Agri-Food Trade Service

Overview of the Foodservice Market in the Pacific Northwest United States

July 2010

The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information. This report is intended as a concise overview of the market for those interested in its potential and is not intended to provide in-depth analysis which may be required by the individual exporter. Although every effort has been made to ensure that the information is correct, Agriculture and Agri-Food Canada assumes no responsibility for its accuracy, reliability, or for any decisions arising from the information contained herein.

Please address any comments or suggestions you have on this report to: Ben Berry – ben.berry@agr.gc.ca

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Table of Contents

Overview

Pacific Northwest Region

Key Metropolitan Areas

The Foodservice Sector

National Foodservice Trends and Opportunities

Key Target Markets

Competitive Environment 

Market Access

Food Distribution

Key Resources

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UPDATE April 2010: The Pacific Northwest economy, like that of the United States, has struggled through a recession in the past couple of years. The economy began to slow in 2007 and a housing crash, credit crunch, the evaporation of consumer confidence, energy costs and financial market uncertainty buffeted the national economy in 2008. However, there appear to be some signs of improvement on the horizon leading into 2010. In summer 2009, gross domestic product and industrial production appeared to hit their lowest point, and from then onward, began to strengthen. The policy-making committee of the Federal Reserve Bank also announced that they believed the recession to be ending (Leonhardt, 2009).

United States consumer spending and personal incomes appear to be improving. GDP is expected to grow by 3% in 2010, after shrinking 2.4% in 2009 (AFP, 2009 and The Economist, 2010). However, consumer confidence remains fragile (but gradually improving) and unemployment is expected to remain elevated in 2010 (The Economist, 2009). Slow economic growth is expected to continue for 2010 as the recession recovery continues. At the end of 2009, the restaurant and foodservice industry continued to face difficulties during the still present recession. Despite this downturn, sales in current dollars are expected to increase 2.5% in 2010. Adjusted for inflation, this represents flat sales for 2010 and gradual improvement compared to the negative growth in real sales that was experienced in 2008 and 2009 (National Restaurant Association, 2010). The NPD Group estimates that restaurant traffic will remain weak throughout the first half of 2010, with visit rates then beginning to turn positive around mid-year (Restaurants and Institutions, 2009). As key contributors to the economy, the restaurant industry is expected to play an important role in the recovery of the United States economy (National Restaurant Association, 2010). The outlook for franchise businesses is expected to be more positive in 2010 than in 2009. Quick-service restaurants are projected to experience economic output growth of 3.2% and employment growth of 0.8% in 2010, while the number of establishments is expected to increase 3.1% (Restaurants and Institutions, 2009).

The information contained in this report takes into account the economic situation and the forecasts available during this time period, but information will be further updated once long term stability returns to this key market.

Overview

The Pacific Northwest United States, comprised of the states Alaska, Idaho, Oregon, and Washington, offers some promising export opportunities for Canadian agri-food companies. The Pacific Northwest states form a dynamic and growing market that has a consumer base of approximately 12.7 million people; about 4.1% of the total American population. Despite the importance of Washington State, where the majority of growth in the region is occurring, the Pacific Northwest is home to several growing metropolitan areas and medium sized-markets. The region may provide a somewhat less competitive entry market than some of the much larger marketplaces in the United States, but the area's proximity to Canada has always been an advantage to Canadian exporters.

Attractive prospects for Canadian exporters lie in several Pacific Northwest markets including Seattle-Tacoma-Bellevue, Washington; Portland-Vancouver-Beaverton, Oregon-Washington; and Boise-City-Nampa, Idaho, which comprise significant populations and continue to grow, although moderately. Several other smaller metropolitan areas are also showing notable growth.

The Pacific Northwest's growing population, particularly among Hispanic, Asian and African American consumer groups, and a closely integrated economy and geographic proximity to Western Canada, all combine to present a dynamic region with intriguing opportunities for Canadian agri-food exporters. This is highlighted by that fact that although the Pacific Northwest only accounted for 4.1% of the nation's population in 2009, 9.5% of Canada's total agri-food exports to the United States went to this region.

Quick Facts

• National restaurant sales are expected to reach US$580 billion in 2010, representing 4% of United States gross domestic product (GDP) and an increase of 2.5% from 2009.
• With 945,000 locations in 2010, the restaurant industry will employ 12.7 million (9% of the United States workforce).
• Commercial establishment sales in 2010 are projected to reach US$530.4 billion. Sales at eating places are expected to account for 73.3% of total commercial sales, while retail, vending, recreation and mobile comprise 10.4%, managed services 7.7%, lodging place restaurants 5.1%, and bars and taverns 3.5%.
• The restaurant industry's share of the food dollar has been rising; growing from a 25% share in 1955 to a share of 49% presently.
• Value, convenience and greater menu options are expected to be key consumer desires for the restaurant industry in 2010.
• Opportunities in 2010 are thus expected to centre on delivery/off-premise food options and interactive activities such as cooking classes.
• The Pacific Northwest region is expected to account for 3.1% of restaurant industry sales in the United States during 2010.
• Major growth areas in the foodservice market include quick and convenient meals, premium products at fast food restaurants, healthy and organic options, ethnic cuisine and at-home meal replacements.
• The Pacific Northwest region's GDP was valued at US$585 billion in 2008; accounting for 4.1% of the nation's total. Washington accounts for 55.2% of the region's GDP.
• The Pacific Northwest region saw strong population growth of 11.4% between 2000 and 2008, and reaching 12.7 million in 2009.

As in other parts of the United States, food consumption in the Pacific Northwest region is affected by the aging baby boom generation, smaller household sizes, time pressures of dual-income households, and growing demand for healthy meals. Major trends currently impacting the foodservice market include quick and convenient meals, healthy and organic options, and ethnic cuisine. Continued growth of the ethnic food market is expected as ethnic food increasingly enters everyday diets and more companies choose to address the needs of these ever-growing demographic segments.

Pacific Northwest Region

The Pacific Northwest region offers a favourable business climate for Canadian exporters wanting to test new markets, comprising approximately 4.1% of the United States population and national GDP. The United States Pacific Northwest is also a part of a dynamic larger economic region, along with Western Canada. Combined, they represent one of the fastest growing regions in North America, with over 200 million people residing in the area and gross regional product of more than US$700 billion (Pacific Northwest Economic Region, 2007).

The Pacific Northwest's economy centres on Oregon and Washington State, which account for a combined 82.8% of the region's GDP. The greater Seattle area in Washington is very economically diverse, representing the region's largest single market and the wealthiest; possessing an approximate population of 3.3 million in 2007 which accounts for over 25% of the region's total population. This economic strength is, in large part, due to some of the world's most high-profile companies being based in the area. Such prominent companies include Microsoft, Boeing, Amazon, Starbucks, and Costco. Not surprisingly, prominent aerospace, ICT, life sciences, clean technology and alternative energy sectors exist in the Seattle area. Oregon has a similarly diverse economy, along with a concentration of large corporations, while Idaho's market is smaller than both Washington and Oregon, and mostly agriculturally driven. As a result, Idaho may offer Canadian exporters opportunities in the form of agricultural inputs. While the largest state geographically, Alaska represents the smallest market in the Pacific Northwest, both by population and GDP. However, the state population has been growing faster than the national rate and is quite a young population.

Due to the proximity of Western Canada to the Pacific Northwest, numerous partnerships exist among United States and Canadian companies in this region. A significant amount of Canadian direct investment is also present in the Pacific Northwest, providing a solid foundation for further ties and business opportunities between Canadian and United States companies in the region (Export Development Canada, 2008).

Population and Food Consumption Trends

The Pacific Northwest is home to 12.7 million people, of which approximately 52.8% reside in Washington. The region's aging baby boomers are steadily driving the population's median age of 35 upwards. However, in 2007 three of the region's states had a population proportion of those "65 years old and over", that was less than the national average of 12.6%. The one exception is Oregon, with 13.1% of the population 65 years and older. Alaska and Idaho possess surprisingly young populations, with 26.7% and 27.2% of their populations "18 years and younger", ranking the states 4th and 3rd in the nation respectively (U.S. Census Bureau, 2009).

While the Pacific Northwest's population does contain a significant percentage of people 65 and over, the region's population continues to increase in size. The region experienced 11.4% population growth between 2000 and 2008, with each state showing noticeable and steady growth. Idaho's population increased by approximately 17%, Washington's and Oregon's by 11% each, and Alaska's by 9%. These growth rates are all above the national population growth rate of 7.8% for the same time period (U.S. Census Bureau, 2009).

Seniors represent a very important consumer segment in the Pacific Northwest retail grocery market. There are more than 38 million Americans age "65 and over" in the United States; 3.9% of which live in the Pacific Northwest. Washington alone is home to over 766,000 seniors or 52% of the region's total, while Oregon has a population of nearly 500,000 or 33.2%. However, as the opportunities increase, the need to accommodate and adjust services to serve this demographic is evident.

Due to the close proximity to the Canadian border, the Pacific Northwest region's consumers share many attributes with their Western Canadian counterparts. Their willingness to try new products, especially imported gourmet and specialty foods, presents numerous opportunities for Canadian exporters looking to penetrate the American market. Seattle in particular remains a popular test market in the United States due to its manageable size, consumer demographics, high per capita income level, and isolation from neighbouring urban centres. The Seattle area is located a mere 120 miles from the Canadian border, with a population comprised of nearly half a million consumers originally from Canada (Foreign Affairs and International Trade, 2007). Consequently, Seattleites are willing to try new products and unique foods, creating excellent prospects for Canadian food companies.

Despite similarities, distinct trends exist in each of the Pacific Northwest states. Age, race, and income demographics vary from state to state and county to county. Oregon, for example, has a significant Hispanic community, as does Idaho and Washington, while Alaska has a larger American Indian and Alaska Native population. The Pacific Northwest states also have an American Indian and Alaska Native population proportion nearly three times that of the national average. Washington also has a particularly high representation of Asian American consumers; while Alaska's Asian population is also higher than the national average (U.S. Census Bureau, 2007).

The region is home to several large metropolitan areas, that have experienced considerable growth in their Hispanic and Asian consumer markets, and now represent sizeable portions of the total consumer population. The Hispanic and Asian consumer markets in Seattle each comprise approximately 8% of the total area population. Portland's Hispanic consumers represent 9% of the total market, while Asian consumers represent 3.5%. The Spokane market is comprised of an 8% Hispanic population, while the Anchorage market's Hispanic and Asian consumers comprise approximately 4.5% each of the total population (Foreign Affairs and International Trade, 2007).

In today's Pacific Northwest region there is no longer a homogeneous consumer market to target. Consumers must now be categorized and marketed to according to various demographics including ethnicity, age, income, and neighbourhood of residence.

