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Market Overview – Peru

April 2019

Market snapshot

Peru is one of the fastest growing economies in Latin America and is the world's 51st largest economy with a total gross domestic product (GDP) valued at US$210.0 billion in 2017 and real GDP growth of 2.5%.

Peru has a large middle class and large median aged population. There are more than 12 million people, aged 25-54 years old, accounting for 40.47% of the total population.

As more consumers desire healthier lifestyles and products, those Peruvians with a higher purchasing power, are seeking fortified/functional packaged food and beverages as well as some niche products such as free from packaged food, pressed 100% juice or ready-to-drink (RTD) coffee mixes. Consequently, opportunities to better serve the middle-to-high-income populations are emerging as companies recognize the need to cater to better informed consumers.

Packaged food sales were valued at US$8.8 billion in 2017, and are anticipated to reach US$10.5 billion by 2022.

Peru's consumer expenditures per capita in 2017 was US$4,390.7 compared with the last update number of US$4,214.4 in 2016.

Peruvian consumers are price sensitive and compare packaged food products (local company led) to fresh alternatives. If Canadian exporters are able to meet or exceed these price sensitive characteristics to export to Peru, expansion in comparable markets within Latin America is anticipated.

Production

Sugar cane is by far the most important crop in Peru, but production declined in both 2015 and 2016.

Among the top 10 production crops, grapes saw the most significant increase in 2016, growing by 15.4% over the volume recorded in 2015. Grapes were the fastest-growing production crop across the whole 2012-2016 period, with a compound annual growth rate (CAGR) of 17.5%.

Crop production in Peru
Top 10 crops (tonnes) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Sugar cane 10,368.9 10,992.2 11,389.6 10,211.9 9,832.5 −1.3
Potatoes 4,474.7 4,570.7 4,705.0 4,705.0 4,400.3 −0.4
Rice, paddy 3,043.3 3,050.9 2,896.6 3,151.4 3,165.7 1.0
Plantains 2,082.1 2,114.9 2,125.8 2,145.4 2,074.0 −0.1
Corn 1,673.9 1,670.5 1,529.6 1,746.4 1,509.8 −2.5
Cassava 1,118.5 1,184.7 1,195.9 1,230.0 1,182.1 1.4
Oil palm fruit 518.3 566.6 617.6 684.3 736.3 9.2
Onions 775.5 748.1 758.2 760.2 705.6 −2.3
Grapes 361.9 438.3 507.1 597.9 690.0 17.5
Oranges 428.8 436.4 450.4 456.2 490.9 3.4

Source: Food and Agriculture Organization Corporate Statistical Database (FAOSTAT), 2018

*CAGR: Compound Annual Growth Rate

Meat production in Peru
Meat (tonnes) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Meat, chicken 1211.1 1254.3 1317.4 1424.0 1514.0 6.0
Meat, cattle 186.6 193.1 196.2 196.0 190.2 0.0
Meat, pig 122.3 127.7 135.4 142.9 149.4 5.0

Source: FAOSTAT, 2018

*CAGR: Compound Annual Growth Rate

Livestock production in Peru
Livestock (head) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Sheep 12183.8 12434.4 12387.6 11986.8 11450.7 −1.5
Camelids, other 5661.0 5600.0 5600.0 5671.3 5888.4 1.0
Cattle 5600.0 5556.0 5578.0 5567.3 5535.5 −0.3

Source: FAOSTAT, 2018

*CAGR: Compound Annual Growth Rate

Trade

Peru is a net exporter of agri-food and seafood products. In 2017, Peru's agri-food and seafood trade surplus was US$3.8 billion with imports valued at US$5.2 billion, and exports of US$9.0 billion. Peru's agri-food and seafood exports grew at a CAGR of 4.1% between 2013 and 2017.

Peru's top agri-food and seafood imports in 2017 were corn, wheat, oilcake, crude soybean oil and semi/whole milled rice. Key supplying countries were the U.S., Argentina, Canada, Chile and Bolivia. Canada was Peru's third largest supplier of agri-food and seafood products in 2017, with an 8.0% share.

