Agri-Food Trade Service

Mexico Organic Market Study

May 2009

Prepared for:
The Canadian Embassy in Mexico 

By: 
Comercio e Integración Agropecuaria, S.C.

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Index

Executive Summary

1) Overview of the organic sector in Mexico

2) Key players

3) Consumption

4) Market-entry considerations

5) Opportunities for Canadian exporters

6) Contacts / resources 

7) Effects of the economic crisis on the demand for organic products

Bibliography

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Executive Summary

Mexico is considered as the 5th largest producer of organic agri-food products in the world. Approximately 70% of the organic farmers are found in Chiapas and Oaxaca. Some of the main organic foods produced in Mexico are: coffee, fruits, vegetables, sesame seed, fine herbs, honey and cocoa. A few processed food products are also starting to be produced. More than 80% of the organic foods produced in Mexico are exported. 

At least 50% of the demand of organics in Mexico is covered by imports. Most of the imported organic foods available in the market are processed food products, given that fresh products are mainly supplied by domestic producers. Among the main imported organic foods available in Mexico are: bakery products, dairy products, beverages, groceries, desserts and ready-to-eat pulses/seeds. Most imported organic foods are found in organic specialized stores, health/natural food stores and supermarket stores. The U.S. is the main foreign supplier of organics to Mexico. Some Canadian organic foods are also available in the market. Other suppliers are Italy, Spain, Chile and Peru. 

Mexican consumers have a positive perception about imported organic foods. There is not a substantial difference between the prices of imported organic foods vis-à-vis the prices of organic foods domestically produced. Currently there are at least a dozen qualified importers and distributors of organic food products in Mexico (led by Aires de Campo), which have the expertise, resources and contacts to introduce effectively imported organic foods in the Mexican market. Most of these importers/distributors are located in large cities and have excellent contacts with Mexican retail stores.

Aires de Campo is the largest importer/distributor of organic foods in Mexico. The company handles a portfolio of more than 600 organic products, both domestic and imported. Most of the imported organic products handled by Aires de Campo are from the U.S., but they also handle some Canadian organic products. Aires de Campo has its own brand, which is well positioned in the Mexican market. The company has a store called "BioCentro", where organic foods are sold directly to the public. Distribuidora Promesa is another large Mexican importer/distributor of organic foods. Other qualified importers/distributors of organics are: Smart Holding México, Marinter, Tendencia Gastronómica, Natucomer, Natural Health, Atari, Tratecom, Ucero, Nutricomercializadora and Vomac. All these importers distribute organic products to the main specialty, departmental and supermarket stores in Mexico. These companies have interest in establishing contact with Canadian suppliers of organics. 

Currently there are at least five store chains in Mexico specialized in organics; The Green Corner is the main one with 4 stores operating in Mexico City. There are some Canadian organic foods already available at The Green Corner stores. Other Mexican stores specialized in organics are: Yerbabuenamarket, Orígenes Orgánicos, Ki-An and Purorganiko. Most of these stores do not import directly; rather they purchase organic products from local producers and importers/distributors. All types of organic foods can be found at these stores, including: dairy products, fruits, vegetables, meat, eggs, beverages, bakery products, groceries, snacks, etc. Approximately 50% of the organic products available at the stores are imported (especially processed food products). These specialty stores represent an excellent venue for the sale of Canadian organic foods.

Organic foods (both domestic and imported) can also be found in some of the main Mexican supermarket stores such as Superama (Wal-Mart), City Market (Comercial Mexicana) and Soriana. The price premium between conventional and organic food products sold at Mexican supermarkets can go from 20% up to 150% (depending on the product). Despite the shelf space currently occupied by organics is still not very significant, it is expected to continue growing in the future. Most supermarket stores (except for Soriana) do not import directly; they purchase imported organics from local importers/distributors. 

The foodservice sector in Mexico is slightly behind the retail sector in organics, but is starting to grow. There are a few restaurants in Mexico that offer organic meals. Generally speaking, the organic food sector is still a niche market in Mexico, representing between 1% and 3% of the total food sector in the country. The largest consumption of organics is concentrated in large cities. The consumption of organics has been steadily growing, but is still in its infant stages. One obstacle to more widespread domestic consumption of organics is a general lack of awareness of the "organic" concept. Impulso Orgánico Mexicano, A.C., which is an association of Mexican producers of organics is planning to implement a promotional campaign in 2009 to promote the benefits of organics. 

Many Mexican consumers do not understand clearly the difference between organic food and conventional food. Usually, only Mexican consumers with a high level of education know what the term "organic food" means and the benefits of consuming these products. The main consumers of organics in Mexico are educated people from the medium and high social classes that are concerned about their health and the environment, that understand the benefits of organics and that have a high purchasing power. Approximately 700,000 Mexican households spend between 1,000-1,500 Mexican pesos in the purchase of organic foods on a yearly basis. All the companies interviewed as part of the study concurred that over the last years the sales of organic foods in Mexico have been growing and are expected to continue growing. 

In February 2006, the Mexican government published its Law of Organic Products with the purpose of establishing an adequate legal framework for organics in Mexico. The Law requires that all products "claiming" to be organic be certified by an internationally recognized organization. In terms of imports, the Law states that the product has to come from countries where there are organic regulations similar to those existing in Mexico or that the product be certified by an organic certification agency approved by SAGARPA. According to the Law, mutual recognition agreements would be pursued with Mexico's main trading partners to facilitate international trade of organic products. 

The provisions of the Mexican Organics Law cannot be fully implemented until the corresponding Regulations are published. These Regulations are still under development and are expected to be published in the near future. Canada has also developed organic products regulations, scheduled to come into force on June 30, 2009. Once the Mexican and Canadian Organic Regulations are implemented, it will be important to seek an equivalency agreement between both countries in order to facilitate the access for Canadian organics to Mexico. Both regulations have several similarities that should facilitate the development of a recognition agreement.

Currently, there are no specific imposed requirements for importing organic foods into Mexico. Organic foods only need to comply with the same standards as imports of conventional foods. According to SENASICA, at this point, any organic certification provided in Canada would be valid in Mexico. However, this is expected to change once the Regulations of Mexico's Organic Products Law comes into force. The Mexican government is also working on specific technical guidelines to indicate how certain provisions of the Law and the Regulations would be implemented (including provisions related to labelling, imports, etc.). These technical guidelines are expected to be issued after the publication of the Mexican Organic Products Regulations. 

The demand for organics is expected to increase as a result of health concerns in Mexico and Mexico's growing middle class. These trends should ultimately represent good opportunities in Mexico for Canadian exporters of organics. Opportunities exist for processed organic foods that are not domestically produced and where Canada appears to have a competitive advantage, such as: bakery products, beverages, dairy products, desserts, dietary supplements, groceries and ready-to-eat pulses/seeds. 

Mexican consumers have a positive perception about Canadian made products. Canadian exporters should take advantage of this leverage to introduce their organic products in Mexico. Canadian exporters interested in shipping organics to Mexico are advised to participate in trade shows and visit the market to meet potential partners/clients, understand import procedures, and develop effective entry strategies. Canadian exporters are also advised to contact local importers/distributors as a crucial step in their efforts to establish themselves in the market. A good partner is essential to establish successful business relationships with local stores specialized in organics and Mexican supermarkets. In order to be competitive, Canadian exporters should focus on promoting the health benefits of their organic products, while maintaining a competitive price. 

As in any other country in the world, the international financial crisis has affected the Mexican market. In fact, several of the interviewed companies concurred that the organic sector in Mexico would not escape from the effects of the international financial crisis. Some of them indicated that this situation could change the food consumption habits of Mexican organic consumers, who may substitute some of the organic food products they use to purchase for conventional foods that are cheaper, and may just purchase those organic foods that they prefer/need the most. In spite of this, it is important to consider that the main consumers of organic foods in Mexico are people from the medium-upper social classes, which are usually less affected by an adverse financial environment and would still have the purchasing power to buy organic products. The recent devaluation of the Mexican peso vs. the U.S. dollar (almost 50%) has increased the cost of food imports from the U.S. and has forced many Mexican importers/retailers to increase their prices. 

The devaluation of the Mexican peso vs. the Canadian dollar has not been as high as the devaluation of the Mexican peso vs. the U.S. dollar, which actually puts Canada in a better or at least equal position than the U.S. in terms of competition in the Mexican market. Despite of the adverse financial scenario, it is expected that the demand for organics in Mexico would be maintained and continue growing in the future, as the economic conditions in Mexico and the world improve.

1) Overview of the organic sector in Mexico

1.1) Mexican organic production

Mexico is considered as the 5th largest producer of organic agri-food products in the world. Mexico also holds the 15th rank on organic food production area cultivated worldwide, with an estimated annual organic production value of over US$370 million on a land base of almost 500,000 hectares (2.3% of the 21.7 million hectares cultivated in Mexico). From this total, approximately 80% are certified and the rest are in the process of being certified. The Mexican government is helping organic farmers by rebating up to 75% of the costs of certification required for organic farming.

Economic Importance of Organic Agriculture in Mexico

Concept/Year	1996	1998	2000	2005	2007	Annual Average Growth Rate
Surface (Has)	23,265	54,457	102,802	307,692	480,883	31.7%
Number of organic growers	13,176	27,914	33,587	83,174	114,198	21.7%
Organic production value (US$1,000)	34,293	72,000	139,404	270,503	377,844	24.4%

Source: Center of Economic, Social & Technological Research for Agro-Industry & World Agriculture of the University of Chapingo (CIESTAAM).