The Pacific Northwest contains some of the fastest growing metropolitan and micropolitan areas in the United States. The Bend Oregon area is estimated to have increased 35.9% from 2000, with a population of 158,456 making the area the 8th fastest growing in the nation. Boise City-Nampa, Idaho was the 20th fastest growing region in the nation, increasing 27.9% to total 599,753 in 2008. Rexburg, Idaho was the 22nd fastest with an increase of 27.4% to total 50,007. Of combined statistical areas in the United States, Bend-Prineville, Oregon increased 33.5% from 2000 to 2008, Idaho Falls-Blackfoot, Idaho, 16.1% and Seattle-Tacoma-Olympia, Washington, 9.9% (U.S. Census Bureau, 2009). Washington is a leader in the region, with a high-population, large-economy, and the most urban centres in the region. The state holds the two largest metropolitan areas in the Pacific Northwest region, Seattle-Tacoma-Bellevue and Portland-Vancouver-Beaverton (in Oregon-Washington).

The Pacific Northwest's food and beverage market has a value of approximately $46 billion; more than half of which is imported (58%). Some of the most rapidly growing demand for agricultural imports is for fresh and processed fruits and vegetables, snack foods, tree nuts, prepared meat products, wine, beer and coffee. (Foreign Affairs and International Trade, 2007). Not surprisingly, caffeine and coffee consumption is particularly high in Seattle, Washington. Seattle was ranked as the second most caffeinated city in the United States, after Tampa, and ranked number one for caffeinated coffee consumption, by the annual HealthSaver Caffeinated Cities Survey (The Shelby Report of the West, March 2009).

Opportunities and Challenges

While the United States is a highly competitive marketplace, the Pacific Northwest region as a whole is a medium-size market. This type of market can provide an easier, less competitive and less expensive market entry into the United States. Several medium-sized metropolitan markets also exist within the region, such as Seattle and Portland (Foreign Affairs and International Trade, 2007).

While competition from national and international competitors may be reduced, Canadian exporters will face intense competition from small- to medium-sized local and national food manufacturers that typically operate on a regional level in the Pacific Northwest states, especially since the area is known for its agricultural output. Alaska is widely recognized for its seafood. Idaho is known for its potatoes, wheat, peas and lentils. Oregon is recognized for its berries, crops and greenhouse products, while Washington is known for its apples, beef, milk and wheat. Although local American suppliers remain top competitors for Canadian exporters, the Pacific Northwest market overall is quite open.

The geographic proximity of the Pacific Northwest to the Western provinces and Canadian border, presents an opportunity for Canadian exporters. The economic and business relations between Western Canada and the Pacific Northwest are enablers for building close trade relationships and partnerships that increase the prosperity of the joined region. Nearly all of the Pacific Northwest states (Washington, Idaho, Alaska) physically border Canadian provinces, touching British Columbia and the Yukon. This proximity to Canada is also beneficial with regards to consumers being more likely to have similar lifestyles and eating habits as Canadian consumers in the Northwest.

However, the market is not self-sufficient and there is strong demand for imports from external sources. Products from other states provide significant support for food capabilities in the region (Foreign Affairs and International Trade, 2007). Nevertheless, the diversity in food commodities exported to Canada from the Pacific Northwest region demonstrates that each state holds different strengths in agricultural production. The food sector in the region also provides an increasingly larger range of niche markets, with prepared, specialty, and value-added foods particularly promising food products in the Pacific Northwest (Export Development Canada, 2008).

The popularity of ethnic food in the United Sates has been growing due to the growth of certain population segments and the fact that more consumers are willing to try different foods. Continued growth of the ethnic food market is expected as ethnic food increasingly enters everyday diets and more companies choose to address the needs of these ever-growing demographic segments. As a whole, the Pacific Northwest possesses a smaller total ethnic population than the national average. However, there is still a strong Hispanic presence in some of the states, as well as Asian American, and American Indian and Native Alaska population representation greater than the national average (U.S. Census Bureau, 2008).

State Economies and Canadian Trade

The Pacific Northwest region of the United States represents a notable market for Canadian agri-food exports. While China, Chile, Brazil, Indonesia and Vietnam have increasingly supplied agri-food products to the region, imports from Canada comprise more than 31% of the Northwest's total food imports (Foreign Affairs and International Trade, 2007). Canada also provides an important market for the Pacific Northwest's exports. Oregon's largest foreign export market in 2007 was Canada, accounting for 16% of Oregon's merchandise goods, with bilateral trade of US$5.4 billion. Oregon's increasing partnership with Canada, particularly in relation to trade, is a large driver for the economy of the Pacific Northwest. Strong trade relationships are also present with the remaining Pacific Northwest states, with Canada ranking as Washington's largest export market, one of Idaho's top three international export markets, and Alaska's fourth largest export market (Government of Canada, 2008).

A considerable amount of the Pacific Northwest states' Canadian total imports are agriculturally-based. Agriculture ranked as the second largest category of Canadian imports for both Idaho and Washington in 2007, accounting for 19% and 8% of imports respectively, while ranking third for Oregon and accounting for 10% of the state's total Canadian imports (Government of Canada, 2008).

Overall, the region accounted for 9.5% ($1.7 billion) of Canada's total agri-food exports to the United States in 2009, experiencing an increase in exports of 10.4% from 2006 to 2008. This increase is greater than Canada's total increase in agri-food exports to the United States (9.1%) for the same time period. While the Pacific Northwest comprises only 4.1% of the national population, it accounts for more than double that percentage of total Canadian agri-food imported into the nation (9.5%). From 2006 to 2008, Canadian agri-food exports to the region grew steadily. However, in 2009, Canada's agri-food exports to the United States dropped 11.6%. Agri-food exports to the Pacific Northwest correspondingly dropped, but only by 5.6%, illustrating the strength of the region and the trade relationship with Canada.

Top Canadian agri-food export products to the Pacific Northwest in 2009 were: live bovine (a value of $420.8 million or 25.2% of total exports to the region), refined canola oil, colza oil and its fractions ($97.8 million or 5.9%), raw mink furskins ($65.9 million or 3.9%), wheat nes and meslin ($53.6 million or 3.2%), and fresh cranberries, bilberries and other similar fruits ($52 million or 3.1%). Live animals are consistently the major export category to the Pacific Northwest, accounting for between 25% and 35% of Canada's annual agri-food exports to the region in the past four years.

Main Canadian agri-food export categories to the region were: live animals; edible vegetables and certain roots and tubers, pulses; animal/vegetable fats and oils, margarine; food industry residues and waste; fruit and nuts.

Although Canadian agri-food exports to the region grew 10.4% from 2006 to 2009, growth in the four states varied. While Washington, by far, accounted for the largest value of Canadian agri-food exports to the Pacific Northwest in 2009 (71.1%), growth from 2006 to 2009 was significantly lower than the other states, at 4.2%. On the other hand, Idaho represented 10.1% of exports to the region; demonstrating a substantial growth of 34.5% from 2006 to 2009. With the smallest population, Alaska represented both the smallest value of exports and growth, at 0.5% and 22.1% respectively. However, it is worthwhile to note that while Canada's agri-food exports to the Pacific Northwest dropped in 2009, as did the exports to Washington, Oregon and Idaho; Alaska was the sole state in the region to experience an increase (15.4%) in agri-food imports from Canada.

The two largest Canadian agri-food exporting provinces to the Pacific Northwest in 2009 accounted for 76% of Canada's total agri-food exports to the region. Alberta is the largest agri-food exporter with exports of $647.8 million, accounting for 38.8% of total Canadian agri-food trade to the region. British Columbia is the second largest, with exports of $622.7 million and representing 37.3% of total Canadian agri-food exports to the Pacific Northwest. Saskatchewan, Ontario and Manitoba follow, representing 8.2%, 6.2% and 5.4% respectively of Canada's agri-food exports to the region.

The majority of Canadian agri-food exports to the Pacific Northwest in 2009 were intermediate exports valued at $859.3 million. This represented 51.4% of total Canadian agri-food exports to the region and a growth of 9.2% from 2006. Main intermediate export categories in 2009 were: live animals; animal/vegetable fats and oils; food industry residues and waste; furskins; and grain products, malt, and starches. Consumer exports to the Pacific Northwest comprised 42.2% of Canada's agri-food exports to the region, with a value of $705.1 million, and growth of 1.7% from 2006. Main consumer export categories were: edible vegetables and certain roots and tubers; fruits and nuts; meat and edible meat offal; preparations of grains, pasta; and miscellaneous edible preparations. While Canadian bulk exports represented only 6.4% of Canada's agri-food exports, this category experienced considerable growth of 220.3% from 2006. This was the only category with increased exports, experiencing a 27.2% growth in 2009. Both intermediate and consumer exports decreased 10.3% and 3.2% respectively. Main bulk export categories were: grains, bulk or cereals; oilseeds, seeds for sowing, fodder; coffee, tea, maté and spices; sugars and sugar confectionery; and other textile fibres.

Pacific Northwest Region - Importance to Canadian Agri-Food Exporters

State/Region	Population (2009)*	Population as Percentage of Region	Total Restaurant Sales (2010 Projected)	Canadian Agri-Food Exports to State (2009)	Exports as Percentage of Region
Alaska	0.7 million	5.5%	US$1.2 billion	$8.1 million	0.5%
Idaho	1.5 million	12.1%	US$1.7 billion	$169.1 million	10.1%
Oregon	3.8 million	30.0%	US$5.7 billion	$305.9 million	18.3%
Washington	6.7 million	52.3%	US$9.5 billion	$1,188.2 million	71.1%
Pacific Northwest	12.7 million	100.0%	US$18.1 billion	$1,671.3 million	100.0%
United States	307.0 million		US$580.1 billion	$17.6 billion

Sources: Population Finder, and The 2009 Statistical Abstract, U.S. Census Bureau; National Restaurant Association, CATS Database
*estimate, U.S. Census Bureau

