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Market Overview – Mexico

May 2019

Market snapshot

At 124 million people, Mexico has the eleventh largest population in the world and second largest in Latin America, behind Brazil. The population is expected to reach 130 million by 2023.

At US$1.2 trillion, Mexico is the world's fifteenth and Latin America's second largest economy, behind Brazil. Gross domestic product (GDP) is forecast to increase to US$1.6 trillion by 2023.

Low-income households make up the country's largest and fastest growing social class with over 40% of the population living in poverty.

Fresh food and homemade meals are preferred by Mexicans as they are more affordable. Typically, Mexicans purchase fresh food at local retailers' and wholesalers' open markets, where there is a variety of products in one place.

Mexico's middle class accounts for 25% of all households and are increasingly driving consumer spending. Middle-class consumers are particularly numerous in the industrialized north.

Mexicans from all income segments, especially in urban areas, with less time for buying, preparing and cooking meals at home, are increasingly purchasing processed and packaged food products that are quick-to-prepare, ready-to-eat, and widely available at various retail outlets.

Packaged food sales are expected to reach US$51.6 billion in 2018, and are anticipated to reach US$69.6 billion by 2023.

The top packaged food companies in Mexico are Grupo Bombo (9.8% market share), followed by Grupo Lala (5.0%) and Sabritas SRL (4.5%).

Production

Corn is by far the most important crop produced in Mexico, with production close to double in size of all other crops produced and grew 4.7% annually over 2013-2017.

Among the top ten crops, soybean meal saw the most significant increase over 2013-2017, growing by 6.9% annually. Production of oranges decreased 82.2%, with sorghum falling 14.5% annually over the same period.

Chicken is the most popular meat in Mexico, representing 51.6% of meat produced and 91.5% of livestock raised in the country.

Crop production in Mexico 2013-2017
Top 10 crops (tonnes) 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Corn 22,880,000 25,480,000 25,971,000 27,575,000 27,450,000 4.7
Sugar 7,393,000 6,382,000 6,344,000 6,484,000 6,314,000 −3.9
Sorghum 8,500,000 6,270,000 5,587,000 4,638,000 4,545,000 −14.5
Soybean meal 3,185,000 3,300,000 3,480,000 3,635,000 4,152,000 6.9
Apples 858,600 716,900 750,324 716,930 720,000 −4.3
Grapes 259,500 246,858 282,000 255,821 290,000 2.8
Peaches and nectarines 161,300 173,500 176,300 176,900 176,900 2.3
Pears 24,100 24,444 24,679 26,952 26,800 2.7
Raisins 10,000 10,000 10,000 9,000 10,000 0.0
Oranges 4,533,000 4,515,000 4,603,000 4,640 4,600 −82.2

Source: United States Department of Agriculture (USDA), 2018

*CAGR: Compound Annual Growth Rate

Meat production in Mexico 2013-2017
Meat (tonnes) 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Chicken 2,907 3,025 3,175 3,275 3,400 4.0
Beef 1,807 1,827 1,850 1,879 1,925 1.6
Pork 1,130 1,135 1,164 1,211 1,267 2.9

Source: USDA, 2018

*CAGR: Compound Annual Growth Rate

Livestock production in Mexico 2013-2017
Livestock (head) 2012 2013 2014 2015 2016 CAGR* % 2012-2017
Chickens 516,711,000 524,271,000 526,843,000 534,693,000 549,125,000 1.5
Cattle 31,925,181 32,402,461 32,939,529 33,502,623 33,918,906 1.5
Pigs 15,857,899 16,201,625 16,098,680 16,364,459 16,753,231 1.4

Source: Food and Agriculture Organization Corporate Statistical Database (FAOSTAT), 2018

*CAGR: Compound Annual Growth Rate

Trade

Mexico is a net exporter of agri-food and seafood products. In 2017, Mexico's agri-food and seafood trade surplus was Can$7.6 billion with imports valued at Can$35.0 billion, and Can$42.6 billion in exports. Mexico's agri-food and seafood imports have been falling by an average rate of 0.25% over the last three years.

Mexico's top agri-food and seafood imports in 2017 were corn, soybeans, pork, poultry and wheat. Key supplying countries were the United States (U.S.), Brazil, Canada, Argentina, and Paraguay. Canada was Mexico's 2nd largest supplier of total agri-food and seafood products in 2017, with a 6.9% market share.

