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Florida is the world cruise capital. Some 16 million people a year board cruises in one of the state’s four ports: Miami-Dade, Everglades, Canaveral and Tampa Port Authority. The world’s largest cruise lines including Carnival, Royal Caribbean, Holland America and Celebrity Cruises sail from Florida to the Caribbean and other destinations, generating US$6 billion in revenues for suppliers and employing over 125,000 people in the state.

The largest cruise ships, such as Royal Caribbean’s sister ships Oasis and Allure of the Seas, are floating cities carrying up to 6,400 passengers and a crew of about 2,000 each.

Each week just one of these ships needs about 35,000 eggs, 22,000 pieces of pizza, 6,800 kg of chicken, 17,000 kg of fresh vegetables and 4,000 bottles of wine to name just a few items. And the list isn’t limited to food with passengers going through 18,000 rolls of toilet paper, 59,000 coat hangers, 13,000 beach towels and 96,400 pieces of glassware amongst other products.

This represents a huge opportunity for Chilean exporters to take advantage of Chile’s Free Trade Agreement with the United States, but first they need more information about the cruise industry. To address this problem, AmCham, in partnership with Chile’s manufacturers’ association SOFOFA and the government’s export promotion agency ProChile, organized a seminar on August 24 titled Cruise Industry Supply Opportunities.

Speakers included Carlos Buqueras, Director of Port Everglades Business Development, and Juan Kuryla, Deputy Port Director at the Port of Miami, who gave an overview of the cruise industry, the characteristics of their respective ports which are the two largest in Florida, and the products consumed on cruise ships.

“There is no Chilean company that does not produce some product that is consumed on these ships,” said Buqueras. However, cruise lines need to keep costs down to lure more passengers in a fiercely competitive business, which means they tend to buy large volumes at low margins.

While Chile’s salmon and wine exporters have been able to supply cruise lines by offering competitive prices, Chilean companies outside these industries have so far not had the same success given the volumes and logistical costs. 

But there are opportunities for Chilean exporters, particularly in niche areas such as gourmet products, health food snacks and semi-prepared foods, said Christopher Hlubb, Director of Corporate Sales and Operations at the gourmet food distributor Marky’s based in Florida.

Marky’s, which supplies cruise lines with products like appetizers, oils, cheese and chocolate, aims to offer more gourmet products from Latin America, said Hlubb who met with Chilean entrepreneurs interested in supplying their products to cruise ships.

“Chile is full of entrepreneurs with lots of potential and high quality products,” he said. But they lack information about the cruise industry and, on their own, they are in a weak negotiating position, which is where Marky’s can help, he said.

“The advantage for Chilean companies of partnering with a distributor like us is that we can negotiate better prices,” he explained.

But first they need to offer products the cruise lines want. One problem for Chilean suppliers is packaging. Cruise lines must pay a tax on garbage produced onboard so products that come with recyclable packaging, for example glass bottles, are preferable to plastic.

In addition, cruise lines faced with rising labor costs, mainly because they are no longer able to hire undocumented workers, want food to be packaged in a way that makes it easy to prepare and serve.

“They want suppliers that have the flexibility to change the packaging to suit their requirements,” said Hlubb. Portion control is particularly important since 75% of food served on Royal Caribbean, for example, is “sous-vide” which comes in vacuum-packed bags that just need to be reheated in water.

In two years, all the cruise lines will be using this method of food preparation, said Hlubb.

But it’s not just about packaging products attractively. American cruise ship passengers are, on average, around 48 years old with a university degree and annual income over US$97,000. This means that if Chilean companies can promote their products onboard, for example on the ship’s TV channel, they could make an impression on consumers who will be buying their products for years to come, said Hlubb.

Today, passengers have access to a variety of food products in shops, restaurants and mini-bars, which could be stocked with Chilean delicacies. For example, health food products are increasingly popular, he noted.

“We need to teach passengers that Chile offers much more than just wine,” said Hlubb. Chilean products like honey, merken and olive oil could all be sold onboard. But suppliers must be able to offer guarantees of quality, volume and price, which is not easy for small start-ups.

Transporting perishable food products to Florida can also be a logistical challenge, but not an insurmountable one especially if they are properly packaged, said Hlubb. Small Chilean companies can also gain a foothold in the industry by selling products to cruise ships in Chile.

Chile’s cruise industry is growing each year with ships regularly departing from the port of Valparaiso during the summer months on their way south around the southernmost tip of South America, sometimes via Antarctica, before heading back up to Buenos Aires or Rio de Janeiro.

Cruise lines used to bring food from Europe to Chile to supply their ships, but that is changing as they locate local suppliers and learn how to prepare Chilean dishes, said Hlubb. Still, there is room to improve: “Cruise lines still don’t understand how to offer a good selection of products in Chile,” he added.

The Florida cruise industry is an important, largely untapped market for Chilean suppliers, but like other markets in the United States it is highly competitive. To make it onboard in this growing industry, Chilean companies need to become better informed and flexible to adapt to the needs of passengers and increasingly cost-conscious cruise lines.

As AmCham President Javier Irarrázaval said during the seminar, “Chilean companies have to learn not just how to play by the rules, but also how to be more competitive.”

Julian Dowling is Editor of bUSiness CHILE