Alaska

• Total restaurant sales are expected to reach US$1.2 billion in 2010.
• In 2008, there were 1,327 eating and drinking establishments.
• The restaurant industry currently employs 26,100, and is expected to experience a job growth of 15.3% by 2020.
• In 2010, Nielsen Claritas ranked Alaska to be the 6th best state for opening a restaurant.
• 2008 population: 686,293, ranking the state 47th in the nation and representing 0.2% of the national population. From 2000 to 2008, the population grew 9.4%, greater than the national average of 7.8%. 2009 population is 698,473 (U.S. Census Bureau).
• The capital of the state is Juneau, while the largest city is Anchorage with a population of 272, 687 (USDA, 2009).
• Alaska has the youngest median age of the Pacific Northwest states, at 33.4 years, which is below the national median age of 36.6 years. Not surprisingly, the state possesses a larger proportion of the very young, with 7.6% of Alaska's population "under 5 years" of age and 26.2% "under 18 years" (compared to 6.9% and 24.5% nationally), while only 7.3% are "65 and older" (compared to 12.8% nationally) (U.S. Census Bureau, 2008).
• Gross Domestic Product 2008 – all industries: US$47.9 billion, ranking the state 45th in the nation.
• Per capita personal income 2007: US$40,352, ranking the state 15th nationally (U.S. Census Bureau, 2009).
• Unemployment rate June 2009: 8.4%, ranking the state 22nd, and below the national rate of 9.5%. The 2007 rate was 6.2%, ranking Alaska 48th.
• Geographically, Alaska is the largest state and a fifth of the size of the contiguous United States (USDA). However, less than 1% of the land is farmed. Long summer daylight allows for the production of world record-breaking vegetables, with main crops being barley, hay, potatoes, and commercial seafood a main industry. Greenhouse and nursery crops are the fastest growing agriculture sector (USDA, 2009).
• Mineral investment is a large area of direct investment into Alaska from Canada, with Canadian owned mines providing significant revenue to the local government. Canadian transportation companies are also well represented, perhaps providing an advantage to Canadian exporters.
• Canadian-Alaskan trade is vital to the state's economy. Canada's agri-food exports to Alaska totalled $8.1 million in 2009, making up less than 1% of total agri-food exports to the United States. This ranked the state 49th overall for Canada's agri-food exports. Despite this poor ranking, Canadian agri-food exports grew 22.1% from 2006 to 2009.
• Top agri-food exports from Canada to Alaska were: animal feed preparations, representing 38.5% of total agri-food exports to the state; non-roasted malt (28.6%); live plants (15.8%); trees, edible fruit or nut, shrubs and bushes (1.4%); and live bovine (1.3%).

Idaho

• Total restaurant sales are expected to reach US$1.7 billion in 2010, with Idaho experiencing the second strongest state sales growth (2.8%) in the United States.
• In 2008, there were 2,857 eating and drinking establishments.
• The restaurant industry currently employs 58,600, and is expected to experience an 11.8% job growth by 2020.
• Idaho was ranked by Nielsen Claritas as being the 48th best state for opening a restaurant in 2010. Coeur d'Alene was ranked as the 141st best metro location to open a restaurant in the United States.
• 2008 population: 1.5 million, ranking the state 39th in nation and representing 0.5% of the national population. Idaho's population increased 17.3% from 2000 to 2008, and nearly 16% from 2006, making it one of the fastest growing states, largely due to immigration from other states and countries. 2009 population remains at 1.5 million (U.S. Census Bureau, 2008).
• The state capital and largest city is Boise with a population of 185,787.
• Idaho's median age is 34.2 years and is slightly below the national average of 36.6 years. A large portion of the state's population (27.1%) is "under 18 years", compared to 24.3% nationally, while the population proportion of those "under 5 years" is also above the national rate, and the proportion "65 years and older" is only slightly below the national (U.S. Census Bureau, 2008).
• Gross Domestic Product 2008 – all industries: US$52.7 billion, ranking the state 43rd nationally.
• Per capita personal income 2007: US$31,197, an increase from $29,290 in 2006. This is below the national average of US$36,714; ranking the state 40th (The Shelby Report of the West, December 2008).
• Unemployment rate June 2009: 8.4%, ranking the state 22nd and lower than the national average of 9.5%. The 2007 rate was 2.7%, ranking Idaho 2nd.
• Agriculture is important, employing many habitants, and producing nearly 1/3 of potatoes grown in the United States (The Shelby Report of the West, December 2008). Idaho ranks 1st in the nation for potato production and 7th for wheat. Despite the importance of potatoes and wheat, cattle milk is the state's main agricultural commodity. Of the state's agricultural exports, 23.2% are destined for Canada (USDA, 2009).
• Canada's agri-food exports to Idaho totalled $169.1 million in 2009; representing 1% of Canada's total agri-food exports to the United States and thus ranking the state to be 28th overall. From 2006 to 2009, Canadian agri-food exports to the state experienced considerable growth, increasing 34.6%. This was significantly higher than the national growth rate of 9.1%.
• Top agri-food export products from Canada to Idaho were: rape/colza seed, representing 18.4% of exports; refined canola, colza oil (11.8%); live bovine (10.3%); lucerne/alfalfa seeds (10.3%); and barley (5.1%) (CATS, 2010).

Oregon

• Total restaurant sales are expected to reach US$5.7 billion in 2010.
• In 2008, there were 8,569 eating and drinking establishments.
• The restaurant industry currently employs 165,200, and is expecting a 13.7% job growth by 2020.
• Oregon was ranked the 9th best state to open a restaurant in the United Sates. Medford, Oregon was ranked as the 74th best metro location in the United States, while Bend, Oregon was placed 82nd.
• 2008 population: 3.8 million, ranking the state 27th in the nation and representing 1.2% of the national population. From 2000 to 2008, Oregon's population grew 10.5%, higher than the national average of 7.8%. 2009 population is 3,825,657 (U.S. Census Bureau, 2008).
• Salem is the state capital, and Portland the largest city with a population of 562, 960.
• Oregon's median age is 37.8, just slightly above the national average of 36.6 years. The population age proportions closely follow that of the national average, with a population "65 years and older" only slightly higher than the national rate (U.S. Census Bureau, 2008).
• Gross Domestic Product 2008 – all industries: US$161.6 billion, ranking the state 26th nationally.
• Per capita personal income 2007: US$34,784, ranking the state 28th and increasing from US$33,299 in 2006 (The Shelby Report of the West, December 2008). Personal income is expected to continue to increase positively, with growth of 4.4% and 5.6% expected for 2009 and 2010 (Potiowsky, 2008).
• Unemployment rate June 2009: 12.2%, ranking the state 49th and higher than the national average of 9.5%. The 2007 rate was 5.2%, ranking Oregon 42nd.
• Oregon has strong wine and salmon industries, ranking third nationally for wineries, with 303 wineries, and possessing the world's largest salmon-fishing industry (The Shelby Report of the West, December 2008). Greenhouse and nursery products, grass seed, hay, wheat, potatoes, Christmas trees, onions, and pears are the state's main crops, while beef cattle and dairy products are main livestock commodities (USDA, 2009).
• Oregon's diverse economy results in an eclectic trade combination, and Canada is the state's largest foreign export destination. Canada and Oregon also share a strong energy relationship, bilateral tourism industry, and numerous relationships and partnerships exist between Canadian companies and Oregon.
• Alaska also aids in Canada's exports internationally. The Port of Portland represents an important transportation connection for Canadian goods and is a gateway to the Asia Pacific market.
• Canada's agri-food exports to Oregon totalled $305.9 million in 2009; representing 1.7% of exports to the United States and thus ranking the state to be 19th overall. From 2006 to 2009, Canada's agri-food exports to Oregon grew 26.8%.
• Top agri-food exports from Canada to Oregon were: wheat and meslin, representing 17.5% of exports; refined canola, colza oil (10.9%); fresh or chilled boneless bovine cuts (10.6%); frozen fruits and edible nuts (6.5%); and oats (5.8%)
• Grains, bulk or cereals are consistently a noticeable export category to Oregon, representing between 10-24% of Canada's annual agri-food exports to the state from 2007 to 2009 (CATS, 2010).

Washington

• Total restaurant sales are expected to reach US$9.5 billion in 2010.
• In 2008, there were 13,557 eating and drinking establishments.
• The restaurant industry currently employs 279,000, and is expected to experience a 10.6% job growth by 2020.
• 2008 population: 6.5 million, ranking the state 13th in the nation and representing 2.2% of the national population. From 2000 to 2008, Washington's population increased 10.8%, noticeably higher than the national average of 7.8%. 2009 population is 6,664,195 (U.S. Census Bureau, 2008).
• Significant immigration growth is forecast for Washington, with a net immigration of 27% expected to occur in the next 20 years (Foreign Affairs and International Trade Canada, 2007).
• Olympia is the state capital, while the largest city is Seattle with a population of 563, 374 (USDA, 2009).
• Washington's median age is 37.1, just slightly above the national average of 36.6 years.
• Gross Domestic Product 2008 – all industries: US$322.8 billion, ranking the state 14th in the nation.
• Real GDP growth for the state is expected to continue to modestly increase through 2011, with annual growth of 2.2%, 3.0%, and 3.2% expected from 2009 to 2011 (Bertolin, 2008).
• Per capita personal income 2007: US$40,414, ranking the state 14th in the nation and a slight increase from 2006. Personal income is expected to grow 4.4% in 2009, 5.1% in 2010, and 5.6% in 2011, with personal disposable income expected to experience similar positive growth (Bertolin, 2008).
• Unemployment rate June 2009: 9.3%, ranking the state 34th and only slightly below the national average of 9.5%. The 2007 rate was 4.5%, ranking Washington 27th.
• Two key sectors in Washington are Aerospace and Software, which continue to expand and aid in stimulating employment growth and investment in the state (Bertolin, 2008).
• Washington is the 4th largest wheat producer in the United States. Apples, milk, potatoes, cattle and calves are other key agricultural commodities, and chicken production has been increasing (USDA, 2009). Washington also has a significant fishing sector, featuring salmon, halibut, bottomfish, oysters and crabs (The Shelby Report of the West, December 2008).
• Canada's agri-food exports to Washington totalled $1.2 billion in 2009; representing 6.7% of exports to the United States and thus ranking the state to be 4th overall. Canada's agri-food exports to Washington grew 4.2% from 2006 to 2009.
• Top Canadian agri-food exports to the state were: live bovine, representing 33.9% of exports; raw mink furskins (5.5%); cranberries, bilberries and other related fruits (4.1%); fresh or chilled tomatoes (4%); and refined canola, colza oil (3.7%).
• Live animals are consistently a large export category to Washington, representing between 30-42% of Canada's annual agri-food exports to the state from 2006 to 2009 (CATS, 2010).

Key Metropolitan Areas

Seattle-Tacoma-Bellevue, Washington

• Ranked 15th in 2009 with an estimated population of 3.4 million.
• Population growth of 1.7% from 2008 to 2009, ranking the area to be 72nd overall.
• There has been significant growth in the Asian and Hispanic consumer market, each representing an estimated 8% of the total population (Foreign Affairs and International Trade Canada, 2007).
• Seattle ranked 4th out of Forbes' list of America's fastest growing large metropolitan areas, with Gross Metropolitan Product growth of 22.7% projected to occur from 2007 to 2012. This is largely due to Microsoft and Boeing's significant presence, as well as the area having the fifth largest concentration of biotech companies in the nation (Pentland and Wingfield).
• Seattle also ranked as the 18th best metro area in Forbes' 2010 Best Places for Business and Careers.
• Median household income for Seattle is $62,717, while income growth is 1.5% (annualized over five years).

