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Food & Beverages in ArgentinaPremium quality + Expertise to meet global market needs
INVESTMENT OPPORTUNITIES
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Highlights
>> STRONG DRIVERS FOR DEMAND The steady economic growth of highly-populated emerging markets combined
with an increase in the number of middle- and high-income consumers in these countries is changing the global food and beverage industry. These factors have led to a strong increase in the volume of demand and in the consumption of traditional and high-end value-added products.
>> SOLID FOUNDATION FOR SUCCESS Argentina’s remarkable human and natural resources provide exceptional
competitive advantages in foods and beverages, making the country a global food supplier. Committed to high-quality standards, product innovation and aggressive export strategies, the industry is prepared to meet the challenge of an increasingly larger and more sophisticated global demand.
>> DIVERSE FIRM PROFILES AND PROFITABLE OPPORTUNITIES With over US$17 billion in food exports, Argentina’s food & beverage sector has
attracted some of the largest global players, as well as small entrepreneurial firms that have successfully built the capacity to take advantage of new opportunities. Along with the production of traditional food products, Argentine companies have broken into unique niches serving premium customers.
>> OUTSTANDING SECTOR PERFORMANCE The food & beverage sector in Argentina has a reputation for innovation
and quality, combining exceptional natural resources with a technologically advanced agro-industry. Attracting significant foreign and local investments, production in the sector grew over 10% a year since �00�.
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I. Why Invest in Food & Beverages in Argentina?
the basis of technological improvements and economies
of scale. The sector has seen important developments
in particular segments such as organic and functional
foods, where growth and innovation have resulted in
the success of entrepreneurial initiatives. In the last
five years, the sector has adopted aggressive export
strategies, particularly targeted to reach beyond the
regional market.
• INNOVATION. Technology will continue to play a key
role in the sector’s dynamics. The huge scope for the
application of biotechnology is expected to make a
contribution by providing nutritious foods to the growing
world population. Argentina’s natural resources are
backed by the significant stock of professionals trained
in disciplines related to the food and beverage industry,
and over 10 firms dedicated to the development of
biotechnology in the area of food ingredients.
• MAIN CHALLENGES. The current opportunity and
the sector’s success in recent years present important
challenges to the Argentine food and beverage industry.
Among other actions, the sector and relevant government
bodies will need to continue supporting the creation and
internationalization of entrepreneurial firms, leveraging
successfully the Argentine brand name and facilitating
the application of technology to the sector’s processes
and products.
• A GLOBAL OPPORTUNITY. A key industry in the world
economy, the global food and beverage (F&B) market is
valued at approximately US$4 trillion with food sales
accounting for 70% of the market. Overall demand is
driven mainly by the size of the world population, the
degree of urbanization and rising income levels. The
spectacular growth of emerging markets will continue
to contribute to expansion in demand in the future.
Simultaneous to this surge in volume, rising incomes
will increase the consumption of higher quality food
and food categories. These trends create a fast growing
export market for Argentina’s premium products, which
is reinforced by an attractive regional market and an
expanding domestic demand.
• WORLD LEADER. Argentina’s vast expanse of fertile
arable land, high productivity levels and developed
agro-industrial capacity shapes the country’s enormous
potential as a global food supplier. With over US$17
billion in exports, Argentina is currently one of the
world’s major food exporters. The Argentine food &
beverage sector is characterized by a combination of
leading firms -national and international- with global
presence and a number of smaller innovative companies
taking advantage of unique niches in the market.
• COMPETITIVENESS. Being the main recipient of Foreign
Direct Investment (FDI) during the 1990s, the Argentine
food-processing sector has become highly competitive on
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II. Sector Structure and Performance
INDUSTRY STRUCTURE
A key sector. The F&B sector is at the core of the
Argentine manufacturing industry. It is the country’s
largest manufacturing sector in both total sales and
value-added (33.1% and 25% of the manufacturing
sector, respectively). The sector’s performance is of vital
importance to the country’s sustainable growth trend
through its contribution to the country’s exports, and
therefore trade surplus.
Premium quality. Argentina has a significant
comparative and competitive advantage in food and
beverages resulting from the combination of abundant
and varied natural resources and highly qualified
human resources, driving the development of world
class products. Argentine food and beverage products
are present around the globe, advancing the country’s
reputation for innovation and quality. Committed to high-
quality health and environmental standards, the sector
is fully prepared to meet challenging and increasingly
sophisticated consumer demands.