Mexico's top agri-food and seafood imports from the world, 2017
Commodity Import value Can$ millions Top suppliers and market share % Canada's share %
1 2 3
Corn 3,699.1 United States: 95.9 Brazil: 3.6 Argentina: 0.4 0.0
Soybeans 2,246.5 United States: 90.7 Brazil: 5.8 Paraguay: 3.4 0.0
Pork 1,821.4 United States: 89.0 Canada: 10.9 Spain: 0.05 10.9
Poultry 1,441.4 United States: 75.9 Brazil: 19.3 Chile: 4.8 0.03
Wheat 1,406.7 United States: 67.8 Canada: 21.5 Russia: 6.6 21.5
Beef 958.2 United States: 83.1 Canada: 11.0 Nicaragua: 5.6 11.0
Milk and cream 942.4 United States: 82.6 Spain: 9.8 Canada: 2.4 2.4
Soybean oilcake 913.8 United States: 99.5 Argentina: 0.31 Denmark: 0.2 0.0
Canola 913.4 Canada: 98.6 United States: 1.4 98.6
Other sugars 898.2 United States: 96.2 Canada: 1.3 Netherland: 0.7 1.3
Source: Global Trade Tracker, 2018

Mexico's processed food and beverage imports were valued at Can$19.9 billion in 2017, with Canada accounting for 4.5% of that total. The U.S., Canada, Spain, Chile, and New Zealand were the largest suppliers of processed food to Mexico in 2017, accounting for 81.2% of the market. Mexico's processed food imports increased by a CAGR of 5.7% between 2013 and 2017.

Canada's agri-food and seafood exports to Mexico were valued at Can$1.9 billion in 2017. Top exports were canola, wheat, malt, beef, and canola oil. In 2017, Canada registered an agri-food and seafood trade deficit of Can$0.8 billion with Mexico (Canada imported Can$2.7 billion worth of agri-food and seafood from Mexico in 2017).

Retail sales

Mexico is the second largest consumer market in Latin America, after Brazil. Retail sales of packaged food products grew 6.8% over 2014-2018, a trend that is expected to continue over the 2019-2023 period.

Savoury snacks and processed meat and seafood are expected to see the largest growth in sales over the 2019-2023 forecast period. Growth in this category is linked to rising demand for convenient foods, with consumer lifestyles becoming increasingly busy and affluent.

However, as Mexico grapples with one of the world's highest obesity rates people between ages 15 to 74, as well as one of the highest diabetes rates among OECD countries, consumers are being encouraged to address these health concerns by eating better. Food manufacturers are seeking to address these health concerns, as well as increasing costs and price sensitivity, by providing healthier food options in smaller packages. For example, offering packaged food with higher nutritional content, such as products including superfood seeds and grains such as quinoa, amaranth, buckwheat and flaxseed. Products with superfood grains include bread, pastries, biscuits, breakfast cereals, savoury snacks and chocolate confectionery.

Packaged food retail sales in Mexico – Historic in US$ millions, fixed 2017 exchange rate
Category 2014 2015 2016 2017 2018[e] CAGR* % 2014-2018
Packaged food 40,654.1 42,216.3 44,630.9 48,366.3 51,622.0 6.8
Baked goods 13,581.5 13,822.5 14,338.8 15,214.6 15,953.3 4.1
Dairy 8,260.7 8,622.0 9,216.7 10,096.3 10,853.8 7.1
Confectionery 3,166.2 3,246.5 3,413.4 3,689.0 3,926.7 5.5
Savoury snacks 2,747.4 2,943.3 3,275.9 3,611.2 3,918.6 9.3
Processed meat and seafood 2,477.4 2,633.6 2,814.0 3,115.9 3,401.1 8.2
Sauces, dressings and condiments 2,242.0 2,383.9 2,536.9 2,789.9 3,021.7 7.7
Sweet biscuits, snack bars and fruit snacks 2,201.3 2,302.2 2,450.6 2,674.2 2,856.6 6.7
Rice, pasta and noodles 1,410.2 1,456.2 1,518.8 1,638.8 1,754.2 5.6
Edible oils 1,164.8 1,222.1 1,291.7 1,419.4 1,513.1 6.8
Baby food 828.5 877.7 928.2 1,015.4 1,089.7 7.1
Processed fruit and vegetables 738.8 783.9 822.1 907 982.4 7.4
Breakfast cereals 570.4 592.6 617.1 658.7 695.7 5.1
Ice cream and frozen desserts 423.4 446.1 470.9 504.9 540.4 6.3
Sweet spreads 367.8 385.2 413.5 459.3 498.5 7.9
Ready meals 353.7 373 391.9 432 468.9 7.3
Soup 119.9 125.7 130.7 139.8 147.2 5.3