The organic growing boom in Mexico began in the 1980s, when European importers discovered the quality of chemical-free Mexican coffee cultivated by peasant farmers in the Chiapas and Oaxaca states. At the same time, foreign non-governmental organizations and business interests were encouraging small farmers to grow more organic products to satisfy increasing world demand. Today, 90% of the nation's over 100,000 organic agriculture producers are modest farmers cultivating 3.6 hectares or less, which are grouped together in cooperatives to consolidate their crops (usually with the assistance from a social or governmental program). The remaining 10% of organic growers is comprised of large-scale producers, which are private enterprises that cover between 100 to 2,000 hectares and operate independently. 

Large scale organic farms from the U.S. (e.g. Earthbound Farm and Natural Selection Foods) also use the favorable climate and low production costs in Mexico to grow their produce. Mexico is considered to have the greatest number of organic farms in the world. Approximately 50% belong to indigenous groups and 70% of the organic farmers are found in Chiapas (44.8%) and Oaxaca (25.2%). Other Mexican states where organic products are grown are: Chihuahua, Sinaloa, Baja California, Baja California Sur, Michoacán, Colima and Veracruz. 

It is estimated that Mexican organic farmers receive a better income (20%-40% higher) than the income of farmers of conventional food products. A significant portion of the Mexican producers of organic products are part of the fair trade movement. Over the last 10 years organic farming in Mexico has grown approximately 30% on a yearly basis, fueled by an increasing demand for organics in foreign markets. More than 80% of the organic food products produced in Mexico are exported abroad. Organic production in Mexico is expected to continue increasing as a result of the growing demand for these types of products in the international and domestic market.

Additionally, many growers in Mexico continue applying traditional production practices, in which fertilizers, pesticides and chemicals are not used mainly because the growers do not have the necessary resources to purchase these products, indirectly favoring the production of organic products. 

Coffee is the main organic agri-food product grown in Mexico, representing around 60% of the total production of organic foods in Mexico. In fact, Mexico is considered as the largest producer of organic coffee in the world, reaching the world's biggest supermarkets and coffee shops. Other organic agri-food products domestically produced are: mango, bananas, pineapple, avocado, oranges, papaw, tomato, peppers, onion, sesame seed, corn, maguey, fine herbs, honey and cocoa, among others. A few processed food products such as meat, sausages, juices, cookies and marmalades are also starting to be produced in Mexico. However, considering that Mexico exports most of its organic products, Mexico is mainly focusing on the production of tropical organic products that cannot be produced in developed countries, which are the largest consumers of organic products. 

Agriculture Organic Surface in Mexico by State and Crop (2005)

State	Hectares	%	Product	Hectares
Chiapas	86,384.36	29.54	Coffee	147,136.74
Oaxaca	52,707.85	18.02	Aromatic and medicinal herbs	30,166.49
Querétaro	30,008.00	10.26	Vegetables	24,724.86
Guerrero	16,834.00	5.76	Cocoa	17,313.86
Tabasco	16,628.86	5.69	Wild grape	12,032.00
Sinaloa	13,591.35	4.65	Coconut	8,400.00
Michoacán	13,245.06	4.53	Maguey	5,943.30
Jalisco	13,202.34	4.51	Cactus	5,039.07
Baja California Sur	6,217.11	2.13	Corn	3,795.47
Veracruz	5,887.32	2.01	Avocado	2,652.09
Sonora	5,867.21	2.00	Sesame seed	2,497.75
Nayarit	5,486.74	1.87	Mango	2,132.42
Chihuahua	4,658.41	1.59	Sabila	1,888.30
Baja California	3,805.00	1.30	Citrus fruit	1,608.35
San Luis Potosí	3,305.00	1.13	Olives	1,000.00
Colima	3,178.60	1.09	Sugar cane	853.00
Tamaulipas	2,315.00	0.79	Safflower	662.40
Puebla	2,153.59	0.74	Guava	623.50
Hidalgo	1,747.00	0.60	Vanilla	571.30
Guanajuato	1,114.86	0.38	Manioc	500.00
Estado de México	1,051.74	0.36	Mushrooms	384.88
Nuevo León	993.00	0.34	Raspberry	263.00
Aguascalientes	633.20	0.22	Apple	253.69
Distrito Federal	427.66	0.15	Pineapple	252.54
Campeche	300.00	0.10	Cashew nuts	242.00
Yucatán	233.00	0.08	Bamboo	230.00
Coahuila	201.00	0.07	Blackberry	229.00
Tlaxcala	181.50	0.06	Neem	213.00
Morelos	66.50	0.02	Amaranth	192.75
National Total	292,459.26	100.00	National Total	292,459.26

Source: CIESTAAM.

In general, prices of Mexican organic food products are between 20% and 150% higher than prices of Mexican conventional food products. The following organic food products are within an average price premium between 20%-60% as compared to conventional food products: vegetable oils, pastas, dressings, tea, coffee and pulses (beans, chickpeas, etc.). Furthermore, the following organic food products show a higher price premium (between 70%-150%) as compared to conventional food products: marmalades, ketchup, alcoholic beverages (wine, beer), rice and dairy products (milk, cheese, etc.). It is important to mention that prices can vary depending of the product and the demand. The organic social movement's hope is that the costs for inputs and certification will decrease; therefore reducing the prices of organic products and making them more affordable for the average consumer.

1.2) Imports of organics

There are no Mexican official import figures for organic food products since all of them enter the country through general tariff codes, making it impossible to determine exact import figures for organics. However, it is estimated that at least 50% of the domestic demand of organics is covered by imported organic foods, representing approximately $380 million Canadian dollars. 

As indicated further in the report, the Mexican government is planning to establish in the near future specific HS Codes for imports of organic food products. This will allow an easier identification of the volumes and origin of the organic food products imported into Mexico. 

It is worth pointing out that most of the imported organic food products available in the Mexican market are processed food products, given that fresh products such as organic fruits, vegetables, meat and eggs are mainly supplied by domestic producers. Organic coffee and honey are also mainly supplied by domestic producers. Among the main imported organic food products available in the Mexican market are:

• Bakery products (muffin/cake/brownie mixes, bread, pastries, cookies, bars, pudding filling mixes)
• Dairy products (milk, cheese, butter, yoghurt)
• Beverages (juices, lemonade, ice-tea, wine, energy drinks, beer, alcoholic beverages)
• Groceries (breakfast cereals, sauces, spices, vegetable oils, tofu, jellies, vinegar, pastas, soups, ketchup, mayonnaise, mustard, seasonings, baby food, risotto)
• Desserts and sweet products (maple syrup, chocolates, candies, ice-creams, sorbets, chocolate shakes)
• Ready-to-eat pulses and seeds (flax, rice, beans, chickpeas, hempseed, dry roasted pumpkin seeds, rye buckwheat kernel)

Most of the imported organic food products available in Mexico are found in organic specialized stores, health/natural food stores and supermarket stores. The U.S. is by far the main foreign supplier of organic foods to Mexico. Since most of the imported organic products come from the U.S., it is very common to see the "USDA Organic" seal in many packages of the organic products available at Mexican retail stores.

Some Canadian organic food products are also available in the market, such as: flax, breakfast cereal, toaster pastries, tea, cake mixes, pudding mixes and chocolate shakes, among others, which indicate that Canada is also a foreign supplier of organic foods to Mexico. Other foreign suppliers of organic foods to Mexico are: Italy, Spain, Chile and Peru. 

As previously indicated, Mexico is an important producer of organic fresh products such as fruits, vegetables, meat and coffee. However, there are only a few processed organic foods produced in Mexico. As a result of this, Mexican supermarkets and specialty stores have to resort to processed organic products from abroad to complement their line of organics for their clients. This opens the door for foreign suppliers which have the capacity to export organic processed food products to Mexico, such as Canada. 

In general, Mexican consumers have a positive perception about imported organic food products, especially those certified by internationally recognized certification agencies such as Bioagricert, OCIA and IMO Control. Nevertheless, many consumers still give preference to domestic organic food products over imported organics, as an effort to support the communities of small domestic organic farmers. In spite of this, in many cases these Mexican consumers do not have other option but to purchase imported organic products, due to the lack of availability of domestic product. 

In terms of prices, as a result of the tours conducted to the different specialty stores and supermarket stores that carry organics in Mexico, it was found that there is not a substantial difference between the prices of imported organic food products vis-à-vis the prices of domestic organic food products. In fact, in some cases it was found that the prices of domestic organic foods were higher as compared to imported organic foods, as indicated in the chart below. This indicates that despite of the recent devaluation of the Mexican peso against foreign currencies (dollar/euro), most imported organic food products continue to be competitive in terms of price vis-à-vis domestically produced organic foods.

Comparative of Prices between domestic organic products vs. imported organic products available in Mexican retail stores

Product/price	Price – imported organic products (Mex pesos)	Price – domestic organic products (Mex pesos)	Difference (%)
Fruit jelly	Dickinson (U.S.) $42	Rancho El Amate $50	-16%
Soy milk (1 lt)	Silk (U.S.) $30	Boulder $23	30%
Rice (1 kg)	Lundberg (U.S.) $62	La Granja Orgánica $24	158%
Olive oil (500 ml)	Olave (Chile) $121	Oasis $104	16%
Tea	United States $70	Mexico $77	-9%

Source: Tours of the main Mexican retail stores.

2) Key players

As part of the research for the study, in-depth interviews were conducted with key players in the Mexican organic sector, including producers, processors, importers, distributors and stores that carry organics. The results of these interviews are reflected in the following sections.