Portland-Vancouver-Beaverton, Oregon-Washington

• Portland-Vancouver was ranked by Nielsen Claritas as the 107th best metro location for opening a restaurant in the United States in 2010.
• In 2009, the area was ranked 23rd in the nation with an estimated population of 2.2 million.
• Population growth of 1.5% from 2008 to 2009, ranking the area to be 54th overall.
• Portland has experienced a noticeable influx of Hispanic consumers, representing approximately 9% of the total population, while Asian consumers comprise 3.5% (Foreign Affairs and International Trade, 2007).
• Portland ranked as the 19th best metro area in Forbes' 2010 Best Places for Business and Careers.
• Median household income for Portland is $55,948, while income growth is 3.2%.

Boise City-Nampa, Idaho

• Estimated population of 606,376 in 2009, ranking the area 85th in the nation.
• Population growth of 1.3% from 2008 to 2009, ranking the area to be 100th overall.
• Boise ranked 3rd in the nation as Forbes' best metros for business and careers in 2007 (Badenhausen).
• Boise ranked as the 25th best metro area in Forbes' 2010 Best Places for Business and Careers.
• Median household income for Boise is $51,025, while income growth is -0.3%.

Anchorage, Alaska

• According to the Nielsen Claritas Restaurant Growth Index (RGI), Anchorage is the 20th best metro location to open a new restaurant in 2010 and beyond. Neilsen bases their best location rankings for new restaurants largely on college towns and vacations spots; not necessarily the biggest cities.
• With 998 restaurants in the metro area and US$861,467 sales per restaurant, total restaurant sales are US$859.7 million. Restaurant sales per capita are US$2,305.
• Anchorage ranked as the 44th best metro area in Forbes' 2010 Best Places for Business and Careers.
• Median household income is $67,751, while income growth is 2.9%.

Pacific Northwest United States (U.S.)
Fastest Growing Metropolitan Areas (2009)

U.S. Rank	Metropolitan Area	Population	Population Growth 2008-09
2	Kennewick-Pasco-Richland, WA	0.246 million	3.6%
7	Logan, UT-ID	0.128 million	2.9%
16	Idaho Falls, ID	0.126 million	2.4%
17	Anchorage, AK	0.375 million	2.4%
25	Olympia, WA	0.251 million	2.2%
49	Bellingham, WA	0.200 million	1.8%
50	Coeur d'Alene, ID	0.139 million	1.7%
54	Portland-Vancouver-Beaverton, OR-WA	2.242 million	1.7%
72	Seattle-Tacoma-Bellevue, WA	3.408 million	1.5%
84	Salem, OR	0.396 million	1.4%
89	Spokane, WA	0.469 million	1.4%
100	Boise City-Nampa, ID	0.606 million	1.3%
135	Corvallis, OR	0.083 million	1.0%
183	Eugene-Springfield, OR	0.351 million	0.8%
240	Medford, OR	0.201 million	0.5%

The Foodservice Sector

The National Restaurant Association forecasts that annual restaurant sales in the United States will reach US$580 billion in 2010, with 12.7 million employees and 945,000 locations. This is an increase from the forecasted restaurant sales of US$566 billion for 2009. Eating places are the primary contributors to commercial foodservice sector sales and are expected to generate US$388.5 billion in sales in 2010 (73% of total commercial sales), followed by managed services (7.7%), retail, vending, recreation and mobile foodservice (10.4%), lodging place restaurants (5%), and bars and taverns (3.5%). On a typical day in 2010, restaurant industry sales are predicted to be US$1.6 billion, and more than 130 million individuals will be patrons of foodservice. Slightly less than half (44%) of adults state that restaurants are an essential part of their lifestyle, while 40% of adults agree that purchasing meals from restaurants, take-out, and delivery places, makes them more productive. Although the foodservice industry has seen growth in the past 10 years, recent economic uncertainties and rising business costs have negatively impacted this sector. In order to remain competitive, foodservice operators are attempting to differentiate themselves from their competitors and offer value-added products and services in order to attract new customers. To meet customer demands and continue to grow, the restaurant industry will have to adapt to new menu trends and evolving consumer preferences.

The foodservice sector is also being impacted by new regulations and lawsuits relating to product labelling and ingredients in states throughout the United States. In May 2008, New York City became the first municipality to enact menu-labelling requirements. Within the Pacific Northwest, the King County Board of Health in Seattle, Washington adopted regulations requiring certain chain restaurants to display nutritional information on their menus. The state or Oregon, as well as the Multnomah County Board of Health in Oregon have also passed similar menu labelling regulations. The movement toward menu-labelling requirements continues to gain momentum, and could have a significant impact on the foodservice industry in the United States.

Growing concerns at a national level about the health risks associated with trans fats are also impacting the foodservice sector. As a result, California has declared that the state will enact regulations phasing out the use of trans fats in restaurants beginning in 2010, while New York City has banned trans-fats at restaurants since December 2006. Many leading fast food restaurants have been working to eliminate trans fats from their products while maintaining flavour. Although growing concern about trans fats has yet to strongly impact all states, it is expected to have an influence on the foodservice sector at a national level.

Commercial Foodservice Sector

Commercial foodservice providers account for nearly 80% of away from home expenditures. Current trends within the commercial foodservice sector include fast food outlets redesigning their menus to offer more premium and healthy options, as well as full-service restaurants improving service and take-away options to compete with quick/fast-casual and fast food options. Restaurants are also competing to meet the needs of time-constrained diners with home meal replacement products. Restaurants are offering healthier choices and attempting to associate their food products with popular health-oriented brands in order to tap into the trend toward healthier eating. There is a growing demand for ethnic cuisine, with Asian (particularly Chinese and Japanese) fast food and full-service restaurants seeing strong growth. With the slowing economy, restaurant operators are also expected to use more regional ethnic cuisine and specific flavours as a way of differentiating themselves in the marketplace; such as Jalisco-style Mexican, and Korean and Vietnamese as opposed to simply ‘Asian' cuisine (Crews, 2009).

Overall, the consumer foodservice sector has seen limited growth in recent years with economic uncertainty leading to a growing number of consumers opting to eat at home rather than dine out. This is resulting in decreasing consumer traffic within the consumer foodservice market, especially in the full-service restaurant sector. Many consumers are also "trading down" from full-service restaurants to more affordable fast food and quick/fast-casual alternatives. However, foodservice outlets continue to diversify their menu and promotional offerings to expand their consumer base and tap into new market opportunities.

Fast Food

• Fast food value sales grew by 4% in 2008 to total US$186 million. This amount was driven by the number of consumers who are trading down from full-service formats to a more affordable alternative. However, it also deals with the challenge of consumers eating at home more frequently (Euromonitor International, Fast Food, 2009).
• The number of fast food outlets in the United States grew 1% in 2008 to reach 249,992 units (Euromonitor International, Fast Food, 2009).
• Take-away sales accounted for 74% of value sales in 2008 (Euromonitor International, Fast Food, 2009).
• Burger fast food sales accounted for 48% of total sector sales in 2008 (Euromonitor International, Fast Food, 2009).
• Fast food chains dominate the American fast food market in terms of sales, transactions and number of outlets.

The fast food sector has seen moderate growth in recent years. Value-conscious consumers are increasingly trading down from full-service restaurants to dine at fast food formats to save money. Although fast food restaurants often have lower-quality and less innovation than their full-service competitors, the fast food sector satisfies consumer demand for speed, convenience and value. Consumers are also increasingly demanding food that can be eaten on-the-go (often in their car), a segment of the market that is well addressed by the fast food sector. In order to remain competitive, fast food restaurants are increasingly offering a more premium experience, greater menu selection, and better service, while maintaining a low-price strategy that attracts consumers. For instance, both Burger King and McDonald's have upgraded their beef patties and are now offering Angus beef burgers. Premium products are becoming an important business strategy for leading fast food chains. Meanwhile, the fast food sector continues to promote value-priced food and the "value menu" continues to maintain popularity.

United States - Leading Foodservice Chain Brands by Number of Outlets (2008)

Rank	Brand	Outlets
1	Subway	21,635
2	McDonald's	13,867
3	Starbucks	10,987
4	Pizza Hut	7,564
5	Burger King	7,213
6	Dunkin' Donuts	5,863
7	Wendy's	5,742
8	7-Eleven	5,622
9	Taco Bell	5,588
10	KFC	5,253

Source: Euromonitor International, Consumer Foodservice, 2009

Hamburgers, a perennial favourite in the United States, continue to remain extremely popular and are one of the fastest growing sub-sectors. Hamburger fast food sales accounted for 48% of sales in 2008 with 44% of all restaurants having a burger on their menu; representing a 7% increase from 2006. Burger chains have also been consistently effective at adapting to the changing American fast food market. For instance, McDonald's has begun offering premium coffee to attract customers.

One of the other fastest growing sub-sectors within the fast food market is Asian fast food chains. The rapid expansion of chains such as Panda Express and Noodles & Co. has fuelled growth. Asian outlets, particularly Chinese and Japanese, are experiencing growing popularity in the United States. Other Asian restaurants, such as Thai, Indian and Vietnamese, are predicted to see strong future growth, despite only currently controlling a small market share.

Quick-service gourmet coffee and bakery sandwiches are other top performers in the American foodservice market. Although beverages currently only make up 7% of total fast food sales, they are growing in importance in the highly competitive fast food sector (Euromonitor International, Fast Food, July 2008). In 2006, both Dunkin' Donuts and McDonald's successfully introduced value-priced premium drip and iced coffees to their menus. Likewise, bakery fast food saw strong value growth of approximately 4% in 2008 (Euromonitor International, Fast Food, 2008 and 2009). Bakery restaurants are well-positioned to meet consumer demand for healthy, fresh, premium products in a fast food environment. Nonetheless, there is growing competition in this area from fast food restaurants, particularly burger chains, which are offering an expanded selection of better-for-you and premium products.

Quick/Fast-Casual

Within the commercial foodservice sector, quick/fast casual dining is seeing some of the largest growth, with sales having increased approximately 15% from 2002 to 2007, and an additional 9% in 2008 (Euromonitor International, Fast Food, 2008 and 2009). Like traditional fast food restaurants, quick/fast-casual restaurants offer rapid and convenient service, but are able to offer better service, higher-quality ingredients and a larger selection in an upscale setting. This segment has been experiencing strong growth as consumers continue to trade down to these lower-priced formats that offer fresh, high-quality meals. Most quick/fast-casual restaurants focus on sales at breakfast and lunch, with a limited dinnertime presence, but are seeing sector-leading growth in these areas while other segments are experiencing a decline in customer traffic. Such restaurants are especially popular with affluent baby boomers and young professionals who have experienced fast food fatigue, but lead busy lifestyles. When compared to traditional fast food restaurants, consumers highlight value, friendliness, atmosphere, cleanliness, accuracy and preparation as reasons for return visits.

