More foreign-owned food companies add `Made in USA' label. A way around import restrictions and quotas
Looking for foreign foods in the supermarket used to mean going to the ``specialty'' section or the ``foreign foods'' aisle. Now, a shopper in a grocery store can find foreign foods on nearly every shelf: oysters from Korea; cereal from Switzerland; cookies from England, Denmark, and Belgium; cheeses and sardines from half a dozen countries; and such imported staples as orange juice from Brazil and beef from Australia and Argentina.Skip to next paragraph
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Once a cornucopia of home-grown groceries, the American supermarket is fast becoming an international foods fair.
Like the auto, apparel, and electronics industries, the food industry has gone global. And the United States, which used to be a leading supplier of food - Carl Sandburg, after all, called Chicago the ``hog butcher for the world'' - has become a net consumer.
From 1982 to 1987, US imports of processed foods rose 33 percent, from $9.6 billion to $14.3 billion, according to Department of Commerce estimates. During those years, US exports of processed foods also rose, from $11.1 billion to $12.3 billion, but not fast enough to keep up with imports. Since 1984, the US has been running a processed food deficit.
While the rise in imports has been dramatic, so has the growth of foreign food companies setting up shop in the US or establishing joint ventures with American companies. Between 1982 and 1986, foreign food investments in the US nearly doubled, from $6.8 billion to $11.7 billion, outstripping US food investments abroad, according to the Bureau of Economic Analysis.
The reasons for processing food here, rather than importing, are many. One of the obvious ones is to get around import restrictions and quotas. Cesare Fiorucci SPA, Italy's largest meat manufacturer, opened a plant in Richmond, Va., last year to break into the US market.
``We saw the market for gourmet food was growing,'' recalls Claudio Colmignoli, president of the subsidiary. ``We could see all the supermarket chains putting up deli counters. At the same time, there was a ban on imports of meat products from Italy because of a swine disease. Economically, it makes sense to produce here. There is very good raw material here in the States, and the labor force is a little less expensive than in Italy.''
Since their debut in July, the company's prosciutto hams, genoa salami, and other specialty meats have been selling well in the US. Having plants in the US, Mr. Colmignoli figures, protects him from fluctuations in the dollar. The Fiorucci meats produced in the US aren't affected by exchange rates or import quotas, and if the dollar rises, Colmignoli says, he can import Fiorucci products from the parent company (the pork ban has recently been lifted) and sell them alongside his own.
When US sales of its Blue Saga cream cheese rose faster than its ability to get import licenses, Tholstrup Cheese Denmark A/S opened a plant in Muskegon, Mich., in 1986 to bypass restrictions. The company is now planning to expand production at the plant, says Jens Bang Pedersen, head of Tholstrup Cheese USA. ``It's obvious when the dollar is falling it makes sense for us to look into manufacturing our cheese products we currently have produced in Europe and imported. That cost is going up and up, and at a certain level it pays for us to make it in the United States.''