Required Report - public distribution

**Date:** 7/16/2004

**GAIN Report Number:** MX4308

MX4308

**Mexico**

**Market Development Reports**

**The Mexican Market for Fruit and Vegetable Juices**

**2004**

**Approved by:**

![](media/image1.wmf)Kate Snipes

ATO Mexico City

**Prepared by:**

Lourdes Guzman and Michael Lehrer

**Report Highlights:**

The Mexican market for fruit and vegetable juices has grown over the
past five years, though most of the market is satisfied by local
production. Imports comprise about 4 percent of domestic consumption and
the US import market share is 74 percent. Innovative products and new
juice blends hold the most potential for market growth.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Mexico ATO \[MX2\]

\[MX\]

# SECTION I. Market Overview

The Mexican market for processed fruit and vegetable juices has had slow
but steady growth over the past 5 years. The processed fruit and
vegetable juice sector has an estimated value of over \$880 million.
Imports comprise between 3 to 5 percent of Mexican juice sales, and the
US import market share is 74 percent.

The processed fruit and vegetable juice market is divided into three
main categories. The main distinction is made by the "bricks percentage"
(amount of fruit pulp) contained in the product:

1.  Nectars: fruit drinks with high concentration of pulp of more than
    20 percent.

2.  Juices: fruit and vegetable drinks with a pulp concentration of 9 to
    20 percent, and 30 percent or more of juice.

3.  Fruit beverages: drinks with less than 30 percent content of fruit
    juice; depending on the flavor, the pulp concentration is between 1
    to 8 percent.

Fruit based juices represent around 85 percent of the total market while
vegetable varieties account for about 15 percent.

**Table 1: Advantages and Challenges for US Exporters of Processed Fruit
and Vegetable juices to Mexico**

+-----------------------------------+-----------------------------------+
| ######## Advantages               | ######## Challenges               |
+-----------------------------------+-----------------------------------+
| NAFTA has eliminated import       | Imported products tend to be more |
| duties for juice products from    | expensive                         |
| the United States                 |                                   |
+-----------------------------------+-----------------------------------+
| US proximity to Mexico makes      | Strong and growing domestic       |
| transportation costs lower than   | production offering quality       |
| for other countries               | products at competitive prices    |
+-----------------------------------+-----------------------------------+
| Distribution networks for fruit   | A few large domestic juice        |
| juice has improved dramatically   | manufacturers control over 60     |
| in recent years                   | percent of the market             |
+-----------------------------------+-----------------------------------+
| Mexico has a potential consumer   | Mexico is one of the largest      |
| base of about 52 million under    | consumers of carbonated beverages |
| the age of 25; this group prefers | in the world and these are        |
| healthier choices and natural     | preferred over juices             |
| flavors                           |                                   |
+-----------------------------------+-----------------------------------+
| US products are viewed as high    | Mexicans generally drink fresh    |
| quality and innovative, i.e. new  | squeezed juice instead of         |
| juice blends                      | processed juice                   |
+-----------------------------------+-----------------------------------+

# 

# SECTION II. Market Sector Opportunities and Challenges

**a. Domestic Production**

Competition from domestic producers is very strong; 250 fruit and
vegetable juice processors account for over 95 percent of juice sales in
Mexico. Nectars account for 40 percent of the production, followed by
juices with 35 percent, and fruit drinks, 25 percent of production.

Production of fruit and vegetable juices is expected to grow at an
annual average rate of over 10 percent. During 2003, total production of
processed fruit and vegetable juices was estimated at \$937 million.
Mexico exports around 10 to 12 percent of its processed fruit and
vegetable juice production. It is estimated that during 2003 exports
reached \$100 million.

