The Hindu Business Line : Comply with food laws before tapping US market: FDA expert

Growing market
‘Pricing and quality, and meeting marketing and regulatory requirements are of utmost importance.’
Specialty foods, organic foods and private labelling are three potential biz areas.

Our Bureau

Kolkata, Jan. 24

Pointing out that new opportunities were emerging in the large US processed foods and beverages market for both specialty items and organic products, Mr David Lennarz, Vice-President of FDA Registrar Corp (a private consulting firm assisting companies to comply with USFDA regulations), has said that regulations are not that complicated, if understood correctly by exporters.

FDA registration is required for all companies that manufacture, process, pack or store food or beverages that may be consumed in the US.

Companies located outside the US need to designate a US agent for FDA communications.

All these are as per the post 9/11 Bio-terrorism Act (FDA Registration and US Agent Requirement) introduced in 2003.

Speaking at an interactive session organised by the Federation of Indian Export Organisations (FIEO), Eastern Region, jointly with the FDA Registrar and National Centre for Trade Information, New Delhi, Mr Lennarz, said pricing and quality, and meeting marketing and regulatory requirements are of utmost importance.

Big opportunity

He said the growing organic foods market in the US was the largest in the world today and presented a huge opportunity for Indian food exporters.

Citing specialty foods, organic foods and private labelling as the three potential business areas for food companies worldwide, he said organic foods have now gone mainstream, finding space in most food or grocery stores across the country.

Expecting sales of organic foods within the US to touch a staggering $30 billion by end 2008, he said US consumers are now willing to pay more for safe and quality food.

Mr Lennarz said that the $85 billion private labelling industry in the US, which recorded an annual growth of over five per cent between 2000 and 2005, offered substantial scope for Indian companies in the branded foods segment.

He said fixed sales in this category are expected to touch $100 billion by 2010.

Food detentions

Labelling violations, it is stated, result in more than 22 per cent of all food detentions in the US. Mr Lennarz said this can be avoided by utilising the FDA Registrar Corp’s Label and ingredient review services.

Food product labelling, according to the expert, is now widely seen from a legal perspective for necessary food label elements and ‘truthful and not misleading’ requirements for all label statements.

Outlining the distribution challenges for the Indian processed foods exporters to the US, Mr Lennarz said the three main elements to be understood clearly are selection of importers, who will handle the import procedures correctly (including hiring of a customs broker), possession of transactional know-how and existing distribution channels. He also stressed on links between importers and retailers in the US.