2.1) Domestic producers and processors of organics

Mexico is considered to have the largest number of farmers dedicated to organic farming in the world. However, as indicated before, most of the Mexican producers of organic food products are small farmers that group together in cooperatives to consolidate and commercialize their crops. In addition, these farmers focus in the production of coffee and organic tropical products that are strongly demanded in export markets such as fruits (mango, bananas, pineapple, avocado, oranges, papaw), vegetables (tomato, peppers, onion) and others (maguey, fine herbs, honey and cocoa). Some of the main Mexican cooperatives of organic producers are:

• Unión de Ejidos de la Selva Lacandona.- cooperative of farmers located in Chiapas, dedicated to the production of organic coffee.
• Mundo Orgánico S.R.P. de R.L.- producers of organic fruits and vegetables.
• Comunidades Campesinas en Camino S. S. S.- producers of organic fruits, vegetables and sesame seed.
• Coordinadora de pequeños productores de café de Chiapas (COOPCAFE).- cooperative of organic coffee growers located in Chiapas.
• KIEE LU'U.- producers of organic jamaica located in Oaxaca.
• Frutos de Tlayacapan.- cooperative of organic fruit growers.
• Pro-Orgánico, S.A. de C.V.- producers of organic fruits and vegetables located in Nuevo León.
• Unión de Ejidos San Fernando, A.C.- cooperative of organic coffee growers located in Chiapas.
• Babo Yaro.- producers of organic tea.
• Tocoringa.- producers and distributors of organic coffee, tea, pineapple, mango and cocoa.
• Agrorgánicos de México.- growers of organic safflower located in Jalisco.
• Eco Rancho Caracha.- producers of organic blackberry.
• Frutas y Hortalizas Orgánicas de Michoacán.- growers of organic avocado, grapefruit, lime and pepper, located in Michoacán.
• Agroproductores Biopremium.- cooperative of growers of organic mushrooms.
• Sociedad Cooperativa “Puente El Trabajo”.- producers of organic honey.

In addition, there are a few Mexican processors, which offer value added organic food products. Some of these processors started as small cooperatives of growers, who decided to give more value added to their products through processing and the creation of commercial brands, in order to obtain higher profits.

Despite the fact that the number of Mexican processors of organic food products is still limited, several cooperatives of growers are now realizing about the benefits of offering value added products, so it is expected that the number of Mexican processors of organic products continue increasing in the future. Following is a list of some of the main Mexican processors of organic food products that currently operate in the market and the types of products they offer, which can be found in Mexican supermarket stores and retail stores specialized in organics:

• Grupo Industrial Cuadritos Biotek.- one of the largest processors of organic food products in Mexico. The company manufactures/sells several organic soy-based products under the Boulder and Bové brands, such as: soy milk, soy mayonnaise and soy cheese. Other organic products sold under the Boulder and Bové brands are: dressings, chocolate powder and cookies. Additionally, the company imports and distributes U.S. soy milk of the Silk brand.
• Comercializadora Agroinpes, S.A. de C.V.- organic cheese, yoghurt and beef.
• Grupo Desarrollo Agrícola Mexicano, S.A. de C.V.- specialized services in production, processing and trade of organic agricultural products.
• Sano Mundo.- organic tofu and rice syrup.
• La Rumorosa.- organic beef.
• Agroinpes.- organic meat and dairy products.
• Finca Las Estrellas.- organic chicken.
• Unifoods S.A. de C.V.- organic milk (Biorganic and Del Rancho brand).
• Bioagrimex.- organic beef, chicken and produce.
• Carnes Orgánicas de México.- organic meats.
• GE Organika.- organic meats.
• MayaMam.- organic marmalades and fruit spreads.
• Cusibani.- organic cocoa candies and toasted sesame seed/sunflower seed sweetened with agave syrup.
• Sabores de Colores, S.A. de C.V.- organic marmalades, chocolates (fruit de la terre brand).
• Corporación Proteína Americana S.C. de R.L.- organic snacks.

It is worth noting that as a result of the Mexican Law of Organic Products published in February 2006 and analyzed further in this study, the Mexican government created an organization called the National Council of Organic Production (CONAPRO), which is integrated by representatives from the government (Mexican Secretariat of Agriculture-SAGARPA, Mexican Secretariat of Environment-SEMARNAT, Mexican Secretariat of Economy-SE and Mexican Secretariat of Health-SALUD), as well as representatives from the following sectors: producers, processors, traders, certification agencies and research/academy. The main objective of this council is to promote and foster the development and commercialization of organic products and crops in Mexico.

In addition, it is important to mention that lower input costs, government subsidies, and assistance from social programs are expected to keep down the prices of organic foods domestically produced. Therefore, Canadian exporters interested in introducing their organic products to the Mexican market will be forced to compete with lower priced domestic products.

2.2 Importers and distributors of organics

Currently there are at least a dozen qualified importers and distributors of organic food products in Mexico (led by Aires de Campo), which have the expertise, resources and contacts to effectively introduce imported organic food products in the Mexican market. Most of these importers/distributors are located in large cities and have excellent contacts with Mexican retail stores specialized in organics/health products and Mexican supermarket stores. Following is a brief profile of each of the main Mexican importers and distributors of organic food products. Section 6.1 of this study includes the full contact coordinates for each company.

Aires de Campo

Aires de Campo is the largest importer and distributor of organic food products in Mexico. The company was established in 2001 and has approx. 120 partnering organic farms in the Mexican territory. Currently, Aires de Campo has approx. 50 employees and handles a portfolio of more than 600 organic food products, both domestic and imported, including:

• Fruits and vegetables
• Grains and seeds (rice, beans, chickpeas)
• Cereals and flours (bars, granola, flax, bread, breakfast cereals, pastries, cookies)
• Dried fruits
• Sauces and spices
• Vegetable oils (coconut, olive, sesame)
• Eggs
• Dairy products (milk, cheese, butter, yoghurt)
• Chicken meat
• Tofu
• Honey, maple syrup and marmalades
• Chocolates and candies
• Snacks
• Ice-creams and sorbets
• Beverages (water, juices, lemonade)
• Coffee and tea
• Amaranth, Jamaica, cactus
• Herbs

Most of the imported organic food products handled by Aires de Campo are made in the U.S. Aires de Campo also manages some Canadian products such as:

• Organic breakfast cereal and toaster pastries (Canada Nature's Path)
• Organic milled flax (CanMar Grain)
• Organic herbed white wine vinegar and garlic oil (Be Organic)
• Pure maple syrup (non-organic) (La Ferme Martinette)

A significant portion of the organic products handled by Aires de Campo (both domestic and imported) are sold under its own private brand. However, Aires de Campo is more about the concept than the product itself. It is about the system they use and their ideology. Therefore, the brand is not as important as the concept. Some products would be more acceptable under the Aires de Campo brand and others would be more appropriate under their own brand.

Aires de Campo represents and assists organic producers by helping them to certify and package their products under the Aires de Campo brand, then distribute and promote them. Aires de Campo's strategy is to work directly with producers and consumers and take out any intermediaries.

The Aires de Campo brand is well positioned in the Mexican market and easily recognized by Mexican consumers of organic food products. Those organic food products that are not sold under the company's private brand bear a seal called Aires de Campo Selection (Selección Aires de Campo), which certifies that the products are endorsed by the company and are from high quality organic brands.

Currently, Aires de Campo distributes its organic products to the main supermarket chains in Mexico, including: Wal-Mart, Comercial Mexicana, Soriana, CostCo, Superama and Chedraui. In fact, Aires de Campo has organized the display of organic products at several of the stores from the supermarket chains previously indicated. Aires de Campo also sells to the 2 main departmental stores in Mexico: Liverpool and Palacio de Hierro.

In addition, Aires de Campo has one store called "BioCentro" where organic food products are sold directly to the public (more than 300 SKUs). This store is located in an upscale neighborhood inside the western part of Mexico City (Bosques de las Lomas), which is home of well-paid Mexican consumers with a high purchasing power. According to Aires de Campo, the organic products that report the largest sales in the stores are: dairy products, snacks and grain derived products. From this store, Aires de Campo also provides home-delivery to the west, central and north parts of the city.

Aires de Campo also has a distribution center located in the south part of Mexico city, which provides home-delivery service to consumers that live in this area. Consumers can place their orders either by phone or by e-mail.

The products from Aires de Campo are also available in specialty stores offering healthy and organic food products, such as: Purorganiko, Greenery and The Green Market, among others. Additionally, Aires de Campo also sells organic products in foodservice presentation to several Mexican restaurants with a health/gourmet focus, such as: Orígenes Orgánicos, Dumas Gourmet and Tierra de Vinos.

Aires de Campo is part of CONAPRO, which was described in the previous section. In addition, Aires de Campo has the ISO-065 certification and is also certified by Bioagicert, which is an authorized organic certification agency. Aires de Campo prefers to import directly, but they also purchase organic food products from local distributors. Aires the Campo is interested in expanding its line of organic food products from Canada. During the interview conducted with the company, they indicated interest in tea, baby food, canola oil and innovative products in general. Aires de Campo is also interested in introducing its products in Canada. Considering the infrastructure, coverage, expertise and brand recognition that Aires de Campo has in the Mexican organic market, as well as their interest in Canada, this company represents an excellent option for the introduction of more Canadian organic products to the Mexican market. Section 6.1 contains all the contact details for the company.

