Prepared Food 2020 Export Highlights

Top 10 Export Markets for U.S. Prepared Food*

(values in million USD)
Commodity  2016 2017 2018 2019 2020 2019-2020 % Change 2016-2020 Average
Canada 1,889 1,908 1,931 2,048 2,178 6% 1,991
Mexico 710 678 743 777 769 -1% 735
EU27+UK 579 567 555 551 613 11% 573
South Korea 365 324 355 509 460 -10% 403
China 126 139 183 240 254 6% 188
Japan 233 275 265 233 234 0% 248
Hong Kong 232 169 228 191 186 -3% 201
Taiwan 162 149 154 149 141 -5% 151
Australia 146 136 151 130 131 1% 139
Thailand 125 131 133 137 129 -6% 131
All Others 1,551 1,462 1,547 1,766 1,638 -7% 1,593
Total Exported 6,118 5,938 6,245 6,731 6,733 0% 6,353

Source: U.S. Census Bureau Trade Data - BICO HS-10
*Prepared foods are primarily shelf-ready foods shipped directly to distributors and retailers for sale directly to consumers. These include pastries, soups, broths, pastas, dough mixes, peanut butter, pizzas, and gelatins.

Highlights

In 2020, the value of U.S. prepared food exports to the world was $6.7 billion, unchanged from the prior year. Canada and Mexico remain the top two markets, accounting for 42 percent of total exports. Canada and the EU27+UK, the third largest U.S. export market, had the largest increases at $130 million and $62 million, respectively. The year-to-year stability of U.S. prepared food exports can be attributed in part to the strength and size of the markets of USMCA partners Canada and Mexico.

Drivers

  • The U.S.-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020, locking in existing tariff-free trade of these products.
  • China implemented a process for excluding U.S. products from retaliatory Section 301 tariffs.
  • The largest increases in 2020 were of soups & broths and pasta, up $61 million and $18 million, respectively.

Looking Ahead

The global trade of prepared foods has nearly doubled in the last decade. Demand is driven in large part by income growth and urbanization, both generally leading to increased consumer desire for convenient, shelf-ready packaged foods. Imported prepared foods provide variety for consumers, and often supply producers in domestic processed food sectors. Asian markets, especially China, have been the fastest growing for prepared foods in recent years, reflecting the effect of income growth on consumption habits. These trends are expected to continue and will likely provide strong markets for U.S. prepared food exports into the future.

However, there are many trade barriers facing prepared foods, including front-of-package labeling (FOPL), marketing and advertising restrictions, and penalties on foods that exceed certain thresholds of nutrients like sugar, fat, saturated fat, and sodium. In October 2020, Mexico implemented its new FOPL warning style labels. U.S. exports of about $3.4 billion are expected to be impacted. Mexico also implemented bans in two states in October, prohibiting the sale of products that carry warning labels to people under the age of 18. A Federal level ban is under consideration, as are proposals for nearly all other states.

In November 2020, Colombia established maximum sodium limits for foods that will be implemented in phases during the next 3 years. Products that exceed these limits will be subject to sanctions. This will impact about $54 million of U.S. exports each year. Latin American countries are expected to consider more regulations for prepared foods in 2021, driven largely by the recommendations of the World Health Organization and Pan-American Health Organization.

The COVID-19 pandemic did not have a significant impact on U.S. exports of prepared foods in 2020, likely because these products are most frequently purchased directly from supermarkets for preparation at home rather than at restaurants. Decreases in global income levels may affect consumer capacity to purchase packaged food, but it is unlikely that this effect will be long term.

In 2020, 63 percent of total U.S. exports of prepared foods were to free trade agreement partner countries. Negotiations with future free trade agreement partners like Kenya provide opportunities to address existing tariff and non-tariff barriers and create a pathway to new customers in regions of the world where income and demand are rising.

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