The Packer / Oct. 4, 2002
By Larry Luxner
HAVANA -- Oregon pears, Washington potatoes, New York apples and Florida onions vied for attention with thousands of other edible items at the U.S. Food & Agribusiness Exhibition -- the first such display of American food products in Cuba since the 1959 revolution that brought Fidel Castro to power.
Castro attended the Sept. 26-30 food expo on three days, tasting occasional samples of everything from raisins to soyburgers. The 76-year-old revolutionary, dressed in a business suit rather than his usual army fatigues, stopped to chat with executives from many of the 288 U.S. companies and trade organizations participating in the show.
Kevin Moffitt, president and chief executive officer of Pear Bureau Northwest, Milwaukie, Ore., spoke with Castro briefly as the Cuban leader walked past his booth.
"He asked if our bartlett pear variety was the same as the williams pear from France. I told him it was similar," Moffitt said. "He was trying to see as many people as he could, and I guess we were in the right place at the right time."
Moffitt said 38% of his members' pear crop is exported to 38 countries, led by Mexico, Canada, Sweden and Venezuela. He was in Cuba not only to attend the food expo but to introduce the first shipment of U.S. pears to the Caribbean island in 42 years.
"In terms of what to expect, there are 38,000 hotel rooms and 700 (dollar-only) restaurants in this country. We believe our first market will be the tourist trade," Moffitt said. "Initially, this market could be worth a few hundred thousand dollars for us, maybe $500,000 within three to five years. But a lot could change."
In fact, a lot has changed.
For most of the past 42 years, U.S. companies were forbidden from doing any kind of business with Cuba - a result of President Kennedy's long-standing trade and travel embargo against the communist government and continuing pressure from Cuban exiles in Miami opposed to trading with what they call an oppressive regime.
But under the Trade Sanctions Reform and Export Enhancement Act passed in 2000, the Cuban government may import U.S. food and agricultural commodities on a cash-only basis.
Since November, when Hurricane Michelle devastated Cuba's agriculture industry, Cuba has imported more than $140 million in U.S. products through Alimport, a unit of Cuba's Ministry of Foreign Trade, after Castro initially declared that he "wouldn't buy a single grain of American rice."
Tony de Lio, vice president of marketing and external affairs at Archer Daniels Midland, Decatur, Ill., said Cuba has changed its tune dramatically in the last year or two.
"Clearly, Alimport has indicated that they're looking to sign as many new suppliers as possible," he said. "Their agenda is to get the broadest possible support of U.S. business behind further reform that will make trading easier."
Many European and Canadian products - and some U.S. ones - are already being sold at dollar-only shops in Cuba, having been imported by various government agencies though they generally arrive through third countries. That often results in outdated products, higher costs and delayed delivery.
Under TSRA, food commodities may be exported directly to Cuba. So far the No. 1 supplier is ADM, which has sold more than $60 million in commodities to Alimport. Other leading U.S. suppliers to Cuba include Cargill, Minneapolis; Marsh Supermarkets, Indianapolis; and Riceland Foods, Stuttgart, Ark.
All those companies were at last week's food expo, along with smaller ones like Florida Produce of Hillsborough County Inc., Tampa. Company president Michael Mauricio decorated his booth with brightly colored balloons - to call attention to his already colorful displays of apples, pears, kiwis, onions and cloves of garlic.
Earlier this year, Mauricio shipped 850 50-pound bags of jumbo yellow onions in three containers worth a total of about $25,000.
"The onion market here could be immense," said Mauricio, who describes himself as an American of Cuban ancestry. "There are 11 million people in Cuba. Their basic ingredients for cooking are onions, garlic and green peppers. Hopefully, we can do several containers of onions a month. Grapes, apples and pears could also be worthwhile. But the dust has got to settle first. They're feeling their way around just like we are."
James Allen, president of the New York Apple Association, Fishers, flew to Havana with three colleagues. Together, they manned a booth dominated by a big poster with a map of the U.S. and Cuba, emblazoned with the slogan, "Mas cerca. Mas rápido. Mejor. Manzanas del Estado de Nueva York." (Closer, quicker, better. Apples from New York State.)
"Our apples can get to Cuba in four or five days," he said. "We have a varietal mix, and we know that in the past Cubans have purchased mcintosh apples from Canada. We are a leading producer of mcintosh apples. They also find the empire apple very appealing, and they like red delicious." New York and Washington are the only states approved to ship apples to Cuba.
Since July, Washington apple growers have made six shipments to Cuba. "In dollar terms, it's worth roughly $100,000, but it's really symbolic more than anything," said Rebecca Baerveldt, international marketing manager at the Washington Apple Commission, Wenatchee.
Since the U.S. trade embargo went into effect in 1960, she said, Cuba has imported apples from Chile and Canada, but they don't compare in quality to U.S. apples.
"They tend to be smaller and rounder, and they don't have the elongation of the red delicious that we have," she said. "They're probably selling very small, inexpensive apples."
Baerveldt conceded that apples are still somewhat of a luxury in Cuba, where the average citizen earns the equivalent of $20 a month and has little or no access to dollars.
"There is difficulty in transacting business with Cuba. All sales have to be in cash, so that limits the distribution of our products only to markets where they'll get paid in dollars, such as hotels, restaurants and hard-currency supermarkets," she said. "We'd be fortunate to sell $500,000 this year (to the Cubans). That would be wonderful."
She said transportation is less of a problem, since the apples are trucked from Washington to Gulfport, Miss., and then put on containerships to Havana. Six shipments of apples totaling 16,000 bushels have been sent to Cuba since July.
Asked about Castro's visit to her booth, she said: "We just talked about Washington apples, but I was really hoping he'd eat one."
Allan Henderson, owner of C.L. Henderson Produce Co., Hendersonville, N.C., also met Cuba's leader.
"This is our first endeavor into the export business, and we're excited," said Henderson, whose produce company has $16 million in revenues. Henderson said he spent nearly a year and a half on paperwork, visas and export licenses to make this trip to Cuba possible, hoping to sell at least a containerload of apples, peppers and yellow squash.
Apparently, Henderson's efforts paid off - especially after he and sales representative Don Ward III enjoyed a three-hour dinner with Castro the night before the trade show opened.
"We didn't know we were going to meet Fidel. We were told we were going to meet Pedro Alvarez, president of Alimport," said Henderson. "So we got into a bus, and the driver didn't know where he was going. We were then taken to a secure site with guards and guns. Fidel came in, shook everybody's hands and took a liking to Don and I. They moved us right in front of him so we could talk to him."
Henderson says he's particularly interested in selling Cuba overwrap packages each containing bell peppers: two greens, one red and one yellow. In the U.S., such a presentation retails for $4. In Cuba it would probably sell for $5.25.
Likewise, Cuba could become an important market for U.S. potatoes - some to be sold fresh, some to be processed into french fries or dehydrated products.
"They're probably looking for seed potato and processed product," said Shannen Bornsen, director of marketing for the Washington State Potato Commission, Moses Lake. "From what I understand, Cubans have a very large potato production, and they basically consume all of what they produce here."