Consumer Profile – Mexico

July 2019

Executive summary

The country of Mexico with its coastlines on both the Atlantic and the Pacific oceans, has a wide range of territorial types and shares borders with the United States, Guatemala and Belize. In 2018, its population was approximately 124.7 million people, increasing at a compound annual growth rate (CAGR) of 1.0% during the period of 2005-2030.

About 80% of the population was located in urban areas in 2018. Although the country's economy is performing well, around 49.5% of the total population are said to live below the national poverty line (NPL), with 12.3% living on less than US$3.10/day.

The unemployment rate was 3.3% in 2018 and is expected to marginally increase to 4.4% by 2030. The gross domestic product (GDP) was US$1.2 trillion and has been steadily growing at a five-year CAGR of 7.7% since 2014.

Mexico is the 13th largest importer of agri-food products from the world. In 2018, Mexico's agri-food imports (US$27.3 billion) accounted for approximately 40% of its total agri-food consumption. The country is highly dependent on grains, oilseeds and meats. Mexico has 13 free trade agreements in place with 52 countries.

Consumer expenditure per capita is expected to grow by a CAGR of 5.4% from 2019 to 2023 and is said to represent 65.9% of GDP in 2019. In 2018, total consumer expenditure per capita was US$6,461, out of which 20.7% was spent on food and 4.5% on both non-alcoholic beverages and alcoholic drinks. There is a steady growth in consumer spending.

There is a rise in demand for health and wellness (H&W) products, due to the fact that Mexico has one of the highest overweight and obesity rates (~72.5%) in the world in people between 15 to 74 years of age. The high number of Mexicans suffering with diabetes (~15.8%) prevails and these health concerns are leading Mexican consumers to increasingly look towards getting fit and eating better by choosing healthier food options. The Mexican government has implemented measures to fight the increasing problem of obesity and to encourage healthier eating habits such as the 8% tax on sale prices of non-basic food with high caloric values.

Key demographic indicators

Mexico's population was approximately 124.7 million people by 2018, increasing at a compound annual growth rate (CAGR) of 1.0% for the period of 2005-2030. In fact, Mexico is the 14th largest country in the world by total area and is the 11th most populous country. A little over three-quarters of the population (80%) are living in urban areas, while the other almost one-quarter (20%) are living in rural areas in 2018. The population is expected to grow by approximately 12.7 million people by 2030.

In 2018, middle class citizens in Mexico made up approximately 39% of the population. Approximately 49.5% of the population in Mexico was living below the National poverty line (NPL), an increase of a CAGR of 0.5% since 2005. According to the International poverty line, this is equivalent to 9.8% living on less than US$3.10 a day and 2.5% of Mexicans that are living on less than US$1.90 a day. The number of people located in urban areas living below the NPL was 48.0% and has slightly increased, while the living conditions in the rural population have been slightly improving as more people move to the city.

Mexican's urban versus rural population 2005-2030 ('000), historic/forecast
Category 2005 2010 2015 2020 2025 2030 CAGR* % 2005-2030
Urban population 81,763.0 88,916.1 95,888.9 102,376.3 108,390.4 113,891.2 1.3
Rural population 25,388.0 25,339.5 25,116.9 24,715.4 24,193.6 23,590.1 −0.3
Total population: 107,151.0 114,255.6 121,005.8 127,091.7 132,584.0 137,481.3 1.0
Urban population (%) 76.3 77.8 79.2 80.6 81.8 82.8 0.3
Rural population (%) 23.7 22.2 20.8 19.4 18.2 17.2 −1.3
Population living below national poverty line (NPL)[1] (%) 47.0 52.0 52.2 0.5
Urban population (%) 41.0 48.0 49.9 1.6
Rural population (%) 66.2 66.1 60.7 −1.7

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

1: Historical data only available from 2005-2018

In 2018, the male-to-female population was distributed almost evenly by around a 0.97:1.02 ratio with slightly more females (63.9 million) over males (60.9 million). The median age in Mexico for males was 27.2 and for females was 29.5. By 2030, the median age of the total population is expected to increase to 32.1, similarly increasing as the population is expected to grow, at a CAGR of 1.1% from 2005-2030.