Market. In addition to Argentine foremost firms– like
Arcor, Aceitera General Deheza (AGD), La Serenísima,
Refinerías de Maíz and Sancor, leading foreign
multinationals have long-standing operations in
Argentina– including Cargill, General Mills, Kraft Foods,
Louis Dreyfus, Nestlé, Quickfood and Unilever. There are
also a growing number of smaller firms, focused on high-
end products, which are making their mark in a variety
of segments and niches. These entrepreneurial firms are
taking advantage of profitable investment opportunities
arising in the premium products segment.
SECTOR PERFORMANCE
Top performance. In 2007, F&B exports amounted
to US$17.8 billion—32% of total exports and 44% of
manufacturing exports. The sector contributes around 5%
to the country’s GDP and exhibited a compound annual
growth rate of 10% between 2002 and 2007. The sector
accounts for 16% of the total expenditure on innovative
activities and 8% of the total R&D investments performed
in the manufacturing industry. Employing 30% of the
manufacturing industry’s workforce, its output per
employee grew 40% in the last five years.
Upgrading tradition. The F&B sector has a long
tradition in Argentina, and has undergone important
transformations during its history. Continuously
incorporating technological advances, the industry has
become increasingly competitive. During the 1990s, the
food-processing industry was the prime destination of FDI
in the country, receiving US$9 billion. During that decade,
United States firms were the largest investors, accounting
for almost one-quarter of FDI, followed by Chilean,
French, Brazilian, and Mexican firms. Beverage firms were
the largest recipients of FDI, accounting for over 40% of
the total (mainly beer and non-alcoholic beverages).
Dynamism. Currently, the sector shows strong dynamism,
recently reaching record production levels. Between 2002
and 2007 production increased 63%.
Profitable investments. The recent sustained
growth drove profitability and attracted local and foreign
investments. During 2007, investment announcements
in the sector reached US$774 millions, being the
most relevant those by Coca-Cola (US$289 millions)
and Cervecería Quilmes (US$109 millions) aimed at
strengthening logistics, acquiring production technology
and reducing environmental impact.
Food & Beverages Production Growth(Phisical production index 1997 = 100)
Food & Beverages Exports Growth (in US$ milllions)
�,000
10,000
1�,000
�0,000
�00� �00� �00� �00� �00� �007
7,���
9,��
10,88�1�,0�7
1�,��9
17,7�7
80
90
100
110
1�0
1�0
1�0
�00� �00� �00� �00� �00� �007Source: National Institute of Statistics and Census (INDEC)
8�.1
9�.1
107.�
118.8
1��.�
1�7.8
Source: National Institute of Statistics and Census (INDEC)
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INDUSTRY SEGMENTS
The food & beverage industry processes agriculture,
livestock and fishing products into food and drinks for
humans or animals, and includes the production of
various intermediate products that are not directly food.
The industry is traditionally classified into the following
five groups: meat, fish, fruit, vegetables, oils and fats; dairy
products; grain mill products and prepared animal feeds;
other food products; and beverages.
The country’s most important segment is production,
processing and preservation of meat, fish, fruit, vegetables,
oils and fats with sales of US$25 billion and exports of
US$15 billion. China, Spain, and the Netherlands are the
main export destinations. Employment in this segment
accounts for 35% of the sector’s total workforce.
Vegetable Oils. These products are one of Argentina’s
main export products. The oils are based on the abundant
offer of oilseeds, among which soybean stands out.
Argentina is the world leader in vegetable oils: the leading
producer and exporter of sunflower oil, first exporter
and third producer of soybean oil and second exporter of
peanut oil. The sector uses state-of-the-art technologies,
producing at competitive costs and reaching world-
class quality levels. Among other, the main players in
this segment are AGD, Cargill, Industrias de Maíz and
Refinerías de Maíz. Increasing investments over the past
five years led to an important expansion in production and
consolidated these firms’ roles as world players.
Cereals and mill products. This product category
is Argentina’s fifth main export, exhibiting the highest
export growth rates between 2002 and 2007 (198%).
