The food industry in Mexico has a relevant importance in the economy, since it is responsible for supplying its products to a growing population.
Below is the analysis he conducted Mexican Packaging and Packaging Association in order to emphasize its importance in the economic development of the country.
Recently, the topic of self-sufficiency in food It has gained importance globally as a result of the problems arising from the constant rise in prices and food shortages.
Several factors have been highlighted in relation to this issue, including: the growth of emerging Asian economies (and their greater demand for food), the reorientation of staple grains towards their use as biofuels.
Also the accumulation control that large companies in the agri-food chain have, from the production and/or genetic manipulation of seeds, to the production of “food” whose consumption is encouraged without necessarily contributing to the improvement of consumer nutrition.
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The importance of the food industry in Mexico
In the case of Mexico, the aforementioned factors are not the only causes of food shortages and rising prices. This is also influenced by other circumstances:
- On the one hand, presence large agro-industrial complexes with seed, agro-biotech, agrochemical, agro-industrial and food companies from various parts of the world that have the capacity and power to control production, distribution and services on a global scale.
- The change in priorities that the state had as a result of variations in the economic model also had an impact, because since the 1980s supporting the village was no longer considered a priority and food security based on national production, to operate under market forces with minimal state intervention.
In addition to all of the above, the food industry in our country has a relevant importance in the economy, since it is responsible for supplying the growing population with its products, in addition to the fact that food is preserved with appropriate packaging from processing to consumption.
Next, some food industries will be analyzed in order to highlight their importance in the economic development of our country:
The poultry industry has great importance in the food sector in Mexico, due to the fact that chicken meat and eggs are the two most consumed animal proteins in our country.
The Mexican poultry industry, as in other countries, is characterized by a long-term decline in real chicken prices. The industry has gone through cyclical periods of high prices and profitability, followed by overproduction, leading to periods of low prices and profitability. Real egg and pork prices in Mexico have also fallen over the long term and fluctuated over the cycle.
According to the National Union of Poultry Growers (UNA), chicken meat is the most consumed meat in Mexico. It represents 35% of the total livestock production in Mexico.
According to UNA, the chicken industry has 3 major chicken production companies in the country; 29 medium enterprises and 150 small enterprises. Bachoco is the leading company in the Mexican poultry market.
From the first day of January 2008, customs duties on the import of chicken products into Mexico were abolished, so we are exposed to greater competition from abroad.
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In February 2011, the Mexican Ministry of Economy initiated an anti-dumping investigation exclusively into the import of chicken drumsticks and drumsticks from the United States of America into Mexico. This investigation was requested by Bachoco and two other Mexican poultry companies. At the time of this publication, there is no additional information on this matter.
As for the egg industry in Mexico, it consists of 9 large companies, 32 medium-sized companies and 150 small companies. Bachoco is the second largest producer and marketer of eggs in Mexico and is the leader in the production of brown eggs.
The egg industry in Mexico is more fragmented than the chicken industry. According to the UNA, the nine largest egg producers produced 44.0% of the total eggs produced in Mexico in 2010, with the rest produced by about 180 producers across the country.
In 2010, the egg industry grew by 3.9% and consumption per capita increased by 2.7% compared to 2009. Consumption per capita for 2010 was 22.8 kilograms.
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Processed food industry
The processed food industry is highly competitive and includes companies with large capital resources, personnel, research and development, advertising investments, product line diversity, and brand recognition.
The main competing brands in the national market are La Costeña, Clemente Jacques, Del Monte, Hellmann’s, Smucker’s, French’s, La Moderna, Dolores, Tuny, Jumex, Del Valle, V8 by Campbell’s, Ades, Vita Real, Karo, Nescafé and Valentina.
Some of the aspects that affect this industry can be: falling prices, changes made in response to the strategies of different companies and changes in consumer preferences.
In addition, the increasing proliferation of products registered as “free brands”, where the original product is reproduced with similar characteristics and sold in large supermarkets at a significantly lower price, is an important factor in this industry.
According to data from AC Nielsen, Grupo Herdez is the market leader in mayonnaise, mole, tomato puree, tetra-recart vegetables, jams, mustard, homemade sauces, mushrooms, 8 vegetable juices, honey, tuna and pasta. three brands: Barilla, Yemina and Vesta in the self-service channel.
