Sector Trend Analysis – Bread and bakery products in Mexico

Trade of bread and bakery products

In 2021, global imports of bread and bakery products (excluding crispbread, gingerbread, sweet biscuits, waffles, non-communion wafers, rusks, toasted bread and similar products) totaled an import value of US$27.2 billion (8,697.6 thousand tonnes). Leading global import markets were the United States (US$5.1 billion), the United Kingdom (US$2.0 billion), and Germany (US$2.0 billion). Following France (US$1.7 billion) in 2021, Canada was the 5th largest importer of bread and bakery products at a value of US$1.3 billion (382.5 thousand tonnes) with a CAGR of 4.6% (2017 to 2021).

Amongst the top 10 markets in the world with a total market share of 59.8%, all of these importers of bread and bakery products have been growing by a total CAGR of 8.3% (US$16.2 billion) over the last 5-year period (2017to 2021). Leading markets with the highest growth over this period, were the United States at a CAGR of 12.5%, followed by the Netherlands (10.4%), and Australia (9.5%).

In 2021, Mexico imported a total value of US$198.5 million (72.1 thousand tonnes) of bread and bakery food products from the world. Leading suppliers to Mexico were the United States at a market share of 79.2% (US$157.2 million), Canada at 4.7% (US$9.4 million), and Guatemala at 3.1% (US$6.2 million). Canada as the 2nd largest import market from Mexico has been growing at a CAGR of 25.0% (2017-2021).

The total Mexican bread and bakery import sector grew by a CAGR of 8.6% between 2017 and 2021. Growing value import markets from Mexico with high CAGRs during this period (≥29%) includes Turkey, Romania, Vietnam, France, Peru, and Spain.

Retail sales and trends - bread and bakery products

Baked goods retail sales in Mexico have increased at a CAGR of 7.9% from 2016 to 2021, reaching US$21.2 billion in 2021. The sector is expected to remain relatively stable in growth at a CAGR of 7.9% from 2021 to 2026, reaching US$31.0 billion in 2026. Bread was the best performing category at a market share of 71.9%, followed by pastries (19.4%), cakes (6.3%), dessert mixes (2.0%), and frozen baked goods, dessert cakes, sweet pies and tarts (0.4%) in 2021.

The government's measures to try to contain price increases on basic goods and services to curb the impact of inflation have impacted the baked goods category in 2022. As the Mexican government tries to reach agreements with suppliers to maintain the prices on basic products such as leavened bread and flat bread, manufacturers of baked goods continue to suffer as a result of issues like rising energy and key ingredient prices, supply shortages, and the impact of climate changes on harvests.^{Footnote 1}

Foodservice volume sales of baked goods have continued to recover in 2022 with the lifting of COVID-19 restrictions, particularly for flat bread, which is a key component used in many dishes through the foodservice channel. However, the channel still has limited growth with consumers being forced to reduce their non-essential spending as many households are facing widespread financial challenges.^{Footnote 1}

In 2021, leading bakery companies and top brand(s) in the Mexican market included Grupo Bimbo SAB de CV (Bimbo, Tía Rosa, Marinela) at a total of US$3.3 billion or 15.5% value share, Kraft Heinz Company (Jell-O) at US$115.1 million (0.5%), and D'Gari SA de CV (D'Gari) at US$105.6 million (0.5%). Artisanal companies held the largest value sales share at 79.1%, while private labels held a 0.6% share at a value of US$119.7 million in 2021.

Grupo Bimbo is expected to maintain its lead in baked goods in 2022, yet has been losing share due to growing competition from artisanal products. Bimbo dominates and benefits most from a broad product portfolio within packaged flat and leavened bread options, while artisanal players account for all sales in the unpackaged flat and leavened bread categories sold through local bakeries and tortilla shops.^{Footnote 1}

Bread

Bread is the best performing category within the baked goods sector, with retail value sales increasing by 13.4% over last year in current terms to reach US$17.3 billion in 2022. Flat bread (that is, Pita, Naan, Chapati, Roti, Arepa etc.) saw the most growth with unpackaged flat bread growing the fastest, at a CAGR of 9.4% from 2016 to 2021, reaching US$7.5 billion in 2021. Sales of pre-packaged (produced industrially) and unpackaged (produced artisanally) leavened bread (that is, sourdough, bagels, English muffin, Panbrioche, Pumpernickel and Rye bread etc.) increased by a CAGR of 7.8% over the same period. Bread overall is expected to continue to grow in value sales over 2021-2026, although growth rates are set to slow in volume terms in all bakery categories - representative of price increases in baked goods largely due to the rising costs of raw materials, energy, oil and packaging.