Exports exceeded US$700 million in 2007. Argentina
CASE STUDY
ARCOR: Argentine Multinational with worldwide presence in the food & beverages industry
Arcor is an extraordinary example of an Argentine firm
with international presence and a culture of permanent
innovation, investment and the creation of competitive
advantages. Specialized in the production of candies,
cookies, chocolates, ice creams and other food products,
its wide offering reaches every consumer segment and
is in permanent expansion, with over 100 new products
developed each year. Founded in 19�1, Arcor is the
largest candy producer in the world. Arcor’s �1 industrial
plants (�0 in Argentina, � in Brazil, � in Chile, 1 in Mexico
and 1 in Peru) produce 1,�00 different products. The
company employs �0,000 people and has total sales of
US$1.8� billion of which US$�10 million were exports to
1�0 countries. Arcor has developed strategic alliances
with partners such as Bimbo (forming Mundo Dulce to
produce chocolates and candies in Mexico) and Danone
(establishing Bagley Latinoamerica, the biggest cookie
producing firm in South America). The permanent search
for new opportunities and markets led Arcor to enter
the ice cream market in �00�, reinforcing the reputation
of their chocolate lines. Additionally they have
strengthened their production of sauces, canned foods,
solid sweets, dessert mixes, jams, jellies and dressings
through its acquisition of Benvenuto, a traditional leader
in the production of these goods. Traditionally, Arcor has
used its well-gained reputation and brands to expand
its lines and reach. The company guarantees the quality
of its products and complies with the most demanding
international norms.
Sales in F&B by Segment (2007)
Source: National Institute of Statistics and Census (INDEC)
7
belongs to the group of countries with the highest yields
in corn and wheat. Currently 138 firms operate in the
milling industry, and develop high quality products
to supply both the internal and export markets. Corn
processing produces a wide array of products that are
directly consumed or serve as inputs for other industries,
such as oil, flours, yeast, starch, sweeteners and gluten,
among many others. Wheat and corn processing has
advanced towards a more diversified product offering,
with higher levels of differentiation and innovation. For
instance, fortified flours with minerals and vitamins
resulting from important R&D investments have external
markets as their main destination
Meat, fish, fruits and vegetables. Cattle meat
production is on its highest level and the value of meat
exports grew at an annual average rate of 35% between
2003 and 2006. Fish exports increased 14% and fruits and
vegetables expanded 17% during the same period.
Dairy Products. Sales in the dairy sector currently
exceed US$4 billion. This sector exports over 15% of its
production, with practically no imports. The main export
destinations are Brazil and Algeria. This sector has seen
a significant recovery recently, managing to surpass
its record production levels exhibited in 1998, with
cheese and milk growing at annual rates of 9% and 12%,
respectively since 2002.
Beverages. The beverage segment has exhibited the
most dynamic behavior in terms of production volumes:
its output volume grew 86% between 2002 and 2007. The
performance of some products, such as mineral waters,
flavored waters and sports drinks stand out as particularly
attractive.
CASE STUDY
Cepas Argentinas: consumer knowledge and permanent innovation
Cepas Argentinas is a business group specialized in the
production and distribution of foods and beverages.
With a turnover of US$1�0 million and exports of US$��
million, the company has managed to position its brands
(such as Dr. Lemon, El Noble Repulgue, Fernet Lusera,
Giacomo, Le Vignoble, Pronto, and Terma) as leaders
in their respective categories. Cepas Argentinas is the
first exporter of concentrated grape juice in the country
through Le Vignoble. With Bacardi-Martini as an inter-
national partner, is responsible for the marketing and
distribution of its products. The company has also market-
ing and distribution agreements for Cinzano and Campari
products, which include the distribution, marketing and,
in some cases, the production of these international
brands. In addition, Cepas Argentinas is in charge of the
distribution of Bodegas Bianchi’s wines. The company
owns five industrial plants (including plants for the
production of non-alcoholic and alcoholic herbal based
beverages, alcoholic beverages, grape concentrated juice,
stuffed pasta and fresh and frozen empanadas) and two
distribution centers. A distinctive aspect is the company
devotion to the continuous development of new products
and markets.
Cepas strongly believes that the driving forces of its
business are the value of its brands and its knowledge of
consumers’ needs. One of the company’s distinguishing
features is its ability to detect and generate new product
categories that are supported by significant investments
in R&D. Cepas Argentinas is known for its outstand-
ing performance in brand image-building, endorsed by
continuous investment in advertising and promotion. As a
result of this business vision, the group ranks among the
first fast moving consumer goods companies in Argentina.
Traditionally, the group’s exports were almost exclusively
focused on concentrated grape juice. In �00� Cepas Ar-
gentinas decided to focus its efforts on the development
of beverage and food brands abroad. This decision has
already produced encouraging results. Besides neighbor-
ing countries such as Uruguay and Paraguay, which have
always been supplied by the company, Cepas Argentinas
already exports products to an important number of
countries, including Australia, U.S., Canada, Italy, Japan,
Netherlands, Spain, U.K., among others.