Mexico's production by flavor is divided as follows:

-   Orange 22 %

-   Apple 17 %

-   Peach 16 %

-   Mango 15 %

-   Grape 6 %

-   Pineapple 4 %

-   Other fruits 20 %

**Table 2: Mexican Production of Processed Fruit and Vegetable Juices**

**2000-2003e**

+---------------------+-----------+-----------+-----------+-----------+
| #### PRODUCT        | **2000**  | **2001**  | **2002**  | **2003e** |
+---------------------+-----------+-----------+-----------+-----------+
|                     | ##        |           |           |           |
|                     | ##### Mil |           |           |           |
|                     | lions USD |           |           |           |
+---------------------+-----------+-----------+-----------+-----------+
| Juices              | 199.8     | 210.3     | 231.3     | 254.4     |
+---------------------+-----------+-----------+-----------+-----------+
| Nectars             | 305.9     | 323.2     | 355.5     | 391.1     |
+---------------------+-----------+-----------+-----------+-----------+
| Specialties (mixes) | 40.1      | 59.1      | 65.0      | 71.5      |
+---------------------+-----------+-----------+-----------+-----------+
| Fruit Drinks        | 143.8     | 182.2     | 200.4     | 220.5     |
+---------------------+-----------+-----------+-----------+-----------+
| ###### TOTAL        | **689.6** | **774.8** | **852.2** | **937.5** |
+---------------------+-----------+-----------+-----------+-----------+

**e:** Estimate

**b. Imports and Foreign Competition**

Imports account for 3 to 5 percent of Mexican juice sales. Imports from
the United States have 74 percent import market share; Spain, 10
percent; Chile and Brazil, 8 percent. Imports of processed fruit and
vegetable juice have fluctuated over the last three years reaching
record \$34.8 million in 2001, dropping 10 percent to \$31.1 million in
2002, and recovering slightly to \$32.1 million in 2003. As the Mexican
economy continues to improve, imports are expected grow at an annual
average rate of 5 to 6 percent.

The strongest demand for imports is in the mixed fruit/vegetable
segment, according to distributors. Growth in demand for these imports
has been hovering around 20 percent in recent years, which far exceeds
growth in the domestic market.

**Table 3: Mexican Imports of Processed Fruit and Vegetable Juices**

**2000-2003e**

+-----------+-----------------+--------+---------+---------+---------+
| **TARIFF  | **PRODUCT**     | **     | *       | *       | **      |
| CODE      |                 | 2000** | *2001** | *2002** | 2003e** |
| NUMBER**  | **DESCRIPTION** |        |         |         |         |
+-----------+-----------------+--------+---------+---------+---------+
|           |                 | ##     |         |         |         |
|           |                 | #####  |         |         |         |
|           |                 | Millio |         |         |         |
|           |                 | ns USD |         |         |         |
+-----------+-----------------+--------+---------+---------+---------+
| 200911    | Frozen Orange   | 0.5    | 0.7     | 0.8     | 0.9     |
|           | Juice           |        |         |         |         |
+-----------+-----------------+--------+---------+---------+---------+
| 200912-19 | Orange Juice    | 9.8    | 6.3     | 4.6     | 4.7     |
+-----------+-----------------+--------+---------+---------+---------+
| 200921-29 | Grapefruit      | 2.7    | 1.2     | 1.1     | 1.2     |
|           | Juice           |        |         |         |         |
+-----------+-----------------+--------+---------+---------+---------+
| 200931-39 | Other Citrus    | 0.5    | 0.5     | 0.5     | 0.6     |
|           | Fruit Juice     |        |         |         |         |
+-----------+-----------------+--------+---------+---------+---------+
| 200941-49 | Pineapple Juice | 0.3    | 0.3     | 0.2     | 0.3     |
+-----------+-----------------+--------+---------+---------+---------+
| 200950    | Tomato Juice    | 0.3    | 0.1     | 0.1     | 0.2     |
+-----------+-----------------+--------+---------+---------+---------+
| 200961-69 | Grape Juice     | 0.9    | 1.4     | 1.3     | 1.4     |
+-----------+-----------------+--------+---------+---------+---------+
| 200971-79 | Apple Juice     | 4.6    | 7.5     | 5.3     | 5.4     |
+-----------+-----------------+--------+---------+---------+---------+
| 200980    | Other Fruit or  | 4.0    | 5.4     | 4.1     | 4.2     |
|           | vegetable       |        |         |         |         |
|           | Juices not      |        |         |         |         |
|           | mixed           |        |         |         |         |
+-----------+-----------------+--------+---------+---------+---------+
| 200990    | Mixtures of     | 10.2   | 11.4    | 13.1    | 13.2    |
|           | Fruit and/or    |        |         |         |         |
|           | Vegetable       |        |         |         |         |
|           | Juices          |        |         |         |         |
+-----------+-----------------+--------+---------+---------+---------+
| # TOTAL   |                 | **     | *       | *       | # 32.1  |
|           |                 | 33.8** | *34.8** | *31.1** |         |
+-----------+-----------------+--------+---------+---------+---------+

