Guide to the Consumer Food Market

There are only a few food importer-distributors in the BVI, all located in Road Town on Tortola. Road Town Wholesale is by far the largest, followed by K-Marks, Supa-Value, and Bobby's. Road Town Wholesale are agents for a number of international companies, and report that they have never signed a non-competition agreement. When other companies on the island bring in a product that Road Town represents, they normally get a commission. Road Town has roughly 60,000 square feet of warehouse space, and operates a chain of four supermarkets on Tortola. Half of Road Town's imports are for their own supermarkets, with the other half going to hotels, other supermarkets, and boats. Yacht chandlery is reportedly big business in the BVI, reportedly accounting for more food sales than the hotel trade.

Wholesalers and supermarkets are the major importers of food products to the Cayman Islands. Most wholesalers represent selected brand names under exclusive representation agreements. They buy the products directly from the manufacturers and receive a special price in addition to marketing and promotional support. Wholesale companies supply the grocery stores, the hotels and the restaurants, as well as the supermarkets for the products for which they are the exclusive importers. Some even assist the supermarkets in the merchandising of the products in-store.

The largest wholesalers in the Caymans import all kinds of food products, whether under exclusive representation agreements or not. Three of them dominate the market: Jacques Scott & Co and its subsidiary Cayman Wholesale, Cayman Distribution Co., and Kirkconnel Brothers Co. These companies supply all the supermarkets, the grocery stores and the HRI (hotel, restaurant, and institutional) trade throughout the islands. Supermarkets also import significant volumes from wholesalers overseas. Wholesalers in Miami are their major sources of supply. Products imported are of a large variety, ranging from fresh, to frozen, to dry products, to drinks and beverages. Imports of alcoholic beverages, however, require a license from the government and have their own specialized distribution system.

Cayman wholesale companies are well equipped, with extensive investments in the storage, handling and delivery of food products, including a computer-controlled inventory system. Most importers and wholesalers are located in George Town and have their warehouse in the proximity of the seaport and airport. They offer a delivery service to their customers throughout the islands. Established customers have an open account payable at the end of the month.

Local production of food products is limited to subsistence farming in North Caicos. Turks and Caicos, therefore, has to rely entirely on imports for its food supply. About ten companies account for 95 percent of food imports. They include four wholesale companies, three supermarkets, and several convenience stores and hotels and restaurants. Major wholesalers such as T.C. Trading, Provo Hits, and Community Enterprises are located in Providenciales, the main tourist location. These firms primarily supply the hotels and restaurants. One company, Turks Islands Importers is the only wholesaler in Grand Turk; however, it makes more revenue on the retail market than the wholesale business. The three supermarkets, First Choice IGA, Island Pride Supermarket and Quality Supermarket are located in Providenciales, and they also sell wholesale to grocery stores throughout Turks and Caicos.

The volume of the food import market is quite small, so most wholesalers have only limited workspace and storage room. Their equipment is modern, however, and includes chilled and frozen rooms. They also undertake truck deliveries within their respective islands. Deliveries to other islands are by small planes, at the expense of the buyer.

Future of Wholesale Distribution

The wholesale distribution market is particularly stable in these islands. Competition is active but involves mostly well-established firms, and no major player has entered or exited the market in recent years.

There are about twenty supermarkets and superettes, or smaller grocery stores, on Anguilla. Albert's is one of the larger supermarkets, with eight aisles and three checkout stands. Ashley and Sons has nine aisles and four checkout stands. The Fair Play Food Center, an IGA franchisee, has five aisles and four checkout stands. There is also a smaller, gourmet grocery store called Vista, which caters mostly to the tourist and part-time resident trade.

There are about twenty supermarkets and grocery stores in the BVI, mostly located on Tortola. Road Town Wholesale operates four stores, K-Marks has three, and Bobby's has two. K-Marks reportedly has the largest single store, which has ten aisles and four checkout stands, and is equipped with scanners. K-Marks also has a five-aisle community superette and a seven-aisle outlet targeted toward boat provision.

