CAB - AN ANALYSIS OF CALIFORNIA'S EXPORTERS OF PROCESSED FOOD PRODUCTS: V. EXPORTERS AND NON-EXPORTERS

- Research Publications -

AN ANALYSIS OF CALIFORNIA'S EXPORTERS OF PROCESSED FOOD PRODUCTS
by
John W. Hagen and Dr. Juan C. Batista
V. EXPORTERS AND NON-EXPORTERS - A COMPARISON
CATI Publication #961102
© Copyright November 1996, all rights reserved

California's non-exporting food processors tend to be smaller and younger firms than the exporting food processors.

Comparative data reported by the 106 exporters and the 56 non-exporters were as follows:

Percent of Percent of Characteristic non-exporters exporters Operating for more than 10 years 78.6 85.8 Firms having under 50 Employees 80.4 55.7 Under $5 million in annual sales 82.1 46.2

CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS

In conclusion, the majority of California food processors are fairly young and relatively small-sized firms. Exports for these processing firms usually represent less than 10 percent of their annual sales. Most export sales are less than $5 million annually.

Exports are not considered an important activity for these firms, and therefore export marketing activities are usually given a low priority among the objectives of these firms. About one-half of the surveyed firms plan to maintain their present minimal marketing efforts in the export market. As one manager related, "If someone comes in here and wants to buy our products and he has money, we will export; if not we have plenty of other problems." This attitude is not likely to facilitate a significant growth in trade.

It appears the California processed food industry conforms to several models of industry behavior related by authors cited in the review of literature of this study.

Many of the present California processed food exporters were presented with the opportunity to export and they took advantage of this connection. Their export connections were developed with little effort by the processing firms. The non-export ing food processors have done little to promote exports. It may be they are unaware of the importance of exports for their future growth.

As Byford and Henneberry found, manager apathy is the leading obstacle to export market development.

Activities by state and federal agencies (tours, foreign visitor sponsorship, and promotions) have exposed foreigners to some California products. This has prompted foreigners to seek out some products. Food processors get these contacts with essentially no direct cost.

RECOMMENDATIONS

Exports are critical to much of California agriculture. Growers of commodities such as beef cattle, cotton, almonds, citrus, and rice, depend heavily on exports.

To California food processors, however, exporting is a low priority market. To encourage these smaller firms to consider entering the export market, the U.S. Department of Agriculture should consider the following:
1. Evaluating the effectiveness of several of its export promoting programs.
2. Making tours, trade shows, and trade leads as user-friendly as possible.
3. Promoting packaging, labeling, and product specification requirements for processed food exports.
4. Recruiting the assistance of freight forwarders, steamship carriers, and trucking firms to promote foreign sales.

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