Exports in F&B by Segment (2007)
Source: National Institute of Statistics and Census (INDEC)
8
Canada, Brazil and Russia the main destinations (together
representing over half of the exports). The most exported
variety corresponds to Malbec, the flagship wine for
Argentina. The five main wine exporters are Esmeralda
(Catena Zapata), La Agrícola (Zuccardi), Norton, Peñaflor
(Trapiche and Las Moras) and Trivento.
Significant investments. Both local and foreign
investment–mainly from the U.S., Chile, France, Spain
and Italy–have made possible the spectacular expansion
of productive capacity. During the past decade, the
sector received over US$1 billion in investments from
beverage companies and investment funds. These
investments have resulted in improved quality and
consistency, matching international standards. Cutting-
edge technology similar to the one used by other major
producing countries is now available in Argentina, and
the country boasts an immense offering of high quality
products at competitive prices. The growth of the wine
industry has also promoted the development of wine-
tourism, attracting an increasing number of tourists and
driving significant investments.
Alliances & associations. Sector participants are
organized in several associations and initiatives.
Beginning in the early 1900s, the Argentine Viticulture
Association and The Mendoza Chamber of Winemakers
first addressed the needs of an emerging group of
producers interested in global exposure. The two
organizations were independently responsible for
maintaining quality standards, establishing prices and
accounting for the needs of member companies. In
August �001, the two organizations united to form
Food & Beverages: Unique Opportunities
The sustained increase in income levels in Argentina
during recent years fostered the return of premium food
and beverage brands to center stage in the marketplace.
This domestic development is reinforced by a growing
global segment of middle- and high-income consumers.
In addition to these general trends, other factors such
as the rise of female participation in the labor force and
a growing number of health-conscious consumers have
created profitable investment opportunities.
WINES
The combination of soils, climates, altitudes and
topographies in Argentina provide excellent agro-
ecological conditions for the elaboration of different
types of grape and wine. Our wines are positioned among
the best in the world, certified by important international
awards. These endorsements have positively driven the
international demand for Argentine wines.
Growing demand and production. With a production
of 1,�00 million liters in �007, Argentina is the world’s
fifth major wine-producing country. Close to 80% of this
rampant production is intended for the domestic market,
which has become increasingly sophisticated over the
last years. Argentina’s domestic market–the seventh
largest wine market in the world–offers an important
stimulus for local production. There are currently over
700 wineries operating in the country, 70% of them in
the province of Mendoza, and the wine industry directly
employs more than ��,000 people.
Global presence. The rise of Argentine wine exports has
been driven not only by a strong increase in volume, but
by a significant increase in value. In the last 17 years,
while the volume exported of wines and must increased
seven-fold, the value of wine exports multiplied by
over �0 times. In �007, export volumes increased �0%
(� million hectoliters), with a �0% increase in export
value, reaching US$��� millions. Wines account for
7�% of this amount, with the remainder corresponding
to musts and sparkling wines. The industry goal to
reach US$900 million exported by �011 is expected
to be met well in advance. Last year, Argentine wines
reached 11� countries, being the U.S., United Kingdom,
1997 1998 1999 �000 �001 �00� �00� �00� �00� �00� �007
0
�0
100
1�0
�00
��0
�00
��0
�00
��0
�00
0
�0
100
1�0
�00
��0
�00
��0 million liters US$ millions
in U
S$ m
illio
ns
in m
illio
ns li
ters
Wine Exports Growth
Source: National Viticulture Institute (INV)
9
“Wineries of Argentina” (Bodegas de Argentina) that
represents grape and fine wine producers accounting for
80% of exports in the industry.
Companies associated with “Wineries of Argentina”
account for almost �0% of the local table wine market
and almost 80% of the local fine wine market. In addition
to provincial representation, “Wineries of Argentina”
supports national efforts to regulate wine production and
its market on behalf of the government. This association
participated in MERCOSUR negotiations with member
countries to develop commercial regulations for the
wine industry in each country which went into effect in
199�. Today, the organization continues to participate in
periodic MERCOSUR meetings. Argentina’s Winegrowing
Association -now part of “Wineries of Argentina”- is a
collection of exporters whose aim is the promotion of
their members’ products in the export market.
