Market Information
Latin America and Caribbean

Nutritional Supplements Sector Profile
Mexico

June 2004

Canadian Embassy in Mexico
Schiller 529
Col. Polanco
11580, México, D.F., México
Contact: Evelyn Alcala, Commercial Officer
Tel.: (52-55) 5724-7900
Fax: (52-55) 5724-7982
E-mail: evelyne.alcala@dfait-maeci.gc.ca

MARKET OVERVIEW

According to the National Association of Natural Products (ANIPRON), the nutritional supplements (nutraceuticals) market has experienced a significant yearly growth of 10- 15% over the last seven years. This trend is expected to continue over the next 3-5 years, as nutritional supplements and natural products become increasingly popular among Mexicans. Although there are no official numbers on the market value, industry sources estimate that in 2003, the market was worth $680 million(2) and represented approximately 10% of the total Mexican pharmaceutical market.

Specific niche products Approximately 60% of all nutritional supplements sold in Mexico are produced locally. Nutritional supplement manufacturing is mostly concentrated in Mexico City and Guadalajara. The remaining 40% of products sold in the market come from a number of countries; the U.S., Sudan, Switzerland and Canada are the major foreign players in the market. are also imported from China, Japan, Korea and South and Central American countries, such as Argentina, Chile and Nicaragua.

* Jan-June 2003
Source: Mexico. Ministry of Economy (Secretaria de Economia). "Trade Statistics," February 2003. Downloaded from http://www.economia-snci.gob.mx on March 10, 2004.

Source: Mexico. Ministry of Economy (Secretaria de Economia). "Trade Statistics," February 2003. Downloaded from http://www.economia-snci.gob.mx on March 10, 2004.

Products are imported primarily by large nutritional supplement distributors and also by manufacturers who import raw materials to develop their own formulas and products. In recent years, Canadian nutraceutical exports to Mexico have experienced staggering growth. In 2003, Canadian products accounted for 6% of total imports, up from 3% in 2002.

OPPORTUNITIES

The Mexican nutritional supplements market offers significant potential for Canadian manufacturers and laboratories as Mexicans are becoming increasingly health conscious. Dietary concerns and the prevention of health problems such as heart disease, diabetes, insomnia and digestive problems, have added to Mexico's widespread and growing consumption of nutraceuticalsand present a positive scenario for future sales.

The Mexican market is strongly influenced by world nutritional supplement trends products. Ginko Biloba and Ginseng, for example, had a significant penetration in the market from 1998 through 2002; however, as new product trends emerged, the demand for such products has stabilized and growth rates have declined. Currently, the most fashionable items on the market are Canadian flaxseed and coral calcium, which had an impressive growth in 2003 and are sold in almost every retail channel. Demand for these products is expected to continue throughout 2004 and 2005.

The vitamins segment, particularly multivitamin complexes(3), pediatric vitamin complements and Vitamin C, present good prospects for Canadian exporters. The market is currently dominated by multinational pharmaceutical players such as Roche (Vitamin C and pediatric multivitamins), Wyeth (Centrum multivitamins) and Boehringer Ingelheim (Pharmaton multivitamins and Kiddi Pharmaton).

Natural fibre, used as a dietary complement to help with digestive problems, as well as proteins and amino acids, used for weight control, also represent potential market opportunities. Similarly, other supplements such as garlic for cholesterol control, calcium for osteoporosis prevention and herbal remedies for insomnia offer solid market opportunities.

Promotional Events

Event:
ANIPRON
February 11-13, 2005 (Annual)
World Trade Center Mexico City
Mexico City, Mexico
Products: Suppliers, distributors and manufacturers of natural products and nutritional supplements

• Organizer:
  National Association of the Natural Products Industry (ANIPRON) (Asociación Nacional de la Industria de Productos Naturales A.C.)
  Contact: Lic. Andrea Olalde
  Tel.: (52-55) 5424-5630, 5424-5631
  Fax: (52-55) 5424-5631
  E-mail: exposicion@anipron.org
  Internet: http://www.anipron.org

Event:
Expo ANTAD Guadalajara 2005
March 2005 (Annual)
Expo Guadalajara
Guadalajara, Mexico
Products: Food, consumer products and retail technology

• Organizer:
  National Association of Retail and Department Stores (ANTAD) (Asociación Nacional de Tiendas de Autoservicio y Departamentales, A.C.)
  Contact: Lic. Gerardo González Guzmán
  Tel.: (52-33) 3121-4577
  Fax: (52-33) 3121-5437
  E-mail: ggonzalez@antad.org.mx
  Internet: http://www.antad.org.mx (Spanish)

Event:
Expo AFM 2005 (Expo Farma, Expo Análisis, Cosme Expo)
March 2005 (Annual)
World Trade Center Mexico City
Mexico City, Mexico
Products: Products and services for the Pharmaceutical and Personal Care Industry.