Peru's top agri-food and seafood imports from the world, 2017
Commodity Import value US$ millions Top suppliers and market share % Canada's share %
1 2 3
Corn 636.1 United States: 95.3 Argentina: 3.9 Brazil: 0.8 0.0
Wheat 480.4 Canada: 62.0 United States: 21.0 Argentina: 10.6 62.0
Oilcake 454.2 Bolivia: 54.0 United States: 21.3 Paraguay: 16.0 0.0
Crude soybean oil 332.2 Argentina: 99.3 Bolivia: 0.7 Brazil: 0.0 0.0
Semi-milled or wholly milled rice 232.2 Uruguay: 60.5 Brazil: 20.7 Thailand: 13.6 0.0
Food preparations 203.1 Chile: 22.3 United States: 18.8 Mexico: 10.6 0.6
Raw cane sugar 160.0 Guatemala: 27.1 Colombia: 23.3 Cuba: 17.0 0.0
Preparations of a kind used in animal feeding 136.8 United States: 22.6 Ecuador: 22.6 Chile: 15.6 2.6
Soybeans 128.8 United States: 43.7 Paraguay: 41.4 Uruguay: 9.0 1.3
Cane or beet sugar 109.8 Colombia: 76.3 Guatemala: 15.8 Brazil: 6.4 0.0
Source: Global Trade Tracker, 2018

Peru's processed food and beverage imports were valued at US$2.87 billion in 2017, with Canada accounting for 0.6% of that total. Argentina, the U.S., Bolivia, Chile and Brazil were the largest suppliers of processed food to Peru in 2017, accounting for 56.1% of the market. Peru's processed food imports increased by a CAGR of 1.9% between 2013 and 2017.

Peru's top agri-food and seafood imports from Canada were valued at US$414.6 million in 2017. Top imports were wheat, durum wheat, dried lentils, dried, shelled peas and miscellaneous animal products (offal/organs). In 2017, Peru registered an agri-food and seafood trade deficit of US$171.5 million with Canada (Peru exported US$243.1 million worth of agri-food and seafood to Canada in 2017).

Retail sales

Peru is the 6th largest packaged food market within Latin America, after Chile and Colombia and the 34th largest packaged food market in the world after Ukraine and Taiwan. However, this sector is seeing moderate growth, a trend that is expected to continue over the coming years. Retail sales were valued at US$8.8 billion in 2017, with a CAGR of 4.5% from 2013 to 2017. By the year 2022, retail sales are expected to reach US$10.5 billion, registering a stronger growth rate of 4.1%.

Breakfast cereals and ready meals are expected to see the most significant sales growth in the packaged food sector over 2018-2022. Processed meat and seafood is also expected to be among the better performers in terms of sales growth. Processed meat and seafood is expected to continue to grow as consumers seek convenience and different meal alternatives. Distribution is largely through the convenience of independent small grocers, however, the modern delivery channel is expanding. Unpackaged products represent a challenge to the processed category as they are available in all distribution channels and carry lower unit prices that packaged variants and consumers still value fresh products over packaged.

Packaged food retail sales in Peru – Historic in US$ millions, fixed 2018 exchange rate
Category 2013 2014 2015 2016 2017 CAGR* % 2013-17
Packaged food 7,367.1 7,808.8 8,243.0 8,538.7 8,778.5 4.5
Baked goods 2,266.5 2,357.4 2,437.2 2,429.9 2,555.8 3.0
Dairy 2,007.3 2,162.9 2,332.2 2,486.6 2,527.9 5.9
Edible oils 568.5 596.3 617.8 650.4 697.4 5.2
Rice, pasta and noodles 609.0 642.0 663.6 672.0 667.5 2.3
Confectionary 441.7 466.6 488.6 505.9 516.1 4.0
Processed meat and seafood 337.0 373.7 403.4 427.1 411.8 5.1
Sweet biscuits, snack bars and fruit snacks 292.2 300.3 325.4 328.5 333.7 3.4
Baby food 204.4 222.5 243.4 270.5 266.2 6.8
Savoury snacks 180.1 194.3 200.7 210.4 220.1 5.1
Ice cream and frozen desserts 148.7 150.6 168.7 177.6 186.8 5.9
Sauces, dressings and condiments 156.5 169.0 175.7 180.8 181.3 3.7
Breakfast cereals 62.7 69.5 76.3 83.0 95.1 11.0
Sweet spreads 51.8 55.7 59.8 62.9 66.1 6.3
Processed fruit and vegetables 31.7 34.6 37.2 39.5 38.5 5.0
Ready meals 4.0 8.3 8.7 9.3 10.2 26.4
Soup 4.8 4.8 4.3 4.2 4.1 −3.9

