Market Information
Latin America and Caribbean

Organic and Natural Foods Sector Profile⁽¹⁾
Mexico

February 2004

Canadian Embassy in Mexico
Schiller no. 529
Colonia Rincón del Bosque, Polanco
11560 Mexico, DF Mexico
Contact: Kim O'Neil, Trade Commissioner
Tel.: (52 55) 5724-7900
Fax: (52 55) 5724-7982
E-mail: kim.oneil@dfait-maeci.gc.ca
Internet: http://www.canada.org.mx

MARKET OVERVIEW

Organic foodstuffs such as fruits, vegetables, aromatics and medicinal herbs, legumes, grains, meat and dairy products are becoming more popular in Mexico. Over the last few years, Mexico has increased its production of organic foods and has taken first place in organic coffee production around the world. Organic coffee represents around 60% of the total production of organic foods in Mexico. Other organic foods produced in Mexico are avocados, mangos, bananas, pineapple, sesame seed, vanilla, cocoa, soybean, cucumber, pepper, chickpeas, garlic, blue corn and onions.

Over 30 000 producers around Mexico have dedicated themselves to organic farming and during the past five years, the amount of land in Mexico devoted to organic crops has increased from 25 000 hectares to 100 000. The States of Chiapas and Oaxaca have the largest surface areas devoted to the production of organic crops. In addition, the Mexican government is helping organic farmers by rebating up to 75% of the costs of certification required for organic farming.

With organic food exports reaching over $100 million⁽²⁾, Mexico exports more organic food products than it imports. It is estimated that around 85% of the organic food produced in Mexico is exported. However, there are niche opportunities for Canadian exporters of certain organic products to Mexico.

Market Trends

A significant part of the Mexican population tends to consume high-fat products. To reverse this trend, education and intervention programs have been established to educate Mexicans about the benefits of healthy eating and a healthier lifestyle. This is resulting in an increased number of Mexicans who are turning to healthier foods, such as natural and organic products.

In addition, many Mexican consumers are also starting to demand more organic food because they like the taste and believe normal food stuffs include toxic substances that will affect their health in the long run. However, several factors such as lack of awareness from most of the consumers about the benefits of organic food, low purchasing power among the Mexican population, and limited distribution channels for organic food have limited the growth of the organic food market in Mexico.

It is important to note that Mexico is a price-driven market, a factor that has also limited the sales of organic food in Mexico. Especially considering that prices of organic food could be 20%-30% above the prices of conventional food.

OPPORTUNITIES

Even though health-food stores handle a variety of products, the most important and most widely sold are muscle-building and weight-gain products, vitamins and fibre supplements, fat burners and weight-loss products, and rebuilding tonics such as ginseng.

There are opportunities for competitive Canadian health-food exporters in fibre supplements, athletic beverages, herbal teas and power candy bars. In addition, the existing market for vitamins and minerals appears to be expanding due to recommendations from physicians for treatment of common health problems such as stress or insomnia.

Also, there are good opportunities in Mexico for organic flaxseed. Health-conscious consumers in Mexico are raising the demand for this product, as they become more aware of its nutritional content and the health benefit of flax in reducing the risk of chronic diseases such as heart disease, stroke, diabetes and cancer.

The Government of Canada has several programs to help Canadian firms gain a competitive advantage in international markets. For instance, Export Development Canada (EDC) offers export financing and insurance to Canadian exporters. Exporters may also find financial and other assistance through the Department of Foreign Affairs and International Trade's Program for Export Market Development.

Suggested Marketing Activities

Canadian exporters are encouraged to improve the visibility of their brands in the Mexican market through well-focused marketing activities. Collaborating with provincial and industry associations, and participating in trade shows and trade missions are all excellent ways to make contacts, to understand import procedures, and to develop effective entry strategies. Promotional activities done in co-operation with Mexican retailers are another way to gain exposure and to better understand this extremely competitive market.