Many fast food outlets are redesigning their menus to mimic the selection available at quick/fast-casual restaurants. To capture many of the full-service consumers who are trading down, fast casual dining is switching to a focus on dinner and the promotion of new products Quick/fast-casual operators in the Pacific Northwest, such as Panera Bread and Chipotle Mexican Grill, have specialized in providing premium dishes and ingredients at reasonable prices, as well as service at the speed of a fast food restaurant.

Trends within the quick/fast-casual sector include:

• Nuevo Latino restaurant chains are a rapidly growing Latin American quick/fast-casual market niche.
• Custom-made sandwiches are increasingly popular and made with fresh and specialty ingredients, which meet demand for convenient and fresh food.
• Wraps, pitas, tortillas, salads, chicken sandwiches and breakfast sandwiches, as well as energy drinks and specialty coffee beverages are becoming increasingly popular choices at quick/fast-casual establishments.
• Quick/fast-casual restaurants are adding specialty items to their menus, such as bourbon-baked beans, fresh-cut seasoned fries, and Hawaiian barbeque or seafood appetizers.

Full-Service

• Full-service restaurant sales grew by an overall 1% to reach US$210.2 billion in 2008, driven largely by growth of Asian and European restaurants. However, certain sub-segments, such as casual dining, experienced static and/or negative growth in 2008 (Euromonitor International, Full-Service Restaurants, 2009).
• In order to boost traffic and sales, full-service restaurants are implementing take-away options, increasing advertising and offer specials, and revamping menus by adding more variety and experimentation with comfort foods. (Euromonitor International, Full-Service Restaurants, 2009).
• The number of full-service outlets decreased slightly, reaching 236,513 outlets in 2008 (Euromonitor International, Full-Service Restaurants, 2009).
• Sales transactions and value are expected to remain relatively stable from now until 2013, due to consumers limiting spending on food away from the home (Euromonitor International, Full-Service Restaurants, 2009).
• Upcoming trends include healthier food options for children, Middle Eastern flavours, comfort food innovation, reduced sodium, and fresh, local ingredients (Euromonitor International, Full-Service Restaurants, 2009).

While the fast food sector has experienced growth, parts of the full-service restaurant sector, particularly fine dining establishments, are facing real challenges. This sub-segment has most recently seen decreasing sales, a drop in transactions, and slowing outlet growth due to economic difficulties which have caused many American consumers to limit their discretionary spending on formal sit-down meals. According to a 2008 Nielsen study, 66% of fine dining and 52% of casual dining patrons are eating out less often than in 2007. Furthermore, as consumer spending power decreased, the foodservice industry continues to face rising ingredient and gas prices. Strong competition from the fast food and quick/fast-casual sectors, which are better meeting consumer desire for speed and convenience, is also negatively impacting the full-service sector. In response to these threats, full-service operators are attempting to offer the consumer better value, as well as more premium ingredients at an affordable price. This sector is becoming increasingly focused on convenience, offering more take-away options and attempting to reduce service time in order to be more competitive with the fast food sector. Nonetheless, mid-scale restaurants and fine dining operators are seeing declines in consumer traffic.

Asian full-service restaurants are one success story in the full-service sector, having seen strong growth since 2000. In particular, Chinese and Japanese cuisines have been gaining popularity among American consumers. PF Chang's China Bistro Inc. and Benihana's have capitalized on this trend and are experiencing increasing sales and outlet growth. These chains have presented unique, but not too exotic, Asian cuisine in upscale environments. Likewise, European operators, which mostly serve Italian-American cuisine, are also performing well. Pizza operators have achieved this strong performance through a consumer perception of pizza being an affordable, convenient and appetizing option (Euromonitor International, Fast Food, 2008 and Full-Service Restaurants, 2009). In other full-service areas, particularly the "bar and grill" category, lack of differentiation has led to difficulties. Well-known chains such as Chili's Grill and Bar, TGI Friday's, Ruby Tuesday and Applebee's have struggled and were forced to offer promotions and increased value.

Self-Service Cafeterias

• Sales at self-service cafeterias decreased by 3% to US$1.7 billion in 2008 (Euromonitor International, Self-service Cafeterias, 2009).
• From 2002 to 2007, sales in this sector decreased 3.7%, with sales forecast to decrease another 10% between 2007 and 2012 (Euromonitor International, Fast Food, 2008).
• The number of self-service outlets also decreased by 2%, reaching 1,054 units in 2008 (Euromonitor International, Self-service Cafeterias, 2009).
• The self-service cafeteria sector is almost equally divided between chain and independent operators at 49% and 51%, respectively (Euromonitor International, Self-service Cafeterias, 2009).
• Top chain banners include Luby's Cafeterias, Piccaddilly, and Furr's.

Overall, the self-service cafeteria sector is declining, as its traditional consumer base of ageing Americans is not replaced and fails to gain popularity with their grown children. Chain self-service cafeterias traditionally offer southern-style recipes and attract consumers based on flavours and large portion sizes. This value-conscious core consumer group includes senior citizens and families. However, this dining concept has limited awareness in the United States, outside of its core market which is in the Mid-Atlantic and Southern states.

Although the self-service cafeteria sector is almost equally divided between chain and independent operators, independent cafeterias have seen more success in recent years due to their broader appeal and greater versatility. These independent self-service cafeterias often serve semi-captive consumers in environments such as office buildings, museums, hospitals and ski resorts.

Cafés

Despite economic difficulties in 2007, coffee specialist sales saw strong growth driven by outlet expansion as well as the still limited household penetration of specialty coffees. However, sales were flat in 2008 at US$20 billion. According to the National Coffee Association, only 17% of adults in the United States consume gourmet coffee on a daily basis. Although cafés have seen growth in sales and number of outlets in past years, strong competition and a slowed American economy are expected to lead to decreased sales, transactions and outlets.

"Other" cafés/bars led growth in 2008, with 6% value growth. Chain coffee shops, dominated by Starbucks, have traditionally led sector growth but are now facing growing problems due to economic difficulties and competition from fast food premium coffees. Starbucks' expansion during the last decade led to a transformation of the American coffee culture. Previously, few Americans were familiar with espresso-based drinks or specialty roasted coffee. However, Starbucks has noticeably been downsizing its operations and has plans for a new value priced menu. Starbucks has been testing a number of regional and national promotions to remain competitive and to attract value-seeking consumers.

Fast food chains are increasingly entering the specialty coffee market. For instance McDonald's and Dunkin' Donuts have both begun to offer a small selection of specialty coffee products including iced and premium roast drip coffee. These product introductions have been very successful and fast food operators are emerging as strong competitors to specialty coffee outlets.

Food Stalls and Kiosks

• Sales at food stalls and kiosks grew by 4% in 2008, reaching US$10.9 billion (Euromonitor International, Street stalls/Kiosks, 2009).
• The number of outlets also rose slightly, to over 40,109 units (Euromonitor International, Street stalls/kiosks, 2009).
• This sector is not expected to see growth in the next few years, given rising food prices and the trend toward increasing suburbanization in the United States. However, the consumer trend of trading down foodservice purchases has aided this inexpensive sector.

Food stalls and kiosks are found in cosmopolitan urban areas with high pedestrian traffic. Hot dog and ice cream venders dominate this sector. Aside from these two core items, food options available at stalls vary regionally. For instance, in areas with large Mexican populations, taco stands are common; in New York, Middle Eastern foods are often available. Sales and growth is limited by local and regional regulations concerning these outlets, as well as many high-end retailers and restaurants who lobby against the presence of food stalls. These factors make the street stall concept unattractive to chain operators; therefore, this sector consists entirely of small independent owners.

Home Delivery and Take-Away

• Sales in the home delivery and take-away sector rose by 3% in 2008 to US$17.9 billion (Euromonitor International, 100% Home Delivery Take-Away, 2009).
• The number of outlets in the home delivery and take-away sector decreased slightly, by 1%, comprising 30,619 outlets (Euromonitor International, 100% Home Delivery Take-Away, 2009).
• Approximately 54% of American adults state they would use delivery services if offered at tableservice restaurants.
• Twenty nine percent of adults say purchasing take-out is essential to their way of life (National Restaurant Association, Pocket Factbook, 2010).

High commodity prices and economic uncertainty have led to challenges for this sector. Pizza outlets are particularly vulnerable as prices are already low and pizza consumers are very price-sensitive. As there is little differentiation between leading pizza chains, price promotions are critical and can have a strong influence on consumer purchases. Promotional activity in this sector has focused on discount coupons and promotional items such as $5 pizzas. Large chain operators such as Pizza Hut and Papa John's are also attempting to effectively target consumers through Internet pizza ordering systems. Pizza chains are also expanding their menus to stay competitive; wings, pasta, bread and desserts are commonly found on pizza outlet menus. Furthermore, this sector is facing competition from full-service restaurants which are increasingly focusing on take-away sales, as well as supermarket purchases and at-home meal preparation.

The improving quality of frozen pizza and other meals available at lower prices from grocery retailers is also a threat. According to the Food Marketing Institute (FMI), nearly 95% of all retail grocers now offer ready-made meals for time-constrained shoppers. Fuelled by demand for quick meal solutions, the segment increased roughly 16% from 2002 to total more than US$23.1 billion in 2007 (Euromonitor International, Packaged Food, 2008). Manufacturers are expected to continue to roll-out more restaurant-quality ready-made meals and frozen pizzas to offer consumers quick, high-quality meal solutions.

Domino's Pizza leads the home delivery and take-away sector, and had an 18% market share in 2008 (Euromonitor International, 100% Home Delivery Take-Away, 2009). Other large chains in this segment include Papa John's, Pizza Hut, and Little Caesar's Pizza.

Travel Industry

• The travel and leisure industry has seen slow growth in recent years. The American domestic travel industry, which is more resilient to economic fluctuations, has seen stronger growth than international travel.
• The United States was visited by 52.5 million international tourists in 2009, down 9% from the previous year. The majority were from Canada (17.2 million) followed by Mexico (12 million) and the United Kingdom (4 million) (Euromonitor International, Tourism Flows Inbound - USA, 2010).
• A recovery is expected in the coming years, with growth of 15% from 2009 to 2014, to reach 60.4 million visitors (Euromonitor International, Tourism Flows Inbound - USA, 2010).
• In 2009, US$118 billion was spent on food by international travellers in the United States (Euromonitor International, Tourism Flows Inbound - USA, 2010)
• Domestic travel expenditures declined in 2009 to US$549 billion, a 10% decrease from 2008 (Euromonitor International, Tourism Flows Domestic - USA, 2010).
• The "Staycation" (staying at home during vacations) grew in popularity with Americans (Euromonitor International, Tourism Flows Domestic - USA, 2010).
• California is the most popular travel destination in the country having accounted for 12% of all domestic travel or 168.1 million trips in 2009 (Euromonitor International, Tourism Flows Domestic - USA, 2010).