Public-private cooperation. The sector has achieved an
important level of public-private coordination, which
resulted in the Strategic Plan Viticultural Argentina
�0�0 that sets global action strategies and goals for
both domestic and external markets. The Argentine
Viticultural Corporation is the public-private entity
gathering the major institutions in the sector, with the
mandate to manage and coordinate the implementation
of the Strategic Plan. The main overseeing public body
is the National Viticulture Institute (INV), a government
organization empowered to control all aspects of the
growing and production aspects of the industry. In
addition to drawing-up major rules and regulations, the
institute runs a large laboratory for quality control of
export wine. The INV also elaborates industry statistics.
10
SOFT DRINKS AND FLAVORED WATERS
The soft-drinks market is dominated by carbonated
drinks, followed by flavored waters and mineral waters.
Volumes of carbonated drinks experienced a significant
fall in �00� but have regained momentum since then,
with domestic market sales reaching ��.7 million
hectoliters in �00�. There are more than �00 new brands
in the market, although the sector remains dominated by
the product ranges of Coca-Cola and Pepsi (subsidiaries
of Mexico’s Coca-Cola Femsa and U.S.-based PepsiCo).
Rapidly growing product segments. Mineral water,
flavored waters and sports and energy drinks stand
out as attractive and rapidly growing segments.
The combination of rising incomes and increasingly
health-conscious consumers are driving demand. It is
expected that sustained increases in real incomes should
continue to drive sales at the high end of the hot drinks
market, such as cappuccino, specialty teas and flavored
“gourmet” yerba mate.
Mineral and flavored waters. Mineral water
consumption has recovered since the slump in �00�, and
the sector recently accounted for 1�% of the soft-drink
market, with sales reaching US$�80 million. In �00�,
the average domestic per capita consumption was ��
liters–similar to other countries in the region but well
below more developed markets such as France (11�
liters) or Germany (7� liters). Coca-Cola of Argentina is
one of the major players in the sector. Recently, there
has also been a huge growth in flavored mineral waters,
which aim to compete with diet sodas. In �00� sales of
flavored waters grew by ��% and this growth trend is
likely to continue.
Sports and energy drinks. Growth rates in the sports
and energy drinks (111% growth in �007) segment is
attracting new investments. Specifically, the isotonic
beverage market is also growing fast (�7% in �007),
with PepsiCo (U.S.) as the leader with its Gatorade brand,
accounting for 9�% of the market.
11
NUTRIFOODS
Consumers around the globe are increasingly interested
in the health benefits of particular foods, and look
beyond the basic nutritional benefits for food with
disease preventing and health enhancing properties.
A more widespread understanding of how diet affects
diseases, rising health-care costs and an aging
population have created a market for functional foods
and natural health products. According to market
statistics, the global functional food and nutraceutical
market is growing at a rate that is outpacing that of the
traditional processed food market. .
Huge Potential. Argentina has the potential to emerge
as a leading world supplier in this attractive market.
The impressive growth rates observed in the local
F&B industry and its propensity towards innovation
constitutes an important stimulus for the development
and attraction of local suppliers. Several domestic
firms are present in the bioactive food ingredients
industry and in that of food ingredients based on
bioprocesses. The local market for bio-produced
food ingredients is estimated at over US$100 million.
Some current developments include incorporating
functional ingredients into food products, such as
probiotic bacterial cultures; prebiotics (e.g. fructo-
oligosaccharides) from corn; bioactives concentrated
from berries and flax; and novel fibres from pulses.
1�
Phytochemicals in brightly coloured fruits and vegetables
are suggested to be the bioactive compounds associated
with reduced risk of cardiovascular disease and cancer.
Berry crops such as blueberries and cranberries have
high concentrations of these compounds, apart from
important vitamins and minerals. U.S. Department
of Agriculture (USDA) studies rank the blueberry as
the most important contributor of antioxidants, and
highlighted its antibiotics effects.
In the last decade, the Argentine production of berries
(comprising today �,000 hectares) increased greatly,
peaking at ��,000 tons and employing 70,000 people.
Its development has been mainly fostered by the rampant
increase in exports which grew at an average rate of ��%
during the last decade. Between �00� and �007 exports
grew ��%, reaching almost US$�0 millions. Estimations
suggest that exports of berries will reach 1�,000 tons in
�008, an increment of �9%. Strawberries occupy the first
place with �0,000 tons, followed by the rapidly growing
production of blueberries. Blueberry production reached
�,000 tons, of which 90% is exported, mainly to the U.S.
The local manufacturing industry is becoming increasingly
aware of the properties and potential of berries. More
and more blueberries and cranberries are processed into
jams, jellies, drinks (especially teas), concentrates, purees,
juices and syrups, pie fillings, dairy products and sauces.
They are canned and frozen in both retail and wholesale
packs. Fresh, frozen and dried berries are used in bakery
products, nutrition bars, trail and snack mixes, cereals and
muesli. Berry extracts are used as coloring and flavoring
agents, and dried concentrated extracts are being packed
into capsules for sale as natural health products.
Nutrifoods in the Spotlight: Berries
Berries Exports (in tons)
Source: Argentine Chamber of Blueberries and other Berries Producers (CAPAB)
�00�/0�
�00�/0�
�00�/0�
�00�/07
�007/08
�008/09P
8��
1,�8�
�,800
�,�99
8,800
1�,000
1�
ORGANIC FOODS
Argentina presents natural and competitive advantages
for the production of organic foods. Currently, both the
production and exports (98% of total production) of
organic products is increasing strongly. This performance
is based mainly on the opportunity of exporting fresh
products by taking advantage of the counter-season
with respect to the Northern hemisphere added to the
confidence on Argentina’s organic product certification
acquired via its renowned and consolidated normative
and control systems. Last year, the surface allocated
to organic cattle increased 17% (reaching � million
hectares) and the one dedicated to organic food grew by
9% (�1,000 hectares).
Global presence. Exports of organic products increased
significantly and during �007 reached 118 billion tons.
Since its beginning, the activity’s main destination has
been the E.U., accounting for 7�% of total exports.
However, the U.S., presently accounting for 1�%, has been
increasing its demand. Among these exports, processed
products stand out: they represented almost �0,000
tons and grew �0% last year. Since 199�, Argentina
presents a specific regulatory framework for organic
vegetable production, which was completed in 199� with
the framework for animal organic production. This early
regulation allowed Argentina to be among the first in Latin
America to receive authorization to export to the E.U.
Domestic consumption, although still small, is rapidly
increasing, especially that of vegetables which currently
represent �0% of domestic consumption.
Organic Foods in the Spotlight: Premium Vegetables
An avid market for varied and high-quality vegetables
in the Northern hemisphere fostered the exports of
premium products, such as asparagus, cols and endives.
Argentina is currently experiencing a significant growth
in its exports, due to its work in cultivation technologies
and post-sown innovations. Several firms are increasingly
aiming at a product differentiation strategy. In this
regard, the “Argentine food: A Natural Choice” seal
constitutes an important strategy aimed at strengthening
its presence in these export markets. Fresh asparagus
reached exports of US$��0,000, with endives and cols
also registering important increases. The main markets
for these products are the U.S., Spain, France, Germany,
Switzerland, the Netherlands and neighboring countries.
1�
III. Foundation for Success
RESEARCH AND DEVELOPMENT
Technological assistance. The country has a wide
array of scientific and technical institutions dedicated
to upgrading and assisting the F&B industry. One of the
most renowned national industrial research centers, the
National Institute for Industrial Technology (INTI), has
a whole division dedicated to food production. Within
this division, four different areas are explored: Meat,
Diary products, Fruits and Vegetables, and Cereals
and Oilseeds. This center conducts valuable research
applied to the production, processing, packaging and
commercialization of existing products as well as
product development and upgrading.
Research capabilities. The National Council for
Scientific and Technical Research (CONICET) has
many research institutions devoted to the F&B industry.
These include the Research and Development Institute
in Food Cryogenic technology (CIDCA), the Center
for Lactobacillus (CERELA), the Industrial Lactology
Institute (INLAIN), and the Research and Development
Center in Industrial Fermentations (CINDEFI).
Funds for science and technology. The National
Fund for Scientific and Technological Research
(FONCYT) has supported 120 research projects in
the area of food technology between 1996 and 2004,
with average grants of US$50,000. Another relevant
public initiative, the Argentine Technological Fund
(FONTAR), sponsored the F&B industry with more than
US$13 million during the 2003-2006 period.
GROWING BIOTECH INTEGRATION
Biotechnology applications. More than 10
biotechnological firms in the country research and
produce food ingredients for the F&B industry, with
total sales bordering US$60 million. Among the main
users of these ingredients, five companies stand out.
