CAB - AN ANALYSIS OF CALIFORNIA'S EXPORTERS OF PROCESSED FOOD PRODUCTS: EXECUTIVE SUMMARY

- Research Publications -

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

In 1992 there were 2,521 food processing firms in California. These firms produced products valued at about $35 billion, or about eight percent of the United States' processed food output.

California produces about 10 percent of the nation's exported processed food products. While exports of processed food products have increased about three percent per year for almost two decades, sales by foreign subsidiaries have increased at 13 percent annually during the equivalent time period.

This study was made to provide an overview of exports by California food processors and to assess what barriers these firms encounter when making sales overseas.

Concern was given to identifying and comparing characteristic differences between exporting and non-exporting food processors. To accomplish this, a mail survey of 576 California food processors was administered during January 1996. Of the 576 firms, 176 firms returned the questionnaire - a 31 percent response rate. Of the 176 returned questionnaires, 162 were used in the final survey calculations.

California's contribution to the processed food supplies of the nation varies with the product type. For instance, California processors produce about 14 percent of U.S. frozen foods, about 24 percent of the country's canned foods, about 85 percent of its wine and brandies, and only about 11 percent of soft drinks sales. California produces about 11 percent of U.S. dehydrated fruits and vegetables.

The 162 surveyed firms tended to have been in business more than 10 years, have from 10 to 50 employees and have annual sales of $10 to $15 million. Sixty-five percent of the surveyed firms had done some exporting.

The 56 non-exporting firms in the sample gave many reasons for not exporting; the most often mentioned reason was the lack of contacts with foreign buyers.

While there are several multi-national food processors, the 106 exporters in this sample were generally smaller firms. Most of these exporters had been in business more than 10 years, had annual sales under $10 million and have 10 to 50 employees.

Major markets for California processed food exporters are northeast Asia, Canada and Western Europe. All other areas represent lesser markets.

Most foreign sales are made directly or through a foreign broker by the 106 California exporting firms. Surveyed respondents indicated freight forwarders are very important to the export process. Ocean transport is the predominant transport except for the Canadian shipments that are made by truck.

Export markets represent a small outlet for California food processors. About 58 percent of these surveyed firms plan to expand export marketing, but 50 percent of the survey processors plan a status quo effort for export marketing.

Finding potential customers was the most important barrier to exporting for these 106 surveyed firms. Packaging and labeling requirements, finding country specific information, and meeting prices of competitors were also problems in exporting.

{ page top }

CAB Research Publications , Table of Contents , Previous page , Next page

{ CATI , also CAB , CFSNR , CIT , VERC }