Why invest in the processed food sector?

Colombia has positioned itself as an attractive destination to invest in processed foods in the region. Its ability to meet the demand for raw materials, its geographical position that can serve the entire region as an export platform, and multiple investment incentives have made it a focal point in Latin America for doing and expanding business; the arrival of major players in the country proves it.

Colombian processed food production is recognized for its capacity to meet the demand for raw materials for the sector. In addition, the sector is a driver of employment generation, and sustainable, environmental, and economic development in the country.

Colombia has the capacity to satisfy the demand for raw materials in the processed foods sector

The country has a potential for sustainable agricultural and livestock growth, being recognized by the Food and Agriculture Organization of the United Nations - FAO, as one of the tropical countries that will have the role of the world's pantry. In addition, the tropical climatic conditions make possible the production of a wide variety of foods throughout the year.

The country is an important producer of fruits, vegetables, sugar, cocoa, dairy products, animal proteins, among others. Furthermore, Colombia has the conditions for sustainable processed food products in approximately 40 million hectares of the potential agricultural frontier with water availability.

Colombia and Latin American are major consumers of processed foods

Colombia is emerging as an export platform to satisfy consumers in the Americas. Colombia's expanded market in the region1  is USD 1.4 billion, equivalent to 30% of the world market for processed foods and beverages.

In addition, the processed food sector is a pillar of the national economy and represents close to 33% of Colombia's manufacturing GDP. The main processed foods produced are beverages and tobacco, processed meat, bakery and milling, dairy products, sugar and panela, processed fruits, oils and fats, coffee and cocoa derivatives, and confectionery.

Colombia is the fifth largest economy in the region, with access to more than 1.5 billion consumers, thanks to the 16 trade agreements in force and its privileged location that allows it to reach consumers within 5 days of the United States, 11 days of Europe and 21 days of Asia (Euromonitor2).

National Government initiatives and programs for the sector

The National Government is committed to promoting the sector and implementing measures to consolidate production and international opportunities. The Colombia Exporta Agro strategy and the Colombia Productiva programs stand out among the initiatives for sector development and growth.

Colombia’s competitive business network is conducive to building partnerships and accessing strategic suppliers

Colombia's business fabric offers opportunities for strategic alliances and/or to be suppliers of raw materials for the development of value-added products in Colombia.

There are more than 5,800 companies in Colombia engaged in the production of beverages, food products; agriculture, livestock, hunting, and related service activities;  forestry, and timber extraction. These companies are classified according to their revenues as follows: large (12%), medium (29%), micro (4%), and small (56%) (EMIS3).

These companies are in 27 of the country's departments, with Bogotá being the main concentration point, accounting for 39% of the sector's companies, followed by Medellín (14%), Cali (13%), and Barranquilla (5%) (EMIS).

Investment opportunities in Colombia’s processed foods sector

The processed food sector offers several opportunities along its value chain:

1. The country has the potential to serve a changing and more sophisticated local market. In the cities, there is a trend that creates opportunities in processed animal protein foods such as sausages with greater sophistication, hamburger kits, frozen food or baby kits.
2. Colombia is one of the most biodiverse countries, therefore, there are opportunities in leveraging Colombian ingredients for research and/or as bases for exporting premium products. Large, processed food players can benefit from Colombian ingredients to establish R&D centers to develop new healthy nutritional products and experiment with native ingredients.
3. Import substitution of inputs and ingredients to produce processed foods.
4. Provision of related services to support exports.