• Organizer:
  Mexican Pharmaceutical Association (Asociacion Farmaceutica Mexicana, A.C.)
  Contact: Lic. Juan Antonio Elizarras Briseño
  Tel.: (52-55) 5524-0993, 5524-4032
  Fax: (52-55) 5534-5098
  E-mail: afm@afmac.org.mx
  Internet: http://www.afmac.org.mx (Spanish)

KEY PARTICIPANTS

There are approximately 400 pharmaceutical companies in Mexico, including nutritional supplement manufacturers. Under Mexican Health Laws, only manufacturers that have a sanitary license can import and register pharmaceutical products in Mexico, therefore, most multinational drug firms have manufacturing subsidiaries in Mexico. Close to 50 of the largest pharmaceutical companies, which are dominantly multinational firms, account for approximately 80% of the pharmaceuticals sold in Mexico.

Parts and seeds of plants for medicinal use (HS Code1211.90) account for approximately 80% of Mexico's nutrititional supplement import market. The key importers are Almacenes Altamira, Comercializadora Mi Casa su Casa, Comercializadora Salda, Comercializadora Suárez, Distribuidora de Productos Deshidratados, Extracciones, Naturales, Globe Chemical, Helm de México, Importadora Premier and Novartis Farmaceutica.

In the food supplement category (HS Code 2106.90), 80% of all imports are done by Abbott Laboratories de México, Alcon Laboratorios, Apco Cosmetics, Atari (GNC), Wal*Mart, Consupharma, Costco, Forever Living Products México, Fortitech México, Frarmex, Gigante, Golden Neo Life Diamite International, Gollek Interamericas, Guillesa Internacional, Haarmann y Reimer, Herbalife Products de México, Heritage International, Johnson Johnson Mexico, Labs Kener, Medicamentos Naturales, Nzmp México, Omnilife Manufactura, Prime Natural Health Laboratories de México and Quest International de México.

The key importers of vitamins (HS Code 3004.50) include Abbott Laboratories de México, Asofarma de México, Atari (GNC), Aventis Pharma, Bayer de México, Boehringer Ingelheim Promeco, Byk Gulden, Distribuidora de Alimentos Naturales y Nutricion, Intervet México, Laboratorios Pisa, Laboratorios Virbac México, Labs Grossman, Lapisa, Novag Infancia, Roche, Pfizer, Pharmacia & Upjohn, Pharmerika de México, Prime Natural Health Laboratories de Mexico, Schering Plough and Schutze Segen.

Other important players in the production of nutraceuticals in Mexico includeAllnat Nutrition, Genoma Lab, Tecno Botanica, Hecho por Capslim, Fuente de Vida, Mexico Vital, Mutriproductos Formula India, Naturales Herbital, Nutri Jadmex, Laboratorios Botánicos Azteca, Plantas Medicinales Anahuac, Yerbamex and Nutry Salud.

Several Canadian companies have found success in the Mexican nutritional supplement market. Apotex, a generic pharmaceutical company based in Weston, ON, opened a manufacturing facility in Mexico in 1996 and currently supplies a variety of nutraceuticals to the local market. Other Canadian players include Northern Edge and Premium Life, which successfully sell flaxseed products through a wide array of distributors. These companies also sell directly to Mexican nutraceutical manufacturers.

PRIVATE AND PUBLIC SECTOR CUSTOMERS

Nutritional supplement importation and distribution in Mexico is done through a variety of channels.

There are only a few specialized distributors of natural supplements in Mexico who buy directly from manufacturers and import products from abroad. The most important distributors in the market are Super Mayoreo Naturista, Pronasoya, Caalfa-Bet, Ultrasoya, and Mundo Natural. In addition, the three largest traditional pharmaceutical distributors (Grupo Casa Saba, Nadro and Casa Marzan) are increasingly carrying nutraceutical products, which they purchase from domestic or foreign manufacturers, as well as from the specialized nutritional supplement distributors previously listed.

Wholesalers are mainly concentrated in the downtown area of Mexico City and other major urban centers. Wholesale distribution centers represent an important channel for nutritional product distribution, as local small distributors and natural health stores from different nearby states and cities purchase products from these outlets.

