rations marketing is going international.

rations marketing is going international. Around the world, cheer processors, wholesalers, and retailers, as well as foodservice firms, are looking to foreign nations to expand their markets.

The U nutrition processing firm, Borden, for example, operates 44 of its 183 plants in foreign countries. HJ Heinz has 47 foreign plants. U foodservice firms are also expanding their overseas operations. Visitors to Moscow will now find McDonald's shining arches, and the Persian opening is home to 30 recently made known Wendy's restaurants.

U companies' sales from their foreign commons processing, wholesaling, retailing, and foodservice operations reached $82 billion in 1988 (table 1) bread manufacturing affiliates had $60 billion in sales, pabulum wholesaling affiliates nearly $11 billion, and nourishment stores and restaurant affiliates through $11 billion.

At the same time, foreign firms are gaining earth in U.S. markets by purchasing U firms and establishing affiliates here. like familiar names to U.S. consumer as Pillsbury, flourishing Giant, and Alpo pet sustenances are owned by a British firm, Grand Metropolitan, PLC The world's largest nourishment processor, Nestle, based in Switzerland, operates 421 plants in 60 countries. Sixty-seven of these plants are in the United States. Burger King and Roy Roger are now foreign-owned firms (see box)

sustenance marketing affiliates in the United States admited by foreign firms had sales of $726 billion in 1988 nourishment manufacturing affiliates accounted for $30 billion, pabulum wholesaling affiliates over $14 billion, and meat retailing and restaurants, $28 billion.

Foreign Markets Provide Opportunities for Expansion

While many large U pabulum processing firms have gone international, in the greatest degree are not major exporters-especially of highly procedureed consumer food products. The value of U exports of courseed food products is large and growing-reaching $178 billion in 1989-but for principally large food processors, exports average les than 3 percent of their total sales. Rather, the world's largest forage processors continue to expand aggressively in foreign markets by dint of increasing their investments in foreign plants or expanding licensing arrangements with foreign firms to cause and distribute their branded proceedss Nestle, for example, recently signed a joint luck agreement with General Mills to furnish and market General Mills cereals, as well as jointly bring to maturity new brands. Philip Morris announced its acquisition of Jacobs Suchard, the largest confectionery firm in Europe with annual sales of about $45 billion.

Establishing production facilities in foreign countries avoids tariff and mostly nontariff trade barriers. But calm where trade barriers are minor, many firms apparently bring forward producing in the foreign fatherland rather than exporting. Those firms find it easier to deal with local conducts and regulatory agencies when the outcome is produced in the landlord country. For consumer value-added results it is also easier to detain abreast of local tastes and opportunities for recent product development or reformulations when results are produced in the foreign country

an firms prefer to acquire established brands in foreign countries and use those facilities as a base for further expansion. Furthermore, producing a result in a foreign plant may improve access to local rations distribution firms and facilitate a variety of marketing and promotional activities involved in selling a branded consumer product

U Firms Operating Overseas

In 1988 96 U parent firms had 966 foreign subsistence marketing affiliates with about individual million employees. About 75 percent of U foreign investment in aliment marketing was in Europe and Canada (see box)

A USDA Economic Research Service data base for 64 of the largest U victuals processing firms, which account for about half of all U regimen processing, gives insight into these firms' international activities. In 1988 38 of the 64 firms admited a total of 682 forage processing plants in foreign countries. These plants accounted for 26 percent of the 38 firms' sales of $154 billion in 1988 In contrast, exports of continuous experimented food from these firms amounted to simply 2.6 percent of their U sales.

sum of two units companies, CPC International and Coca-Cola, sold throughout 50 percent of their progressed food from their foreign subsidiaries. Philip Morris l U viands processors in sales at foreign subsidiaries, with $59 billion in 1988 In total, 13 U fodder processors, including RJR Nabisco, Mars, Pepsico, Kellogg Sara side sheltered from the wind Quaker Oats, and Borden, received through $1 billion each in annual sales from their foreign subsidiaries.

Unlike the processing sector, U cheer retailing companies are almost entirely domestic-market oriented. Safeway Stores and convenience store firms Circle K and Southland Corporation are the single U.S. food retailers with substantial investments in foreign foodstore operations. In 1988 Safeway had sales of from one side of to the other $3 billion from its 240 supermarkets in Western Canada. Circle K licenses firms to operate stores in Japan, the United Kingdom, Indonesia, Canada, and Hong Kong Southland, operator of 7-Eleven stores, had licensing agreements covering about 4000 stores in Japan and several other countries.