BMI's Executive Summary

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The Mexican frozen food market has increased rapidly over recent years, with 2006 sales estimated at over US$1bn. Sales growth, forecast to average around 13% per annum (pa), is driven by rising disposable incomes, increasing ownership of refrigerators and microwaves, busier lifestyles, leaving less time for meal preparation, and changing consumer tastes. Until the 1990s, frozen food was considered to lack freshness and taste, even among consumers able to afford it. New freezing technologies and manufacturers' marketing and advertising efforts have over recent years changed this perception, with younger urban consumers in particular having changed their opinion. According to data published by the Mexican Institute of Statistics, Geography and Informatics (INEGI), around 17mn households owned refrigerators in 2006.

Demand does, for the time being, remain mainly concentrated in large cities, including Mexico City, Monterrey, and Guadalajara, where the majority of Mexico's middle and upper class consumers, which account for around 25% of the overall population, live.

Sigma Alimentos is the leading domestic producer, followed by Grupo Bimbo, Nestlé Mexico and Corporativo Unilever. The market is, however, characterised by a large number of imported products, mainly from the US, which benefit from North American Free Trade Agreement (NAFTA) rules. Significant imports also come from Canada, Chile, and Spain. Sales are mainly via mass grocery retail outlets, with the leading Mexican operators having significantly increased their in-store freezer space over recent years. This has meanwhile also extended to smaller convenience stores, which have installed freezer cabinets in response to growing consumer demand for convenient and easy-to-prepare frozen ready meals.

Within the frozen food sector, the most important product categories are baked goods, meat products, fish products, vegetables, snacks, heat-and-serve Mexican and Italian dishes, ice cream and frozen desserts. Strongest growth is recorded for the frozen snack foods sector for reasons of convenience, and frozen vegetables, in line with consumers' increasing health consciousness.

With disposable incomes further increasing, the sector has strong potential for further growth, and a variety of new and innovative products is being launched on a regular basis. At the same time, Mexican mass grocery retailers (MGRs) continue to improve shelf display and space available for frozen food products, making it easier for consumers to appreciate the whole variety of products available and thus creating potential for further sales growth.

Contents

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Chapter 1 – Business Environment

Retail Business Environment Rankings

Economics – Long-Term Risk

Politics – Long-Term Risk

Mass Grocery Retail Sales Growth

Market Entry Potential

Barriers To Entry

Per-Capita Consumption

Table: Latin America Business Environment Rankings

SWOT Analysis

Mexico Food & Drink Industry SWOT

Macroeconomic Outlook

Table: Economic Activity Indicators

Chapter 2 – Retail

Regional Overview

Trending Towards Hypermarkets in Latin America

Rise Of Hypermarkets

Table: Number Of Supermarkets/Hypermarkets, 2005

Table: Top Five Mergers & Acquisitions In The Latin American Retail Sector, 2005

Share Of MGR Sales In Total Sales

Industry Forecast Scenario

Table: Mexico MGR Value Sales by Format – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Table: Mexico MGR – Value Sales by Format

Table: Structure of Mexico's MGR Market by Number of Outlets

Chapter 3 – Food & Drink

The Growing Market for Wine Sales and Production in Latin America

Table: Per-Capita Consumption Of Wine (litres)

Table: Wine Production Estimates By Country 2005

Industry Forecast Scenario

Table: Mexico Food, Drink and Tobacco indicators

Industry Developments

Company Developments

Market Overview

Table: Mexico Agricultural Sub-Sector Production – Historical Data

Chapter 4 – Tobacco

Industry Forecast Scenario

Table: Cigarette Value/Volume Sales – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Chapter 5 – Competitive Landscape

Key Players

Table: Key Players In Mexico’s MGR Sector

Table: Key Players In Mexico’s MGR Sector (continued)

Table: Key Players In Mexico’s Food & Drink Sector

Latin America Regional Company Case Studies

Company Case Study – Organization Soriana

Table: Organizacion Soriana: Stores By Format, June 2006

Table: Organizacion Soriana, SA – Income Statement, January-June 2005 & 2006

Table: Organizacion Soriana: New Store Openings, April-June 2006

Table: Market Shares Of The Four Largest Mass Grocery Retailers In Mexico, 2005

Company Case Study – SABMiller

Table: Top Five M&As In Latin America In 2005

Table: SABMiller In Colombia, As At June 2006

SABMiller in Peru, as at June 2006

Wal-Mart in Latin America 65

Table: Wal-Mart Latin America Regional Operations

Table: Wal-Mart de Mexico (Walmex)

Table: Wal-Mart Brazil

Nestlé in Latin America

Table: Nestle in Latin America

Company Analysis

Industrias Bachoco

Grupo Herdez Sa de CV

Gruma SA de CV

Wal-Mart de Mexico Sa de CV (Walmex)

Controladora Comercial Mexicana SA de CV (CCM)

Grupo Bimbo SA

Grupo Modelo

Coca-Cola FEMSA

BMI Forecast Modelling

How we generate our industry forecasts

Retail Industry

Sources

Competitive Landscape for Latin America Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of Latin American Food Sources

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BMI's Latin American Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: