section, Unit 5119

APO AA 34038

Phone: (57-1) 315-2138

Fax: (57-1) 315-2181

Email: agbogota@usda.gov

**APHIS Attaché**

**(Agricultural and Plant Health Inspection Service)**

U.S. Mailing Address:

U.S. Embassy - Bogota

Agr Section, Unit 5103

APO AA 34038

Phone: (57-1) 315-2192

Fax: (57-1) 315-2191

Email: usdacol@colomsat.net.co

**COLOMBIAN GOVERNMENT CONTACTS**

**Ministry of Agriculture and Rural Development**

Colombian Agricultural Institute (ICA)

(Animal and Plant Health requirements office)

Calle 37, No. 8-43, Piso 4

Bogota, Colombia

Deyanira Barrero-León

Deputy Manager Animal Health Protection and Regulation

ICA -Instituto Colombiano Agropecuario

Calle 37 \# 8-43, Of. 401

Bogota, Colombia

Tel. (57-1) 320-3654, 332-3700/ext: 250 259

Cel pone: (315)899-7032

Fax: (57-1) 232-4695

e-mail: subgerencia.pecuaria@ica.gov.co

Jaime Cardenas, Head

Plant Health Risk Assessment

ICA -Instituto Colombiano Agropecuario

Calle 37 \# 8-43, Of. 401

Bogota, Colombia

Tel: (57-1) 232-4709

Fax: (57-1) 288-1753

E-mail:sanidad.vegetal@ica.gov.co

**Ministry of Social Protection**

National Institute for the Surveillance of Food and Medicine (INVIMA)

Division of Food and Alcoholic Beverages

(Food products registration and health permits)

Carlos A. Robles

Carrera 68D \# 17-21 Zona Industrial

Bogota, Colombia

Phone: (57-1) 294-87003 Ext. 3920

Fax: (57-1) 315-1762

E-mail: invimasal@invima.gov.co

www.invima.gov.co

**Ministry of Comerce, Industry and Tourism**

Juan-Guillermo Castro

Director of Commercial Relations

Calle 28, No. 13A-15, 6th Floor

Apartado 240193

Bogota, Colombia

Phone: (57-1) 606-7676 Ext. 1433

Fax: (57-1) 606-7539

E-mail:jcastro@mincomex.gov.co

**MAIN RETAIL ORGANIZATIONS**

**ANDI**

Asociación Nacional de Industriales

Luis Carlos Villegas

President

Carrera 13 \# 26-45 Piso 6

Bogota, Colombia

Tel: (57-1) 336-1990

Fax: (57-1) 341-9988

E-mail: <lpineda@andi.com.co>

FENALCO

Federacion Nacional de Comerciantes

Guillermo Botero

President

Carrera 4 \# 19-85

Bogota, Colombia

Tel: (57-1) 336-7800/350-0600

Fax: (57-1) 350-9424

E-mail: guillermobotero@fenalco.com.co

**MAIN HYPER/SUPERMARKETS**

ALMACENES EXITO

Edgar Hidrovo

Commercial Vice-President

Av. Las Vegas

Carrera 48 \# 32B Sur 139

Medellín, Antioquia

Colombia

Tel: (57-4) 339-5920/339-6565

Fax: (57-4) 339-6036

E-mail: edgar.ydrovo@grupo-exito.com.co

**CARULLA-VIVERO**

Samuel Azout

President

Carrera 68D \# 21-35

Bogota, Colombia

Tel: (57-1) 570-8646/570-7500 Ext 1000

Fax: (57-1) 411-4194

E-mail: sazuot@carullavivero.com

**CARREFOUR**

Noel Priu

General Director

Avenida 15 \# 106-57

Bogota, Colombia

Tel: (57-1) 657-9797

Fax: (57-1) 637-5256

E-mail: <Noel_Priu@carrefour.com>

**MAKRO DE COLOMBIA**

Renato Minuzzo

President

Carrera 39 \# 193-63

Bogota, Colombia

Tel: (57-1) 678-1616 Ext 1101/678-1323

Fax: (57-1) 678-2874

E-mail: <jaime.moreno@makro.com.co>

**SUPERTIENDAS OLIMPICA**

Antonio Char

General Manager

Carrera 36 \# 38-03

Barranquilla, Atlantico

Colombia

Tel: (57-5) 371-0245/371-0317

Fax: (57-5) 351-0263

E-mail: anchar@olimpica.com.co

**ALKOSTO**

Rafael Londono

Commercial Manager

Diagonal 72ª \# 57-02

Bogota, Colombia

Tel: (57-1) 437-6868

Fax: (57-1) 630-5812

E-mail:
[**rafael.londono@alkosto.com.co**](mailto:rafael.londono@alkosto.com.co)

**CACHARRERIA LA 14**

Lelia Cardona

General Manager

Calle 70 \# Carrera 1

Cali, Valle

Colombia

Tel: (57-2) 665-1817

Fax: (57-2) 665-1819

E-mail: <gerencia@la14.com>

**COLSUBSIDIO**

Luis Carlos Arango

General Director

Calle 26 \# 25-50

Bogota, Colombia

Tel: (57-1) 343-1899

Fax: (57-1) 340-2690

E-mail: planeacion.segsocial@colsubsidio.com

**CAFAM**

Arcesio Guerrero

President

Transversal 48 \# 94-97 B-5 Piso 2

Bogota, Colombia

Tel: (57-1) 664-8000

Fax: (57-1) 617-6400

Web: http://www.cafam.com.co