Tortillas (flat bread) is the most popular and affordable staple in Mexico, where tortillas are often the only source of food for the poorest consumers, alongside some beans. Given its importance to the local diet, with the observed consistent price increases due to the rising costs of ingredients, the government intervened by buying over half-a-million tons of white corn flour early in 2022 in efforts to keep prices relatively stable.^{Footnote 1}

In 2021, the leading bread company (top brands) in the Mexican market was Grupo Bimbo SAB de CV (Bimbo, Tía Rosa, Milpa Real, Wonder, Oroweat) at a sales total of US$1.6 billion or 10.2% value share in its category. Meanwhile, artisanal companies held the majority 88.9% market share of the bread sector in Mexico in 2021.

Cakes

In 2021, retail sales of both packaged cakes (US$962.5) and unpackaged cakes, incl. muffins (US$376.3 million) totaled US$1.3 billion in Mexico. Between 2016 and 2021, unpackaged cakes (prepared artisanally/baked in-store) grew at a higher CAGR of 6.7% over pre-packaged cakes (3.8%) that accounted for 71.9% of the sales value in the cake category in 2021. With the cost of living rising in Mexico, however, more expensive indulgences such as packaged cakes may be impacted more as further significant price hikes occur over the next 5-year period. Nevertheless, with COVID-19 restrictions on gatherings being lifted and tourism returning this should help to offset and alleviate losses - whereby the cake category is expected to grow at a combined CAGR of 6.1% (2021-2026) to reach US$1.8 billion in 2026.^{Footnote 1}

In 2021, the leading cake company (top brands) in the Mexican market was also, Grupo Bimbo SAB de CV (Marinela, Bimbo, Suandy) at a total value of US$835.2 million or 62.4% value share in its category. Artisanal companies held a 28.1% market share in value terms in 2021.

Dessert mixes and frozen baked goods

In Mexico in 2021, retail sales of dessert mixes (US$430.3 million) and frozen baked goods (US$56.3 million) totaled US$486.6 million, growing at a CAGR of 9.2% (2016-2021). Dessert mixes consisted of 88.4% of value sales, followed by frozen dessert cakes, sweet pies and tarts (excluding ice cream desserts) at 6.6%, and other frozen baked goods, excluding cakes (that is, frozen croissants, waffles, pizza crusts, pie/pastry shells, garlic bread etc.) at 5.0% in 2021.

Frozen baked goods (9.3%), including frozen dessert cakes, sweet pies and tarts (9.5%) are expected to report the highest CAGRs between 2021 and 2026 - to reach combined sales values of US$88.2 million in 2026.

In 2021, leading companies (top brand) with the highest sales in the Mexican market within the dessert mixes category included The Kraft Heinz Co. (Jell-O) at a total of US$115.1 million or 26.7% value share in its category, D'Gari SA de CV (D'Gari) at US$105.6 million (24.5%), and Con Alimentos SA de CV (Pronto) at US$31.4 million (7.3%). Private labels held a 3.1% market share at a value of US$13.3 million in 2021.

Last year, leading companies (top brand) in the Mexican market within the frozen baked goods category included The Kellogg Company (Kellogg's Eggo) at a total of US$10.9 million or 45.3% value share in its category, General Mills Inc. (Pillsbury) at US$2.1 million (8.7%), and Deli & Bagel SA de CV (New York Bagels) at US$1.3 million (5.6%). There were no private labels registered in this category in 2021.

In 2021, the leading company (top brand) with the highest sales in the Mexican market within the frozen desserts (incl. cakes, sweet pies and tarts) category was Sara Lee Frozen Bakery (Sara Lee) at a total of US$5.8 million or 18.0% value share in its category. Private labels held the majority 45.9% market share at a value of US$14.8 million in 2021.

Pastries

In Mexico, retail sales of both packaged pastries (US$1.3 billion) and unpackaged pastries (US$2.8 billion) totaled US$4.1 billion in 2021. Both packaged and unpackaged cakes (that is, pain au chocolat, croissants, buns, viennoiserie, scones, brioche, doughnuts, sweet waffles, crèpes, baklava, savoury pastries like tiropita etc.) grew at approximately the same rate at a combined CAGR of 6.6% (2016-2021) and is expected to grow at a rate of 8.0% (2021-2026) to reach US$6.0 billion in 2026.

In 2021, the leading pastry company (top brands) in the Mexican market was the Grupo Bimbo SAB de CV (Tía Rosa, Bimbo) at a total of US$894 million or 21.7% value share in its category. Artisanal companies held the highest market share at 68.7%, while private labels held a 2.2% share at a value of US$91.6 million over the year.

