South of US Border, Down Mexico Way,
Frozen Food Market Having Great Day

Evolving from an exporter of raw fruits and vegetables, to an importer of processed foods.

Mexico may still be thought of by some as a source of frozen broccoli and strawberries for the United States. But the days when Mexico was a mere exporter of frozen commodities are long gone. Now there is a consumer frozen food economy that depends on imports.

Mexican consumption of processed frozen food increased from $528.5 million in 1999 to an estimated $649.6 million in 2001, and leading US brands are now familiar to Mexican consumers, according to a report prepared this year by Alfredo Gayou and Pablo Orozco for the US Foreign Agricultural Service (FAS).

Of approximately 100.4 million Mexicans, some 22 million have the purchasing power to buy frozen foods, the authors estimate. Mexican consumers, especially those of the younger generation, are embracing international tastes and lifestyles, and thus becoming a growing market for imports - including frozen foods.

Domestic production of processed frozen foods was $578.5 million in 2001, compared to $551 million in 2000 and $505.5 million in 1999, according the National Institute of Statistics. Leading producers are Grupo Ind. Bimbo, Nestlé-Mexico, Sigma Alimentos and Corporativo Unilever. But with consumption up 22.9% in two years and production just 14.4%, there is an obvious need for increased imports, nearly all of which come from the US.

The principal channel for processed frozen food sales in Mexico, say Gayou and Orozco, is the retail market, with most products being sold through supermarkets and convenience store chains, as well as through wholesalers in central markets (centrales de abasto) and mom & pop and corner grocery stores. Increased cold storage space assures that these outlets can be supplied efficiently.

The Mexican frozen food processing industry is still relatively small; but it is growing to meet the needs of a wealthier and larger middle class. A growing number of new companies, an expanding customer base and more cold storage space available for these products in retail stores indicate that the industry will continue to expand. But for the time being, imports are on the rise - $115.7 million in 2001 versus $99.6 million in 2000 and $84.9 million in 1999.

Meanwhile, Mexican consumers recognize most US brands and associate them with high quality and value. In a random store check conducted in the Mexico City metropolitan area, typical Mexicans were familiar with brands ranging from Green Giant in vegetables and Ore-Ida in french fries, to Tyson in poultry, Oscar Mayer in red meats, High Liner in seafood, Dean in dairy product, ConAgra brands in dinners, and McCain in other products. Even ethnic brands like Chung's Gourmet Food and Empire Kosher were recognized.