Road Town Wholesale's four supermarkets are called Riteway. These stores are planning to install scanners. Two of the stores are reportedly bigger than the larger of the two Bobby's supermarkets, which is about 15,000 square feet. Bobby's imports mostly from various Miami wholesalers, and also buys from Road Town and K-Marks. There are a few other independent groceries who are supplied by a combination of local, Florida, and St. Maarten wholesalers.

Cayman Islands

Two major categories of operators participate in the retail food market: supermarkets and grocery stores. Supermarkets account for about 90 percent of food sales to the consumer. Foster's Food Fair is the largest food retailer and owns two supermarkets, one in George Town and another, the largest in the Caymans, in West Bay. Food Fair's competitors are the Kirk Supermarket (a division of the wholesale company Kirkconnel Brothers) Hurley's Supermarket (a division of the wholesale company Cayman Imports Ltd.), and Republix Supermarket. Kirk and Hurley are both located in George Town while Republix supermarket is in West Bay.

Foster's Food Fair's store in West Bay has an area of 50,000 square feet, and the one in George Town is 31,000 square feet. The Kirk and Hurley supermarkets both have an area of 25,000 square feet, while Republix Supermarket is of about half the size of these stores. Caymanian supermarkets are similar to those in the US in that they use bar codes, their checkout stands are equipped with scanners, and credit cards are accepted. Each store has different departments such as meat, produce, seafood, dairy products, dry goods, drinks and beverages or snacks, but they do not carry any alcoholic beverages. There are about fifteen licensed liquor stores in the Cayman Islands.

About one hundred smaller grocery stores also compete in the food retail market. Cayman Brac, the second island with a population of 1,500, has four grocery stores. Few of the grocery stores import from overseas, instead buying from local wholesalers. Grocery stores are usually of a size smaller than 3,000 square feet, and only the larger ones use bar codes and accept credit cards.

There are three supermarkets, three medium size grocery stores and about one hundred small shops and convenience stores in Turks and Caicos. The supermarkets are located in Providenciales, while the grocery stores tend to be in Grand Turk. Each island also has a number of small stores that carry a wide variety of products. Supermarkets import most of their supplies from the US. They might also import from Europe, but imports from other sources are very small. Many of the small grocery stores also import food products and, at the same time, rely on the wholesalers and supermarkets for the supply of some low volume items and selected goods. Supermarkets tend to import on a weekly basis, with the smaller stores importing on a monthly basis.

First Choice IGA and Island Pride Supermarket each have store areas of about 10,000 square feet. The First Choice supermarket just opened two years ago and is the most modern grocery store in Turks and Caicos. The third supermarket, Quality Supermarket, is similar in design to the other two, but smaller at only 4,000 square feet. Convenience stores are quite small, generally between 100 to 500 square feet. They carry a limited variety of products and tend to concentrate on dry and canned goods.

Future of Retail Distribution

In Anguilla, with the exception of a few stores planning to install scanners and the IGA's plan to put in an in-store bakery and deli, no expansion is foreseen in the supermarket industry. At the moment, the main competition to BVI retail food sales is coming from the US Virgin Islands. St. Thomas is only a short ferry ride away and many BVI residents take advantage of lower prices at the Cost-U warehouse store and K-Mart there. Though no major changes or additions are planned to existing supermarkets in the BVI, some retailers said they were considering creating a warehouse-type store to compete with Cost-U. Road Town Wholesale already allows individuals to shop its warehouses, a practice which is quite popular.

In the Cayman Islands, the most recent change in the retail distribution market is the opening of the second supermarket by Foster's Food Fair. Considering the size of this new store, it is likely that competition will increase within the industry. In Turks and Caicos, the market is small, and not very dynamic. The owners of First Choice IGA are currently seeking a buyer for the store they just inaugurated two years ago.