Distribution channels of bakery products (off-trade)

In Mexico, distribution of bakery products in terms of value share did not change much amongst outlet channels between 2016 and 2021. Store-based grocery retailer outlets had the largest sales (98.7%) at a value of US$20.9 billion in 2021 (share down 0.6 percentage points) since 2016, followed by non-store e-commerce and vending retailers at US$145.4 million (remained stable at 0.7% share), and store-based/non-grocery health and beauty specialists at US$124.9 million (up from 0% to 0.6% share).

Bakeries (food/drink/tobacco specialists) remains the leading retail distribution channel (US$8 billion) with most of the baked goods purchased in Mexico going toward artisanal players, especially with some consumers returning to their local bakeries over shopping in larger grocery retailers now that the fears of COVID-19 have resided.^{Footnote 1} Other leading channel outlets were small local grocers (US$4.9 billion), discounter grocery retailers (US$2.6 billion) and hypermarket grocer outlets (US$2.4 billion) in 2021.

Product launch and trend analysis: bread and bakery products

Mintel's Global New Products Database (GNPD) indicates that there were 998 new bread and bakery products launched (including new variety/range extension, packaging, formulation or relaunched) in Mexico between January 2017 and November 2, 2022.

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	2017	2018	2019	2020	2021	2022 (January-November)	Total
Bread and bread products	175	109	104	136	147	93	764
Cakes, pastries and sweet goods	41	28	19	21	21	20	150
Baking ingredients	18	12	4	8	16	10	68
Other baked goods	1	5	2	2	3	3	16

Source: Mintel, 2022

Top parent companies launching bread and bakery products in Mexico between 2017 and 2022 (Jan. - Nov.) were Grupo Bimbo (581), Walmart (55), Supermercados Internacionales H-E-B (55), Gruma (24), and Mission Foods (24). More recently between Q4-2021 vs. Q4-2022, top companies launching a total of 171 new products were Grupo Bimbo (48), Walmart (8), Tiendas Tres B/Chedraui (8), Deli Dips and Snacks (7), and Distribuidora New York Deli & Bagel (6).

Top bread and bakery brands (January 2017 to November 2022) included Bimbo (Nito/Medias Noches) (91), Great Value (21), Tía Rosa (Tortillinas/Rosa Bigotes) (46), Libanius (16), and Hill Country Fare (15). Recent new brands launched into the Mexican market (October 2022) were Rialto Rústica Tostada (round toasted Biscottinas with olive oil and salt), Santo Apetito (corn Tortillas), Pedrito Bakery (wholegrain sweet bread), and Dora3 Linea Classica (puff pastry croissant with strawberry filling).

Leading manufacturer locations for these bread and bakery products over the 6 year period (2017-2022) were Mexico (740), the United States (92), Spain (29), Italy (26) and the Canada (9). The latest Canadian brands launched in the Mexican market back in December and April 2021 was Dare Boulangerie Grissol (original Melba toast) from Dare Foods and Furlani Texas Toast (Garlic bread) manufactured by Furlani's Food.

Popular or top growing flavours (including blends) were Sesame (+200%), and unflavoured/plain (+3.7%) [Q4-2020 and Q4-2022]. Declining flavours during this period were Oregano (−100%), seed (−50%), and chocolate (−33.3%). New ingredients within the last 12 months included Ganache, cream flavour, Polysorbate, cheese sauce, Emmental cheese, soft cheese, wheat grit, elderberry juice concentrate. Top packaging materials/types for these bread and bakery products from the last 2 years (Q3-2021 vs. Q3-2022) were flexible stand-up pouch (+500%) and plastic LDPE/unspecified (+28%) with declining packaging combinations of flexible (−26%) and plastic PP (−60%).

Meanwhile, top related claim combinations associated with these bread and bakery products used the most during the last three months were Kosher (23.3%), low/no/reduced allergen (16.3%), gluten free (16.3%), no additives/preservatives (9.3%), high/added fibre (7%), and digestive health (4.7%). Trending claims were gluten free (+450%), ease of use (+400%), low/no/reduced allergens (+267%), low/no/reduced cholesterol (+200%), and dairy free (+100%); with declining claims by 100% being plant-based, vitamin/mineral fortified, all natural product and premium (−80%) between Q3-2021 and Q3-2022.

Product examples

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Resources

• Euromonitor, 2022. Data statistics (2016-2026)
• Euromonitor | November 2022. Country Report: Baked Goods in Mexico
• Global Trade Tracker, 2022
• Mintel Global New Products Database, 2022

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Prepared by: Erin-Ann Chauvin, Senior Market Analyst

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