> **Source:** World Trade Atlas and Mexican Secretariat of Economy
> Statistics
>
> **e:** Estimate

**d. Domestic Consumption and Market Structure**

Mexicans prefer fresh squeezed over bottled juices. However, consumption
of processed fruit and vegetable juices in Mexico is estimated at 5.5
liters of juice per capita, representing annual sales of over \$880
million.

According to members of the Mexican juice industry, the retail sector is
the most important distributor of processed fruit and vegetable juices
in Mexico. Almost 60 percent of processed juice sales are in the retail
chains, and the largest retail chains are Walmart de Mexico, Comercial
Mexicana, and Gigante. Since most retail chains do not import products
directly, they source their imported products through local
importers/distributors and wholesalers.

**e. Mexico City Market Study**

For the purpose of this report, a market survey was conducted in Mexico
City with a group of 200 men and women. The survey discovered that 70
percent of the people interviewed drink bottled water, 20 percent
consume soft drinks, and 10 percent drink juices.

For the 10 percent of Mexicans that drink juices, the following results
were obtained:

-   90% of juice drinkers prefer to drink fresh squeezed juice over
    processed product

-   70% prefer juice packed in tetra-pack containers over bottled or
    canned

-   65% prefer packaging of 220--300 ml (7-10 oz) over larger packaging

-   28% prefer apple, 25% pineapple, 22% mango, 20% orange, 5% other

-   60% prefer juice to nectar

###### SECTION III. Entry Strategy

**a. Business Culture**

Personal relationships are of primary importance in Mexican business
relationships because they attach great importance to courtesy in all
business endeavors. The US concept of "time is money" should be left at
the border because most Mexicans prefer to become better acquainted with
their new business partner instead of "getting down to business". Thus,
a personal visit to Mexico is the best way to understand the market and
make business contacts to formulate an entry strategy.

Several important points should be recognized in order to have success
in the market:

-   *Business is generally conducted in Spanish.* Assume business
    communication will be conducted in Spanish. A translator is
    acceptable to facilitate communication.

-   *Personal face-to-face communication is critical.* Personal contact
    with buyers is essential to initiate business relations in Mexico. A
    fax or email is not considered appropriate for initial
    communication. After establishing the initial personal contact, a
    follow-up email or fax is appropriate. An in-country representative
    or periodic personal visits is important to continue relationship.

-   *Importers/distributors are key to export sales in Mexico.* A good
    distributor should promote sales and make sure that the products are
    available at points of sale. They are important because they have
    the expertise to handle complicated regulations and can
    trouble-shoot problems that imports can face at the border.

**b. Trade Services Available and Events**

The Agricultural Trade Offices (ATOs) in Mexico are located in Mexico
City and Monterrey. Their function is to assist US businesses to access
the market by providing a variety of services such as: sponsoring US
Pavilions in trade shows, provide information about local distributors,
and arrange services from a contractor (Ag Aides) who can set up
individual meetings in the country for a fee. For more information on
available services, or to connect with our Ag Aides, please contact our
ATO offices directly.