The travel and tourism industry provides a variety of opportunities for foodservice providers; these include but are not limited to:

• Hotels and motels
• Cruise lines
• Onboard commercial transportation (e.g., aircraft, train, ship and coach)
• Airports, railways stations, ports and motorway service stations

With economic difficulties in the United States having an impact on consumer travel choices, "staycations" as well as restrained business travel will likely remain popular. However, a weaker dollar may lead to increased domestic travel in place of international travel. Despite these changes in consumer behaviour, one area of growth in travel and tourism-oriented foodservice is airport dining. Stricter travel regulations following the events of September 11, 2001 have forced passengers to arrive at the airport earlier creating opportunities for full-service restaurants. Additionally, financial difficulties among airlines have resulted in more airlines charging for onboard meals, resulting in increased demand for restaurant food at airports.

The airport dining segment has significant growth potential given that the United States has the largest airline passenger market. HMS Host is a leading travel foodservice provider, with 2,500 units in travel plazas and airports throughout the United States and Canada. HMS Host is a franchisee for a number of leading brands including Starbucks, Burger King and Chili's Grill and Bar. Large restaurant chains are also increasingly expanding their operations to offer meals for in-flight purchases.

Non-Commercial Foodservice Sector

The non-commercial foodservice sector serves specific and captive populations within institutions, services or businesses and is usually unavailable to the general public. National non-commercial foodservice sales totalled US$48 billion in 2008. The non-commercial foodservice sector has shown slow growth as it continues to adjust to changing food demands and stricter food regulations among other factors. Changing customer eating habits have profoundly affected the non-commercial foodservice sector, as employees demand that workplaces provide quick, healthy and fresh food choices. Aramark Global Food and Support Services is the leading player in the American contract catering industry. Non-commercial foodservice opportunities exist in a number of sectors, including education, health, military and business dining.

Schools, Colleges and Universities

• Total food expenditure at schools and colleges was US$31.9 billion (including food subsidies) or 5.7% of food away from home sales in 2007.
• Canadian agri-food exporters should note that all food products in American schools (kindergarten through grade 12) must be domestically produced. The United States Department of Agriculture (USDA) forbids foreign countries to export food products to American schools.

Universities and colleges provide a growing opportunity in the United States foodservice sector. Gone are the days of poor quality, generic cafeteria food. American colleges have begun using their foodservice options as a marketing tool for students. The battle for enrolment has pushed a makeover in the university foodservice sector, which has resulted in easy options for alternative diets, high-end food choices, artisan food and local specialties for students. Restaurant-style dining with multiple options is becoming more common. This movement is a genuine effort to speak to both the culinary desires of students and the nutritional desires of parents, all in the hope of giving a college or university an edge in the selection process.

Foodservice providers to schools, colleges and universities are increasingly becoming sensitive to demands as they realize the need to help curb the obesity epidemic. Other trends in colleges and universities include demand for authentic ethnic food, vegan/vegetarian food, healthy options, and organic, sustainable and locally-sourced food. Campus convenience stores are also becoming "hybrid" operations that offer partially prepared meals, while flexible lifestyle menus, a greater selection of foodservice outlets on each campus, and more flexible meal plans are prevalent in educational institutions.

Health Institutions

• Foodservice at health institutions includes service to hospitals and private clinics, as well as residential care.
• Only one-in-five hospital foodservice providers are outsourced to private companies, such as Sodexho USA and Aramark. The remaining are independent, hospital-run operations.
• Sixty-eight per cent of meals at health institution foodservice outlets are served to individuals other than patients, including employees and visitors.
• The aging baby boomer population has increased demand for quality healthcare services, including foodservice. Buffet-style foodservice is now taking on more of a bistro, quick and casual feel. Menus are offering a wider and more innovative range of selections in an effort to increase patient satisfaction.

National Foodservice Trends and Opportunities

The story of the American foodservice market over the last 10 years has been one of stability. Unfortunately, the current economic climate has impacted the foodservice industry and a number of negative factors could seriously impact future sales and growth. While the various regions of the United States are very unique submarkets, there are national issues and trends which have impacted individual regions to a similar degree. On the positive side, there are new areas of expansion which have created opportunities that will at least maintain, if not increase, business.

Overall, consumer traffic is weak. Issues such as rising gasoline prices and a sense of overall economic uncertainty have led to declines in the purchase and consumption of meals outside of the home. Not only are consumers eating and preparing meals at home more frequently, they are also trading down in the foodservice expenditures that they do make. The industry itself has been impacted by an overall increase in food prices which have not had a positive effect on a consumer market that is being bombarded daily by news of rising fuel costs, a mortgage crisis and an unstable stock market. Regardless of the level of knowledge or interest in issues of the day, these trends are influencing consumer purchasing behaviour; further price increases will only compound this effect.

Although the foodservice industry is facing the most serious impacts from consumer-level economic issues, on a national scale it is also experiencing some sector-specific issues that will frame business in coming years. First and most importantly, American restaurant visits have peaked. Over the past 10 years the number of meals purchased at foodservice outlets has levelled off. From 1998 through 2007, average per capita restaurant purchases remained constant. Given the current economic climate, this figure will most likely not increase in the foreseeable future. In fact, a recent survey has reported that as many as 75% of Americans believe they will eat out less, while 50% believe they will cook more at home, and 55% believe they will buy fewer prepared meals. How have these shifts in consumer habits affected the foodservice sector? Fast food sales growth, the leader and traditional driver of growth in the overall sector, slowed dramatically in 2007, but did experience moderate-slight growth in 2008. Sales at mid-scale and fine dining restaurants have also shown declines.

Since 2003 (long before the American economic slowdown and the impact of higher fuel and food prices), consumers have been cooking and preparing more food from scratch at home, as well as eating-in more. This return to a home-cooked or at least a home-prepared and -consumed meal has been an ongoing trend for a number of years. In many cases this trend could be tied at least in part to the longer-term healthier eating trend, as well as an increase in competition from food retailers who continue to offer options for prepared meals, innovative meal components, partial meals and even semi-prepared meals. It would also be difficult to ignore the recent conservative movement promoting issues like family values, as well as the impact these beliefs have on the long-held idea of the traditional sit-down family meal. The reason for the trend toward greater meal consumption at home could also be as simple as increasingly busy lifestyles having finally pushed consumers to want to spend more time in their home. Regardless of these factors, Americans are consuming more dinner meals at home, and more consumers are "brown-bagging" their lunch, particularly women, which has hurt the foodservice industry at all levels. In fact, brown-bagged weekday lunches from home increased to 38 per capita in 2007 from 35 a year earlier, the equivalent of 8.5 billion bagged lunches annually for American adults (The NPD Group, 2008). According to NPD Group, the majority of American consumers (93%) cite saving money as the largest driver for doing so. Although there are a number of factors which have pushed this trend, the economic downturn clearly compounded the growing trend of "eating more at home" amongst American consumers.

Current Trends and Reactions

While overall restaurant sales seem to be stable, there are dynamic shifts in the industry influencing what people purchase from foodservice outlets, when they purchase these goods, and where they consume them. Meals eaten inside a restaurant have fallen in the last 10 years and now make up less than half of total restaurant meals. Americans are also cooking more, and even when they do not cook they typically go out to eat less. Foodservice retailers have attempted to capitalize on this trend by introducing ready meals "to go" through take out windows, drive-thrus, and quick or side pickup kiosks at traditional sit down establishments. "Picking something up on the way home" seems to be a consumer trend that many restaurants are catering to, as 47% of American adults claim they would use curbside take out if offered at tableservice restaurants.

Higher-priced menu items are facing challenges at the fast food level, but there is also a movement to replace socially unpopular larger serving products with gourmet style food and beverages. Restaurants are increasing their discount offerings, the so-called 99 cents menus, while "free" seems to be the new discount, e.g., a free coffee or dessert with each purchase. Increasing food prices have even resulted in some companies reducing packaging or serving sizes to maintain price points, while more family-style entrées capable of feeding more people are also expected. Providing value to customers is a key trend for both quickservice and casual-dining operators for 2010.

Another trend gaining momentum is the prevalence of fast food chains with a recognizable chef or brand attached to a single product or an entire menu. This type of marketing has been dubbed "cheap chic" as an exclusive chef or product is used to promote a low-priced fast food item.

Health and Wellness

As the number of Americans with health problems and/or a general concern for living a healthy lifestyle grows, dietetic, better-for-you, fresh, and high-quality products are projected to see strong growth. In fact, 73% of adults say they are trying to eat more healthily at restaurants than they were two years ago (National Restaurant Association, Pocket Factbook, 2010). Foodservice operators continue to offer more healthy options including portion-controlled meals and items with reduced fat, sugar and salt content to meet such demand. Restaurant owners are also shifting their starchy menus to leaner, protein-based dishes. Demand for vegetables, chicken, meat, fish, antipasto meat, cheese and olive oil continues to increase rapidly as people attempt to improve and maintain healthy, low-carbohydrate diets. Chefs are crafting more "light" meals and meatless entrées made with an increasing array of exotic ingredients now available in the American marketplace.

Opportunities in the health and wellness category include but are not limited to:

• Introducing healthier alternatives and nutritionally balanced meals for children's menus
• Demonstrating food safety on product packaging and in food outlets
• Offering consumers information they can use to make informed shopping decisions on portion size, nutritional value, caloric intake, balanced diets, and smart cooking techniques
• Offering fresh, natural, organic and wellness products in retail outlets and restaurants
• Developing smaller portion sizes as well as healthy finger foods, such as sushi and tapas.

Although, the trend toward healthy eating in the United States is significant, it fails to offset the popularity of many less healthy options. As much as healthy eating is a trend amongst the average consumer, the effort to eat healthier could easily be described as casual, with healthy eating choices being incorporated into less than healthy diets. While dieting consumers are huge targets, this is not a growing segment of the population, and in fact, the percentage of adults on a diet in the United States has decreased significantly since 1990. Spurred by the economic downturn, there has also been a growing demand for comfort foods. Growth can be seen in products targeting specific "hot button" consumer issues, e.g., increasing concern over the health risks associated with trans fats in food.

Increasing obesity rates within the United States may indicate that demand for super-sized products is growing. The national obesity rate increased to 26.6% in 2009 from 16.5% in 1997. However, obesity rates are slightly lower in the Pacific Northwest region (25.8%) than nationally, which may suggest stronger regional demand for fresh and healthier products. All states in the Pacific Northwest region ranked within the top 30 states with the lowest obesity rates: Oregon 12th, Idaho 13th, Washington 23rd, and Alaska 29th (United Health Foundation, 2009).