From 2005 to 2030, the amount of people in the 0-14 age group is expected to continue to drop by a CAGR of −0.2%. Meanwhile the age group from 15-64 is growing along with an expected 1.0% population increase, whereby the amount of people in the 65+ age range will increase at the highest rate within the age groups at 3.4%.

Mexican population by age group 2005-2030 ('000), historic/forecast
Category 2005 2010 2015 2020 2025 2030 CAGR* % 2005-2030
Male Population 52,449.8 55,801.9 59,046.8 61,898.1 64,440.9 66,697.1 1.0
Female Population 54,701.2 58,453.6 61,959.0 65,193.5 68,143.2 70,784.2 1.1
Population aged 0-14 34,283.4 34,122.0 33,687.9 33,299.2 32,956.6 32,664.6 −0.2
Population aged 15-64 66,852.4 73,133.7 79,141.2 84,090.9 88,004.5 90,926.4 1.2
Population aged 65+ 6,015.2 6,999.9 8,176.6 9,701.5 11,622.9 13,890.4 3.4
Median age of population 24.5 26.0 27.5 29.0 30.6 32.1 1.1
Total population 107,151.0 114,255.6 121,005.8 127,091.6 132,584.1 137,481.3 1.0

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Mexico's vital statistics

The fertility rate in Mexico was 2.2 per female, equivalent to 17.9 per thousand children born in 2018. Mexico's fertility rate is declining by a CAGR of −0.7% from 2005 through to 2030, with a drop down to 15.8 births per thousand people and a 2.1 fertility rate per female by 2030.

Mexican's demographic trends, 2005-2030, historic/forecast
Category 2005 2010 2015 2020 2025 2030 CAGR* % 2005-2030
Average age of women at childbirth 27.0 26.7 26.5 26.5 26.7 26.9 0.0
Birth rates[1] 21.5 19.7 18.5 17.5 16.6 15.8 −1.2
Fertility rates per female 2.5 2.3 2.2 2.1 2.1 2.1 −0.7
Live births ('000) 2,302.1 2,251.7 2,241.4 2,227.4 2,202.2 2,167.7 −0.2
Infant mortality rates[1] 13.7 12.3 11.2 9.6 8.4 7.4 −2.4
Death rates[1] 5.2 5.6 5.7 6.0 6.3 6.7 1.0
Net migration ('000) −477.3 −182.5 −267.3 −316.2 −323.1 −326.7 −1.5
Rate of net migration[1] −4.5 −1.6 −2.2 −2.5 −2.4 −2.4 −2.5
Refugees and asylum seekers[2] 3,390.0 1,567.0 4,273.0 15.9
Natural change ('000) 1,741.3 1,611.2 1,549.0 1,469.5 1,365.3 1,242.5 −1.3
Rate of natural change[1] 16.3 14.1 12.8 11.6 10.3 9.0 −2.3

Source: Euromonitor International from national statistics/UN

*CAGR: Compound Annual Growth Rate

1: Birth, infant mortality and death rates and the rates of natural change and net migration refer to the number per '000 population and fertility rates to the number of children born per femaile. Age at childbirth refers to average age of women in years.

2: Data from 2005-2018

Household structure in Mexico

As the population increases in Mexico, it is forecasted that the number of households with couples without children (4,243,500) will eventually surpass the number of single-parent families (4,226,500) by 2030. Couples with children will remain the largest group, followed by the more common other blended or mixed marriages of couples with children and extended families. The single person household is a growing trend at a CAGR of 3.4% between 2005 to 2030. Overall the number of households with two or more children has been declining over this period. By 2030, the most common trends will be 41.4% of households choosing to have no children and 35.1% are expected to have a one child household.

Number of households by type in Mexico from 2005-2030 ('000), historic/forecast
Type 2005 2010 2015 2020 2025 2030 CAGR* % 2005-2030
Couple with children 12,467.0 12,942.9 13,921.5 14,981.4 15,896.1 16,606.5 1.2
Other[1] 6,693.7 7,740.4 9,005.4 10,081.0 10,910.1 11,511.2 2.2
Single-parent family 2,441.8 2,831.3 3,300.7 3,698.6 4,004.7 4,226.5 2.2
Couple without children 2,206.4 2,607.7 3,111.7 3,563.2 3,937.4 4,243.5 2.7
Single person 1,928.5 2,518.2 3,004.7 3,556.4 4,054.6 4,487.1 3.4