Through its associates, Grupo Herdez has 10 factories, 8 distribution centers and corporate offices located in the Republic of Mexico, where more than 6,100 people work serving more than 12 thousand clients.
Sales of the dairy food industry
For its part, the volume of sales on the yogurt market in Mexico amounted to 575 thousand tons in 2010. This market is estimated to have grown at a rate of 10% per year from 2004 to 2007, although it has since slowed to just 2% per year.
The growth is explained by two factors: first, the acceptance of yogurt among Mexican consumers, who consider it a nutritious product and not just an addition to breakfast, and, second, the dynamic innovation that prevailed in the industry. The leader in this market is Danone, and the other participants are Nestlé, Lala, Alpura and Sigma.
The Mexican cheese market is mature and highly fragmented, with more than 600 producers participating in the formal market. It is estimated that the cheese market in Mexico grew at an annual rate of approximately 2% from 2005 to 2010, reaching a size of 300 thousand tons.
Cheese consumption in Mexico is very important, but it is greatly influenced by regional tastes and preferences, which is also a consequence of Mexican consumers’ preference for fresh cheeses. Sigma estimates that it is the leader in this market with a share of around 27%.
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The bakery industry in Mexico, including bread, cakes and biscuits, has a market value of $14.807 million, while per capita consumption is 53.4 kilograms per year and expenditures related to this concept amount to $131.6.
Traditionally, white bread has been the most popular type of bread in Mexico, with strong penetration in low-income households.
However, as consumers embrace healthier diets, consumption of white bread has decreased and sales of substitutes such as whole wheat bread have increased.
In the bar segment, a category with less than a decade of development, competition has been fierce when looking for alternatives for consumers who want a healthier diet.
In 2010, Bimbo maintained its leadership in this category through innovation. Other competitors in this segment are Kellogg’s, Quaker and other imported bars.
Segments of the cookie sector
According to the form of consumption, the national market is divided into two large segments: that of practical cookies, in which brands such as Gamesa, Nabisco, Lara and Marinela participate, and that of cookies that are consumed as a pleasure and gift/luxury, which mainly consists of Mac’Ma, Marian and to a lesser extent imported cookies.
The participation of Galletas Mac’Ma in the segment of “Premium” or “Superior” cookies is about 60%, both in terms of quantity and value. In the total market of sweet biscuits, its share is about 2%.
The segment of the Mexican “Premium” cookie market, in which Mac’Ma participates, is estimated to have an approximate size of 4,800 tons per year. According to Euromonitor data, in December 2005 the total sweet cookie market in Mexico amounted to 541,800 tons.
Based on the information published in the annual reports of the leading companies, it is evident that the strategies they implement are influenced by various factors such as the market and industry they are in, the growth path they follow and the problems they face, such as:
- Reduction in the purchasing power of consumers
- Greater competition on the domestic market
- The presence of foreign competitors
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Undoubtedly, the growing openness to food trade between different regions of the world, as well as the demand that less industrialized countries reduce agricultural subsidies, have led to an increase in capital flows that are favored by processes of commercial opening.
Added to this is the concern for healthy and safe food, the demand of consumers to know the origin of the product and the handling conditions to which it was exposed, which greatly favored the development of new technologies, as well as the growing concentration of private brands under the protection of large commercial food chains.
Finally, it should be mentioned that global trends will be driven by an increasing number of mergers and acquisitions of companies dealing with retail food distribution and the need for increasing investment in the areas of “knowledge”, that is, in logistics and information. the need to promote strategic alliances between participants in the production-consumer chain.
Source: Mexican Association of Containers and Packaging
Rendón and A. Morales (2008). BUSINESS GROUPS IN THE FOOD INDUSTRY. A new era.
Annual report 2010 BACHOCO. Mexican Stock Exchange
Annual report 2010. HERDEZ. Mexican Stock Exchange
Annual report 2010 ALFA GROUP. Mexican Stock Exchange
Annual report 2010 GRUPO Mac Ma. Mexican Stock Exchange