Distribuidora Promesa

Distribuidora Promesa is another large Mexican importer and distributor of organic food products, located in Mexicali, Baja California. Distribuidora Promesa has a sister company located in the U.S. called Delta International, LLC. Currently the company distributes in Mexico a broad line of organic grocery products under the following brands:

• Baby's Only.- baby formula certified organic
• Blue Sky.- soft drinks made with organic cane sugar
• Bob's Red Mill.- organic flours, grains and cereals
• Butte Creek.- organic beer
• Dr. Oetker.- organic flours for cakes and puddings (Canadian brand)
• Eden Foods.- organic soy milk, pasta, flour, canned beans, grains, condiments, snacks, fruit juices, fruit sauce, pop corn, oil and vinegar.
• Eel River.- organic beer.
• Healthy times.- organic food, biscuits and cookies for babies
• Lundberg Family Farms.- organic rice and rice cookies
• Muir Glen.- organic tomato sauce for pasta, ketchup and canned tomatoes
• Nutiva.- organic shelled hempseed and chocolate hempshake drink mix (Canadian brand)
• Organic Food Bar.- organic food bars
• Peace Cereal.- organic cereals and granola
• Santa Barbara Olives.- organic olives
• Soy Dream and Rice Dream.- organic soy milk and rice drink
• Spectrum Oils.- organic oils and mayonnaise
• Yogi tea.- organic tea

Distribuidora Promesa distributes organic food products to some of the main specialty stores, departmental stores and supermarket stores in Mexico City and Guadalajara, such as: The Green Corner, Orígenes Orgánicos, Purorganiko, Superama (Wal Mart) and Liverpool. Distribuidora Promesa has interest in handling more Canadian organic food products that have a good quality.

Smart Holding México

Smart Holding México is a young but dynamic Mexican company established in 2006 in Jalisco, dedicated to the constant search of innovative products that offer value added to consumers. The company has 7 employees. The owners of the company introduced the Red Bull energy drink in Mexico. Currently, Smart Holding México is distributing an extensive line of leading products in different market segments, including organic foods and beverages. Currently the company represents/distributes in Mexico several organic grocery products under the following brands:

• Organic Valley.- organic cheeses, milk, meat, butter and juice
• Organic Prairie.- organic beef, pork and poultry products.
• Steaz.- organic tea soda and energy drinks.
• Crofter's Organic.- organic fruit spreads (Canadian brand)

Smart Holding Mexico distributes organic food products to some of the main specialty stores and supermarket stores in Mexico, including: Wal-Mart, Soriana and Comercial Mexicana, among others. Smart Holding indicated that they would be interested in getting in touch with new Canadian suppliers of organic food products, given that they are always looking for new products and represent them in the Mexican territory.

Marinter

Marinter is an importer and distributor of wine, liquors and gourmet food products established in Mexico City. The company has 110 employees. Since approx. 7 years ago, Marinter imports and/or distributes in Mexico some organic food groceries from the following brands:

• Santa Cruz.- organic juices and nectars
• De Cecco.- organic Italian pasta
• Filippo Berio.- organic olive oil
• Dickinson's.- organic marmalade

Marinter has its own warehouses and they distribute product to organic specialty stores and supermarket stores in all the Mexican territory, including: The Green Corner, Yerbabuenamarket, Wal-Mart, Comercial Mexicana, etc.

When asked about Canadian organic food products, Marinter indicated they are not very familiarized with them, but expressed interest in establishing contact with Canadian suppliers of organics, which in the company's view are a good option to offer to Mexican consumers.

Tendencia Gastronómica

Tendencia Gastronómica is a Mexican company specialized in the importation and distribution of gourmet food products such as vegetable oils, condiments, preserved fruits, pastas, jellies, seafood products, tea, truffles and vinegars, among others. The company has 25 employees and annual sales of 56 million pesos. Since 3 years ago, Tendencia Gastronómica handles some organic products under the Roland brand, such as:

• • Organic Dijon mustard
• Organic coconut milk
• Organic noodles
• Organic balsamic vinegar

Tendencia Gastronómica distributes products both for the retail and foodservice sectors in Mexico. Currently, the organic food products handled by the company are only sold at stores specialized in organics such as The Green Corner and Bio-Centro (Aires de Campo). The company is not familiar with Canadian organic food products, but is interested in exploring what types of organic foods Canada can offer.

Natucomer

Natucomer is a company established in Mexico City that for the last 6 years has been importing and distributing organic food products such as organic baby food, organic breakfast cereal, cereal bars and organic chocolate bars, from the U.S. The organic food products distributed by Natucomer can be found in the main retail stores (specialty/supermarkets/departmental) in Mexico, such as: The Green Corner, Comercial Mexicana, Chedraui, Wal-Mart, Superama, Soriana, Liverpool and Palacio de Hierro. Natucomer is not familiar with Canadian organic food products. However, the company expressed interest in working with Canadian suppliers, given that according to Natucomer, Mexican consumers have a positive perception about Canadian products.

Natural Health

Natural Health is a Mexican company established in Guanajuato, which is dedicated to the importation and distribution of natural/healthy food products in Mexico. The company has 108 employees. Five years ago the company started importing and distributing some organic products, including herbs and organic milled flax from Canada. Natural Health distributes product to supermarket stores and healthy food stores in Mexico such as Nutrisa. The company is interested in establishing long-term relationships with Canadian suppliers of organic products.

Atari

Atari is a Mexican company dedicated to the importation and distribution of nutritional supplements and other food products. Since 5 years ago, the company has also being handling organic nutritional supplements, mainly from the U.S.

Atari is part of the VALTRA group, which is a consortium based in Nuevo Léon that handles the GNC store chains in all the Mexican territory, which are stores specialized in the sale of nutritional supplements. The nutritional supplements imported by Atari are sold in the GNC stores. When asked if they knew any organic product from Canada, Atari only mentioned Canadian flax. Atari also indicated that they would like to have contact with more Canadian suppliers.

Others

Importer/Distributor	Imported products	Distribution channels
Tratecom	Organic cereal, bread and sprouted corn tortillas (Ezekiel 4:9 brand) from the U.S.	Retail stores specialized in organics and supermarkets
Ucero	Organic wine from Chile	Retail stores specialized in organics and supermarkets
Nutricomercializadora (subsidiary of Nutrisa)	Organic dietary supplements from the U.S.	Retail stores specialized in nutritional supplements
Vomac	Organic pasta, crackers and other bakery products from Spain and U.S.	Retail stores specialized in organics and supermarkets
Olkan Comercializadora Import Export	Broad variety of gluten-free organic food products including: crackers, corn flakes, etc. from the U.S.	Retail stores specialized in organics
Comercializadora México-Americana (Wal-Mart subsidiary)	Organic breakfast cereals and instant oatmeals from Canada	Wal-Mart and Superama stores

2.3) Main supermarkets and specialty shops that carry organic

As part of the information gathering process for the study, visits to specialty and supermarket stores were also carried out to gather intelligence about the types of organic food products available in Mexico and opportunities for Canadian organic products. Currently there are at least five store chains in Mexico specialized in organics and several other health food stores that also carry organics. In addition, most Mexican supermarket stores already carry organics, which are gaining more shelf space. The results of these store tours are described in the following sections.

2.3.1) Specialty shops in Mexico City

The Green Corner

The Green Corner is one of the main store chain in Mexico specialized in organics. This company established 5 years ago and with approximately 100 employees, has 4 mini supermarket stores specialized in organics. These stores are located within areas that are home to well-educated/well-paid residents who are aware of organics and able to afford them. All the stores are built with environment-friendly materials and have environment-friendly systems for water use and generation of electrical power. The stores also have a small restaurant inside, where clients can have meals prepared with organic products. The Green Corner also has home-delivery service. The products can be ordered by phone or by internet.

Most of the food products sold at The Green Corner mini supermarkets are organic, but there are also a few non-organic products that the company classifies as: natural, ecologic and biodegradable. Creamy fresh yogurt from hormone-free cows, coffee untainted by chemicals and avocados plucked from pesticide-free trees line the shelves of The Green Corner market. At The Green Corner mini supermarkets, consumers can find all the food products that are usually available in conventional supermarkets including:

• Organic dairy products (cheese, butter, soy milk)
• Organic fruits and vegetables
• Organic meat, eggs and sausages
• Organic beverages (juices, beer, wine, energy drinks and alcoholic beverages)
• Organic bakery products (bread, biscuits, cookies, muffins, pudding filling mixes)
• Groceries: vegetable oils (canola, sunflower, safflower), vinegar, pastas, pasta sauce, cereal, soups, ketchup, mayonnaise, mustard, tea, coffee, sauces, sugar, seasonings, honey, chocolate, baby food, marmalades, etc.
• Organic snacks (hempseed, dry roasted pumpkin seeds, rye buckwheat kernel)

The Green Corner tries to give preference to domestically produced organic foods. However, approximately 50% of the organic products available at the stores are imported (especially processed food products, which are not produced in Mexico). The Green Corner is working in some projects to help Mexican producers to have access to technologies and machinery that allow them to manufacture processed food products, so that the company stops importing processed food products and rather buy them from local producers. However, this is a long-term project and in the meantime, the Green Corner is planning to continue importing organic agri-food products.

From the imported organic food products available at The Green Corner stores, most of them are originally from the U.S. In addition, there are some products from Italy, Chile, Spain and Canada. Among the Canadian organic products currently available at the Green Corner stores are:

• Tea (Four O'Clock Brand)
• Muffin/cake/brownie mixes (Dr. Oetker Brand)
• Cooked pudding and pie filling mixes (Dr. Oetker Brand)
• Shelled hempseed and chocolate hempshake drink mix (Nutiva brand)
• Milled flax (Northern Quinoa brand)

The Green Corner does not import organic products directly; they purchase organic products from local producers and importers/distributors.