Large retailers -- primarily supermarket and drugstore chains -- have recently incorporated specific nutritional supplement shelf space within their stores, targeted at selling the higher-end, fashionable and heavily advertised nutraceutical products including vitamins, multivitamins, Canadian flaxseed, calcium complements and weight loss products. This sales channel purchases products from major distributors, including traditional pharmaceutical distributors and in some cases directly from small specific niche importers. The most important players that have incorporated nutritional supplements are Wal*Mart, Comercial Mexicana, Gigante, Sanborns, Soriana, Farmacias del Ahorro, and Farmacias Similares.

Although there are no official statistics available on the number of specialized natural product stores in Mexico, there is an estimated 1000 small retail stores selling low-cost nutritional supplements in the country. These stores target the lower-income population of the country, which represents 80% of the market. Large natural product stores chains, such as Mundo Natural, GNC, Nutrisa, Nutry Salud and El Angel de tu Salud, are beginning to expand their presence in shopping malls throughout the country. These types of companies primarily sell private label brands and offer only medium opportunities for other brands.

In recent years direct marketing and sales of nutraceuticals, which includes catalogue, door-to-door and infomercial sales, have become an important distribution mechanism in Mexico. Mexico is the fourth largest market in the world in terms of direct sales agents, and the largest catalogue sales market in Latin America. The Mexican Association of Direct Sales (Asociación Mexicana de Ventas Directas- AMVD), estimates that nutritional products account for 17% of the $1.7 billion total direct sales market. Main players in the nutritional segment include Genoma Lab, Omnilife, Advance Nutrition, Forever Living Products Mexico, Golden Neo Life Diamite International, Grupo Fortoul, Herbalife International de México, Morinda Internacional, Nature Sunshine Poroducts de Mexico, Neways de Mexico and Orbis. Similarly, traditional direct sale companies such as Avon, Amway, Arabela, Stanhome, House of Fuller and Jafra are expanding their nutritional supplement offerings through catalogue sales. These companies offer excellent opportunities to sell and distribute private label nutraceuticals, as well as purchase of bulk materials for local production of supplements.

Market Entry Considerations

Canadian companies seeking to enter the Mexican market should consider that pricing and meeting Mexican regulations are the two most important factors to successfully penetrate the market.

In 1998, the Ministry of Health (Secretaría de Salud-SSA) published the Regulations for Health Products (Regulaciones de Productos para la Salud). This law establishes the need to obtain a Sanitary Import Permit prior to importing nutritional supplements. The registration process normally takes 45 working days and importers are required to fill out a SSA-04-002-A form, (http://www.ssa.gob.mx). The following documents and information are also required:

• Product's commercial and generic name;
• Volume information;
• Invoice or pro-forma invoice for the products;
• Certificate of Origin;
• Receipt of payment of permit dues;
• Certificate of "free sale" in the country of origin;
• Certificate of goods manufacturing practices;
• Laboratory analysis;
• Microbiological analysis;

A copy of the original label as sold in the country of origin and the translation to Spanish of the label that will be used in Mexico, complying with regulation NOM-051-SCFI-1994; and

For nutritional supplements the label must also comply with NOM-141-SSA1-1995, which, among other things, requires the inclusion of product ingredients (scientific names and percentages), instructions, batch information and product warnings. For more information on labeling please consult: http://www.ssa.gob.mx/nom/141ssa15.html (in Spanish)

In addition to sanitary import permits, current legislation establishes that only companies with a valid sanitary license can import vitamins and several specific nutraceutical product categories, therefore Canadian companies seeking to export products to Mexico should partner with local companies that have a current license. The need for a sanitary license will depend on the ingredients and percentages contained in the product; these can be found in Spanish in the Ministry of Health's Web site or by direct consultation with the Products and Services Sanitary Control Division of the Ministry (Dirección General de Control Sanitario de Productos y Servicios de la Secretaia de Salud).

On the marketing side, the leading nutritional supplement companies have found infomercials to be the most successful selling tool in the market. Mexican authorities have recently began making efforts to regulate advertisement for nutraceuticals and have assigned a special commission -COFEPRIS- headed by the Ministry of Health, to develop new legislation which is expected to come into force in 2005.