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

1: Couples with children and extended families

Number of children per household in Mexico from 2005-2030 ('000), historic/forecast
Type 2005 2010 2015 2020 2025 2030 CAGR* % 2005-2030
Households without children (%) 30.2 33.9 36.3 38.3 39.8 41.4 1.3
Households with 1 child (%) 28.6 29.3 31.2 32.8 34.3 35.1 0.8
Households with 2 children (%) 18.8 18.2 17.4 16.5 15.6 14.7 −1.0
Households with 3 children (%) 11.0 9.9 8.7 7.6 6.6 5.8 −2.5
Households with 4 or more children (%) 11.4 8.7 6.4 4.8 3.7 3.0 −5.2

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Business environment and economic indicators

Although Mexico's economy grew slower than most other large Latin American countries for more than a decade, their economy has moderately improved over the past few years. In 2018, Mexico's economy performed well where the real gross domestic product (GDP) growth was at 2.1% in 2018, however, that result is expected to drop slightly to 1.9% in 2019. GDP was US$1.2 trillion in 2018. This healthy economic performance is driven mainly by the service sector and due to strong gains in exports. Moderate gains in private consumption are also contributing to the growing support of consumer spending.

The unemployment rate is slowly increasing by a CAGR of 0.9% (between 2005-2030), where 3.3% of the economically active population were unemployed in 2018 and is expected to rise to 4.4% by 2030. The average gross income of the population from age 15 to 65+ within Mexico was US$11,439.2 equivalent to the Mexican peso of MXN$220,191.2. The percent of the population within this age grouping that were educated was 77.4% of whom had both primary and secondary education, equivalent to 94.5% of the Mexican population that can read and write (Central Intelligence Agency). Agriculture employs 12.7% of the workforce, manufacturing employs 16.6% and tourism provides employment for more than 13%. With the minimum wage being raised by 10.4% in late 2017 and then increased again to MXN$102.68/day or Can$7.12/day (effective January 1st, 2019), there was still 12.3% of the population living below the International poverty line of less than $3.10/day in 2018, since almost six out of ten Mexicans work under informal agreements and do not qualify to earn the enforced minimum daily wage rate.

Mexican economic figures, US$ from 2005-2030, historic/forecast
Category 2005 2010 2015 2020 2025 2030 CAGR* % 2005-2030
GDP[1] in millions 496.8 694.4 963.8 1,390.0 1,892.5 2,559.3 6.8
GDP per capita 4,636.3 6,077.6 7,964.6 10,936.8 14,274.3 18,615.6 5.7
GDP measured at PPP[2] per capita 14,243.3 15,807.1 18,816.2 21,707.2 26,012.2 31,545.4 3.2
Real GDP (% growth) 2.3 5.1 3.3 2.1 2.8 2.6 0.5
GDP deflator (2010 = 100) 77.0 100.0 120.0 155.1 185.2 219.4 4.3
Unemployment rate (% of economically active population) 3.5 5.3 4.4 4.1 4.2 4.4 0.9
Male (%) 3.3 5.3 4.3 3.9 4.1 4.2 1.0
Female (%) 3.8 5.2 4.5 4.3 4.5 4.6 0.8
Youth (% aged 15-24)[3] 6.1 9.0 8.0 0.2
Population living below national poverty line (NPL)[3] (%) 47.0 52.0 52.2 0.5

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

1: Gross Domestic Product

2: Purchasing Power Parity

3: Data available from 2005-2018

Average gross income and educational attainment levels in Mexico, historic/forecastfixed current prices in US$, 2005-2030 ('000)
Type of statistic 2005 2010 2015 2020 2025 2030 CAGR* % 2005-2030
Average gross income by age (15-65+ years) currency in US$ 5,566.5 7,419.5 9,616.0 12,775.2 16,641.3 21,669.9 5.6
Average gross income by age ((15-65+ years) currency in MXN$[1]) 107,149.3 142,817.6 185,097.7 245,907.7 320,327.6 417,121.9 5.6
Population aged 15+ by educational attainment 72,867.6 80,133.6 87,317.9 93,792.5 99,627.5 104,816.8 1.5
Population aged 15+ by educational attainment (primary) 29,230.2 28,708.2 28,468.0 27,955.3 27,367.7 26,689.1 −0.4
Population aged 15+ by educational attainment (secondary) 27,221.6 33,249.9 39,106.4 44,727.3 50,012.4 54,949.4 2.8
Population aged 15+ by educational attainment (higher) 9,178.6 11,527.0 13,660.7 15,615.3 17,343.6 18,859.0 2.9
Population aged 15+ by educational attainment (no education) 6,844.7 6,238.3 5,708.3 5,132.7 4,562.0 3,996.1 −2.1
Population Aged 15+ by Educational Attainment (Other and Unknown) 392.5 410.2 374.5 361.9 341.8 323.2 −0.8