Trade Shows

Event:
All Things Organic - Conference and Trade Show
May 2-4, 2004
McCormick Place, Chicago, Illinois
North America's all organic conference and trade show

Organizer:
Lisa Murray, Sales Manager
121 Free Street
PO Box 7437
Portland, ME 04112-7437
E-mail: lmurray@divcom.com
Tel.: (207) 842-5468
Fax: (207) 842-5503
Internet: http://www.atoexpo.com

Event:
International Naturista ANIPRON EXPO 2004
February 13-15, 2004
World Trade Center, Mexico

Organizer:
National Association of the Natural Products Industry
Periferico Sur No. 5482
Col. Pedregal de Carrasco
04700 Mexico, DF Mexico
Tel.: (52-55)5424- 5630
Fax: (52-55)5425- 5631
E-mail: anipron@anipron.org
Internet: http://www.anipron.org

Market-Access Considerations

As organic products are sold at higher prices than conventional products, consumers require an assurance that these products have been produced according to certain standards. This guarantee mechanism, or certification process is contained in the Mexican Official Standard: NOM-037-FITO-1995, "Requirements and Specifications for the Production of Organic Produce", which explains the characteristics that a product needs to comply with in order to be considered organic A link is provided at the end of this report. In addition to these requirements, the government of Mexico established special regulations for labelling, processing and packing organic produce. These regulations include restrictions concerning methodology used, packing equipment and products used.

Imported produce can only be sold commercially as organic when the Mexican Ministry of Agriculture (SAGARPA), or an approved certified institution, can certify that the product complies with the NOM. SAGARPA can request detailed information on production of the organic produce to be imported, require tests of produce, or can have the product sent to a laboratory.

There are certain general requirements which a grower needs to meet to be certified as an organic grower, such as logging of all materials used for production, processing and packing, plus dates and lot registration, providing an exact description of the production area as well as production practices, and allow for verification visits.

It is important to note that the labels may include nutritional claims such as product boosts your energy, for example. However, the label must not indicate that the consumption of the product may prevent, alleviate, treat or cure an illness, disorder or physiological state.

Imported products are for the most part supplied to the market by an importer-distributor such as Super Soya, Super Mayoreo Natursita, Ricco, and Comercializadora Cosado. Canadian exporters should consider contacting these local distributors and importers as an indispensable early step in their efforts to establish themselves in the Mexican market. Many chains, including Wal-Mart--one of Mexico's largest buyer of imported food products--import directly from suppliers.

Only a Mexican resident who has an import license is authorized to import goods. In principle the importer bears responsibility for obtaining any necessary permits, establishing labelling and documentation requirements, and arranging for customs clearance. But in many cases compliance requires important support from the exporter, especially where regulations are enforced at the border.

Mexican regulations established in 1994 essentially define most natural foods (including several health foods and vitamins and minerals) as drugs or medicines. This classification subjects them to the same restrictions that pharmaceutical products face (e.g. labelling, formal approval, permits) and has slowed imports of these products.

KEY PARTICIPANTS

With local companies such as Aires de Campo, Bioplaneta and Dana, domestic production of organic foods supplies most of the Mexican consumer market. A large number of organic farming co-operatives have switched from subsistence farming to organic crops due to currently high demand for these products in foreign markets.

As a result of rapid expansion, Mexico now has a health-food store association called Asociacion Nacional de la Industria de Productos Naturales (National Association of the Natural Products Industry [ANIPRON]).

Leading organic food producers from the United States, such as Earthbound Farm and Natural Selection Foods, grow produce in Mexico due to the availability of high-quality organic farmland in a temperate climate.

Canada has been expanding its presence in the Mexican organic food market, with the exportation of organic oat fibres and organic flaxseed, which are highly demanded by Mexican consumers.

PRIVATE- AND PUBLIC-SECTOR CUSTOMERS

In general, the most common ways of distributing organic products are through commission sales, contract sales, joint ventures and direct sales. More than 80% of Mexico's organic products are sold by commission.

Important health-food chains in Mexico include Nutrisa Alimentos Naturales, General Nutrition Center (GNC), Nutrisoya, Golden Harvest and Super Soya. These chains sell the vast majority of imported health-food products.

Some of the important health-food importers that Canadian companies may want to contact are Super Soya, Super Mayoreo Natursita, Ricco, GNC and Comercializadora Cosado.