Business Relationships/Choosing a Partner

Often in the Caribbean, one has the choice of exporting to a distributor or directly to retail outlets. Dealing with a distributor has the advantages of national coverage as well as marketing and promotion assistance, while dealing with retailers has the advantage of shortening the distribution chain and lowering costs. For most of the British territories in the Caribbean, the wholesalers and retailers are the same companies, so this choice doesn't present itself as often. When choosing agents in these islands, it is always advisable to deal with the established companies, as they have the capital and contacts necessary to effectively market the product. US-based wholesalers are another avenue of supplying the Caribbean. More information on these companies is available in "the Caribbean: A Summary Export Guide to the Consumer Food Market."

Most importers report receiving a credit from their traditional suppliers. Wholesalers, in turn, sell to established customers with a 30-day credit or less.

Laws and Regulations Concerning Imported Food

Food laws are quite relaxed in the British dependencies in the Caribbean. However, food from the United States is expected to conform to US regulations. Meat imports must be accompanied by a certificate of wholesomeness from USDA.

It is not necessary to register trademarks in these countries, but it is advisable to do so. Trademark registration may be done through the Registry of Companies in Anguilla and the General Registry in the Cayman Islands.

Permits are not required for most food imports. In the Cayman Islands and the BVI, fruit and vegetable importers are required to obtain a Plant Import License.

See Appendix 1 for a list of representative tariff rates for the British territories.

Most imports of consumer foods are subject to a 5 to 15 percent duty rate, except for certain items which are duty-free, including the following poultry, dairy, and produce items: whole chickens, geese, turkey, duck, fresh or chilled poultry cuts, frozen boneless poultry cuts, powdered milk and cream, potatoes and sweet potatoes, bananas and plantains, dates, figs, pineapples, avocados, guavas, mangos, citrus fruit and various grains.

Duty-free rates are also applied to imports of baby food, pastries, some prepared vegetables, jams, jellies, and soup. Fruit juices and waters are also duty-free, while tariffs on alcoholic beverages range from 30 percent on wine and beer to $3.80 per gallon of stronger spirits.

BVI

Many food imports into the British Virgin Islands are subject to a 5 percent duty rate except for the following which are duty-free: poultry, fish, all vegetables, fresh or chilled (but not including potatoes of the solanum family, onions and garlic), all cereal grains (but not including sweet corn on the cob), sugar, water and ice.

Other items receive a higher rate of duty. Some are 10 percent: dried or frozen fruit, coffee and tea, cooking oils, and peanut butter. Other imported products are subject to a 15 percent duty rate: mollusks and crustaceans, butter, fresh nuts other than coconuts or peanuts, roasted or salted nuts, sugar confectionary, chocolate and chocolate confectionary, breakfast cereals and pastries, olives, potato chips, fruit preserved by sugar, fruit juices, ice cream, and aerated waters. Duties on alcoholic beverages range from $1.10 per gallon of beer to $3.00 per gallon of brandy or whiskey. Spirits such as gin, rum, and vodka receive a $2.30 per gallon duty.

Cayman Islands

Most imported food items attract a 15 percent to 20 percent duty, except the following duty-free items which may be of interest to US exporters: poultry, fish, milk and cream, cheese, peas and beans, coffee, grains, spaghetti products, margarine, flours, and breakfast cereals. Duties for alcoholic beverages vary depending on alcohol content, from $1.80 per liter for beer to $17.10 per liter for strong spirits.

Tariffs on imported foods can reach up to 25 percent of the f.o.b. value, plus an additional 10 percent surcharge on the duty. All fruits and vegetables, whether fresh or frozen, are duty-free. The following is a brief list of the duties applied to other imported foods and beverages in the Turks and Caicos Islands: processed meats, 10 percent; lard and lard substitute, 12 percent; tea, 15 percent; sugar, 16 percent; all other assorted foodstuffs, 25 percent.