US firms should also consider using a variety of marketing tools to
effectively distribute their products in Mexico. These promotional
activities could include:

-   Participating in trade shows,

-   Preparing brochures and promotional materials in Spanish,

-   Hosting technical seminars to inform end users, distributors, and
    retailers of new technologies, innovations and product advantages,
    and

-   Being involved with the ATO who continuously organize marketing
    campaigns to support American companies exporting to Mexico.

**[Trade Events:]{.underline}**

**ABASTUR 2004**

When: September 29 - October 1, 2004

Where: Centro Banamex, Mexico City

Contact: Lourdes Guzmán, US Agricultural Trade Office (ATO)-Mexico City

Tel: (011-5255) 5280-5291

Fax: (011-5255) 5281-6093

Email: lourdes.guzman@usda.gov

Web Page: www.feriasalimentarias.com

Show type: Mexico's largest Hotel and Restaurant show

**EXPO INTERNACIONAL NATURISTA ANIPRON 2005**

When: February 11-13, 2005

Where: WTC World Trade Center, Mexico City

Sponsor: Nutrisa

Contact: ANIPRON-Asociación Nacional de la Industria de Productos
Naturales, A..C.

Lic. Andrea Olaide, Organizing Committee

Tel: (011-5255) 5665-5802 or 7790 or 6733

Fax: (011-5255) 5665-9248

Email: anipron@anirpon.org

Web Page: www.anipron.org

Show type: Mexico's largest show for natural and healthy products

**BEBEREXPO 2005**

When: February 22-24, 2005 (TBC)

Where: Palacio de los Deportes, Mexico City

Contact: Conexpro, Ms. Tere Sandoval, or Mr. Roberto Hernández

Tel: (011-5255) 5682-8667

Fax: (011-5255) 5523-1976

Email: rhv@conexpro.com.mx

Web Page: www.beberexpo.com

Show Type: Mexico's largest beverages show in its 9^th^ edition.

# ANTAD 2005

When: March 11-13, 2005

Where: Expo Guadalajara Convention Center, Guadalajara, Jalisco

Contact: Carlos Zertuche, US Agricultural Trade Office (ATO)-Mexico City

Tel: (011-5255) 5280-5291

Fax: (011-5255) 5281-6093

E-mail: carlos.zertuche@usda.gov

Web Page: www.antad.org.mx

Show Type: Mexico's largest retail and supermarket show

**SECTION IV. Import Requirements**[^1]

**a. Tariffs and Taxes**

According to NAFTA import tariffs for the following processed fruit and
vegetable juices reached zero on January 1, 2003.

> Grapefruit Juice 2009.21-29
>
> Other Citrus Fruit Juice 2009.31-39
>
> Pineapple Juice 2009.41-49
>
> Tomato Juice 2009.50
>
> Grape Juice 2009.61-69
>
> Apple Juice 2009.71-79
>
> Other Fruit or vegetable Juices not mixed 2009.80
>
> Mixtures of Fruit and/or Vegetable Juices 2009.90

Imports of orange juice (frozen and non-frozen) tariff codes 2009.11,
2009-12, 2009.19 are subject to quotas (especially frozen) and a special
duties between \$.10 and \$.60 cents per liter apply depending on the
"bricks content" once the quota has been exceeded.

Mexico has a 15 percent value-added tax (VAT, or IVA in Spanish).
Mexican Customs collects the VAT on foreign transactions upon entry of
the merchandise into the country. Customs brokers use the total figure
to calculate their fees, which are usually 0.5 percent, on average, plus
any storage and handling fees.