KEY CONTACTS

Canadian Contacts

Canadian Embassy in Mexico
Shiller No. 529
Col. Rincón del Bosque Polanco
11560, México D.F. México
Contact: Evelyne Alcala, Commercial Officer
Tel.: (52-55) 5724-7900
Fax: (52-55) 5724-7982
E-mail: evelyne.alcala@dfait-maeci.gc.ca
Internet: http://www.canada.org.mx

Canadian Drug Manufacturers Association
4120 Yonge St., Suite 606
North York, ON M2P 2B8
Tel.: (416) 223-2333
Fax: (416) 223-2425
E-mail: keonj@cdma-acfpp.org
Internet: http://www.cdma-acfpp.org

Canadian Wholesale Drug Association (CWDA)
5255 Yonge St., Suite 505
Toronto, ON M2N 6P4
Tel.: (416) 222-3922
Fax: (416) 222-8960
Internet: http://www.cwda.com

Health Canada
International Affairs Directorate
Room 814ª, Brooke Claxton Building
Postal Locator: 0908ª, Tunney's Pasture
Ottawa, ON K1A OK9
Contact: Marsha Permut, International Business and Development Manager
Tel.: (613) 941-3136
Fax: (613) 952-7417
E-mail: marsha_permut@hc-sc.gc.ca
Internet: http://www.hc-sc.gc.ca

Therapeutic Products Program Office
Holland Cross, Tower B, 2nd Floor
Postal Locator: 3102D1, 1600 Scott St.
Ottawa, ON K1A 1B6
Internet: http://www.hc-sc.gc.ca/hpb-dgps/therapeut

Industry Canada
Life Sciences Branch
235 Queen St.
Ottawa, ON K1A OH5
Internet: http//strategis.gc.ca
Tel.: (613) 954-3160
Fax: (613) 952-4209
Internet: http://strategis.ic.gc.ca/ttchealth

International Trade Canada
125 Sussex Dr.
Ottawa, ON K1A 0G2
Internet: http://www.dfait-maeci.gc.ca

Market Research Centre (TMR)
Contact: Michelle Morris, Senior International Market Analyst
Tel.: (613) 996-2462
Fax: (613) 943-1103
E-mail: michelle.morris@dfait-maeci.gc.ca
Internet: http://www.infoexport.gc.ca

Market Support Division (TMM)
Contact: Christopher Duggan, Trade Commissioner
Tel.: (613) 996-1431
Fax: (613) 944-0050
E-mail: christopher.duggan@dfait-maeci.gc.ca
Internet: http://www.infoexport.gc.ca

Nutraceutical Alliance
Medicinal Herbs and Nutraceuticals Research
Equine Research Center
50 McGilvray St.
Guelph, ON N1G 2W1
Tel.: (519) 837-0061
Fax: (519) 767-1081
E-mail: info@neutraceuticalalliance.com

Mexican Contacts

Association of Pharmaceutical Products Distributors of México (Aociación de Distribuidores de Productos Farmacéuticos de la República Mexicana-DIPROFAR)
Córdoba No. 42
Col. Roma
06700 México, D.F. México
Contact: Arturo Gunter, President
Tel.: (52-55) 5533-1750
Fax: (52-55) 5525-3287

Mexican Association of Direct Sales (Asociación Mexicana de Ventas Directas-AMDV)
Tlacoquemecatl 21 desp. 201
Col. Del Valle
03100 México, D.F. México
Contact: Gabriela Moreno, President
Tel.: (52-55) 5575-8233
Fax: (52-55-) 5575-8237
E-mail: amvd@mail.internet.com.mx
Internet: http://www.amvd.org.mx (Spanish)

Mexican Pharmaceutical Association(Asociación Farmacéutica Mexicana A.C.)
Calle. Adolfo Prieto No. 1649, piso 6
Col. del Valle
03100 México, D.F. México
Tel.: (52-55) 5524-0993, 5524-5685
Fax. (52-55) 5534-5098
E-mail: afm@afmac.org.mx
Internet: http://www.afmac.org.mx (Spanish)

Mexican Society of Herbs and Nutritional Supplements (Sociedad Mexicana de Herbolaria y Suplementos Alimenticios, A.C.)
Guadalajara No. 21-C
Col. Roma
México, D.F. México
Contact: Hilda Virgen Urcelae, Director
Tel: (52-55) 9149-5285

Ministry of Economy (Secretaria de Economía)
Bureau of Standards (Dirección General de Normas-DGN)
Av. Puente de Tecamachalco No. 6, piso 3
Col. Lomas de Tecamachalco
53950 México, D.F. México
Contact: Salvador Franco, Standards Manager
Tel.: (52-55) 5729-9300, 5729-9100
Fax: (52-55) 5729-9484
Internet: http://www.economia.gob.mx (Spanish)

Ministry of Health (Secretaría de Salud)
General Direction for Sanitary Control of Products and Services (Direccion General de Control Sanitario de Productos Y Servicios)
Monterrey 33 Esq. Oaxaca
Col. Roma
06700, Mexico, D.F., Mexico
Tel.: (52-55) 5553-7670, 5553-6888
Internet: http://www.salud.gob.mx (Spanish)