Organics

Fuelled largely by consumer demand for more natural, minimally-processed and pesticide-free food in North America, the American organic sector has seen dramatic growth in recent years and is now one of fastest-growing segments of American agriculture. Consumer awareness and demand for organic food and beverages has also greatly increased since the USDA Organic standards logo and certification program was introduced in 2002. Restaurants have responded by expanding the number of organic ingredients used. Results from the 2010 National Restaurant Association's chef survey indicate the growing presence of organic produce, coffee and alcoholic beverages in restaurants.

Ethnic Cuisine

Due to increased ethnic diversity and global travel in recent years, the North American ethnic food sector has moved out of the specialty food category and into the mainstream food industry. In fact, 75% of ethnic food consumption in the United States is now supported by the mainstream population (Euromonitor International, 2006). Research has also shown that the majority of ethnic food and beverages are consumed by Caucasian consumers in the United States, and are purchased largely by mainstream shoppers and those of other minority groups (Datamonitor, 2005).

Ethnic food restaurants are growing in popularity, with the National Restaurant Association's survey naming ethnic cuisines and flavours on of the hot menu trends in 2010. Recent trends have resulted in an increasing consumer base for Asian, Hispanic, Caribbean, Mediterranean, Indian, Halal and Kosher food. Regional ethnic and fusion cuisines are expected to be particularly popular in restaurants in 2010. Asian fast food, quick/fast-casual and full-service restaurant chains have been an area of strong growth in the foodservice industry in the past few years, with chains such as Panda Express, Noodles & Company, PF Chang's China Bistro and Benihana expanding rapidly.

While consumer demand for healthier food and exotic flavours is driving interest in these areas, rising immigration levels are also playing a key role. The United States is expected to see a visible minority population of 123.1 million (i.e., roughly one in three Americans) by 2020, a 30% increase over the country's 2006 population of 94.4 million. The majority of this increase (i.e., roughly 59%) is expected to be driven by Hispanics, followed by African Americans (i.e., 23%) and Asian Americans (i.e., 18%).

At-Home Meal Solutions

The American ready-made meal market has seen considerable growth over the past few years, as consumers increasingly lead busier lifestyles. The home meal replacement market has become a battle ground between restaurants and food retailers as they both try to serve the needs of time-pressed diners. Restaurant quality is the new trend in at-home meals. Chef or restaurant-branded products imply credibility. Consumers continue to look for ingredients and home meal replacements to replicate the experience of dining out. Families are the most time-conscious consumers and need ways to alleviate time-pressured stress. This is driving growth in the take out food market; more than 73% of sales at fast food restaurants were take out orders in 2008 (Euromonitor International, Fast Food, 2009).

Opportunities in the at-home meal solutions market include but are not limited to:

• Offering quick-and-easy take home meals
• Preparing easy-to-carry "car food"
• Offering premium meal ingredients for at-home consumption

Green Foodservice Establishments

The green trend currently sweeping North America is also starting to impact the foodservice industry. Consumers are increasingly looking for foodservice establishments with greener operations, and foodservice operators are responding by developing energy efficient outlets and switching to eco-friendly and even compostable take out packaging. According to the National Restaurant Association, 56% of Americans say they are more likely to go to a restaurant that offers food that is grown or raised in a way that is organic or environmentally friendly. Furthermore, 70% of adults say they are more likely to frequent a restaurant that provides food which is locally produced. This trend may grow to offer foodservice operators unique marketing opportunities in the future.

Other Popular Trends

According to results from the National Restaurant Association's chef survey, the following items are expected to be the top ten "hot" trends in 2010:

• Locally grown produce
• Locally sourced meats and seafood
• Sustainability
• Bite-size/mini desserts
• Locally-produced wine and beer
• Nutritionally balanced children's dishes
• Half-portions/smaller portion for a smaller price
• Farm/estate-branded ingredients
• Gluten-free/food allergy conscious
• Sustainable seafood

Future Trends and Opportunities

With a future that seems to point to stability at best where do the opportunities in the foodservice sector lie? First, two growing trends with significant room for further growth are take-away breakfasts and eat-in snacks. Secondly, beverages are a growing trend in the eat-in and take out segments, and they are also being rolled into the rapidly-expanding snacks category. Third, as restaurants continue to implement various strategies to differentiate their businesses from competitors', late-night dining options are becoming increasingly common. Value and convenience remain key attributes with consumers, even as the economy begins to recover. However, there is also demand for more menu options and diversity.

Breakfast

Breakfast consumption in the United States has been growing since 2001. There are a number of contributors to this, but one important tie-in with trends in food consumption as a whole is the necessity of breakfast for a healthy diet. Eating breakfast has been pushed by producers and medical people alike as a key component of a healthy diet, vital in weight loss and important for child development. Regardless of what people are eating, more are eating breakfast. The sector as a whole is seeing sales of restaurant-purchased breakfasts grow, and while eat-in breakfasts are stable, take-out breakfasts have been growing steadily since 2001. Eating on-the-go, in a car or on a bus, has also increased the popularity of the breakfast sandwich.

Foodservice sales currently represent 10% of all breakfasts consumed in the United States. The excitement in this segment is due to the fact that 11% of Americans still skip breakfast. In other words, more Americans skip breakfast than eat breakfast in a foodservice outlet, representing huge potential for growth. With the increasing trend toward consumers actually eating breakfast, the industry is excited about capturing some of this untapped market.

Breakfast away from home has shown strong popularity among Hispanic consumers, a key and growing demographic in the United States. Nearly 23% of this consumer group states that it often eats breakfast away from home on weekdays, which is significantly above the national average of 14%. Take-out breakfasts are particularly popular, with roughly 29% of Hispanic breakfast buyers stating they always or often eat breakfast in a car. McDonald's national introduction of the McSkillet Burrito is an attempt to attract this demographic and recognition of the large growth potential for both breakfast meals and the Hispanic food market.

Breakfast sandwiches and other hand-held food products are driving growth in the breakfast market. Breakfast sandwich bread preferences also vary by region (e.g., biscuits are most popular in the south), but bagels, English muffins and other breads are all experiencing positive growth. The most popular breakfast sandwich toppings in the United States are bacon and sausage. Ham and multiple meats are declining in popularity, while preference for steak and chicken is increasing quickly, although they account for a very small portion of sector sales. Burgers are also increasingly being eaten as a morning meal. The smallest category in the breakfast sandwich segment is meatless sandwiches, which is not showing significant growth.

Snacking

Since 2005, one of the bright spots in the foodservice industry has been the healthy growth in snacking and snacking occasions, which has led many restaurants to introduce menu items targeting this trend. With the increased presence of smaller portions, portable products and lower-priced goods on their menus, many fast food restaurants have focused on offering snacks to boost sales. Eat-in restaurants have introduced mini portions and samplers to address this growing trend. For instance, items such as mini burgers (also known as sliders) are an increasingly popular menu item at restaurants. While spending habits demonstrate that Americans generally eat throughout the day, their key snacking points revolve around 10 a.m., 3 p.m. and 8 p.m.

In the eyes of the industry, one key growth point in the snacking segment is beverages, such as specialty coffee or smoothies. These high-dollar and -calorie items have become a very popular consumer choice during key snack periods. Beverage sales are an important part of the snacking trend, but also an increasingly important part of an overall in-restaurant dining experience. Beverage sales have been growing steadily in spite of an overall decline in add-on restaurant sales. While sales of appetizers, salads and other extras continue to fall, beverage sales, particularly non-traditional beverages, are experiencing significant growth. Tea, specialty coffee, juice and bottle water are the leading products for growth. Iced tea is especially popular and coffee sales are growing, driven by demand for specialty coffee.

Late-Night Offerings

Restaurant chains looking for ways to differentiate are beginning to focus marketing efforts on late-night diners. Burger King has extended its hours to 2 a.m. Thursday to Saturday in the United States and has launched a television campaign focused on these diners. Buffalo Wild Wings, Wendy's, Denny's and Taco Bell are also exploring late-night marketing. Taco Bell currently has an online promotion for a late-night meal described as the "Fourthmeal", while, Denny's has recently added four new items to its menu which are served only from 10 p.m. to 5 a.m. Late-night marketing strategies are generally targeted toward 18- to 30-year-old consumers.

Key Target Markets

Ethnic Consumers

The world's largest ethnic food market is expected to see its ethnic consumer base continue to grow. Ethnic consumers are forecast to account for 52% of the American population by 2050 or 219.7 million consumers, an impressive 78% increase over the country's estimated 2020 population. These trends are, in turn, creating new and increasingly attractive opportunities for Canadian agri-food producers and exporters.

Distinct foodservice trends exist in each region of the United States. Age, race and income demographics vary from state to state and impact regional flavour profiles. While the Pacific Northwest possesses Hispanic and African American population ratios below that of the national average, the region's American Indian and Alaska Native, and Asian American consumers represent a larger portion of the region's population than that of the national average. The following table outlines the Pacific Northwest region's ethnic consumer markets' respective importance to Canadian food exporters.

Pacific Northwest United States Ethnic Populations, 2007

State/Region	Hispanic Population	African American Population*	Asian American Population	American Indian & Alaska Native Population	Ethnic Population**	Ethnic Population as % of Nation's Population
Alaska	0.037 million	0.025 million	0.031 million	0.091 million	0.184 million	0.1%
Idaho	0.139 million	0.009 million	0.017 million	0.017 million	0.182 million	0.1%
Oregon	0.376 million	0.064 million	0.131 million	0.062 million	0.633 million	0.2%
Washington	0.583 million	0.217 million	0.419 million	0.090 million	1.309 million	0.4%
Pacific Northwest	1.135 million	0.315 million	0.598 million	0.260 million	2.308 million	0.8%
United States	44.02 million	36.97 million	12.95 million	2.37 million	96.31 million	32.2%

Source: U.S. Census Bureau, 2007
*To conserve space, African American, refers to Black or African American.
**The total ethnic population is an estimate based on the total American Indian and Alaska Native, Hispanic, African American and Asian American populations. Some overlap may exist between the populations in each of these groups. This total does not include ethnic consumers from other groups.

A brief overview of major ethnic consumer markets in the United States is provided below. For more in-depth information, please consult the United States Ethnic Food Market report on the Agri-Food Trade Service Web Site at www.ats-sea.agr.gc.ca/amr/4489-eng.htm.

The American Indian and Alaska Native Consumer

The Pacific Northwest region's large American Indian and Alaska Native population (representing 2.1% of the region's population) sets it apart from other American markets. At nearly three times the national average (0.8% of the population), the ratio of American Indian and Alaska Natives in the region does have a considerable effect on the sales volumes and spending patterns in various markets in the area. With an American Indian and Alaska Native population comprising 13.4% of Alaska's population, the state is definitely the driver of these demographics in the region. However, Idaho, Oregon and Washington all possess American Indian and Alaska Native population ratio's greater than the national average. However, this population segment actually decreased in Alaska, Idaho and Washington from 2000 to 2007. On the other hand, Oregon's population experienced considerable growth of 37.8% in this same time period (U.S. Census Bureau, 2007). Both the American Indian and Alaska Native consumer segment in the Pacific Northwest states and the region's well-known Native-inspired cuisine, present a significant market opportunity for Canadian exporters.