In terms of prices, The Green Corner usually adds a 30% margin over the price of the products. This is a factor to consider when selling product to this chain.

As part of its near future projects, the Green Corner is planning to open new stores in working-class neighborhoods in Mexico City, in order to introduce organics to this sector of the population and avoid that these products be only for the elite.

The Green Corner represents an excellent venue for the sale of Canadian organic food products, given that as indicated before, this is a store chain specialized in organics, which is growing and is well-known among the Mexican consumers of organic products. In fact, during the interview conducted with representatives of the Green Corner, they expressed interest in handling more Canadian organic products. Since The Green Corner does not import directly, Canadian exporters interested in selling their products to this chain would have to work with a Mexican importer that can bring the product into Mexico and then introduce/distribute the product to the Green Corner stores.

Yerbabuenamarket

Yerbabuenamarket is another Mexican store specialized in organic food products, which is located in the southern part of Mexico City. This store which has a modern/upscale look, is also like a mini supermarket, where consumers can find all types of organic food products including:

• Dairy products
• Meat products (beef and poultry)
• Fruits and vegetables
• Eggs
• Beverages (juices, beer, energy drinks, ice tea)
• Bakery products (bread, cookies, pudding filling mixes)
• Groceries (vegetable oils, vinegar, pastas, pasta sauce, cereal, tea, coffee, sauces, seasonings, honey, chocolate, baby food, marmalades, canned beans, risotto, preserved fruit)
• Seeds (flaxseed, quinoa)

Yerbabuenamarket carries plenty of imported organic food products, mainly from the U.S. Products from Chile, Peru, Spain and Canada (cake mixes, cooked pudding/pie filling mixes and tea), can also be found in the store. There are also several domestically produced organic foods available at the store (fruits, vegetables, eggs and meat).

As in the case of the Green Corner, Yerbabuenamarket does not import organic products directly. Therefore, the imported organic products exhibited at the stores are purchased from local importers/distributors.

Despite the fact that the Yerbabuenamarket is still in a growing process (only 1 store opened so far with a total of 2 employees), it also represents an excellent venue for the sale of Canadian organic food products, given that the store is specialized in organic food products and is well located, close to one of the most affluent freeways in Mexico City (Periférico Sur). Canadian exporters interested in selling their products in this store, would have to contact first a Mexican company that can import and distribute the products to Yerbabuenamarket. For contact details of the Yerbabuenamarket store, please check section 6.2 of this study.

Orígenes Orgánicos

Orígenes Orgánicos is a Mexican company established in 2004, whose purpose is to create ecologic consciousness among Mexicans by offering environment-friendly products such as organics. The company has a mini-market store where there are approximately 500 SKUs, including the following organic products:

• Groceries (vegetable oils, dressings, bars, beverages, snacks, coffee, chocolate, pet food, preserved foods, candies, cookies, jellies, honey, bread, pasta, sauces, tea, etc).
• Dairy products (milk, butter, cream, cheese, yoghurt, etc.)
• Meat (beef and poultry)
• Fruits and vegetables
• Egg

Currently, only a few Canadian products are available at Orígenes Orgánicos such as: organic tea (imported by Marcial Fernández) and pure (non-organic) maple syrup (imported by Primex, S.A. de C.V.). Some organic food products imported from other countries such as the U.S. and Spain are also available at the store.

Orígenes Orgánicos does not import directly. The imported organic foods that they offer at their store are sourced from local importers.

According to Orígenes Orgánicos, the organic food products that have larger sales at its store are vegetables, dairy products and groceries. In addition, the store includes a small restaurant that serves full prepared organic meals to customers. The menu includes: appetizers, soups, salads, pasta, Mexican dishes, sandwiches, burgers, juices and pastries. The contact details of the store can be found in section 6.2 of the study.

Ki-An

Ki-An is a Mexican store opened 2 years ago in the south part of Mexico City, which is specialized in organic and natural food products. A broad range of organic food products (between 250 and 300 SKUs) are sold at the store including:

• Vegetable oils
• Dressings
• Rice
• Nutritional bars
• Juices and lemonade
• Coffee
• Breakfast cereal
• Chocolate (chocolate syrup)
• Bakery products (cookies, bread)
• Marmalades
• Honey
• Pasta
• Sauce
• Tea
• Meat (chicken meat and beef)
• Dairy products (soy milk, cream, cheese, tofu, yoghurt)

Ki-An handles several imported organic food products, mainly from the U.S. The company also offers home-delivery service within Mexico City. The representatives from Ki-An indicated they are not aware about Canadian suppliers of organic food products. However, they indicated interest in knowing more about Canadian organic products, in order to have more options to offer to their clients.

Nutrisa and GNC

Nutrisa and GNC are probably the two most significant health store chains in Mexico with hundreds of stores all over the Mexican territory, offering a large variety of food supplements and healthy food products. Nevertheless, the presence of organic food products at these stores is limited.

Among the few organic food products sold at the Nutrisa stores are: soy milk (product of the U.S.), superberry liquid dietary supplement (product of Chile) and vacuum-packed milled flax (product of Canada). In the case of GNC the only organic food products found at the stores were: organic fibre mix (made of flax seed, oat bran and acacia), liquid aloe vera and vacuum-packed milled flax (product of Canada).

Most of the Nutrisa and GNC stores are well located, usually inside Mexican shopping malls; however, as previously indicated, currently they only carry a few organic products. GNC has approximately 900 employees. Despite the fact that both store chains do import directly, the organic food products sold at their stores are supplied by local importers/distributors. These stores could be a feasible option for Canadian organic food supplements and functional/high-fibre products. In fact, both companies expressed interest in Canadian products. For contact details of these stores, please check section 6.2 of this study.

La Canasta Orgánica

On-line store that offers home-delivery service of organic food products in Mexico City and the surrounding areas. The orders are placed by the clients on-line through the company's website. Among the organic food products sold by this company are: fruits, vegetables, dairy products, eggs, bakery products, cereals, jellies, soy products, meat, sauces, beverages and nutritional supplements, among others.

Other shops in Mexico City that carry organics

• Sano Mundo.- Mexican company with more than 10 years dedicated to the production, marketing and export of natural/healthy/high quality food products, including organics. The company has a store in the south part of Mexico City – Col. Del Valle, where products are sold directly to clients.
• Shaya Michán.- Shaya Michán is a famous teacher specialized in natural medicine. He also practices yoga and promotes a healthy lifestyle based in the consumption of natural products. Currently, Shaya Michán has a radio program and several stores under his name where natural foods (including organics) are offered.
• Centro UK´U´X Nutracéuticos y Orgánicos de México.- UK´U´X is a Mayan word that means spring. This is an evironment-friendly center surrounded by nature aimed at environment-conscious consumers. Clients can visit the center to read, take courses related to astrology, the mayan world, music, etc. or eat something at the cafeteria. The center has a store offering natural/healthy food products, including organics.
• La Buena Nutrición.- store chain specialized in natural/healthy food products.
• La Ruta Orgánica.- small store specialized in organics – mainly fresh produce.
• Naturalia.- store specialized in natural food products (including organics).
• Alimentos orgánicos e integrales.- small store specialized in organic and functional food products.

2.3.2) Specialty shops in Jalisco

Purorganiko

Mini supermarket store located in Jalisco specialized in the sale of certified organic food products. There are all kinds of organic food products available at Purorganiko such as: pastas, sweeteners, tea, grains/seeds, seasonings, candies, vegetable oils, dairy products, fruits, vegetables, juices, bakery products, beverages, meat, baby food, dietary supplements, snacks, coffee and dressings, among others. Purorganiko imports organic foods directly and also purchases organic products from local importers/distributors. The store also has a special area for reading, where clients can go to have a coffee/snack and read.

Best Health Arquitectos Corporales

Store located in Jalisco, specialized in the sale of natural, healthy and organic food products.

2.3.3) Specialty shops in Nuevo León and Mexican beach areas

The Green Market

Boutique store located in Garza García, Nuevo Léon, specialized in natural and healthy organic products. The company handles both domestic and imported certified organic products. Besides shopping directly at the stores, consumers can also place orders via internet and phone (home-delivery). A significant portion of the organic food products available at the Green Market store are supplied by Aires de Campo.

La Manzana Sana and Vegetarian

Two small stores located in Nuevo León, which handle organic food products, mainly from Aires de Campo.

Greenery

Retail chain that has stores specialized in gourmet and organic food products, located in Mexican beach areas such as: Cancún, Ixtapa and Mérida. The company is also planning to open soon a store in Playa del Cármen. Both domestic and imported organic food products are sold at these stores, including several products distributed by Aires de Campo.

2.3.4) Supermarkets

Superama (Wal-Mart)

Superama, which is the upscale format store of the Wal-Mart supermarket chain, also carries organic food products.Most of the organic foods available at the store such as vegetable oils, vinegars, pasta, sauces, juices, marmalades, coffee, honey and ketchup, are concentrated in a single area. In the old Superama stores, most organic food products are concentrated in the same section, but it does not have any special signs and therefore cannot be easily identified by the consumers. In addition, it is important to mention that in the old Superama stores, some organic food products such as fish (tilapia) and fruits/vegetables are located in the same areas/shelves where conventional foods are located.

On the flip side, the new Superama stores have a larger section of organics, which is well identified and includes an extensive variety of products.