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

1: Mexican peso

Food and beverage expenditures and preferences

Mexico has the second largest consumer market in Latin America (after Brazil). In 2018, total consumer expenditure per capita was US$6,461, out of which 20.7% was spent on food and 4.5% on both non-alcoholic beverages and alcholic drinks. In comparison, disposable income per capita amounted to US$7,260.0.

Consumer expenditure per capita is expected to grow by a CAGR of 5.4% from 2019 to 2023 and is said to represent 65.9% of GDP in 2019. During the period of 2019-2030, expenditure on transport and miscellaneous goods and services will experience the most significant gains.

Retail value of packaged food sales continue to grow steadily in Mexico representing approximately US$51.6 billion in 2018 and is forecasted to reach US$69.7 billion by 2023, representing a CAGR of 6.1% throughout the 2019 to 2023 period. Mexican consumers spent the most on staple foods, dairy and snacks such as bread & cereals, fruit & vegetables, milk, cheese & eggs, meat, confectionery and savoury snacks.

Growth in the packaged food category is being driven more and more from sales within the health and wellness (H&W) segment due to high obesity levels, where Mexican consumers are becoming more knowledgeable and interested in their digestive health and the important role it plays in immune functions. However, rising inflation rates with a weaker peso is expected to reduce the demand for retail consumer products, including clothing and footwear, food and other consumer durables. As imported products become costlier, this will have an adverse impact on purchasing power for the Mexican population and can cause growth in retail to marginally slowdown.Footnote 1

Despite the recently government imposed 8% tax on sale prices of non-basic food with high caloric values (≥275 kcal per 100 grams) to help raise health awareness, sugary drinks such as carbonated soft drinks have seen volume sales growth, particularly for cola products. Bottled water sales rose by 12.5% and increased demand for sports and energy drinks also saw robust sales growth of 28% between 2013 and 2017. Demand for tea is growing in terms of a healthy beverage, yet coffee is by far the most popular hot drink of choice, in particulary for instant coffee due to its convenience and low cost compared to fresh coffee. In contrast to many other countries, coffee in Mexico is not seen as a morning staple drink, but is more important at lunch or dinner time, seen as a way to socialize and relax, where coffee shops often don't open until late in the morning and stay open later in the evening.

Mexicans enjoy drinking alcoholic beverages both in and outside the home. Beer is the leading alcoholic drink in volume terms, where sophisticated craft beers and beers from independent producers are becoming more popular among younger consumers. Imported wines and regional wines are growing significantly, although volume sales are still smaller in comparison with beer. Consumption of spirits which increased by 15.3% between 2014 to 2018, of which 38.2%, consisted of tequila and mescal, accounting for the off-tradeFootnote 2 volume of around 1.3 litres per capita out of the 3.2 litres (at legal purchasing age) in 2018. The cocktail culture among the younger consumers in urban areas has become increasingly popular and there is greater demand for craft or premium tequila, produced in small batches and aged for longer periods of time.

Leading National retailers in Mexico include Walmart de México (Bodega Aurrera, Superama, Sam's club, Medimart), Organización Soriana (Super City, Mercado Soriana, Soriana Express, Soriano Hiper, Soriano Súper, Mega Soriano, City Club), Grupo Comercial Chedraui (Súper Chedraui, Chedraui, Chedraui Selecto), Costco (managed by San Diego) and Grupo La Comer (City Market, Fresko, Sumesa). Leading regional retailers include H-E-B or Mi Tenda del Ahorro (Hill Country Fare, EconoMax, Season's Select & Central Market Organics), S-Mart (Valu Time, Food Club), Casa Ley (Ley Express/Mayoreo, Super Ley), Alsuper (My Brand, Mimarca), Arteli (Arteli Express/Mȧs, Akȧ SuperBodegas) and private label brands (Los Asados, Girasol, La Granja) - [Webinar: Doing Business with Mexico, 2019].