Pharmaceutical Products Department (Dirección General de Medicamentos)
Tel.: (52-55) 5250-9478
Fax: (52-55) 5250-1683

National Association of Medicine Distributors (Asociación Nacional de Distribuidores de Medicinas- ANADIM)
José María Rico No. 212-206
Col. Del Valle
03100 México, D.F. México
Contact: Sergio Chaboya, Director
Tel.: (52-55) 5534-3785, 5524-0234
Fax: (52-55) 5524-0033

National Association of the Natural Products Industry (Asociacion Nacional de Productos Naturistas- ANIPRON)
Periferico Sur 5482-A
Col. Pedregal de Carrasco
04700 México, D.F. México
Contact: Andrea Olalde, Executive Manager
Tel.: (52-55) 5424-5630, 5424-5631, 5424-5631
E-mail: gerencia@anipron.org
Internet: http://www.anipron.org

National Association of Retail and Department Stores (Asociación Nacional de Tiendas de Autoservicio y Departamentales - ANTAD)
Horacio 1855, piso 6
Col. Chapultepec Morales
11570 México, D.F. México
Tel.: (52-55) 5580-1772
Fax: (52-55) 5395-2610
Internet: http://antad.org.mx (Spanish)

National Chamber of the Pharmaceutical Industry (Cámara Nacional de la Industria Farmacéutica- CANIFARMA)
Av. Cuauhtémoc No. 1481
Col. Santa Cruz Atoyac
03310 México, D.F. México
Tel.: (52-55) 5688-9477, 5688-9616

BIBLIOGRAPHY

Print

Reforma Newspaper. "Nombres, Nombres y Nombres," February 12, 2004.

----. "Tiempo de Negocios. Van por CV Directo," January 21, 2004.

U.S. Commercial Service. "Drugs and Pharmaceuticals-ISA," March, 3, 2003.

Electronic

Industrial Directories. "Natural Food Business Directory," February 2002.Downloaded from http://www.dirind.com/alimentaria/iindex.html on February 15, 2004.

Mexican Association of Direct Sales. "Members Directory," December 2003. Downloaded from http://www.amdv.org.mx on February 15, 2004.

----. "Annual Sales," January 18, 2004.Downloaded from http://www.amvd.org.mx/amvd/presentacion.asp on March 16, 2004.

----. "Direct Sales Scheme," Downloaded from http://www.amvd.org.mx/amvd/ventaDirecta.asp on March 16, 2004.

Mexican Association of Natural Products (ANIPRON). "Labeling Requirements for Nutritional Supplements," November 16, 2002.Downloaded from http://www.anipron.org on March 23, 2004.

Mexico. Ministry of Economy. SIAVI. "Total Imports of Nutritional Supplements," November 12, 2003.Downloaded from http://www.economia-snci.gob.mx on February 10, 2004.

----. Mexican Standards "NOM-051-SCFI-1994," January 24, 1996.Downloaded from http://cronos.cta.com.mx/cgi-bin/normas.sh/cgis/despresult.p?clave=NOM-051-SCFI-1994 on February 10, 2004.

----. "Imports of Nutritional Supplements, Share by Country," November 12, 2003.Downloaded from http://www.economia-snci.gob.mx/sic_php/ls23al.php?s=24&p=1&l=1 on February 10, 2004.

----. "Main Importers," November 12, 2003.Downloaded from http://www.economia-snci.gob.mx/sic_php/ls23al.php?s=24&p=1&l=1 on February 10, 2004.

----. "Mexican Official Standards," December 2003.Downloaded from http://www.economia-snci.gob.mx/sic_php/ls23al.php?s=24&p=1&l=1on February 10, 2004.

Useful Internet Sites

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

Ministry of Econcomy (Secretaría de Economía): http://economia.gob.mx

Ministry of Health (Secretaría de Salud): http://www.ssa.gob.mx

National Association of the Natural Products Industry (ANIPRON) (Asociación Nacional de la Industria de Productos Naturales A.C.): http://www.anipron.org

National Chamber of the Pharmaceutical Industry (CANIFARMA) (Cámara Nacional de la Industria Farmacéutica): http://www.canifarma.org.mx

National Institute for Geography and Statistics (INEGI) (Instituto Nacional de Estadística, Geografía e Informática): http://www.inegi.gob.mx

1. The Government of Canada has prepared this report 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 the Bank of Canada average exchange rate for 2003 of 0.1301 Canadian dollars to 1.00 Mexican peso.

3. Multivitamins account for close to 45% of the total vitamin market.