Market Penetration Strategy
What Are Some Competitive Advantages That Mexico Has Over Other Major Tomato-Supplying Countries?
Mexico has one of the lowest salary ranges for the agricultural industry among the OECD Countries. As of February 2019, the salary for agricultural workers stands at USD 166 monthly, thus giving Mexico a competitive advantage over other countries.
Over 30% of tomatoes in Mexico are produced from greenhouses, whereas the remaining 60% come from open-field farming. Over 80% of tomatoes are cherries & the rest are green tomatoes. For greenhouse production, the producer is required to undertake cultivation guidelines & courses with INTAGRI (Institute for technological innovation in agriculture). The production of tomatoes is regulated by the National Food Health, Safety, and Quality Service (SENASICA) from the Ministry of Agriculture (SAGARPA).
Production Supply Chain
What is the Supply Network Structure for Mexican Tomatoes
Most of the grower companies are medium-sized, having a land size of around 15-20ha, with their own packing facility where the tomatoes are sanitized, packed, and cooled before loading. The loading specs are usually 1,600 boxes in a 40ft container. Most production happens in Sinaloa, Mexico. Grower companies harvest other products such as peppers to have steady cash flow all year round. In Mexico, plum is the most harvested tomato variety, followed by round tomatoes and cherry tomatoes. The presence of a broker between the growing company and the marketing or distributing company is rare because US buyers already have a longtime partner in Mexican tomato grower companies. The US marketer/distributor shoulders the customs, logistics, and carton costs and receives the product in their US warehouses, where the quality inspection is conducted.
Trade Overview
What Are the Main Importing Countries of Mexican Tomatoes?
The major importing countries for Mexican tomatoes are the US and Canada.
The US imports 98% of the tomatoes exported from Mexico. The import value of US tomatoes from Mexico was USD 2.48 billion in 2021. Canada is the second-largest importer of Mexican tomatoes, but its import value was only USD 230 million in 2021.
The third-largest importer of Mexican tomatoes would be Japan with only USD 5 million in 2021.
What Are the Demand Trends for Mexican Tomatoes?
The consumption of tomato-based products has increased by around 4% between 2018 and 2019 compared to the average level of the previous three years and increased by 8% compared to the preceding year, according to the World Processing Tomato Council. Western Europe and North America comprised 44% of the world’s total tomato consumption in 2019, a drop from when the regions comprised 56% in 2000. The reason for this shift is that while regions like North America and Western Europe have slightly increased consumption, emerging regions have also significantly increased tomato consumption, surpassing North America and Western Europe in 2007.
Overall, the consumption of tomatoes has risen. This overall trend has been linked to the health benefits of tomatoes. For example, 23% more consumers in 2019 within the US are prioritizing vegan and sustainable diets compared to 2018.
Who are the largest exporters of tomatoes?
The leading exporters of tomatoes, as of 2020, are:
1) Mexico - USD 2.61B
2) Netherlands - USD 1.92B
3) Spain - USD 1.07B
4) Morocco - USD 767M
5) Canada - USD 458M
Seasonality of Main Producing Regions
What Is the Seasonality of Mexican Tomatoes?
Mexico produces tomatoes all year round, but each producing region has small seasonality differences. These seasonality differences mainly impact the different varieties' availability in the market.
Source: USDA
What Are the Production Trends for Mexican Tomato?
Mexico is the 9th largest tomato producer worldwide, producing 3,324,263 mt in 2021 with a harvest area of 45,000 hectares. However, production in 2021 decreased by 1.48% YoY from the previous year.
It is estimated that in Mexico, 70% of red tomato is produced under the protected agriculture scheme, while the rest, 30%, is under open field agriculture.
Red tomato, one of the most profitable crops for the country, has registered an average growth of 9.5% in the last 10 years.
Where Are the Main Producing Regions for Mexican Tomatoes?
According to the Agri-Food and Fisheries Information Service (SIAP, In 2020, the 32 states reported tomato production, of which Sinaloa unquestionably led tomato production in Mexico, with 684,333 mt, that is 20.3% of the total volume produced, followed by San Luis Potosí and Michoacán, which produced 380,175 mt and 248,499 mt, that is, 11.3% and 7.4%, respectively.
Sinaloa was also the state with the largest harvested area, 10,369 ha, followed by 5,321 ha in Michoacán and 3,077 ha in Zacatecas, so these 3 entities represented 41.5% of the national harvested area for this crop. However, in terms of yield, Querétaro is currently the reference state, with 366 t/ha, leaving Sinaloa in 18th position with 66 t/ha. The states that followed Querétaro were Nuevo León and Coahuila with 214 t/ha and 156 t/ha, respectively.
Regarding the value of production, Sinaloa also led with 8,376 million pesos, leaving San Luis Potosí and Michoacán in second and third place; while the highest average price per ton was obtained by Baja California with 23,022 $/mt, a state that was fourth in terms of production value with 2,058 million pesos.