Annual per capita expenditure on food and beverages in Mexico, historic and forecasted fixed current prices in US$, 2014-2023
Consumer expenditure 2014 2018 CAGR* (%) 2014-2018 2019 2023 CAGR* (%) 2019-2023
Total consumer expenditure 5,032.8 6,461.0 6.4 6,843.4 8,433.1 5.4
Food 1,045.8 1,340.3 6.4 1,419.0 1,742.7 5.3
Meat 266.8 344.6 6.6 364.8 448.1 5.3
Bread and cereals 253.7 313.3 5.4 331.3 407.2 5.3
Milk, cheese and eggs 189.4 224.1 4.3 236.6 288.7 5.1
Vegetables 143.7 193.8 7.8 205.6 253.2 5.3
Fruit 73.9 98.5 7.4 104.6 128.4 5.3
Sugar and confectionery 30.7 49.2 12.5 52.2 64.4 5.4
Other food 32.4 47.8 10.2 50.7 62.5 5.4
Fish and seafood 32.9 45.3 8.3 48.1 59.2 5.3
Oils and fats 22.2 23.7 1.6 25.0 30.9 5.4
Non-alcoholic beverages 147.7 172.4 3.9 182.3 224.2 5.3
Mineral waters, soft drinks, fruit and vegetable juices 135.5 157.9 3.9 166.9 205.4 5.3
Coffee, tea and cocoa 12.2 14.5 4.4 15.4 18.8 5.1
Alcoholic drinks 94.2 120.4 6.3 127.1 155.3 5.1
Beer 68.4 87.9 6.5 92.7 113.6 5.2
Spirits 21.5 26.6 5.5 28.1 34.1 5.0
Wine 4.3 5.9 8.2 6.2 7.6 5.2

Source: Euromonitor International 2018

*CAGR: Compound Annual Growth Rate

Consumer trends and opportunities

Steady growth in consumer spending

Consumer expenditure has grown steadily over the last five years, despite the fluctuation in consumer confidence while withstanding the recent impact of international and internal economic and political events. Members of middle class households are growing to around 39% of the total population, however, there still exists high income inequality both in the urban and rural locations, with a significantly large number of low-paying jobs. Mexicans are often employed by informal contracts (not meeting minimum wage standards) and almost half of the Mexican consumers are struggling to meet day-to-day needs. In fact, according to OECD data, individuals in the top 20% of households earn 10 times more than those in the lowest 20% of households.

Mexico is the 9th largest importer of agri-food products in the world. In 2018, Mexico's agri-food imports (US$28.7 billion) accounted for approximately 40% of its total agri-food consumption. The country is highly dependent on grains, oilseeds and meats. The top commodities that Canada currently exports to Mexico are canary seeds, worked oats, canola products, maple products, mustard seeds and waffles and wafers.

Further opportunities in the retail sector include health and wellness products (especially in organic, reduced fat/sugar, high fibre, allergen/gluten-free categories), ready-to-eat or ready-to-cook packaged food (quinoa mixes, frozen meals and pasta packs), and differentiated healthy superfoods and high quality gourmet products (supergrains, savory healthy snacks and ready-to-bake bakery packages for fresh bread, specialty pastries and cakes). Introducing private labels into the Mexican hyper/supermarkets are proven to be particularly of high interest. Mexican food manufacturers are also anticipating increased demand for superfoods and grains with greater nutritional value and 'clean' (fewer ingredient) labels that include GMO-free or sustainable certifications.

An article on the comments that - "Mexican cuisine is much more than tacos and burritos and is every bit as varied as most cuisines… Coastal regions lean heavily on seafood, while in the northern areas, cattle is king, where all of the cow is relied upon." Common tropical flavors that are enjoyed include papaya, mango, habanero peppers and yucca. Mexicans also specialize in preparing a variety of mole sauces. In the foodservice - hotel, restaurant and institution (HRI) sector, opportunities exist for high-quality gourmet products including frozen bread, pastry and cakes, beef, and premium fish and seafood.