# 

# 

**b. Import Requirements**

Under NAFTA, Mexican imports of fruit juices do not require import
permits. However, imports of fruit juices are subject to several
official Mexican standards (NOMs). There are two kind of NOMs: the first
kind details what requirements products must comply with; the second
kind actually requires action by the producer to show their compliance
with the NOM. Mexico's current regulatory process is based on its
"Federal Law of Metrology and Standarization", originally published in
Mexico's Diario Official (Federal Register) on July 1, 1992. Before
introducing imported goods into Mexico, the importer/distributor has to
prove that the products comply with the corresponding NOM. The NOMs that
imported juices have to comply with are: NOM-002-SSA1-1994
"Environmental Health, Goods and Services", "Sealing Specifications for
Metallic Food and Beverage Containers", and NOM-130-SSA1-1995 "Goods and
Services. Sanitary Provisions and Specifications for Food Packaged in
Hermetically Sealed Containers and Subject to Heat Treatment".

**c. Labeling**

Imported processed fruit and vegetable juices to be sold at retail must
be labeled according to the Mexican government specifications
NOM-051-SCFI-1994. Some US suppliers choose to develop special packaging
for the Mexican market. At a minimum, a label must be affixed to each
package of the imported product prior to entering the country. All the
information on the label must be in Spanish and include the following
data: [^2]

-Commercial/brand name

-Producer\'s name and address

-Exporter\'s name and address

-Country of origin (i.e. product from the US)

-Importer\'s name, address and RFC number (taxation number)

-Product description in Spanish

-Product description in English

-Preparation and handling instructions

-Net weight in metric units

-Date of expiration

-Ingredients

-Special warnings

For complete information the Federal law on Metrology and Normalization
can be consulted in the following web page:

http://cronos.cta.com.mx/cgi-bin/normas.sh/cgis/despresult.p?clave=NOM-051-SCFI-1994

# NOM-051-SCFI-1994, "General labeling Specifications for pre-packaged foods and non-alcoholic beverages". Under this NOM, nutritional information is voluntary, unless a nutritional claim is made. This NOM applies to most food items.

**d. Cargo Unloading, Transport, and Storage Fees**

Cargo unloading fees vary depending on the weight, number of pieces,
type of merchandise and location. These fees are usually charged
according to pre-established tables. In general, cargo-unloading fees in
Mexico are slightly higher than those in the United States for
comparable services.

Trucks are the most reliable method of delivery within Mexico,
accounting for approximately 60 percent of cargo volume. Trucking
companies cannot bring merchandise directly from the United States to
Mexico. A US trucking company drives the shipment to the border and
transfers its trailer to a Mexican rig. The best way to ship by truck is
to use an internationally bonded carrier that has relationships with
Mexican carriers. Mexican trucking companies generally determine their
fees by mileage or distance, weight, and type of merchandise.
Practically all transport companies/freight forwarders offer a basic
insurance plan, which covers transport and handling of cargo. When
selecting a transporter it is recommended to check their claim history
and complaints they might have received. Though trucks are more
expensive than shipping via "Container in Flat Car" (COFC) or "Trailer
Flat Car" (TOFC), transportation fees are lower in Mexico by as much as
10 percent.

# Warehousing costs vary depending on the space required and any specific product needs. Average monthly meter squared warehouse rental fees in Mexico City are around \$3.60, \$3.00 in the Guadalajara area, and approximately \$3.20 in Monterrey and surrounding areas. In bond storage facilities are a popular storage method used by exporters by which duties are paid on the items stored until they are released from the facility for distribution in the market. Any merchandise placed in a warehouse should be insured. A basic insurance policy can be secured from the warehouse administrator or a more comprehensive policy from a private insurance company.

