Overview
In 2022, U.S. agriculture exports to El Salvador in the consumer-oriented product category reached a record USD 281.5 million, a 5.5% increase from 2021 and approximately 20% of the total market. Beef and beef products, nuts, beer, bakery products/cereals/pasta, condiments/sauces, food preparations, processed vegetables, dairy products, pet food, and chocolates all reached record imports in 2022. The distribution of consumer-ready foods is carried out through several channels. Supermarkets, such as Walmart and leading local chain Super Selectos, are the principal outlets, but a fair amount is moved through wholesalers, who may be supermarket owners themselves or distributors delivering products to smaller stores. Typically, distributors handle products on an “exclusive” basis, often as representatives for a line of products. Direct sales are common practice; however, having a local distributor facilitates operations and supports client service. Most large importers/distributors are members of the Salvadoran Distributors Associations (ADES). ADES manages the relationship of its members with local retailers, wholesalers, and supermarkets.
The Salvadoran market may be significantly larger than portrayed by U.S. export data. A high percentage of El Salvador’s imports of consumer-oriented products are registered as Guatemalan imports. This is because many containers from the United States come through Guatemala’s Atlantic ports. Although they are in transit to El Salvador, customs officials may tally the products as Guatemalan imports.
Consumers are increasingly purchasing groceries in supermarkets and moving away from the traditional open-air markets or small family-run stores, mainly due to more extensive product offerings. It is estimated that approximately 40% of food sales are generated in supermarkets. The supermarket industry is dominated by Walmart, Super Selectos, and U.S. wholesaler PriceSmart.
Leading Sub-Sectors
Consumer-Oriented Products
- Confectionary: Chocolates and Cocoa Products
- Processed Foods: Processed Fruit and Vegetables, Breakfast Cereals, Pancake mixes, and Salad dressings
- Animal Feed: Pet Foods (Dog and Cat)
- Beer
- Tree Nuts: Peanuts, Almonds, Walnuts, Mixed nuts
- Dairy Products: Aged Cheese, Processed Cheese, Whey Protein
- Fruit and Vegetables: Apples, Grapes, Stone Fruit (peaches, plums, cherries)
- Meats: Pork Cuts for Hotel/Restaurant/Institutional (HRI) and Retail, Beef Cuts for HRI and Retail, Mechanically Deboned Poultry Meat (for sausage manufacturing), Meat, Sausages, Processed Egg products, Poultry Meat
*Selection criteria are based on USDA/FAS Country Strategy Statement (CSS), market surveillance, and suggestions by industry players.
Wheat
Overview
Nearly 100% of the wheat processed by Salvadoran mills comes from the United States, although some Canadian wheat is imported when the price is competitive for local wheat millers. Annual imports of U.S. wheat range from 230,000 to 295,000 metric tons. In 2022, U.S. wheat imports reached USD 196 million.
Best Products
Bulk Wheat – DNS, SRW, and HRW varieties
Opportunities
Bakery consumption continues to increase, mainly due to the growth of new bakery centers in all major supermarket chains and the number of cafés that also serve desserts.
Bakery manufacturers remain optimistic about free trade and believe that the Central America - Dominican Republic Free Trade Agreement (CAFTA-DR) provides growth opportunities. Ethnic bakery products exports, particularly sweet cookies and Salvadoran quesadillas, are growing due to the high demand by the Salvadoran community residing in the United States. U.S. wheat has no tariffs or quotas due to the benefit of free trade under CAFTA-DR.
Rice
Overview
El Salvador is not self-sufficient in rice production and must import from other countries, particularly the United States, to meet demand. Local demand is estimated at approximately 118,000 metric tons of rough rice, of which about 25% is covered by local production. Typically, El Salvador imports rough rice to keep rice mills operating throughout the year. However, small quantities of imported U.S. and South American milled rice have recently reached local supermarket chains to fulfill upscale consumer demand. El Salvador has officially abolished using a price-band mechanism to assess import duties for basic grains. CAFTA-DR established Tariff Rate Quotas (TRQs) for rice (see Opportunities).
Members of the Salvadoran Rice Millers Association (ASALBAR) are the distributors of both imported and locally processed rice. ASALBAR continues to work with the U.S. Rice Producers Association on a marketing campaign to increase local consumption of U.S. rice through the USDA Market Access Program (MAP). U.S. rice imports reached USD 11.5 million in 2022.
Best Products
Rough rice, Milled parboiled rice
Opportunities
Rice production continues to decrease in El Salvador and the region. Under CAFTA-DR, tariffs for rice will be eliminated in 2024.
Corn
Overview
El Salvador is an important market for U.S. yellow corn, used almost exclusively by the poultry and animal feed industries. The snack processing industry is also a significant importer of hard endosperm corn. Imports of yellow corn from the United States account for 90% of local demand, estimated at 485,000 metric tons for the 2022-23 crop year.
Best Products
Yellow corn for animal feed and hard endosperm for snack manufacturing.
Opportunities
Snack food production is at the top of the list in the food processing sector. Yellow corn is a main ingredient in the snack manufacturing process. Corn chips, salted peanuts, cheese puffs, and party mixes are some of the most popular items in the local snack sector. The DIANA and Bocadeli snack brands produced in El Salvador capture roughly 75% of the snack market and are already exporting products such as corn chips and nacho tortillas to ethnic markets in the United States.
The poultry, swine, and dairy sectors are also significant users of yellow corn for feed mix.
El Salvador will liberalize trade in white corn by expanding a TRQ rather than by tariff reductions. White corn was granted a TRQ of 35,000 MT under CAFTA-DR. There is also a growing market for white corn flour to make tortillas.
Soybeans
Overview
El Salvador does not produce soybean meal; thus, the total demand estimated at 180,000 metric tons in the 2022-2023 marketing year must be met with imports. The poultry, swine, and livestock sectors use the product as feed. Commercial trade is growing quickly due to the high demand for poultry products. In 2022, soybean meal imports reached a record USD 120.4 million, an 11% increase from 2021. El Salvador’s poultry industry is the most developed in the region and a large user of soybean meal.
Best Products
Soybean meal
Opportunities
Dairy production is increasing due to government incentives and sanitary regulations that provide protection against contraband cheese from Nicaragua and Honduras. Soybean meal is an essential ingredient used in cattle and swine feed mix. CAFTA-DR offers immediate access to U.S. soybean meal with no tariffs or quotas.
Opportunities
Close to three million Salvadorans reside in the United States and annually remit more than USD 7 billion to relatives in El Salvador, representing approximately 25% of GDP. The remittances, in turn, raise Salvadoran consumers’ disposable income and expenditures. The typical consumer believes U.S. products are of superior quality and is generally willing to pay a premium price. Nevertheless, the relatively high price of U.S. products can be a constraint to increasing market share and attracting new customers. In addition, while opportunities exist for U.S. suppliers, competition from Central America, Mexico, Chile, and the European Union (EU) is substantial.
In summary, at least 1.2 million consumers, or 20% of the population, are buying U.S. consumer-ready products. Households are continuously searching for convenience in food preparation. The affluent segment of the population is being served by boutique-style supermarkets such as Super Selectos stores in upscale neighborhoods in the Greater San Salvador Metropolitan area. A younger generation joining the labor force is providing growth to retail consumption and increasing the use of eCommerce.
Resources
FAS Contact in El Salvador: Miguel.Herrera@usda.gov