Commodity Innovation Series – Snapshot of opportunities in Mexico’s grain and bakery sector
Mexico was the second-largest consumer of bread (US$9.8 billion) in Latin America in 2017.
Market trends
- Consumer trends toward healthy eating and natural products are increasing the demand for specialty breads with functional ingredients that are high in protein, rich in dietary fibre, and that contain antioxidants such as magnesium, iron, and folate.
- “Super grains”, such as quinoa, millet, and buckwheat, offer companies that produce baked goods and flour a variety of options for taking advantage of current health trends and increasing price-points.
Grain trade
- Canada exported grains to Mexico at the value of US$200.4 million in 2017 and was the second-largest grains supplier to Mexico after the United States (US$3.9 billion) in 2017.
- Canada’s grain exports to Mexico decreased from 2013 (US$309.1 million) to 2017 with a negative compound annual growth rate of -8%. The United States’s grain exports to Mexico increased at a compound annual growth rate of 3% from 2013 (US$3.4 billion) to 2017.
Historic and forecast retail sales
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| Category | Percentage |
|---|---|
| Bread | 67% |
| Pastries | 23% |
| Cakes | 8% |
| Dessert mixes | 2% |
The frozen baked goods category experienced the most growth with sales increasing by 35% from 2012 to 2016.
- Bread is expected to remain the most significant category in terms of value from 2017 to 2021, with a steady growth rate of 2.9%.
- Snack bars experienced substantial growth over the last five years, increasing by 36.4%, reaching retail sales worth US$461.4 million in 2016.
- Retail sales of sweet biscuits are expected to increase by 5.2% from 2017 to 2021.
Grains used as an ingredient
- Top product launch categories were sweet biscuits/cookies, and cold cereals.
- Bimbo and PepsiCo released the highest amount of grain/bread products with 604 and 507 product launches respectively between 2012 and 2016.
From 2012 to 2016, 11,516 products containing grains were launched in Mexico.
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| Company | Launches |
|---|---|
| Bimbo | 604 |
| PepsiCo | 507 |
| Supermercados Internacionales H-E-B | 374 |
| Wal-Mart | 320 |
| Kellogg | 266 |
Mexican consumers want healthier alternatives and products with reduced fat and sugar content
Top 5 growing claims
- Social media
- Low/no/reduced allergen
- Wholegrain
- No additives/preservatives
- Kosher
Top 5 declining claims
- Beauty benefits
- Interesting packaging
- Carbon neutral
- Brain and nervous system (functional pet)
- Low/no/reduced carbs
Consumers are increasingly seeking products in convenient or miniature formats
Top package types
- Skinpack
- Tub
- Composite
- Flexible stand-up pouch
- Bottle
Top package materials
- Plastic PP (polypropylene)
- Plastic HDPE (high-density polyethylene)
- Multi-layer board
- Multi-laminate
- Metallised film
Top innovative markets for grains and bakery products in Latin America
65% of product launches were new products, varieties, ranges and extensions.
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| Innovation Criteria | Brazil | Mexico | Colombia | Chile | Argentina | Peru | Puerto Rico | Venezuela | Costa Rica | Ecuador |
|---|---|---|---|---|---|---|---|---|---|---|
| Relaunch | Good | Good | Fair | Fair | Good | Low | Fair | Fair | Fair | Low |
| New product | Good | Very good | Very good | Very good | Good | Excellent | Very good | Very good | Very good | Excellent |
| Product line diversity | Excellent | Excellent | Very good | Very good | Very good | Very good | Very good | Very good | Very good | Good |
| Health & wellness claims | Excellent | Excellent | Excellent | Excellent | Excellent | Excellent | Excellent | Excellent | Excellent | Excellent |
| Rating scale: Excellent (20-17), Very good (16-13), Good (12-9), Fair (8-5), Low (4-0) | ||||||||||
Factors of consideration
Even though Mexico gives preferential access to Canadian exporters under the North American Free Trade Agreement (NAFTA), Mexico has strict import requirements for many products and Canadian exporters are responsible for determining these import conditions by working with their Mexican importers.
Recommendations for entry
It is crucial to develop and maintain close relationships with clients and partners. Mexicans prefer direct communication such as telephone calls or face-to-face meetings, especially in the initial stages of establishing a rapport. Email, however, is widely used and social media apps, such as WhatsApp, are very popular for quick interactions.
How we can help
View our Agri-Food Trade Services for information and support to help you achieve your international business goals.
International Trade Commissioners are also an excellent point of contact for export advice and can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions, and local business contacts.
Our market intelligence services include:
- Identifying market opportunities and trends abroad
- Economic, business, and consumer trend forecasts
- Analysis of distribution channels, including e-commerce
- Detailed sector analysis
- Product innovation trends
Have we piqued your interest?
Contact our national network of analyst at aafc.mas-sam.aac@canada.ca and join our distribution list, or request customized analysis that meets your organization’s unique needs.
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