Most of the organic food products available at the Superama stores are imported from the U.S., Chile and Italy. The only organic food products from Canada that were identified during the tours of the Superama stores were breakfast cereals and instant oatmeals from the Barbara's Bakery brand, which are imported and distributed by Comercializadora México-Americana, which is a subsidiary of Wal-Mart

It is important to note that although Superama does import directly, in the case of organic food products, Superama usually prefers to rely on local importers/distributors. Currently, Superama only imports a few organic food products directly, through its subsidiary Comercializadora México-Americana, as previously indicated. The price premium between conventional and organic food products sold at the Superama stores can go from 20% up to 150%.

Average Price Premiums for Organic Food Products sold in Superama

Product/price	Price – organic (Mex pesos)	Price - conventional (Mex pesos)	Price Premium (%)
Olive oil	$76	$62	23%
Spaghetti	$48	$33	45%
Vinegar	$74	$56	32%
Marmalade	$45	$24	88%
Ketchup	$28	$11	155%

Source: Tours of Superama stores.

In 2007, Wal-Mart U.S.A. announced plans to double its line of organic products. Wal-Mart is considered so influential that it not only supplies what consumers demand, but influences what consumers demand as well. As demand for organics increases in Mexico, it is likely that the policy established by Wal-Mart U.S.A. also be applied to the Wal-Mart stores in Mexico in the near future. Considering that Wal-Mart is currently the leading retailer in the Mexican market, a stronger focus from Wal-Mart Mexico on organics could change dramatically the sales of organic products in Mexico.

City Market (Comercial Mexicana)

Organic food products can also be found at City Market, which is an upscale format store of the Comercial Mexicana supermarket chain. Currently there are only 2 City Market stores in Mexico City, which carry several gourmet food products, aimed at medium and high class consumers. Most of the organic food products available at City Market are concentrated in a special area within the store, which although is bigger than the organics area in Superama, the shelf space occupied by organics is still not very significant. Some organic food products such as soy milk, vegetables, butter, cheese and ice-cream are located in the same shelves where conventional food products are located.

Most of the organic foods available at the City Market stores are from the Aires de Campo private label. In fact, Aires de Campo organized the display of the organic foods for sale at the City Market stores. Both Mexican as well as imported organic food products can be found at the City Market stores, such as: dressings, tea, coffee, chocolate, honey, nuts, canned chickpeas, granola, flax, beans, juice, energy drinks and ice tea, among others. Some of the few Canadian organic food products available at the store are teas and flax. The price premium between conventional and organic food products sold at the City Market stores is between 40% and 60%.

Average Price Premiums for Organic Food Products sold in City Market

Product/price	Price – organic (Mex pesos)	Price - conventional (Mex pesos)	Price Premium (%)
Dressing	$55	$38	45%
Salad	$30	$19	58%
Milk	$19	$12	58%
Tea	$57	$40	43%
Coffee	$80	$50	60%

Source: Tours of City Market stores.

Considering that City Market is an upscale store aimed at wealthy consumers with a high purchasing power, these stores could also be a good venue for the sale of Canadian organic food products. It is important to mention that City Market as part of Comercial Mexicana does import many products directly. However, for now in the case of organic food products, City Market prefers to go through local distributors instead of importing directly. Therefore, Canadian exporters of organics interested in selling at the City Market stores would have to introduce their products through a local importer/distributor. As indicated before, considering the important presence of the products from Aires de Campo at the stores, it may be a wise decision for the Canadian exporters to work with Aires de Campo in order to introduce their organic products at the City Market stores.

Soriana

Soriana is currently the second largest supermarket chain in Mexico after they purchased the Gigante retail chain. There is a special section within the Soriana stores for organic food products. The section, which is kind of an island in the middle of an aisle, is not very big, but is well identified/easy to find. Most of the organic food products available at the stores are either imported directly by Soriana or supplied by Aires de Campo. Among the organic products available at the Soriana stores are: pasta, oregano oil, wine, vinegar, nectar, juices, rice, beans, chickpeas, jellies, macaroni and cheese and soy milk. Most of these products are either domestic or imported from the U.S., except for a few ones such as pasta (Italy) and wine (Chile). As shown in the next table, the price premium between conventional and organic food products sold at the Soriana stores are in a range between 30% and 100%. 

Average Price Premiums for Organic Food Products sold in Soriana

Product/price	Price – organic (Mex pesos)	Price – conventional (Mex pesos)	Price Premium (%)
Wine	$126	$72	75%
Rice (1 kg)	$34	$18	89%
Beans (1 kg)	$28	$20	40%
Chickpeas (500 g)	$28	$16	75%
Pasta	$50	$37	35%
Balsamic vinegar	$72	$54	33%
Milk	$22	$11	100%

Source: Tours of Soriana stores.

As indicated before, Soriana does import organic food products directly. Therefore, Canadian exporters interested in introducing their products to this supermarket store, may want to establish a direct business relationship with Soriana. Another possible strategy to introduce organics into Soriana may be through Aires de Campo, which as indicated before also has a significant presence at the Soriana stores. It is important to point out that as opposed to Superama and City Market, Soriana is not only aimed at middle-upper class consumers, but at all social classes. However, the coverage of Soriana stores is more extensive, especially with the purchase of the Gigante retail chain, which allowed Soriana to open several stores in Mexico City. This makes Soriana an attractive sales venue for organic food products in Mexico.

SAM's Club

SAM's Club, which is a club format store owned by Wal-Mart, does not carry many organic food products. As a result of the visits conducted to SAM's Club stores, only a few organic food products were identified such as: spinach, carrots and a soy drink that is sold under SAM's Club private label: Member's Mark. The organic food products are on the same shelves of conventional food products and therefore are not very easy to identify. The staff from the store was not very familiar with organics and they didn't even know what organic food products were actually available at the store. Considering the above, until organics have a stronger presence at SAM's Club stores, at this point SAM's may not be the ideal sales venue for Canadian organic food products.

2.3.5) Foodservice

The foodservice sector in Mexico is slightly behind the retail sector in organics, but is starting to grow. There is a restaurant in Mexico City founded in 2004 called Orígenes Orgánicos, whose menu is 85% organic. The first restaurant opened by this company is located in one of the most trendy and bohemian neighborhoods in the city (La Condesa). In addition, Orígenes Orgánicos has also opened a new restaurant called "ECO-Bistrot" located in one of the main business/commercial neighborhoods in Mexico, which is home to medium and upper class residents (Polanco). The restaurant also has home-delivery service.

The Green Corner also has a small cafeteria within their stores, where they serve meals prepared with organic products. There are other healthy-oriented Mexican restaurant chains that offer organic meals in their menus, such as: La Buena Tierra and SAKS. Currently they don't promote organic on their menu, except for a small mention that some products are organic. However, specific products aren't mentioned in the individual dishes because production is so unsteady, sometimes they can't find the organic version and must buy conventional. These restaurants are interested in introducing more organic ingredients in their menus and promote the consumption of organics as part of their marketing strategy. In addition, there are some Mexican hotels such as Misión del Sol, located in Cuernavaca, Morelos, which is a resort/spa that caters to individuals interested in healthy activities and offers organic meals in its restaurant menu. Furthermore, there are some small cafeterias that also offer a few organic products such as: Cafetería Papalotl and Cafetería Café de Nuestra Tierra. The distribution method for these restaurants and cafeterias is mostly through local organic producers. Many restaurants work directly with the producer, visit their farms, and give them unofficial product certification. Despite of the fact that most of the organic ingredients used by these restaurants are domestically produced, the restaurants are willing to explore the possibility of using imported organic food ingredients, provided that the quality and price are right.

3) Consumption

The organic food sector is still a niche market in Mexico, which represents between 1% and 3% of the total food sector in the country. The market for organics has been growing but at a slow pace. The largest consumption of organic products in Mexico is concentrated in large cities such as Mexico City, Guadalajara and Monterrey. Currently, the annual sales of organic food products in Mexico reach approximately 8.4 billion pesos (CDN$760 million).

The consumption of organic agri-food products in Mexico is growing, but is still not as high as in Europe, the U.S. or Japan, mainly because of the lack of awareness of these products. The majority of Mexican agri-food products grown in Mexico are exported to other countries with a large consumption of organics. According to figures from SAGARPA, approximately 85% of the organic agri-food products domestically produced is exported, while only 15% is consumed in the domestic market. Based on figures from organic certification companies with presence in Mexico, it is estimated that Mexico exports between US$200 million and US$300 million per year of organic products and the main export markets are: the U.S., Germany, Italy, the Netherlands, Switzerland, the United Kingdom and Japan. 

The Mexican government has support programs in place to help farmers pay for the international organic certification needed for export and required by many organic food stores. Currently, there are more than 15 private organic certification organizations active in Mexico, including the Organic Crop Improvement Association, Certimex and Naturaland, among others. When getting certified, farms or producer groups select which countries, markets, or standards they want to be certified for. For example, for export to Europe, the certification is for EU Regulation 2092/91, for the U.S., it's the USDA NOP Final Rule, for Japan, the Japan Agricultural Standards, for Quebec, the CAQ, etc.