Hispanic Consumers

The Hispanic consumer segment is the largest ethnic group in the United States, making up nearly 15% of the population or 45.5 million consumers in 2007. By 2030, it is projected that this segment will account for one out of every five Americans, with an estimated 73 million Hispanics living in the United States. The Pacific Northwest's Hispanic population of more 1.1 million accounts for 9.2% of the total population. This population segment has been experiencing strong growth in the Pacific Northwest, increasing 34.3% from 2000 to 2007. All of the Pacific Northwest states have experienced considerable growth, with Washington registering the slowest growth of 31.9%, and Alaska the highest at 42.3%. However, Washington does possess an increasingly diverse population, with a noticeable and growing Hispanic consumer segment.

Apart from the United States' close proximity to Mexico, a recent influx of Hispanic consumers in non-traditional Hispanic markets, such as Utah, has been aided greatly by friendly municipal and state governments seeking key consumer groups to boost local populations and economies. Hispanic buying power is expected to reach US$1 trillion in 2008, nearly doubling from US$581 billion in 2002, to achieve the highest level among ethnic groups in the United States. Roughly US$55 billion of this total is allocated to food annually.

Hispanic families tend to be larger than the national household average; Hispanic households have an average 3.34 residents, while that of the general American population is 2.57 persons. Furthermore, more than 43% of Hispanic homes have four or more people residing in them, versus 22% of non-Hispanic households. Wal-Mart recently announced a partnership with Pollo Campero, the largest Latin American chicken restaurant chain, to attract more Hispanic consumers to Wal-Mart stores. Roughly 500 Pollo Campero restaurants are forecast to open in the United States by 2012, some of which will be located within Wal-Mart outlets.

African American Consumers

Apart from the growing Hispanic market, the country's African American population is also an attractive consumer segment. Estimated at US$847 billion, the African American consumer market's level of purchasing power is the second-highest among ethnic groups in the United States. This value has seen a compound annual growth rate (CAGR) of almost 6% since its 2002 value of US$645 billion. African Americans comprised almost 13% of the American population or 38.7 million consumers in 2007, an 8% increase over the 2000 population of 35.8 million. By 2030, it is projected that this segment will account for 14% of Americans, with an estimated 50.4 million African Americans living in the United States.

The African American population in the Pacific Northwest has also been growing. The population increased 15.4% from 2000 to 2007, totalling a population of approximately 0.3 million and accounting for 2.6% of the region's population in 2007. While the majority of states (Alaska, Oregon and Washington) experienced growth of approximately 14%, Idaho had remarkable growth of 80% in its African American population (U.S. Census Bureau, 2007).

Asian American Consumers

In addition to the country's largest ethnic consumer groups, there is strong emphasis on addressing the needs of the expanding Asian American population. Currently estimated at 13.3 million consumers or nearly 4.5% of the population, this consumer segment is projected to become the fastest-growing ethnic group in the United States from 2010 to 2050, and see a 135% population increase over the period. Asian Americans possess the highest median household income of US$69,047, compared to US$56,648 for Caucasians, US$41,630 for Latinos, and US$35,085 for African Americans. The national median household income is US$52,175 (GoldSea, 2010). While being the fastest-growing population segment, Asian Americans' buying power is quickly increasing.

After the Hispanic consumer group, the Pacific Northwest's Asian American consumers represent the second largest ethnic population in the region, totalling approximately 0.6 million consumers in 2007. The Asian American population accounted for 4.9% of the total Pacific Northwest population, slightly higher than the national percentage of the Asian American population (4.3%). As a result, there is strong emphasis on addressing the needs of the region's expanding Asian population, which increased a noticeable 30% from 2000 to 2007. The Asian American population increased significantly in all Pacific Northwest states from 2000 to 2007, with Alaska experiencing the lowest growth of 24%, followed by Oregon and Washington at approximately 30% each, and Idaho's population growing 41.7% (U.S. Census Bureau, 2007). Washington's population includes a significant Asian population, particularly in the western region of the state where there are a number of businesses that cater to Asian consumers (The Shelby Report of the West, June 2008).

Halal and Kosher Food Markets

The large and growing Muslim and Jewish consumer populations in the United States also present considerable opportunity for Canadian food manufacturers looking to enter new markets. With its population of 8 million to 11 million Muslim consumers, the United States offers a lucrative halal market estimated at US$12 billion. The kosher food industry, while not new to North America, also continues to grow with an approximate 6.15 million Jewish consumer base in addition to a number of non-Jewish consumers that are increasingly buying kosher products for numerous reasons, and comprise the fastest growing consumer base for kosher products. Halal and Kosher restaurants exist throughout the United States and contract foodservice is increasingly offering halal and kosher options. For instance, Delta Air Lines offers halal and kosher options on select flights to the Middle East.

Furthermore, as consumers continue to become more health conscious, especially in the wake of recent worldwide food scares and the burgeoning green movement, halal and kosher food is gaining popularity (i.e., meat and other food products slaughtered or processed according to Islamic and Jewish law). Such food is appealing to a growing number of consumers outside of the Muslim and Jewish communities, whether it be due to humane animal treatment concerns, demand for vegetarian or lactose-free products (i.e., kosher food only), or a perception that such products are healthier or safer.

Mediterranean Food Market

Mediterranean food (i.e., particularly Greek, southern Italian and Spanish), cited as a major emerging ethnic cuisine in the North American marketplace, gained huge popularity in 2007. The consumer trend toward wholesome, boldly-flavoured ethnic food has grown considerably in recent years, largely due to Mediterranean cuisine having been marketed as a healthy diet option in the United States since 1993. A Mediterranean diet symbol for packaged food was released in the United States in April 2007 and has helped further drive the popularity of this cuisine.

Competitive Environment

Canada has long been the number one exporter of live animals, meat, grain mill products, bakery goods and fats and oils to the United States. This has given Canadian agri-food exporters a distinct advantage over international competitors in the United States. Western Canada's geographic proximity to the Pacific Northwest also provides an advantage to Canadian agri-food exporters, over other international competitors. However, Canadian agri-food exporters also face competition from small to medium-sized local and national food manufacturers that operate on a regional level, as well as large multinational manufacturers such as Danone and Nestlé.

The top countries exporting agri-food and seafood products into the United States include Canada (19.5% import share), Mexico (14.2%), China (5.5%), Thailand (3.7%), France (3.6%), and Italy (3.5%). The main exports originating from these countries are as follows:

• Mexico: edible vegetables; beverages, spirits and vinegar; edible fruit and nuts; sugar and sugar confectionery; prepared vegetables, fruit and nuts.
• China: fish and crustaceans; prepared vegetables; fruit and nuts; prepared meat and fish; products of animal origin; edible vegetables.
• Thailand: prepared meat and fish; fish and crustaceans; prepared vegetables, fruit and nuts; cereals; miscellaneous preparations.
• France: beverages, spirits and vinegar; dairy produce, birds' eggs, and natural honey; lac, gums and resins; miscellaneous preparations; cocoa and cocoa preparations.
• Italy: beverages, spirits and vinegar; animal and vegetable fats and oils; preparations of cereals, flour, starch or milk; dairy produce, birds' eggs, and natural honey; miscellaneous edible preparations.

Market Access

The United States remains a destination of constant trade and investment interest for foreign investors, and holds strong potential for Canadian companies wanting to enter the export market. To facilitate successful market entry, Canadian exporters are encouraged to develop market entry strategies that include working with local brokers, importers and distributors to develop a presence, gain valuable market advice, and best position products to meet local tastes, laws and pricing.

Canadian exporters should contact the Canadian Consulate General offices in the Pacific Northwest region to obtain market information, identify new markets, find qualified trade contacts, and obtain assistance in successfully exporting abroad. Detailed information on customs procedures, documentation, tariffs and labelling requirements can also be found on the Trade Commissioner Service Web site at www.infoexport.gc.ca/ie-en/USMissions.jsp.

Food Distribution

The majority of exporters (75% to 80%) choose to ship their product directly to the retailer's warehouse. The advantage of this channel is expediency over shipping to distributors/wholesalers without the excessive transportation and labour costs of shipping directly to the store.

The Pacific Northwest is home to some of the largest food distributors in North America. To arrange distribution in the Pacific Northwest, the manufacturer has three options at their disposal: manufacturer direct to the food outlet; manufacturer to merchant wholesaler, to food outlet; or manufacturer to distributor, to retailer, to food outlet. However, many food products are sold through food brokers and distributors. With the consolidation trend occurring in the industry in Canada and the United States, the number of channel partners has become increasingly amalgamated along the supply chain, at manufacturing, representation, distribution, and retail levels (Foreign Affairs and International Trade, 2007).

Sysco, with sales of US$28 billion, is the largest food distributor in the United States. Sysco Corporation possesses broadline companies in Washington, Oregon, and Idaho. Other substantial broadline distributors serving the Pacific Northwest region include U.S. Foodservice (with a distribution facility in Seattle, Washington), McLane (distribution center in Lakewood, Washington), DPI Northwest (headquarters in Tualatin, Oregon), Food Services of America (distribution centres in all Pacific Northwest states, with headquarters in Seattle, Washington), Ocean Beauty Seafoods, Pacific Seafood Group (processing plants along the coast and distribution facilities in Oregon and Washington), Unified Western Grocers (serving Alaska, Oregon, and Washington), Western Family Foods (headquarters in Tigard, Oregon) and United Natural Foods (two distribution centres in Washington).

The Consulate General of Canada, Seattle
1501 4th Ave, Suite 600
Seattle, Washington,
98101-4328, United States of America
Tel: (206) 443-1777
Fax: (206) 443-9735
E-mail: seatl-td@international.gc.ca
Web Page Address (URL): www.seattle.gc.ca
Territories: Washington, Alaska, Idaho, Oregon
Hours: Mon-Fri: 08:30-16:30
Time Difference E.S.T.: -3

Mr. Doug McCracken
Trade Commissioner
Agriculture, Food and Beverages, Consumer Products, Fish and Seafood Products
Email: clients.seattle@international.gc.ca

Consulate of Canada in Anchorage
A satellite of the Consulate General of Canada in Seattle.
310 K Street, Suite 200
Anchorage, AK 99501
United States of America
Tel: 907-264-6734
Fax: 907-264-6713
E-mail: seatl-cs@international.gc.ca
Web Page Address (URL): www.anchorage.gc.ca
Hours: Mon-Fri: 08:30-16:30 (Alaska time)

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