Processed food export caught in ethnic marketing strategy 
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WEDNESDAY, FEBRUARY 01, 2023
Processed food export caught in ethnic marketing strategy 

Economy

Shawkat Ali
25 November, 2021, 03:20 pm
Last modified: 25 November, 2021, 03:24 pm

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Processed food export caught in ethnic marketing strategy 

Bangladeshi manufacturers need to widen their customer target to explore the export potential of processed foods      

Shawkat Ali
25 November, 2021, 03:20 pm
Last modified: 25 November, 2021, 03:24 pm

There has been a huge export potential for Bangladeshi agri items, agro products and processed foods in foreign markets, but it remains largely untapped.   

For instance, if you browse the shelves of a super shop in Malaysia, chances are you will find puffed rice or spicy chanachur, even with a "made in Bangladesh" tag. Even in Dubai, you will get toast biscuits at the supermarkets made by the Bangladeshi Pran-RFL Group.

For now, that is all the local manufacturers can offer the Bengali diaspora abroad – some spicy snacks or sweet cookies, not the main dishes.

Local food makers said they are yet to make it to European countries and the US with fast-moving processed foods and beverages thanks to their "ethnic marketing" (Bengali community-centric marketing that targets a satisfying of the community's particular tastes and needs) strategy, limited export basket, a lack of international standards and other compliances.             

"If we want to enter their market, we need to maintain their standards and compliances at the production units. That needs research and development," Kamruzzaman Kamal, director (Marketing) at Pran-RFL Group, told The Business Standard.

At present, Bangladesh exports processed foods to 144 countries, with Bangladeshi agri items and agro products going to Bengali community markets in Europe. But the items are not allowed at European chain shops since the manufacturers do not produce them through targeting foreign consumers.   

According to the Export Promotion Bureau, export of agri items and agro products surpassed $1 billion in the 2020-21 fiscal year.

The government, manufacturers and trade bodies have taken a number of initiatives to boost the export of processed foods.  

Md Iqtadul Hoque, general secretary of Bangladesh Agro Processors Association, said local manufacturers lag behind both in international technology and standards.    

Echoing Pran's Kamal on the need for more research, he said Bangladeshi manufacturers also should focus on improving food quality.

A $4.8 billion market with 15% growth

The commerce ministry recently conducted a study on the agro-processing industry. The study found Bangladesh's processed food market registered 15% annual growth in the last five years.

At present, the size of the market comprising domestic demand and export is $4.8 billion. According to the Foreign Investors Chamber of Commerce and Industry, the market will reach $5.8 billion by 2030.

With a 32% share, spices occupy the largest segment of the domestic market for processed food. Besides, juices and drinks account for a 26% market share, while biscuits occupy 13%.

Candy, chanachur, noodles, vermicelli, puffed rice, flattened rice, frozen snacks, jam and jelly together occupy 23% of the processed food market.

In export, dried foods account for 25% of the basket, while spices hold 4.5%, vegetables 11%, fruits 0.04%, tea 0.3% and other items 58.6%.

Micro and small ventures contribute most of the processed food making, while conglomerates have only 3.4% contribution.

Initiatives to boost the export

The Foreign Investors Chamber of Commerce and Industry says the world's population will reach 9.8 billion by 2050, while global demand for processed foods will increase by 60%.

Bangladesh certainly does not want to lose out on its export potential. The Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) recently signed an agreement with HSBC regarding market research.

The research is being carried out by PricewaterhouseCoopers (PWC), a UK-based consulting firm.

It will look into barriers for Bangladeshi processed foods to the UK market, how the obstacles can be overcome, areas of improvement and recommendations on international standards and compliances.           

After the UK, FBCCI President Jasim Uddin said the trade body will continue the research for other markets too.

Besides, the industries ministry is working to formulate the "Agri Food Processing Industry Development Policy-2021" to provide various forms of assistance to new and old entrepreneurs of the industry.

According to ministry sources, the government's policy support to the industry targets drawing $5 billion foreign investment for processed foods by 2026. The ministry is working on a formulation of the policy within this year. 

 

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processed food / Food Export

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