As previously indicated, over the last few years the consumption of organic agri-food products has been steadily growing, but is still in its infant stages. One obstacle to more widespread domestic consumption of organic food is a general lack of awareness that organic certification exists and sometimes confusion with regard to the concept of "organic" among the Mexican population. The concept of organics is relatively new in Mexico and still not widely known. Many Mexican consumers tend to confuse the term "organic" with "fat-free", and do not understand clearly the difference between organic food and conventional food. Some Mexican lower class consumers even have a negative connotation with the term "organic", given that ‘Organico' is commonly used in Mexico to label organic chemicals or organic trash. Therefore, language ambiguities and differences in perception have become an obstacle for Mexican sellers of organics. Usually, only Mexican consumers with a high level of education know what the term "organic food" means and the benefits of consuming these types of products. 

The low purchasing power and higher prices of organic foods as compared to conventional foods is another factor that hinders the consumption of agri-food products in Mexico, especially considering that Mexico is a highly price-driven market. It is estimated that currently the Mexican domestic market for organic food products amounts to 3 million people, mostly from the medium and upper classes. In general, products labeled as "organic" are perceived as healthy by this sector of the Mexican population. It is estimated that approximately 700,000 Mexican households spend between 1,000 and 1,500 Mexican pesos (CDN$90 - CDN$140) in the purchase of organic food products, on a yearly basis.

It is estimated that the organic market in Canada is growing at an annual average rate between 20% and 25%, with annual sales over 3 billion dollars. Currently, the sales of organics in Canada are considered to be at least 3 times higher than the sales of organics in Mexico, which are under 1 billion dollars per year. In the U.S., the annual average sales of organics are estimated at approx. 10 billion dollars.

Impulso Orgánico Mexicano, A.C., which is an association of Mexican producers of organic products, is planning to implement a government funded promotional campaign in 2009 to promote the benefits of organics and the consumption of Mexican certified organic products. The campaign would be aimed towards Mexican housewives and new families (double income – no kids), from the middle and upper social classes, and would include promotional activities at points of purchase, billboards, etc. While the campaign will be mainly focused on Mexican organic products, it would help to increase the awareness in general about the benefits of organics among the Mexican population, so this would also be helpful for imported organic food products. For more information about Impulso Orgánico Mexicano, A.C. and its promotional campaign, please check section 6.5. 

According to the Center of Economic, Social & Technological Research for Agro-Industry & World Agriculture of the University of Chapingo (CIESTAAM), other factors that are restricting a larger consumption of organics in Mexico are: the lack of culture for a healthy food consumption and environment protection, and a lack of confidence in the quality of the products.

3.1) Profile of organic consumer

As a result of the research conducted, it was determined that generally speaking, there are 2 types of consumers of organic products in Mexico: 

1. One group is integrated by alternative "hippy" consumers, vegetarians and people with health issues or special dietary needs. Despite the fact that people in this group prefers organics, it does not mean that they have the purchasing power to purchase these products. 

2. The second group is integrated by educated adults between 20 and 60 years old from the medium and high social classes that are concerned about their health, the environment, the animal welfare and/or the sustainability of the agriculture economy. This group of consumers believes that food products should be naturally grown, without the use of pesticides, fertilizers, hormones, antibiotics or any other chemical product, which they consider harmful for human health. This group of consumers understands the benefits of organics and has the purchasing power to buy these types of products. Consumers in this group are prepared to pay premium prices for organics because they know they are getting premium quality products in return. This is the group of consumers that are more likely to purchase imported organic food products from Canada. Some of the companies interviewed as part of the research for the study, such as Aires de Campo and Atari indicated that in general, Mexican consumers of organic products believe these are healthier, of a better quality than conventional foods and environmentally friendly. Some of these consumers also purchase organic products as a sign of solidarity towards small farmers dedicated to the production of organics. Another company interviewed (Natucomer) pointed out that Mexican consumers of organics are people willing to pay a premium price in exchange of maintaining a healthy nutrition.

According to research conducted by the Mexican Organic Production System Committee, among the main reasons why Mexican consumers buy organic products are:

• Consumers feel organic products are good for their families
• Organic products have less chemicals
• Organics are environmentally friendly
• Flavor
• Product presentation
• Curiosity
• Animal welfare

Based on the interviews conducted as part of the study, it was found that on average, from the total food products purchased on a monthly basis by organic consumers at least 25% are organics. Of course, this percentage goes up to 90-100%, in the case of those people that only consume organic products.

3.2) Retail sales of organic

In Mexico, the commercialization of organic food products is made through traditional distribution channels, which usually means placing the products on the shelves of the stores, without a promotional campaign behind to support and point out the competitive advantages of organic products. This lack of promotional activities is one of the reasons why the growth in the consumption of organic products in Mexico is lower than the growth in consumption reported in other markets such as Canada and the U.S. Figures from the Mexican Organic Production System Committee indicate that the main sales venues for organic products in Mexico are traditional supermarkets and natural product stores, and only a small amount is sold directly between the producer and the consumer, as shown in the following graph.

Source: Comité Sistema Producto Orgánicos

As previously indicated, there are several stores within major cities, which are specialized in organics such as: Aires de Campo, The Green Corner, Yerbabuenamarket, Orígenes Orgánicos, Purorganiko and the Green Market, among others. Usually, the areas where these stores are located are home to well-educated, well-paid residents who represent the few Mexicans aware of organics and able to afford them. Some of these stores such as The Green Corner, give preference to local production and hence if the product is available domestically, they tend to purchase domestically first. However, these stores also try to offer a complete line of products to their customers. Therefore, if the product is not available locally, they are open to purchase imported products. In addition, some healthy/natural food store chains in Mexico such as: Nutrisa and General Nutrition Center (GNC), also carry organic products.

Organic food products (both domestic and imported) are also gaining shelf space within Mexican supermarkets. Some upscale supermarket stores in Mexico such as Superama and City Market offer organic food products within their stores. Organic food products (both domestic and imported) can also be found in the gourmet section of the main departmental stores in Mexico such as Palacio de Hierro and Liverpool. 

There are also some informal organic markets and street markets (tianguis) that offer organic products, such as: Tianguis del Círculo de Producción y Consumo Responsable in Guadalajara, Jalisco; Mercado Ecológico Ocelotl, in Xalapa, Veracruz.; Expo Venta de Productos Orgánicos y Naturales "El Pochote", in Oaxaca; Tianguis Orgánico Chapingo in Estado de México; Granja Orgánica, Comercio Justo México and Red Bioplaneta in Mexico City. However, most of the organic products sold in these markets are local and they only carry very few imported organic food products. 

According to data from the Mexican Consumer Protection Agency (PROFECO), among the organic agri-food products with higher demand in Mexico are: fruits, vegetables, chocolate, dairy products, herbs, tea, cereals, coffee, rice, juice, preserved fruits and meat. Domestic production supplies a significant portion of the Mexican organic consumer market (especially fresh produce, meat, eggs, coffee and honey). However, the presence of imported organic products in the Mexican market is also significant and is growing (especially processed organic food products). In fact, one of the imported organic food products most commonly found in Mexican health stores is Canadian organic flax. 

Basically all the companies interviewed as part of the study concurred that over the last years the sales of organic food products in Mexico have been growing and are expected to continue growing towards the future. Some companies such as Aires de Campo, The Green Corner, Ki-An and Orígenes Orgánicos indicated that sales of organics have grown because more Mexican consumers are becoming conscious about their health and the environment. Others like Impulso Orgánico attribute the growth in sales of organics to the activities implemented by associations and the government to promote organics.

4) Market-entry considerations

The research process of the study also included in-depth interviews with organic certification agencies with presence in Mexico and government agencies involved in the regulation of organics. These interviews were useful to gather information about the current and upcoming regulations for organics in Mexico, as well as the certification process for organics. The following sections reflect the information gathered through these interviews, as well as the consultations and analysis made of the organic legislation both in Mexico and in Canada.

4.1) Mexico's regulations and certification

4.1.1) Update on the Regulations expected to be issued for the implementation of the Mexican Law of Organic Products

Mexico's regulatory efforts related to organic production began in 1995 with the publication of the Mexican Official Standard: NOM-037-FITO-1995, which establishes specifications for organic agricultural production and processing. Following its publication, however, the Mexican government concentrated its efforts on marketing and promotion strategies despite the fact that they had yet to establish a legal framework for regulating organic production. On practice, NOM-037 was never really enforced or recognized. In fact, based on the provisions of the revised Mexican Plant Health Law, which was published a few years ago, this Standard is no longer in effect. Due to the lack of a legal framework for organics, several food products were sold in Mexico (and in some cases continue to be sold) as “organic”, without having a proper organic certification. 

With the purpose of establishing an adequate legal framework for organics in Mexico, on February 7, 2006, the Mexican government published its Law of Organic Products, after years of legislative revisions. The new law creates a regulated framework for the conversion, production, processing, manufacturing, preparation, storage, identification, packaging, labeling, distribution, transport, commercialization, verification and certification of organic products. SAGARPA is assigned as the government department in charge of verifying compliance with and enforcing the Law. One of the main objectives of the Law is to address the need of establishing control and supervision of organic certification, in order to provide certainty to the consumers that the organic products they purchase are really organic, establishing economic sanctions to companies/individuals that sell products as organic, without complying with the provisions of the Law.

The Mexican Organics Law requires that all products "claiming" to be organic be certified by an internationally recognized organization. In addition, the Law indicates that mutual recognition agreements would be pursued with Mexico's main trading partners to facilitate international trade of organic products. The government's goal is to develop a program that complies with all of their trading partners' regulations (U.S., Japan, Europe, Canada, etc.).

Additionally, the Law calls for the creation of specific HS Codes to identify imports of organic products and the creation of a Mexican organic seal to identify those organic products that comply with the Law. The Law also created a National Council of Organic Production, integrated by government, producers, processors, traders, certification agencies and researchers, with the purpose of fostering the development and commercialization of organic products and crops in Mexico. Furthermore, the Law establishes the basis for a national promotional campaign of organic foods and support campaigns that encourage the constant supply and diversity of organic products in the domestic market.