**SECTION V. Key contacts and further information**

**US Agricultural Trade Office, Mexico City**

Bruce Zanin, Director

Jaime Balmes No. 8-201

Col. Los Morales Polanco

11510 Mexico, D.F.

Tel: (011-5255) 5280-5291

Fax: (011-5255) 5281-6093

E-mail: atomexico@usda.gov

Web Page: www.fas-la.com/mexico

**US Agricultural Trade Office, Monterrey, Nuevo León**

Dan Martínez, Director

Oficinas en el Parque Torrell

Blvd. Díaz Ordaz No. 140, Piso 7

Col. Santa María

64650 Monterrey, N.L.

Tel: (011-5281) 8333-5289

Fax: (011-5281) 8333-1248

E-mail: atomonterrey@usda.gov

**[Government and associations:]{.underline}**

Oficial Company Registry: www.siem.gob.mx/portalsiem

INEGI (Census Office): www.inegi.gob.mx

Bancomext (Foreign Trade Bank): www.bancomext.com

Secretariat of Helath: www.ssa.gob.mx

Secretaria de Economía: www.economia.gob.mx

######## CANAINCA- Cámara Nacional de la Industria de Conservas Alimenticia

Leibnitz No. 206

Col. Anzures

11590 Mexico, D.F.

Tel.: (011-5255) 5203-3886

Fax: (011-5255) 5203-9587

Web Page: www.canainca.org

**ANIPRON-Asociacion Nacional de la Industria de Productos Naturales**

Address: Periferico Sur No. 5482

Col. Pedregal de Carrasco

04700 Mexico, D.F.

Tel.: (011-5255) 5424-5630

Fax: (011-5255) 5424-5630

Contact: Lic. Andrea Olaide

Web Page: www.anipron.org

**ANTAD-Asociacion Nacional de Tiendas de Autoservicio y
Departamentales**

Horacio No. 1855-6

Col. Polanco

11560 Mexico, D.F.

Tel.: (011-5255) 5580-1772, 5580-0641

Fax: (011-5255) 5395-2610

Web Page: www.antad.org.mx

**[Private sector (processors and distributors)]{.underline}**

**Frugosa, S.A. DE C.V. (Jumex)**

Km. 25 Ant. Carr. Mexico-Pachuca

Col. Tustica Xalostoc

55340 Ecatepec, Estado de Mexico

Tel: (011-5255) 5775-1050

Web Page: www.jumex.com.mx

# Jugos del Valle 

Ejercito Nacional No. 904

Col. Palmas Polanco

11510 Mexico, D.F.

Tel: (011-52-55) 5281-6500

Web Page: www.jvalle.com.mx

# Pascual Boing 

Clavijero No. 75

Col. Tránsito

Mexico, D.F.

Tel: (011-5255) 57410882,

Fax: (011-5255) 57410842

E-mail: compras@pascualboing.com

**Tecnologías Narciso, S.A. de C.V.**

Tamaulipas No. 150-20

Col. Condesa

06700 Mexico, D.F.

Tel: (011-5255) 5211-2200, 5272-5965

Fax. (011-5255) 5272-6435

E-mail: ysalant@mexitec.com.mx

**Kraft Foods de Mexico (Imports Department)**

Poniente No. 116- 553

Col. Industrial Vallejo

02300 Mexico, D.F.

Tel.: (011-5255) 5325-0999

Fax: (011-5255) 5327-7959

E-mail: joel.mota@kraft.com

**[Publications:]{.underline}**

# BViendo

Published by: Fuerza Editorial, S.A. de C.V.

E-mail: suscripciones@Fuerzaeditorial.com

Issued: Monthly

**Gente Saludable**

Published by: Nutrisa

Tel: (011-5255) 5081-8947

Issued: By-monthly

**Prevention**

Published by: Vía Satelite, S.A.

Tel: (011-5255) 5272-6088

Issued: Monthly

**Salud y Belleza**

Published by: Grupo Editorial Armonia

Tel: (011-5255) 5442-9680 D.L. 5442-9685

Contact: Graciela Boran, Sales Manager

Issued: Biannualy (April and August)

[^1]: For a detailed study of Mexican Regulations for Exporting/Border
    Crossing, the Mexico Exporter Guide and Guide to Service Providers
    in Mexico see reports MX1205, MX3322, and soon to be release Service
    Provider report on FAS-USDA site:
    http://www.fas.usda.gov/scriptsw/attacherep/default.asp.

[^2]: For additional information on labeling NOMS, see Labeling
    Regulations report MX1223 on FAS-USDA site:
    http://www.fas.usda.gov/scriptsw/attacherep/default.asp