Three of them are domestically-owned–Alimentaria
San Luis, Arcor and Georgalos–, and the other two–
Industrias de Maíz and Refinerías de Maíz–have been
acquired by global food companies. Two leading firms
in the dairy sector (SanCor and La Serenísima-Danone)
have recently launched their probiotic milk lines by
incorporating Lactobacillus and Bifidobacterium
strains that, as probiotic species, favor the intestinal
microbacterial ecosystem.
1�
LOCAL SKILLS AND TALENT
Attracting the brightest minds. Argentina
presents an abundant flow of university graduates
in diverse disciplines related to the food & beverage
industry. The federal government, through its
Ministry of Education, included “Food Engineering”
and “Bachelor in Science and Technology of Foods” as
priority disciplines. Students in those fields can enjoy
specially tailored scholarships aimed at increasing
the stock of educated professionals to meet a rising
sector demand. Two main associations, the Argentine
Association of Food Technologists (AATA) and the
Argentine Association of Food Industry Engineers
(AAIIA) represent industry professionals.
Entrepreneurship. The F&B sector has seen a
number of entrepreneurial firms penetrate attractive
niches. This is due to a large extent to the fact
that Argentina offers a pool of young, motivated
and talented entrepreneurs. More than 65,000
undergraduate and 4,600 graduate students from 103
universities across the country enter the labor market
each year and the country ranks tenth in the Global
Entrepreneurship Monitor (2007) and counts with
world-class business schools.
NATURAL RESOURCES
Naturally rich. Argentina is one of the most
geographically varied and resource rich territories
in the world. It is the second largest country in Latin
America and the eighth in the world. Along with its
2.8 million square kilometers Argentina is endowed
with extraordinary fertile agriculture lands - almost
32 million hectares of arable land- perfectly fitted for
agriculture and cattle production, and rich fisheries.
These resources endow Argentina with a remarkable
potential as a global food supplier.
1�
IV. Main Challenges
Industry players and government agencies face key
challenges to sustain growth and consolidate the sector’s
competitiveness. In themselves, these challenges present
attractive opportunities for the industry and Argentina.
• Support the creation and internalization of
entrepreneurial companies: the current scenario
presents outstanding opportunities for innovative
companies capable of developing differentiated products
for the world market. Encouraging the creation of
companies with a strong export focus to further develop
niche markets is a public sector priority.
• Facilitating the application of technology:
the industry will benefit greatly from a closer
integration between the F&B sector and knowledge-
intensive activities such as biotechnology. The
widespread use of technology across the productive
process has the potential to increase efficiency and
improve the quality and nutritional properties of food
production.
• Leverage the Argentine brand name: a closer
identification should be achieved between local
products and Argentina’s prestige as a global food
supplier. Progressively, Argentina’s reputation for
quality food and the export market penetration of local
products should reinforce each other, taking advantage
of mutual synergies.
OUR CHALLENGES ARE YOUR OPPORTUNITIES.
SOURCES: The trends, data and figures included in this material were elaborated by ProsperAr on the basis of: National Institute of Statistics and Census; Center of Studies for Production (CEP); Argentine Chamber of Blueberries and other Berries Producers (CAPAB); SAGPYA; National Viticulture Institute (INV); Bisang, Gutman, Lavarello, Sztulwark and Diaz (comp.) “Biotecnología y desarrollo. Un modelo para armar”, UNGS-Prometeo, Buenos Aires, �00�; National Fund for Sci-entific and Technological Research (FONCYT); Argentine Technological Fund (FONTAR); “World Consumer Goods and Retail Outlook”, The Economist Intelligence Unit; and “Global Food, Beverage and Tobacco. Industry Profile”, Datamonitor, �00�.
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The information provided through this brochure does not constitute legal or professional advice whatsoever. ProsperAr (Agencia Nacional de Desarrollo de Inversiones) reserves the right to revise, amend, alter or delete the information provided herein at any time, but shall not be responsible for or liable in respect of any such revisions, amendments, alterations or deletions.Photos: Photos: Argentinean Tourist Board, Stock Exchange and Pampa Gourmet.
