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Food business is booming south of the border

By Jenni Spinner+

21-Nov-2013

Food processing business is growing in Mexico, currently ranked the 15th biggest producer in the world.
Food processing business is growing in Mexico, currently ranked the 15th biggest producer in the world.

Thanks to affordable manufacturing labor and increased demand for Latin-flavored foods, Mexico is becoming an attractive locale for processing and packaging firms.

In 2011, Mexico’s processed food sector output a production value of nearly $120m USD. The figure put the figure 15th on the ranking of the world’s top food producing countries.

However, countries ahead of Mexico on that list might be advised to watch their backs. From 2005 to 2010, the industry’s production grew at an average rate of more than 5%, and the rate is expected to accelerate to more than 6% by 2020.

Increased production

One factor contributing to the increased health of Mexico’s food processing sector is increased interest in Mexican foodstuffs in the US and abroad. This hunger has helped Mexico’s food exports grow at a marked rate—32.4% from 2010 to 2011.

The biggest customer for exported Mexican processed foods is the US, representing about 71% of consumption. The size of the US share is due in part to Americans broadening their culinary horizons, but also because of Mexican expatriates living in the US, looking for a taste of home.

Growth in equipment imports

An increasing influx of processing and packaging machinery into Mexico indicates the trend likely will continue for the foreseeable future. Enrique Guzman, Latin American director for PMMI: The Association for Packaging and Processing Technologies, said a number of factors make the country a good candidate for business activity.

Current conditions in Mexico are favorable for capital investment projects,” he said.

According to PMMI, firms in Mexico plunked down $535m to import new packaging machinery last year. The figure ranks the country as the globe’s seventh largest importer of packaging equipment.

Of the sectors bringing packaging equipment into Mexico in 2012, food processing accounted for nearly one third of the machines.

PMMI produces EXPO Pack Mexico, an annual processing and packaging event geared toward firms currently operating in Mexico, or those interested in testing the waters. The 2014 event is scheduled June 17-20 in Mexico City.