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Packaged food retail sales in Peru – Forecast in US$ millions, fixed 2018 exchange rate
Category 2018[e] 2019 2020 2021 2022 CAGR* % 2018-22
Packaged food 8,986.9 9,317.7 9,685.8 10,092.4 10,536.7 4.1
Dairy 2,642.0 2,790.9 2,948.8 3,115.5 3,291.2 5.6
Baked goods 2,568.3 2,586.5 2,613.5 2,657.9 2,717.6 1.4
Edible oils 732.5 768.8 809.1 850.7 893.4 5.1
Rice, pasta and noodles 693.3 725.3 760.9 799.1 839.1 4.9
Confectionary 533.1 553.6 575.4 598.9 624.8 4.0
Processed meat and seafood 373.2 394.2 416.5 440.3 465.5 5.7
Sweet biscuits, snack bars and fruit snacks 342.0 353.7 366.1 379.1 392.7 3.5
Baby food 264.7 270.5 279.2 288.9 299.7 3.2
Savoury snacks 230.8 241.6 253.0 265.2 278.3 4.8
Ice cream and frozen desserts 195.2 203.5 212.4 221.8 231.8 4.4
Sauces, dressings and condiments 183.9 187.1 191.8 198.2 206.1 2.9
Breakfast cereals 104.5 113.2 123.3 133.9 145.6 8.6
Sweet spreads 69.4 72.9 76.5 80.2 84.1 4.9
Processed fruit and vegetables 39.0 40.2 42.2 44.7 47.4 5.0
Ready meals 11.1 12.0 13.0 14.1 15.3 8.4
Soup 4.0 4.0 4.0 4.1 4.2 1.2

Source: Euromonitor International, 2018

e: Estimated

*CAGR: Compound Annual Growth Rate

Health and wellness food products

The health and wellness sector grew by a CAGR of 10.2% from 2013 to 2017 and is expected to grow by a CAGR of 6.8% over the 2018-2022 period.

Better for you and fortified/functional foods showed the largest growth in the 2013-2017 period. Organic and better for you products will lead the way over the next 5 years.

Health and wellness food product retail sales in Peru – Historic in US$ millions, fixed 2018 exchange rate
Category 2013 2014 2015 2016 2017 CAGR* % 2013-17
Health and wellness by type 1,223.8 1,339.1 1,507.3 1,669.6 1,801.8 10.2
Fortified/functional (FF) 593.0 648.7 723.3 804.0 860.8 9.8
Better for you (BFY) 275.6 300.5 331.7 385.7 453.2 13.2
Naturally healthy (NH) 269.9 294.1 323.8 349.9 376.1 8.6
Free from 85.2 95.7 128.4 129.7 111.4 6.9
Organic 0.0 0.0 0.1 0.3 0.3 0.0

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Health and wellness food product retail sales in Peru – Forecast in US$ millions, fixed 2018 exchange rate
Category 2018[e] 2019 2020 2021 2022 CAGR* % 2018-22
Health and wellness by type 1,920.5 2,063.4 2,209.2 2,354.9 2,500.8 6.8
Fortified functional (FF) 913.9 976.8 1,044.9 1,112.5 1,180.3 6.6
Better for you (BFY) 506.2 556.2 603.5 650.5 697.0 8.3
Naturally healthy (NH) 399.3 423.6 447.6 471.2 494.4 5.5
Free from 100.7 106.2 112.7 120.0 128.2 6.2
Organic 0.4 0.5 0.6 0.6 0.7 15.0

Source: Euromonitor International, 2018

e: Estimated

*CAGR: Compound Annual Growth Rate

Opportunities for Canada

On March 8, 2018, Canada signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with 10 countries: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. CPTPP represents a significant step toward closer trade and investment between Canada and Peru. Significant gains are possible for Canadian producers, who could gain market share in economies such as Peru. The CPTPP provides Canada with greater market access to CPTPP countries with the same level of tariff as major regional competitors like Australia and New Zealand for key sectors, including beef, pork, seafood, cereal and many others. Access the following link to obtain more information on CPTPP.

The CPTPP Agreement, along with NAFTA and free trade agreements with the European Union (CETA) and South Korea (CKFTA), will make Canada the only G7 nation with free trade access to the Americas, Europe and the Asia-Pacific region.

All Canadian provinces and territories are expected to benefit from the CPTPP.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

Resources

Market Overview – Peru
Global Analysis Report

Prepared by: Laurie Bernardi, International Market Research Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2019).

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