Report: Mexican and Latin food markets sturdy and growing swiftly

The Mexican food and beverages market has grown 67 per cent since 2004, and in Venezuela growth has been more than 50 per cent in the same period.

While the impact of the global recession is expected to "significantly" curtail this growth, these are just two of the promising findings to appear in a new report published in May by Leatherhead Food International, Emerging Food Markets in Latin America.

"Recent growth has been stronger in Latin America than in many parts of the developed world, since many sectors of the food and drinks industry are considerably less well established," the report stated. "Latin America now accounts for an estimated 8 per cent of the global food and drinks market, a figure which is believed to have experienced a slight rise in recent years."

With such rich opportunities waiting in Latin America, how can North American businesses tap into this market?

"Supplements manufacturers have been trying for years to penetrate the Hispanic market, and they have generally not been successful," said Cesar Diaz, MD, a physician based in Utah who works mainly in natural and holistic health with the Hispanic community.

"The problem every company faces is they don't understand the culture. People think that if people speak Spanish, they must be a Mexican, or that they have the same background and beliefs. But it's simply not true. Each country has own unique culture of its own dialect. You need to learn the country you are trying to target."

The countries of Argentina, Brazil and Chile are a great example. Although all located on the southern tip of Latin America, Brazilians speak Portuguese, not Spanish, and Argentinians and Chileans are age-old rivals.

"If you hire a Chilean to be a spokesperson for your project in Argentina, that is not the best way to approach it," Diaz said. "That's like sending a Yankee down South. The two cultures are totally different. In South America, the roots of culture are very deep, so you better do it the right way or you will not be successful."

Other key findings of Leatherhead's report include:

  • The food and drinks sector typically accounts for 25-30 per cent of all consumer expenditure in Latin America. Consumers are now spending more money on imported foodstuffs.
  • Market potential is considered particularly high in Brazil and Mexico, where a more affluent class is emerging in urban areas. Other promising countries include Argentina and Chile, which have more stable economies in the region.
  • The only "unattractive" market in the region is Venezuela, due to friction between the government and many food producers.
  • The soft drinks market continues to perform well, with highest growth in mineral water and fruit juices, as consumers become more health-conscious.
  • Dairy products (especially value-added varieties such as ice cream and yoghurts), convenience products (such as ready meals and pizza, beer and soft drinks) are likely to experience the highest levels of future growth in the region. Sales of bakery products are expected to remain, owing to their position as an essential staple.

Major Growth Sectors of the Food and Drinks Industry by Country, 2008

Country

Growth Sectors

Brazil

Dairy products, bakery products, breakfast cereals, frozen foods, pasta, chocolate confectionery, poultry, baby foods, cooking oils, pet foods, coffee, soft drinks, beer

Mexico

Dairy products, bakery products, breakfast cereals, convenience foods, savoury snacks, confectionery, cooking oils, pet foods, tea, soft drinks, beer

Argentina

Dairy products, bakery products, breakfast cereals, pasta, savoury snacks, confectionery, cooking oils, baby foods, pet foods, soft drinks, hot drinks, beer

Chile

Dairy products, convenience foods, biscuits, savoury snacks, confectionery, meat & poultry, baby foods, pet foods, soft drinks, beer

Venezuela

Dairy products, pasta, confectionery, poultry, coffee, soft drinks, beer, wine

Colombia

Dairy products, breakfast cereals, biscuits, savoury snacks, confectionery, poultry, eggs, shrimps, soft drinks, beer

Peru

Dairy products, bakery products, noodles, chocolate confectionery, coffee, soft drinks, beer

Uruguay

Dairy products, bakery products, meat & poultry, soft drinks

Source: Leatherhead Food International/Global Food Markets (GFM)

Countries Displaying Growth Potential for Various Sectors of the Food and Drinks Industry, 2008

Food Sector

Regions/Countries

Baby Foods

Brazil, Argentina, Chile

Bakery Products

Brazil, Mexico, Argentina, Chile, Colombia, Peru, Uruguay

Beer

Brazil, Mexico, Argentina, Chile, Venezuela, Colombia, Peru

Breakfast Cereals

Brazil, Mexico, Argentina, Colombia

Confectionery

Brazil, Mexico, Argentina, Chile, Colombia, Peru

Convenience Foods

Brazil, Mexico, Chile

 

Cooking Oils

Brazil, Mexico, Argentina

Dairy Products

Brazil, Mexico, Argentina, Chile, Venezuela, Colombia, Peru, Uruguay

Fish & Seafood

Colombia

Hot Drinks

Brazil, Mexico, Argentina, Peru

Meat & Poultry

Brazil, Chile, Venezuela, Uruguay

Pasta

Argentina, Venezuela

Pet Foods

Brazil, Mexico, Argentina, Chile

Savoury Snacks

Mexico, Argentina, Chile, Colombia

Soft Drinks

Brazil, Mexico, Argentina, Chile, Venezuela, Colombia, Peru, Uruguay

Wine

Venezuela

Source: Leatherhead Food International/Global Food Markets (GFM)

 

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