Last year, Mexico hit record exports levels with more than US$37.4bn worth of goods exported to various countries across the globe, according to Trading Economics. A significant bulk of these exports were food and beverages, according to ProMéxico – the country's federal government agency developed to promote trade, investment and internationalization.
In 2017, Mexico's most significant food and beverage exports were vegetables (20.9%), edible fruit and nuts (20.53%) and beverages and liqors (17.67%), according to Source Trade Map data.
Avocados and beer
Speaking to FoodNavigator-LATAM, José Antonio Peral, executive director of ProMéxico, said exports of food and beverage products were extremely significant and important for Mexico.
“We must keep in mind that the production value of the food industry represents a high dynamism and a growth perspective higher than the average growth rate of the economy,” Peral said.
In number of export categories, he said Mexico was a significant global player. The country, for example, was the world's leading avocado producer and exporter, pulling in revenues of US$2.8m in 2017, with a big bulk of that business going to the US.
“In colloquial terms, the Super Bowl would not be the same without the guacamole made with Mexican avocado, since seven out of 10 avocados in the United States are Mexican. To have an image of all the production in a year of Mexican avocados: if we packed them in boxes of 20kg and formed them into a single row, it would be enough to make a complete line around the world.”
Most avocados produced in Mexico – around 80% – were produced in the Michoacán state in west Mexico, he said.
Another important export product, Peral said, was beer.
“With the annual production of Mexican beer, we could fill 29.5bn liter bottles,” he said. “One of the keys to the rise in exports is the opening of the Mexican economy. Since 1994, when the North American Free Trade Agreement (NAFTA) was signed, the country has signed similar agreements with more than 40 countries. This position allowed the country to increase exports of many products, especially beer.”
ProMexico network stretch
However, Peral said exporting and maintaining a strong trade market was not always straightforward, particularly for SMEs.
“ProMéxico is working closely with different governments and private organisations to facilitate the market diversification process to Mexican exporters.
“...Exporting is not an easy task. However, if you are a high-quality producer, willing to export, you just need to find out the main quality standards and best practices in order to succeed in this competitive market.”
Peral said ProMéxico was focused on supporting local companies, large and small, across Mexico with these challenges, helping with things like export certifications, specialized logistics, securing suppliers, e-commerce and digital marketing strategies and offering knowledge on the international market.
“With these services, we encourage companies to increase their participation in foreign markets, making sure that these activities support the success of those who face the export challenge.”
ProMéxico also aimed to drive foreign investment in the country, Peral said.
Between 1997-2017, foreign direct investment (FDI) in Mexico's F&B industry generated revenues of US$59.8bn, according to data from Mexico's Ministry of Economy. In 2017 alone, FDI revenues for food generated US$1.6bn and beverages US$1.1bn, with the US registering the highest involvement in the market.
“Mexico is one of the most competitive countries in the world for productive investment due to its macroeconomic and political stability, low inflation, the size and strength of its domestic market, its rate of economic growth, and the savings offered by the industry in terms of manufacturing costs.”
He said the country also had a “strategic geographic location” to service world markets cost-effectively, and whilst many companies were interested in mergers and acquisitions or building from scratch, ProMéxico encouraged a different tact.
“We are encouraging companies to consider strategic alliances and joint venture projects to facilitate the process and share technology, capital, and market knowledge, among other things. It is working and we see more projects willing to consider this option,” he said.
Eyes on agriculture
Asked what part of Mexico's F&B market would drive growth in the coming years, Peral said agribusiness would contribute hugely.
“The agribusiness industry in Mexico is in constant expansion, and the agribusiness landscape is affected by the strong demand from consumers and the growing middle class.”
A focus, therefore, on organics and targeting increased vegetarian and vegan demands would be key, he said.
“Mexico ranks third in agricultural production in Latin America and 12th in the world, so people will turn to Mexico in search of fresh produce with organic certifications and with an increased awareness of health factors in purchase decisions.”