Although retail chains represent only 20% of all retail outlets, they sell approximately 70% of all health-food imports. Pharmacies, department stores and supermarkets account for another 20%, with the last 10% being sold in specialty independent health-food stores.

Suggested Business Practices

A locally based distributor or representative can be an important asset for successfully entering a market. A good distributor will prove invaluable in establishing successful business relationships with local buyers, and will also help handle customs and importing issues, while maintaining an excellent after-sales service. Choosing a qualified and competitive distributor has always been one of the most important ways to successfully export to the Mexican market.

Since travelling in Mexico can be difficult, companies should have an agent representing their products at a national level. However, it is not advisable to give the agent national exclusivity; instead, exporters are urged to hire regional distributors as well.

KEY CONTACTS AND SUPPORT SERVICES

Canadian Contacts

Canadian Embassy in Mexico
Schiller no. 529
Colonia Rincon del Bosque, Polanco
11560 Mexico, DF Mexico
Contact: Kim O'Neil, Agri-Food Counsellor or
Alejandro Ruiz, Agri-Food Commercial Officer
Tel.: (52-55) 5724-7900
Fax: (52-55) 5724-7982
E-mail: kim.oneil@dfait-maeci.gc.ca
Internet: http://www.canada.org.mx

Agriculture and Agri-Food Canada
Sir. John Carling Building - Floor:10 - Room:1051
930 Carling Ave.,
Ottawa, ON K1A 0C5
Contact: Richard A. Clegg, Senior International Marketing Officer, Mexico
Tel.: (613) 759-7743
Fax: (613) 759-7506
E-mail: cleggr@agr.gc.ca
Internet: http://www.agr.gc.ca

Canadian Food Inspection Agency
59 Camelot Dr.
Ottawa, ON K1A 0Y9
Tel.: (800) 442-2342 or (613) 225-2342
Fax: (613) 228-6125
Internet: Internet: http://www.inspection.gc.ca

Canadian Organic Growers Inc.
PO Box 6408, Station J
Ottawa, ON K2A 3Y6
Tel.: (613) 231-9047
E-mail: info@cog.ca
Internet: http://www.cog.ca

Department of Foreign Affairs and International Trade
125 Sussex Dr.
Ottawa, ON K1A 0G2
Internet: http://www.dfait-maeci.gc.ca

Market Research Centre (TMR)
Contact: Sean McLean, Senior International Market Analyst, Agriculture Industries
E-mail: seanmclean@dfait-maeci.gc.ca
Tel.: (613) 996-1793
Fax: (613) 943-8820

Market Support Division (TMM)
Contact: Rick Winter, Trade Commissioner
E-mail: rick.winter@dfait-maeci.gc.ca
Tel.: (613) 995-1773
Fax: (613) 996-9265

Mexican Division (NMX)
Contact: Marcello DiFranco, Trade Commissioner
E-mail: marcello.difranco@dfait-maeci.gc.ca
Tel.: (613) 996-8625
Fax: (613) 996-6142

Mexican Contacts

Mexican Embassy in Ottawa
45 O'Connor St., Suite 1500
Ottawa, ON K1P 1A4
Contact: Lisette Lopez, Agri-Food Counsellor
Tel.: (613) 233-8988
Fax: (613) 235-9123
Internet: http://www.embamexcan.com

Aires de Campo
Poniente 122 # 459-A
Col. Industrial Vallejo, Mexico
Contact: Lupe Latapí
Tel.: (52-55) 5333-1200
E-Mail: lupe@airesdecampo.com
Internet: http://www.airesdecampo.com

Association of Importers and Representatives of Food Products and Beverages
Tuxpan 41-202
06760 Mexico, DF Mexico
Tel.: (52-55) 5584-9522
Fax: (52-55) 5584-5317
Internet: http://www.anierm.org.mx (In Spanish)

Bioplaneta
Av. del Parque # 22
Col. Tlacopac Sal Angel, CP 01049 Mexico
Tel.: (52-55) 5661-6170 / 6156
Fax: (52-55) 5662-2783

Canadian Chamber of Commerce in Mexico
Ave. de las Aguilas No. 251
Col. Las Aguilas
01710, México, D.F.
Tel.: (25-55) 5593-0997
Fax: (52-55) 5660-3263