Lunch is traditionally the main meal of the day taken later in the afternoon, while starting the day with a lighter breakfast and ending the day with a late night, lighter dinner at around 8pm or 9pm. More consumers are dining out and eating heartier meals all round. Mexicans love to snack and purchase street food and as a result are consuming more unhealthy, high-calorie and high-sugar content foods. According to the results of a 2017 survey by the Culinary Visions Panel, however, 61% of Mexican workers said that they were willing to sacrifice taste in their snacks if they knew what they were eating was healthy; in contrast with the US, where only 25% were willing to sacrifice taste for healthfulness.

Consumers are increasingly more knowledgeable about food and beverages

Consumers are informing themselves about the ingredients and the production processes involved in the creation of more beneficial and sophisticated products, especially those claiming to be health and wellness products with added functional ingredients or with the implementation of more healthy standard processes. In turn, they are becoming more willing to change their purchasing habits by increasing their consumer budget for higher quality products. Nevertheless, although they are willing to increase their spending they are more rational about their purchases, making it challenging for large existing or new players in the industry, to differentiate their 'perceived' more valuable products when introducing best clean-labelling practices and promotion strategies.Footnote 3

According to the Canadian Trade Commissioner Service in Mexico, there are market opportunities in value-added & semi-processed food ingredients such as oilseeds, wheat, barley, flaxseed, oats, sunflower seeds and mustard seeds. Due to the growing interest in H&W products, keeping in mind the need for

cost-effectiveness, there are also opportunities to introduce healthier alternatives in thickeners, sweeteners and flavorings. The ingredients that go into animal feed is another sub-sector seen as an opportunity for Canadian exporters, as Mexico is highly dependent on imports by around 60% for feed ingredients such as canola meal, feed barley, wheat, corn, oats and peas. Other opportunities where Mexican retailers and importers demonstrate high interest towards is in the niche market of premium pet food, treats and toys.

Health and wellness products are on the rise

Health and wellness products overall had steady growth with a CAGR of 6.8% from 2014 to 2018, mostly within the 'free from' category that almost doubled in retail sales value during this period. The fortified/functional (FF) and especially the organic categories, are the only two categories expected to grow at a higher rate during the forecasted 2019 to 2023 period, over the better-for-you (BFY), naturally healthy (NH) and 'free from' categories which are anticipated to continue to grow yet at a slower pace, with a projected overall CAGR of 6.9% in the Health and wellness sector.

Mexico is a significant producer of organic produce for exports, yet demand and domestic consumer confidence in organics to understand its overall benefits remain low due to their higher prices and limited availability. Demand is growing amongst the younger middle-class and the substantial ageing population concerned about their health, has pushed sales to almost double and reach US$86.2 million with a five-year CAGR of 12.2% by 2023.

Over the last few years, the expansion of traditional and modern retailers targeting a wide range of new and existing brands in the health and wellness sector substantially increased, to create more sustainability and increase the value share for fortified foods and beverages and for low-calorie or low-fat BFY products. Meanwhile, organic and NH products were mainly sold through specialist retailers, supermarkets and hypermarkets, and are slowly being made available in traditional distribution channels. Urbanization and growth within the prosperous middle class youth have helped expand the health and wellness sector in Mexico.

A recent analysis from UNICEF ranked Mexico first worldwide in childhood obesity and second in adult obesity, so most younger middle-class consumers are responding to these alarming rates and other health concerns. Despite the changing diets which have led to higher consumption of unhealthy snack foods and heartier meals along with a more sedentary lifestyle, many consumers are looking to improve or maintain their fitness levels, while believing strongly in the beneficial claims found in health and wellness products like how digestive health plays in the gut microbiome. Within survey data, Mexicans have demonstrated that they are more willing and interested in increasing the demand for more healthier food products and supplements which offer for example, prebiotic benefits.

