Processed food industry in Mexico

The processed food industry is constituted by the sub sectors of grain and oilseed milling; sugar and confectionery products; fruit and vegetable preserving and specialty food; dairy products; animal slaughtering and processing; fish and seafood product preparation and packaging; bakeries and tortillas; animal food; and other food manufacturing.

In Mexico, the processed food industry has grown in recent years, mainly due to its productivity and inputs availability, as well as the country's macroeconomic solidness, competitiveness to attract foreign investment and capability to be an export platform to more than 40 countries with which it has free trade agreements.

In 2016, Mexico was ranked:

  • Second exporter of powdered cocoa with sugar;
  • Third exporter sweet cookies and decaffeinated non-toasted coffee;
  • Forth exporter of confectionery products.

Companies Established in Mexico

The following are some of the leading companies in the processed food industry located in Mexico:

  • Bimbo;
  • Sigma Alimentos;
  • Gruma;
  • Lala;
  • Bachoco;
  • Nestlé México;
  • SuKarne;
  • Pilgrim's Pride México;
  • Danone de México;
  • Mondeléz de México.

In 2016, Mexico's processed food industry produced 104.1 billion dollars, which represented 16.1% of the country's manufacturing production and 5.8% of its total production.

The main export destinations in 2016 were the United States, Venezuela, and South Africa, with shares in total Mexican exports from this industry of 64.9%, 3.0% and 2.6% respectively.

Foreign Direct Investment Attraction

Investment in Mexico has increased due to the country's cost competitiveness compared to other countries, its geographic location and skilled workforce.

According to the Secretariat of Economy, in 2016, FDI summed 790 million dollars, summing 6.4 billion dollars during the 2010-2016 period.

The attraction of foreign direct investment of the industry in Mexico is the result of the evolution on consumption, health trends and the country's capability to produce a wide variety of food products.

Strengths of the Industry in Mexico

Competitive Costs: In the processed food industry, Mexico offers 11.1% savings in manufacturing costs when compared to the United States.

Skilled Workforce: According to the National Association of Universities and Higher Education Institutions (ANUIES) information, in 2016 more than 11 thousand students graduated from programs related to agronomy, forestry and fishing, as well as food industry manufacturing and processing. In Mexico, during the 2016-2017 school year, more than 82 thousand students were enrolled in such programs.

Geographic Location: The country has access to the Atlantic and Pacific oceans and is an intermediary in the North and South American markets, where growth is increasing.

Skilled Workforce: According to the National Association of Universities and Higher Education Institutions (ANUIES) information, in 2016 more than 11 thousand students graduated from programs related to agronomy, forestry and fishing, as well as food industry manufacturing and processing. In Mexico, during the 2016-2017 school year, more than 82 thousand students were enrolled in such programs.

Geographic Location: The country has access to the Atlantic and Pacific oceans and is an intermediary in the North and South American markets, where growth is increasing.

Competitive Costs: In the processed food industry, Mexico offers 11.1% savings in manufacturing costs when compared to the United States.

 

    Economic Units

    Foreign Direct Investment 2016 (million dollars)

    Graduates from the programs of Manufacturing Processes of the Food, Agronomy, Forestry and Fishing Industries programs

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    Success stories

    Cargill

    As a result of an association between EnerAll and the company from the United States, Cargill, in 2017 an new plant was opened at Tizimin, Yucatan, which will supply farming origination services of grains such as yellow corn, white corn, soy and sorghum, among others, with an investment of 140 million pesos. The plant will have an initial capacity to stock 50 thousand metric tons; however, it is expected a capacity increase up to 130 thousand metric tons in the next years to receive grains form the local region, serving the markets of Yucatan, Quintana Roo, Campeche and Chiapas. The new facility will imply the creation of 100 jobs.

    Mars Petcare

    In 2016, the pet food division of the North American Company, Mars Incorporated, invested around 900 million pesos for its new plant of pet food at El Marques, Queretaro. Mars Petcare, will produce packaged pet food of the brands Pedigree and Whiskas. The Project will create an estimated of 500 direct and indirect jobs in the following four years.

    Mondeléz

    The confectionary company from the United States moves forward to consolidate its operative infrastructure. Since 2014, Mondeléz México has invested an estimated of 133 million dollars to renovate its infrastructure through first level production lines known as "lines of the future"; the last of them was installed in 2016 at its Puebla, Puebla, facility to produce powder to prepare beverages for the Central America market. This classifies the plant as a "multi category" one.

    Ingredion

    The global provider of ingredient solutions to the food, health care and personal care industries, based in the United States, announced an investment of approximately $30 million dollars in Mexico to expand capacity at the company's San Juan del Rio, Queretaro, manufacturing facility. "With close to $1 billion in annual sales, Mexico is a profitable and growing market for us. It has a positive economic outlook and favorable demographics," said Jim Zallie, Ingredion executive vice president, global specialties and president, Americas.