DANA
Avenida San Fernando 765
Local 4-C, Esquina Insurgentes
Col. Pena Pobre, Mexico
Tel.: (52-55) 5666-7366

Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (Secretaria de Agricultura Ganaderia, Desarrollo Rural, Pesca y Alimentos (SAGARPA)
Municipio Libre No. 377
Col. Sta. Cruz Atoyac
CP 03310 Mexico, DF Mexico
Tel./Fax: (52-55) 9183-1000
Internet: http://www.sagarpa.gob.mx (In Spanish)

National Association of Supermarkets and Retailers (ANTAD)
Homero 109 Piso 11
Col. Polanco
11560 Mexico, DF Mexico
Tel.: (52-55) 5580-1772
Fax: (52-55) 5395-2610

National Association of the Natural Product Industry A.C. (ANIPRON)
South Periferico 5482-A
Col. Pedregal de 04700
Carrasco, CP, Mexico
Tel.: (52-55) 5424-5630
Fax: (52-55) 5425-5631
E-mail: anipron@anipron.org
Internet: http://www.anipron.org

Nutrisa, S.A. DE C.V.
Periférico Sur 5482
Col. Pedregal de Carrasco
México, D.F. México 04700
Contact: Lic. Gina Martínez Torres
Purchase Manager
Tel.: (52-55) 5665-5802 / 7790
Fax: (52-55) 5665-9248

Super Mayoreo Natursita
Av. 1 Mayo Esq. con Calle 3 # 13 local 4
fraccionamiento Industrial Alce Blanco
Naucalpan, Estado de México
CP 05100 México
Tel.: (52-55) 5359-4180
Fax: (52-55) 5359-4181
Internet: http://www.smn.com.mx (In Spanish)

Super Soya S.A.
Av 1 de Mayo No. 178
54040 Naucalpan, Mexico
Tel./Fax: (52-55) 5359-4180
Internet: http://www.supersoya.com.mx

BIBLIOGRAPHY

Canada. Agriculture and Agri-food Canada. "Mexico Market Analysis," May 12, 2000.

Corporate Mexico. "Mexico one of world's top producers of organic foods," June 24, 2002.

EFE News Service. "Hispanics gaining weight as they move up economic ladder," October 16, 2003.

Latin Trade. "The Sweet Spot," January 1, 2003.

Natural Selection Foods. "High-Quality Organic Farmland." Downloaded from http://www.nsfoods.com/organic_mexico.html on November 17, 2003.

Organic Perspectives. "Mexico in the organic produce race," July 2001.

Quick Frozen Foods International. "Mexico takes steps to help farmers with organic certification," October 1, 2002.

Reforma Newspaper. "The Organic Market is Here." Downloaded from http://www.mural.com/buenamesa/articulo/316080 on November 26, 2003.

United States. Foreign Agriculture Service. "The Mexican Market for Health Foods," February 11, 2000.

------. "The Mexican Market for Organic Products," February 8, 2000.

------. "The Mexican Market for Organic Products," July 20, 2001.

USEFUL INTERNET SITES

Canadian Embassy in Mexico: http://www.canada.org.mx

ExportSource: http://exportsource.ca

InfoExport: http://www.infoexport.gc.ca

Importers, Distributors and Retailers of Health Foods in Mexico: http://www.fas.usda.gov/gainfiles/200002/25607110.wpd

Mexican Association of Supermarkets: http://www.antad.org.mx (In Spanish)

Mexican Ministry of Agriculture: http://www.sagarpa.gob.mx (In Spanish)

Mexican Ministry of Economy and Trade: http://www.economia.gob.mx (In Spanish)

Mexican NOMs: http://www.economia-noms.gob.mx

National Association of the Natural Products Industry: http://www.anipron.org (In Spanish)

Organic Trade Association: http://www.ota.com

Organic Trade Services: http://www.organicts.com

^1. The Government of Canada has prepared this Country Sector Profile based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information.

^2. All monetary amounts are expressed in Canadian dollars, unless otherwise indicated. The conversion rate to Canadian dollars is based on IDD Information Services, Tradeline, September 2003.