Although Mexico has achieved universal health coverage, healthcare consumers are served by a complex system of both public (where the quality of healthcare still needs to be improved) and private healthcare. The increased demand for health and wellness products is probably also driven by the fact that only 7.2% of the population are covered by private health insurance and a large proportion of the cost of healthcare services are out-of-pocket expenses.Footnote 4 Additionally, research studies in Mexico City have pointed out that there is a growing threat of heart ailments thought to be caused by air pollution due to high concentrations of particulate matter in the air. Rampant deforestation along with depleting and contaminated water resources are also not helping to alleviate health concerns surrounding environmental issues throughout Mexico.Footnote 5

Mexico's health & wellness sector by category distribution - 2018 retail value sales in current fixed US$
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  • Fortified/functional (FF): US$9,562.5 million (58.7%)
  • Better for you (BFY): US$3,310.0 million (20.3%)
  • Naturally Healthy (NH): US$2,371.2 million (14.6%)
  • Free from: US$997.4 million (6.1%)
  • Organic: US$47.9 million (0.3%)

Source: Euromonitor International, 2019

Mexican health and wellness market - historical and forecasted retail value sales in US$ millions
Categories by type 2014 2018 CAGR* (%) 2014-2018 2019 2023 CAGR* (%) 2019-2023
Health and wellness 12,517.3 16,289.0 6.8 17,472.6 22,793.5 6.9
Fortified/functional (FF) 7,666.8 9,562.5 5.7 10,191.9 12,866.4 6.0
Better for you (BFY) 2,535.1 3,310.0 6.9 3,519.9 4,500.7 6.3
Naturally healthy (NH) 1,713.8 2,371.2 8.5 2,573.3 3,536.0 8.3
Free from 566.6 997.4 15.2 1,133.1 1,804.2 12.3
Organic 35.0 47.9 8.2 54.3 86.2 12.2

Source: Euromonitor International, 2019

*CAGR: Compound Annual Growth Rate

Opportunities for Canada

On March 8, 2018, Canada signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with 10 countries: Mexico, Australia, Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam. CPTPP represents a significant step toward closer trade and investment between Canada and Mexico. Significant gains are possible for Canadian producers, who could gain market share in economies such as Mexico. Under the CPTPP, some Canadian products with no preferential access under North American Free Trade Agreement (NAFTA) can be exported to Mexico duty free or with preferential duty under country-specific permanent tariff rate quotas (TRQs) established by Mexico. These include products such as milk powder, evaporated and condensed milk, butter, cheese, and dairy-based preparations. To obtain more information on specific tariff reductions in Mexico under this agreement see Tariff schedule of Mexico (HS2012) (PDF, in Spanish only). For more information on what the CPTPP will mean for Canada's agriculture and agri-food sector visit the CPTPP for Agri-Food Exporters page.

On November 20, 2018, although not ratified as of yet, Canada, the United States and Mexico signed the new Canada-United States-Mexico Agreement (CUSMA). If CUSMA comes into force, the NAFTA/CUSMA and the CPTPP are free trade agreements that will co-exist. Therefore, Canadian exporters will be able to choose the free trade agreement (FTA) that provides them with the best preferential treatment that applies to their products, including relevant tariff outcomes and rules of origin. For more information on what the CUSMA will mean for Canada's agriculture and agri-food sector visit the Doing business in the United States and Mexico page.

The CPTPP Agreement, along with the CUSMA and free trade agreements with the European Union (CETA) and South Korea (CKFTA), will make Canada the only G7 nation with free trade access to the Americas, Europe and the Asia-Pacific region. All Canadian provinces and territories are expected to benefit from these FTAs.


Mexico has a desire to diversify its regular import supply sources, creating opportunities for Canadian exporters to positively position their Canadian food and beverage product brands. In the retail sector, there are opportunities in health and wellness products, ready-to-eat or ready-to-cook convenient packaged food, private labels and differentiated healthy superfoods and high quality gourmet ready-to-bake products. In the foodservice (HRI) sector, there are also opportunities for quality gourmet products with the growing middle class, in higher-end restaurants and 'European-plan' boutiques and high-end hotels in major cities and tourist regions.

To be successful, Canadian exporters should focus on competitive pricing when introducing specialty and high quality products and when differentiating its premium products within niche markets like the pet food, treats and toys sector. It is important to understand that labour is cheap in Mexico and to fill the gap, the introduction of high quality products is key, although the cost must be kept low to compete with local supply. To build and develop a trusting relationship with local partners, creating a demand with chefs, consumers and retailers is key through perhaps becoming acquainted with a good local partner to help import small shipments at first, while focusing on price and quality.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.


Consumer profile – Mexico
Global Analysis Report

Prepared by: Erin-Ann Chauvin, Market Analyst

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