Food and Drink sector

An Expert's View about Food , Beverages and Tobacco in Mexico

Posted on: 2 Dec 2012

The Mexican food industry has grown rapidly over recent years, fuelled by the establishment of the North American Free Trade Agreement (NAFTA) and the spread of its retail model.

Food and Drink sector in Mexico On the basis of a growing population and a large number of young people (half of Mexico’s population of 112 milion people are under the age of 26), Mexican food and drink consumption is expected to continue delivering a steady growth in the four years to 2016, as the GDP growth is expected to be of 3.5% for 2012 and of 3.9% for 2013. Market overview The Mexican food industry has grown rapidly over recent years, fuelled by the establishment of the North American Free Trade Agreement (NAFTA) and the spread of its retail model leading to an increase in the import of foreign foods. International operators are seeking to extend their product portfolios and new producers looking to enter into this profitable market. A fact is that Mexico is becoming increasingly dependant on imports of some products. ξ 2012 per capita food consumption = +3.4%; forecast to 2016 = +11.5% ξ 2012 alcoholic drink sales = +7.5%; forecast to 2016 = +27.1% ξ 2012 soft drink sales = +5.2%; forecast to 2016 = +20.6% ξ 2012 mass grocery retail sales = +6.8%; forecast to 2016 = +26.4%. Key opportunities ξ Dairy: In the dairy sector, both production and imports of a range of dairy products have increased, driven by growing domestic demand from both consumers and processors. Imports have been rising, Mexico having the second largest dairy market in Latin America. ξ Prepared/Canned Food: Canned and dried foods are the most popular types of prepared food in Mexico due to the widespread lack of cold storage facilities in local retailers and homes. Demand for frozen and chilled food is mainly concentrated in large cities, including Mexico City, Monterrey and Guadalajara, where the majority of Mexico’s middle and upper class consumers are. ξ Organic: Organic foodstuffs and products are becoming more popular in Mexico; the country now ranks amongst the top twenty producers of organic food worldwide with 1.3 million acres of land dedicated to organic agriculture. ξ Confectionery: Both the chocolate and sugar confectionery sub-sectors have benefited from the introduction of value added products over recent years, mostly imports, which have increased value sales in particular. ξ Baby Food: The Mexican market for baby food registered a positive volume growth in 2011. This is mainly due to the rising number of working mothers that translate into families with better income, allowing Mexican families to invest further in child nutrition. ξ Alcoholic Drinks: The alcoholic beverages industry accounts for an estimated 0.2% of GDP. The wine market is growing slowly but surely: it is certainly an opportunity within middle- and upper class parties in Mexico. Further, the alcoholic drinks market in this country is currently dominated by beer, the most popular drink. ξ Soft Drinks: Mexico is among the largest per capita consumers of soft drinks in the world and the top ones in Latin America. However, there is currently a larger focus on non carbonated drinks. Also, demand for energy drinks looks likely to soar after two of the three leading US brands entered the market in 2009. ξ Health awareness: Growing health-consciousness and concerns about obesity create opportunities for increasing sales of low-fat, sugar-free and calories reduced products in all sectors. Mexico’s food-processing sector accounts for a sizeable proportion of industrial output and GDP, with the sector attracting significant foreign direct investment. The country benefits from a large and growing population, with a relatively large middle class compared with other regional markets, providing a major audience for packaged and processed foods. Further, per capita soft drink consumption is the highest in Latin America, making the Mexican soft drink market one of the largest in the world. Finally, modern retail formats are proving popular with consumers and further growth is expected in the hypermarket, discount and 'express' convenience store formats.. Latest export opportunities – Food & Drink Latest export opportunities - Mexico Getting into the market Mexico is now judged to be more economically stable than in the past. Sound monetary and exchange rate policy means that inflationary pressures have been kept at a minimum. Mexico is also judged to be less plagued by bureaucracy and corruption than some of its other Central and South American neighbours, and also to be more open to foreign trade and investment. British companies wishing to develop their business in the Mexican market are advised to undertake as much market research and planning as possible in the UK. The food and drink sector is changing constantly and companies have to be aware of new opportunities. UKTI’s team in Mexico, with its wide local knowledge and experience, can provide a range of services to British-based companies wishing to grow their business in global markets. This can include: ξ Provision of market information ξ Validated lists of agents/distributors ξ Key market players or potential customers in the Mexican market ξ Establishment of interest of such contacts in working with you ξ Arranging appointments ξ Organise seminars or other events for you to meet contacts and promote your company in the Mexican market More about doing business in Mexico Contacts Market intelligence is critical when doing business overseas and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists based overseas - or contact your local international trade team. ξ Jose Luis Rodriguez , UK Trade & Investment Office Guadalajara +52 33 3630 4357 ext. 101 or email:, ξ Irma Gloria Saldaña, UKTI Office Guadalajara. Tel: +52 (33)3630.4357 or email: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events – Food & Drink Useful links More about OMIS and other UKTI services for exporters
Posted: 02 December 2012

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