INTERNATIONAL: The Cuban connection

The scene at the U.S. Food and Agribusiness Exhibition held in Havana, Cuba in September looked at times like something from a melodrama. Curious spectators eyed pears as if they were foreign objects; older visitors reminisced about brands they hadn't seen in nearly half a century.

The dramatic moments were a testament to the significance of the event. The largest American trade show held in Cuba in more than 40 years, it featured many products spectators hadn't seen since the 1960s, when the U.S. government imposed a trade embargo on the communist-run Caribbean island. In total, 288 American exhibitors from 33 states, the District of Columbia, and Puerto Rico showed more than 3,000 products.

The show was made possible by a measure signed into law in 2000 by President Bill Clinton that allows the direct commercial sale of American food and other agricultural products to Cuba on a cash basis. Since last November, when Cuba began taking advantage of the law, private Cuban food-importing agency Alimport has signed for more than $140 million worth of products.

Food from Marsh

Marsh Supermarkets, which became the first American business to sell U.S.-brand food products directly to Cuba, contracted for 750 tons of food, including butter, baby food, cookies, condiments, pasta, and paper products in a $750,000 deal. The products began shipping in August. At that time, Mohamed Bouras, director of the Marsh International division, announced that the company would like to sell millions of dollars of products to Cuba next year and estimated that retail sales could one day reach $35 million.

Sales were booming at the U.S. exhibition. As the five-day show came to a close, Cuba had struck deals to buy more than $66 million in American food, including rice, cooking oil, soy, apples, frozen chicken and chicken eggs, and some brand-name packaged products.

But amid the enthusiasm, economists cautioned that U.S. companies should keep in mind that Cuba is still a relatively poor market, with just 11 million consumers and many competitors. Top U.S. diplomat James Carson, chief of the U.S. Interests Section, said, "I think it's great to sell eggs for cash, but let's not leave U.S. taxpayers with a big giant goose egg. This is a Jurassic Park economy and it's no great market for the United States." He estimated Cuba's current foreign debt at $11 billion.

Still, those who made the trek to the Caribbean island conceded that, while the market is small, it presents new opportunities for business. Leaving their politics at home, executives networked as they do at any American trade show, and some exhibitors even dined with Cuban President Fidel Castro at evening festivities.

One booth that was particularly well attended belonged to the USA Rice Federation, which sold 120,000 tons of rice during the show. "Cubans not only eat a lot of rice, but prefer U.S. varieties and quality," says Marvin Lehrer, director of Latin American promotion programs. Attendees admired the bags of rice on display and talked about how the quality is so much better than what they've been getting, says Lehrer. At one point, Castro came by and tasted a sample, to the dismay of his security entourage.

Last year, USA Rice became the first American company in 42 years to participate in a Cuban fair, the International Fair of Havana. At that show, some of the older attendees cried when they saw brands of rice they remembered eating before the trade embargo, says Lehrer.

Rice Goes to School

At this year's U.S. exhibition, USA Rice stirred additional interest by sponsoring several coinciding events, including a cooking contest with chefs from the Cuban Culinary Association, and the association's Rice Goes to School program, which emphasizes the importance of rice in a healthy diet for schoolchildren. Both programs are already being used in Mexico, and Lehrer says the response in Cuba was very positive.

Across the show floor from USA Rice, the Pear Bureau Northwest attracted curious visitors, many of whom had heard of pears, but hadn't seen them in person. "It was amazing. One lady asked if she could just hold one," says president and c.e.o. Kevin Moffitt. During the show, Cuba made a commitment to buy four containers of pears, which amounts to about 4,000 boxes.

Moffitt says he has been told that Cuba was a relatively large market for pears in the 1950s, but he acknowledges that nowadays it might be considered more of a treat to consumers who are strapped for cash. "I think it's a potential market if they can get enough people with the currency to buy the fruit," he says.

Lehrer has a similar view. "We're in a good position now, but it depends on how long Cubans can continue to pay cash for their purchases," he says. "In order for Cuba to be an important market for U.S. food products, they're going to have to find a way to make money."
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