Source: Euromonitor International, 2018

e: Estimated

*CAGR: Compound Annual Growth Rate

Packaged food retail sales in Mexico – Forecast in US$ millions, fixed 2017 exchange rate
Category 2019 2020 2021 2022 2023 CAGR* % 2019-2023
Packaged food 54,991.6 58,394.3 61,929.3 65,677.3 69,658.9 5.1
Baked goods 16,810.0 17,676.3 18,590.9 19,572.8 20,626.3 5.2
Dairy 11,604.3 12,362.3 13,153.8 13,992.8 14,890.5 6.4
Savoury snacks 4,245.3 4,572.7 4,910.4 5,266.7 5,643.9 7.4
Confectionery 4,185.7 4,453.6 4,721.5 4,999.2 5,291.8 6
Processed meat and seafood 3,670.4 3,940.3 4,219.9 4,516.8 4,830.3 7.1
Sauces, dressings and condiments 3,242.0 3,464.7 3,691.6 3,929.5 4,175.5 6.5
Sweet biscuits, snack bars and fruit snacks 3,038.1 3,222.8 3,421.0 3,634.8 3,862.5 6.2
Rice, pasta and noodles 1,870.1 1,984.9 2,100.4 2,221.1 2,348.0 5.9
Edible oils 1,597.1 1,680.2 1,765.8 1,855.3 1,949.4 5.1
Baby food 1,164.0 1,240.4 1,317.9 1,400.7 1,489.0 6.3
Processed fruit and vegetables 1,055.4 1,126.9 1,201.4 1,279.9 1,361.9 6.6
Breakfast cereals 735.8 775.2 815.7 857.4 900.8 5.2
Ice cream and frozen desserts 580.5 622.6 666.2 711.9 760.2 7.0
Sweet spreads 534.0 569.9 606.9 645.9 687.1 6.5
Ready meals 503.5 538.4 574.6 612.9 653.6 6.7
Soup 155.3 163.2 171.3 179.6 188.3 4.9

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Health and wellness food products

The health and wellness sector grew by a CAGR of 6.9% from 2014 to 2018 and is expected to grow by a CAGR of 7.1% over the 2019-2023 period. This trend is reflected in the country's growing middle class, which is demanding convenient and healthy food and is willing to pay the higher price for it.

Naturally healthy and free from food products showed the largest growth in the 2014-2018 period. Free from and organic products are expected to lead the way in terms of growth over 2019-2023.

Health and wellness food product retail sales in Mexico – Historic in US$ millions, fixed 2017 exchange rate
Category 2014 2015 2016 2017 2018[e] CAGR* % 2014-2018
Health and wellness by type 12,459.3 13,128.7 13,907.6 15,037.7 16,271.0 6.9
Fortified/functional (FF) 7,666.8 8,000.6 8,371.0 8,999.6 9,650.0 5.9
Better for you (BFY) 2,535.1 2,672.9 2,829.3 3,006.2 3,261.0 6.5
Naturally healthy (NH) 1,655.8 1,771.1 1,921.6 2,119.0 2,314.2 8.7
Free from 566.6 649.0 747.8 869.8 997.4 15.2
Organic 35.0 35.1 37.8 43.0 48.4 8.4

Source: Euromonitor International, 2018

e: Estimated

*CAGR: Compound Annual Growth Rate

Health and wellness food product retail sales in Mexico – Forecast in US$ millions, fixed 2017 exchange rate
Category 2019 2020 2021 2022 2023 CAGR* % 2019-2023
Health and wellness by type 17,497.5 18,758.2 20,090.0 21,517.3 23,052.6 7.1
Fortified/functional (FF) 10,291.8 10,939.1 11,615.7 12,333.4 13,101.9 6.2
Better for you (BFY) 3,504.0 3,753.2 4,018.8 4,304.2 4,610.7 7.1
Naturally healthy (NH) 2,514.0 2,726.1 2,950.2 3,190.8 3,449.2 8.2
Free from 1,133.1 1,278.1 1,436.3 1,611.3 1,804.2 12.3
Organic 54.6 61.7 69.0 77.5 86.7 12.3

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Opportunities for Canada

On December 30, 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force between Canada, Mexico and the other four Parties that triggered the entry into force of the Agreement (Japan, Singapore, Australia, New Zealand). Although most Canadian agriculture agri-food exports currently benefit from duty free access to Mexico under the North American Free Trade Agreement (NAFTA) (expected to be maintained under the new Canada-U.S.-Mexico Agreement (CUSMA)), the CPTPP could open modest, new commercial opportunities in Mexico for some Canadian dairy and poultry products that were excluded from tariff elimination commitments under NAFTA. Under the CPTPP, Mexico has established new tariff rate quotas (TRQs) with duty-free access (within specified volumes) for imports of cheese, butter, evaporated milk, condensed milk and dairy-based preparations, and skim milk powder, among other dairy products, from CPTPP member countries (including Canada). The corresponding Harmonized System (HS) codes are:

Furthermore, under CPTPP, Mexico will eliminate its tariffs on whey, turkey and some chicken products over phase out periods ranging from 10 to 15 years. To obtain more information on the CPTPP regarding trade opportunities under this agreement see: CPTPP for Agri-Food Exporters.

Consolidated TPP Text:

Under CPTPP, Canadian exports to Mexico will also benefit from modern trade rules in areas such as sanitary and phytosanitary measures and biotechnology, which are expected to minimize adverse impacts to trade. Furthermore, due to geopolitical considerations, another important trend in Mexico that is creating opportunities for Canadian exporters is the diversification of supply sources away from the U.S.

In terms of market access, the majority of raw/fresh/bulk Canadian agri-food products already have sanitary protocols in place allowing their export to Mexico. Processed food products generally do not require a sanitary protocol, and in most cases are just required to comply with the Mexican Official Standard: NOM-051-SCFI/SSA1-2010 (PDF version, in Spanish only), related to labelling of pre-packaged food.

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.

Resources

Market Overview – Mexico
Global Analysis Report

Prepared by: Kris Clipsham, Market Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2019).

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