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Argentina at a glance
Country profile
Official name República Argentina
Capital city Buenos Aires
Main cities Córdoba, La Plata, Mar del Plata, Mendoza, Rosario
Surface area �.7 million square kilometers
Population �0.� million inhabitants
Population growth 1.0% per year
Adult literacy rate 98%
Life expectancy at birth 7� years
GDP per capita (PPP) US$ 1�,�1�
Currency Argentine peso ($)
Form of government Federal Presidential Republic
Political division �� autonomous provinces and the Autonomous City of Buenos Aires
Time zone GMT-0�:00
Official language Spanish
�00� �00� �00� �00� �007 �008
GDP growth rate (annual %) 8.8% 9.0% 9.�% 8.�% 8.7% 7.0%
GDP (PPP) (millions of US$) ���,�99 �7�,0�1 �19,��8 ��9,7�0 ���,1�0 �7�,8�0
GDP (millions of US$) 1�8,078 1��,1�8 181,9�7 �1�,8�8 ��0,�8� ��8,�0�
Exports of goods and services (millions of US$) ��,��9 �9,8�� �7,0�� ��,��7 ��,088 8�,�08
Imports of goods and services (millions of US$) 18,8�7 �7,9�0 ��,9�9 �1,1�0 ��,��� �7,�9�
Balance of trade of goods and services (millions of US$) 1�,�1� 11,9�� 1�,08� 1�,��7 1�,7�� 1�,11�
Trade surplus (% of GDP) 1�.�% 7.8% �.�% �.�% �.9% �.�%
Current account surplus (% of GDP) �.�% �.1% �.9% �.�% �.7% �.�%
Primary fiscal surplus (% of GDP) �.�% �.9% �.7% �.�% �.�% �.1%
Gross capital formation (% of GDP, constant prices) 1�.�% 17.7% 19.8% �1.�% ��.�% ��.0%
Gross national savings (% of GDP, current prices) 19.�% �0.�% ��.7% ��.�% ��.�% ��.7%E
Foreign direct investment (millions of US$) 1,��� �,1�� �,��� �,��7 �,�7� 7,979
Exchange rate ($/US$) �.9� �.9� �.9� �.07 �.1� �.1�
Foreign reserves (millions of US$) 1�,119 19,��� �8,077 ��,0�7 ��,17� ��,�8�
Unemployment rate (% of EAP) 17.�% 1�.�% 11.�% 10.�% 8.�% 7.9%
Source: ProsperAr based on data provided by the Argentine National Institute of Statistics and Census, the Central Bank’s Market Expectations Survey (REM), the International Monetary Fund and the United Nations Conference on Trade and Development (as of April �0, �009).
Main Economic Indicators
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ProsperAr is Argentina’s National Investment Development Agency
Our mission is to develop direct foreign and domestic investment to contribute to Argentina’s competitiveness and sustainable development.
ProsperAr’s four main objectives are:
Provide services to investors ProsperAr provides investors with personalized professional services throughout the investment
process, from initial advisory services to investment facilitation and aftercare. The Agency’s team
assesses on investment projects, responds to queries from investors and provides key business
information. Leveraging the Agency’s cooperative relationships with different government bodies,
ProsperAr’s integral services offer investors a unified one-stop support system.
Attract and generate investment ProsperAr works in the promotion, attraction and expansion of both domestic and foreign investment.
We identify investment and innovation opportunities in high growth sectors, communicating
them to national and overseas investors through international missions, conferences, meetings and
publications. We work to build relationships that enable multinational companies to take advantage of
local, regional and global opportunities. We also encourage domestic firms to expand and develop their
businesses.
Boost the Investment EnvironmentProsperAr works to strengthen Argentina’s investment environment. We interact with local and
multinational companies, as well as potential investors, identifying and removing possible obstacles to
doing business in Argentina. Through active dialogue with the private sector, and in coordination with
other government departments, we advocate for the formulation of policies and programs to optimize
the investment and innovation environment.
Promote the internationalization of local companies ProsperAr promotes the growth and internationalization of Argentine firms. Fostering local vocation
for innovation and entrepreneurship and promoting overall competitiveness are key aspects of
the Agency’s strategy. Two programs “Entreprenuer Development” and “Pioneers” are in place to
strengthen local companies’ critical capacities in different growth phases. ProsperAr also assists
international companies to invest in and/or work with their local counterparts to form global joint
ventures.
ProsperAr is your strategic partner to invest and prosper in Argentina.
What ProsperAr can do for you:
>> Provide timely and relevant information on business sectors and geographical locations in Argentina.
>> Help identify investment and innovation opportunities in strategic sectors.>> Troubleshoot red tape and obstacles; facilitate the investment process and doing
business in Argentina.>> Assist in building partnerships between foreign investors and local companies.
To learn more about how investing in FOOD & BEVERAGES in Argentina can benefit you, please contact us:
www.prosperar.gov.arinfo@prosperar.gov.ar+54 11 4328 9510
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