Outline of opportunities in Mexico

An overview of Canada's fourth-largest market

Canada and Mexico are among each other's largest trading partners. Mexico is Canada's fourth-largest market on an individual country basis for agri-food and seafood products with exports of Can$1.7 billion in 2016, most of which was made up of wheat, canola, beef, pork, frozen fries and canary seeds. With its population of over 128 million people, which makes it the eleventh-largest country in the world, Mexico is an attractive market with its large consumer population and stable economic policies. Mexico's agri-food and seafood imports have consistently exceeded Can$30 billion over the past three years, while Canada's share has ranged from 6% and 7%. Some great opportunities for Canadian businesses continue to be developed.

Canada's main competitor in the Mexican food market is the United States (U.S.). Large U.S. companies such as Walmart and Costco dominate the retail food market with market shares over 50%. Additional competition comes from local food companies, such as Herdez. Mexico is a price-sensitive market with long-established businesses in the food sector, and Mexican consumers have developed a strong brand loyalty. As a result, Canadian companies need to be prepared to compete with strong local firms. Opportunities also exist in terms of collaborating with local firms and exporting food ingredients for processing.

Major sector opportunities in Mexico

Discover more information, strengths, opportunities and considerations for Canadian agri-food and seafood. Read our Mexican agri-food market intelligence!

How do we select priority sectors?

The sectors were prioritized through a quantitative analysis of the data available in the Global Trade Tracker database for 2016. The first step was to identify the top 100 products among all agri-food and seafood products, ruling out the products which Canada does not have a capacity to produce. Each product was evaluated based on a series of quantitative criteria (i.e. size of market, market growth, Canada's trade intensity and tariff reductions), all of which were ranked over ten years of historical trade data. The top 100 products identified through this method represented, in 2016, 57% of Mexico's total imports from the world, and 93% of Canada's exports to Mexico.

Our analysis focused on assessing opportunities from a strengths and challenges perspective:

  1. Strengths were defined by high performance in large Mexican import sectors and high growth.
  2. Challenges were defined by the issues that industry might face while trying to take advantage of market opportunities.

During phase two, the products were further categorized into seventeen super sectors. These have been assessed by Agriculture and Agri-Food Canada (AAFC), Global Affairs Canada and ten provincial experts through a survey to further determine the opportunities and challenges associated with those product categories in the Mexican context.

All priority agri-food and seafood products are imported by Mexico and are within Canada's capacity to produce and supply internationally.

Growth through processed food products

Mexico is an attractive market for the Canadian food and beverage processing industry. The Mexican food import market is large and easily accessible, and most Canadian food products can enter Mexico duty-free. The demand for Canadian products has grown rapidly over the past 25 years, since the introduction of supermarket food distribution systems in Mexico. With the removal of customs tariff barriers, processed food products are exported to Mexico from every region of Canada on a regular basis.

In 2016, Canada supplied Can$913.4 million in processed food products to Mexico, a figure that has been growing from 2012 to 2016 at a compound annual growth rate of 12.5%. High-performing products include pork, beef, malt, frozen fries, canola oil, waffles and chocolate preparations.

Processed foods provide an income multiplier; exporters can compete in a growth environment that is less sensitive to market share and price point. Margins tend to be higher for processed food products. Exporting these products also tends to be less volatile than commodities would be.

In 2016, processed foods made up 41.8% of all Canadian agri-food and seafood products shipped to Mexico.

It is in Canada's interest to position differentiated, high-value, unique and niche products. The Mexican market offers Canadian businesses an opportunity to position products that consumers identify with Canada, such as beef, pork, lobster, maple products, or waffles and wafers. Canadian businesses can take advantage of Canada's brand and positive image to enhance their product offerings to the Mexican market.

Canadian Processed Food Exports to Mexico
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Fresh hams (bone in) 20%
Fresh beef (boneless) 11%
Malt (excl. roasted) 9%
Frozen fries 7%
Canola oil (refined) 6%
Others (waffles and wafers, chocolate block preparations, etc.) 47%
Source: Global Trade Tracker – November 2017

Canada has a significant comparative advantage in the production of many high-quality commodities in the grains and oilseed sectors as well as other areas, such as pulses. While the Mexican market has been very responsive to these Canadian products, there are also great opportunities to extend the value of our quality commodities, including ready-to-eat products, unprocessed and processed meats, food ingredients, snack foods, private-label products, frozen and prepared foods, and health and wellness products. Canada has a great variety of products that are seen as novel or innovative in these categories.

Canada's competition

As of 2016, Canada was the second-largest supplier to the Mexican food market, with a share of 6.4% of the total $C34 billion Mexican agri-food and seafood food market. Canada was also the second-largest supplier of processed foods, representing 4.7% of the Can$19.4 billion processed food market. Canada's main competitor is the United States, which currently controls 70.8% of the total agri-food and seafood market and supplies 71.3% of the processed food imported by Mexico. Other top suppliers that Canadian exporters of processed foods can compete with are Chile, China, Spain and New Zealand.

Canada's main competition in Mexico for processed food and their top three export products in 2016
Country Percent of total processed food imports of Mexico Top three processed food exports to Mexico (% share of country's processed food exports)
United States 71.3% Oilcakes (7.9%), fresh hams, bone in (7.8%), fresh beef , boneless (5.4%)
Canada 4.7% Fresh hams, bone in (20.1%), fresh beef, boneless (11.0%), malt (8.6%)
Chile 2.3% Peaches and nectarines (15.9%), frozen cuts and offal of fowls (13.6%), wine of fresh grapes (11.0%)
Spain 2.3% Wine of fresh grapes (18.0%), spirits (13.9%), virgin olive oil (13.1%)
New Zealand 2.0% Fats and oils derived from milk and dehydrated butter and ghee (58.7%), casein (17.9%), milk and cream in solid forms (5.8%)

Opportunities for Canada: NAFTA and e-commerce

Mexico gives preferential access to Canadian exporters under the North American Free Trade Agreement (NAFTA). Since its enactment in 1994, NAFTA has created the largest free trade region in the world and generated economic growth by bolstering an active exchange in components along supply chains for various sectors, particularly the agri-food sector. NAFTA has proved to be a solid foundation for building Canada's prosperity. Exports may increase over time, depending on the outcome of the pending renegotiation of this treaty. Learn more about how Canadian companies can capitalize on the NAFTA advantage.

E-commerce is another emerging opportunity to sell Canadian products in the Mexican market, as the Mexican middle class is expanding and Mexican consumers are starting to shop more online. Learn more about e-commerce trends in Mexico.

We can help you grow your business

In today's competitive markets, knowledge is the key to success.

We offer free international market intelligence services for Canadian agriculture and agri-food businesses, including:

  • Identifying new and existing market, sector and product trends and opportunities abroad
  • Providing economic, business and consumer trend forecasts
  • Analyzing distribution channels, including international e-commerce platforms
  • Customized analysis that meets your organization's unique needs

Contact us for market intelligence services: aafc.mas-sam.aac@canada.ca

Market access

Mexico has strict import requirements for many products and Canadian exporters are responsible for determining these import conditions by working with their Mexican importer. However, the Market Access Secretariat (MAS) of Agriculture and Agri-Food Canada is also available to assist by providing export-related information and support. This service offers a single point of contact with the goal of helping the Canadian food industry and businesses reach international markets.

If you have questions about exporting your agriculture or food products, or are looking for support, please contact the Market Access Secretariat at aafc.mas-sam.aac@canada.ca.

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