Industry profile

Processed foods industry in Mexico

The processed food market considers dehydrated food, frozen food and refrigerated food; canned food, cereals, ice cream, pasta, sauces and dressings, snacks, packaged food such as meat, fish, bread, dairy products and candies.

The Mexican processed food industry has grown in recent years, mainly because its production capacity and agricultural resources.

In the period between 2003 and 2010 the production of the processed food industry had a compound annual growth of 6.2%, which shows that the industry has performed well due to increased consumption and purchasing power.

In 2010, the processed food industry in Mexico generated a market value of 102,307 million USD, becoming the third highest valued in America, just behind the US and Brazil.

In 2010, Mexico?s exports in this industry reached $5,667 million USD, representing a growth of 12% over 2009 exports.

The main destinations were The United States, Japan, Guatemala and Venezuela, participating with 72%, 6%, 2% and 2% of Mexican exports in the industry, respectively.

In 2010 Mexico was:

? The main exporter of powdered cocoa with added sugar.

? The third exporter of pickled fruits and vegetables, soup or broth preparations and decaffeinated coffee.

? The fifth exporter of non-cocoa confectionery products.

? The sixth exporter of baby food preparations.

? The seventh exporter of cereal-based products and cookies.

Companies established in Mexico

Some of the major food processing companies established in Mexico are:

? Grupo Bimbo

? Alfa-Sigma

? Gruma

? Industrias Bachoco

? Grupo Herdez

? Grupo la Moderna

? Grupo Bafar

? Grupo Pinsa

? Grupo Altex

Attraction of Foreign Direct Investment

Investment has grown in Mexico due to its competitive costs compared to other countries, the advantage of its geographical location and its qualified labor.

In 2010, the FDI reached a value of 6,058 million USD, mostly due to Heineken?s acquisition of FEMSA Beer.

This is considered a growing industry in Mexico because of the increase in consumption, the trends in health and the chances of producing a wide range of products.

Strengths of the Mexican Processed Food Industry

Qualified workforce

According to ANUIES, more than 790 thousand students are enrolled in engineering and technology programs, representing the largest pool of engineering talent in America.

In Mexico, there are alliances between industry and academia, which allow the continuous incorporation of new technologies into the productive chain of the industry.

Competitive costs

According to AlixPartners, Mexico is the most competitive country in the world in terms of manufacturing costs, which are approximately 25% lower than in the United States and are also lower than in the BRIC countries. KPMG states that Mexico is the country with better cost index in the food processing industry.

Location

Mexico plays a strategic role due to its geographic location. The country has access to the Atlantic and the Pacific Oceans and is an intermediary between the North and South American markets, where growth is increasing.