THE Philippine food retailing industry is expected to grow 7% this year as modern retail outlets continue to expand, according to the US Department of Agriculture (USDA).

Retailers are expanding into rural areas and introducing new food and beverages options, the USDA Foreign Agriculture Service in Manila said in a note to US exporters.

“Some retailers feature promotions of imported products to attract consumers, while others offer private-label products to deliver value for money to price-sensitive consumers.”

“Retail chains of supermarkets, hypermarkets, convenience stores, and warehouse clubs continue expanding in key cities and rural areas, further contributing to food retail sales growth,” it added.

The USDA said the food retail sector provide export opportunities for fruit and vegetable juices, tree nuts, beef, pork and poultry cuts, milk, butter, cheddar, mozzarella, cream cheese, ice cream, and soy milk.

It also cited chewing gum and candy, chocolate, tomato sauces, sausages, hotdogs, luncheon meat, meat loaf, pasta, seasoning, tomato ketchup, raisins, peas, beans, kidney beans, garlic, onions, potatoes, mushroom, cereals, bakery goods, frozen fruit and vegetables, beverages, and pet food.

The report noted that retail stores sell industrial quantities of ingredients for use by restaurants, hotels, and caterers, including dairy products, condiments, sauces, seasonings, and juices.

Popular US brands sold in warehouse clubs and supermarkets have high brand recognition and higher sales compared to competitors, the USDA said.

On the other hand, the report noted that retail chains continue to charge high fees to carry new products or feature products in promotions.

“Some US products and unknown brands sold in rural areas may have difficulty selling in stores,” it added.

Meanwhile, the USDA said sales of the food service sector are expected to grow 12%, “driven by consumer dining, event bookings, and tourist influx to hotels.”

Citing government data, it noted that consumer spending increased 15% in restaurants and hotels between 2023 and 2024 as “tourism flourishes.”

The report said restaurant and kiosk franchises continue to open more stores in key cities and rural areas to surpass last year’s sales figures.

“While many hotels and restaurants are featuring imported premium ingredients, some restaurant chains, including quick-service restaurants, explore direct importation for stable ingredient supply,” it said.

The USDA, in its note, said restaurant chains in the Philippines post volume orders for chicken leg quarters, mozzarella, and other imported ingredients used in preparing fried chicken, pizza, and burgers.

Meanwhile, coffee shops and street kiosks offer opportunities for bakery products, potato fries, processed meat, fruit beverages, and roasted coffee and bean extracts.

“As more consumers drink distilled spirits and wines at bars and fine dining restaurants, others resort to online deliveries for gatherings at home,” the report noted.

“Mobile food delivery applications such as Grab and Food Panda continue to provide convenience and augment sales,” it added.

It said restaurant groups with more than 200 stores nationwide present volume-order opportunities such as The Bistro Group, Moment Group of Restaurants, Jollibee Foods Corp., Max’s Group, Inc., Shakey’s International, Inc., and Yum! Brands, Inc.

“Opening of new hotels, increased occupancy in hotels rooms, and more event bookings (promise) volume orders of export products for dining and catering services,” it added.

It said high-end restaurants and hotels tend to highlight US ingredients in their menus such as ribeye, porterhouse, tenderloin, Kurobuta pork, duck, cheese, and wines. — Kyle Aristophere T. Atienza