In terms of imports, the Law states that when a product labeled as organic wants to be imported into Mexico, it has to come from countries where there are organic regulations similar to those existing in Mexico or that the products be certified by an organic certification agency approved by SAGARPA. The Law also indicates that imported organic products must maintain their integrity from the time of the importation until they reach the final consumer. 

Mexico's Organics Products Law is an effort to organize and regulate organic production in Mexico. Based on traditional Mexican law development, the new Organics Law sets the grounds for a series of complementary additional Regulations and Standards that will need to be developed to achieve the objectives defined in the Law. In fact, the Regulations (Reglamento) of the Organic Products Law are currently under development and is expected to be published in the near future. In general, the purpose of the proposed regulations is to establish specifics for the implementation of the provisions included in the Law. It is important to point out that without these regulations the provisions of the Law cannot be fully implemented. 

The draft regulations establish the basis for the coordination of SAGARPA with other government departments such as the Mexican Secretariat of Environment (SEMARNAT), for the implementation of the Law. One of the objectives of the proposed regulations is to guarantee the organic identity of products and define the criteria for those agencies interested in being approved to conduct the certification of organic products. The draft regulations also establish the characteristics of the certificate to be granted to organic products and the description of those documents that must be used to facilitate the traceability of organic products both in the domestic and the international market. 

In addition, the draft regulations specify the conditions for the use of the Mexican organic seal, the specifications for the promotion of organic production/marketing, and the treatment to be applied to imported organic product to preserve their organic integrity. In this subject, the draft regulations state that only in those cases where there are no applicable measures for the organic production that guarantee the integrity of the organic products or those measures applied are not sufficient, appropriate security measures would be taken for imported organic products.

The draft regulations have been already approved by the Mexican Federal Commission of Regulatory Improvement (COFEMER); however, the draft regulations are still under review of the Mexican Sanitary, Food Safety and Food Quality National Service (SENASICA), which is the agency within SAGARPA responsible for the oversight of organics. It is expected that the regulations be published/enforced soon; however, there is still not a specific date. 

In the case of Canada, currently the provinces of British Columbia and Quebec have regulations in place governing organic production systems. For the remaining provinces, voluntary systems are relied upon. Therefore, multiple organic standards are currently used to certify products as organic in Canada and organic producers frequently pay multiple fees for several different certification systems.

As an effort to establish a single Canada National Organic Regime, Canada has developed organic products regulations that will incorporate the current voluntary system into a federally regulated framework establishing mandatory provisions for the production and trade of organic products. The purpose of the regulations is to establish a system by which the CFIA as competent authority will regulate the use of the "Canada Organic" agricultural product legend. Additionally, consumers would be protected from deceptive and misleading labeling practices through regulatory controls. The CFIA will verify compliance with and enforce the regulations. 

Canada's Organic Products Regulations were published in December 2006 and were supposed to come into effect in December 2008. However, the regulations were opened again for review. The revised Regulations were published on February 14, 2009, providing a 75-day period so that any interested persons can make representations concerning the proposed Regulations, which are scheduled to come into force on June 30, 2009. It is worth mentioning that under the Regulations, Canadian organic producers are also required to comply with certain Canadian Standards.

4.1.2) Equivalency of Mexican organic legislation with Canadian standards

Once the Mexican Organic Products Regulations and the Canadian Organic Products Regulations are implemented, it will be important to seek an equivalency agreement between both countries to recognize each other's system, in order to facilitate the access for Canadian organic products to Mexico. In fact, this is an objective set out in both regulations. This equivalency agreement would have to be negotiated by the competent authorities of both countries. The ultimate goal of this equivalency agreement would be that the Canada organic logo be accepted and recognized by the Mexican authorities as a valid certification for Canadian organic products to be sold in Mexico. 

It is important to mention that both the Mexican and Canadian draft organic products regulations have several similarities that should facilitate the development of a recognition agreement. Following is a comparative analysis of the similarities between both regulations that could be used as a reference for the negotiation of the recognition agreement.

Similarities between the Mexican and Canadian draft organic products regulations

Subject	Mexican Law and draft regulations	Canadian draft regulations
Distinctive organic seal	Contemplates the creation of a Mexican organic seal to identify those products that are really organic. The organic seal can only be used by those products that contain at least 95% of certified organic ingredients.	Contemplates the creation of a "Canada organic regime" logo to identify those products that are certified as organic. Any organic product may bear the agricultural product legend except for a multi-ingredient product that contains less than 95% organic products.
Organic certification bodies	Contemplates federal regulation of organic products with certification delivered by accredited private certification agencies. The draft regulations describe the criteria for the approval, suspension and cancellation of private agencies interested in certifying products as organic. The approvals of the certification agencies would be valid for 1 year and could be subject to renewal.	Contemplates federal regulation of organic products with accreditation and certification delivered by accredited certificated bodies, including the criteria to be applied for the accreditation, suspension and cancellation of certification bodies.
Certification process	Indicates that those individuals interested in having their products certified as organic would have to request such certification from an accredited/approved certification agency, describes the information that the organic certification should include, and states that such certificate would be valid for one year.	Indicates that a person who wishes to have an agricultural product certified as organic shall apply in writing to a certification body for a certificate confirming that the product is an organic product, within 12 months before the day on which the product is expected to be marketed. A person who wishes to package and label an organic product shall also apply for a certificate from a certification body. It also indicates that the organic product packaging and labelling certification remains in effect for a period of 12 months.
International marketing	Indicates that when a product labeled as organic wants to be imported into Mexico, it has to come from countries where there are organic regulations similar to those existing in Mexico or that the products be certified by an organic certification agency approved by SAGARPA. The regulations also indicate that imported organic products must maintain their integrity from the time of the importation until they reach the final consumer.	Indicates that a product may be imported and marketed in Canada as organic if it meets either of these requirements: 1) It is an organic product under the Regulations 2) In the case of a product originating from a country with which the CFIA has entered into an agreement for imports/exports of organics, that it is certified in accordance with the agreement by a certification body recognized by that country. If it comes from a country that has not an agreement with Canada, it can be imported if certified by a certification body recognized by a country with whom Canada has an agreement.
Labelling	Indicate that only those products that comply with the Mexican organics legislation would be able to be identified as organic in their labels or advertisement material. The label must state the number of organic certificate, the identification number of the organic certification organization that issued the certificate, as well as a statement saying that the product is free of genetically modified organisms.	Indicates that the labels or if applicable the advertisement for an organic product may contain the words: "organic", "organically grown", "organically raised", "organically produced" or similar words, and shall contain the name of the certification body that has certified the product. In the case of an imported product for which the Canada Organic logo is used, the statement "Product of" or "Imported" must also be included in the label.
Equivalency agreements	Contemplates the pursue of equivalency agreements for the recognition of the Mexican organics control system in order to facilitate exports of Mexican organic products and assess the organics control system applied in those countries requesting equivalency agreements with Mexico. Points out that the National Council of Organic Production would collaborate with SAGARPA in the development of the said equivalency agreements.	Contemplates the pursuit of recognition agreements with trading partners to facilitate fair and equitable trade.

As previously indicated both the Canadian and Mexican organic products regulations are still under review and are yet to be enforced. Therefore, the draft regulations may still be subject to changes; however, it appears that the basic principles of both regulations are the same, which should facilitate the development of an equivalency agreement.

4.1.3) Mexico's certification process

In order to be certified as organic, food products have to comply with strict standards established by internationally recognized organizations such as the International Federation of Organic Agriculture Movements (IFOAM). In order to certify the compliance with these standards, the producers are subject to a process of analysis and tests, through which approved certification agencies monitor and confirm that the products comply with applicable standards. The certification process of organic products includes a thorough analysis of water, soil, handling practices, manufacturing practices, among others and the organic certification is not provided until all the requirements are properly fulfilled, which in some cases can take several years. The certification agencies have to comply with the ISO Guide 65 and be approved by IFOAM.

Most of the internationally recognized certifying agencies in Mexico are foreign, except for one Mexican certifying agency called CERTIMEX. Some certifiers travel from the host country to certify, but now many have certified third parties in Mexico City to act on their behalf. The producer chooses a certification program based on which country they plan to export their products. For example, if their customer is in the U.S., they will use a program such as OCIA, QAI or OTCO. Section 6.7 of this study includes a list of approved organic certification agencies that operate in Mexico. 

Importance of the organic certifying agencies that operate in Mexico, by country of origin (2005)

Certifying Agency	Country of Origin	Certified Production Units (2005)
		Number	%
Bioagricert	Italy	259	34.26
Certificadora Mexicana de Productos y Procesos Ecológicos, S.C. (CERTIMEX, S. C.)	Mexico	168	22.22
Organic Crop Improvement International (OCIA)	United States	109	14.42
Institute for Marketecology (IMO Control)	Switzerland	84	11.11
Naturland	Germany	61	8.07
Quality Assurance Internacional (QAI)	United States	26	3.44
Oregon Tilth Certified Organic (OTCO)	United States	23	3.04
IMO Control Bolivia	Bolivia	5	0.66
Aurora Certified Organic (ACO)	United States	4	0.53
Guaranteed Organic Certification Agency (GOCA)	United States	3	0.40
Demeter Bund	Germany	2	0.26
California Certified Organic Farmers (CCOF)	United States	2	0.26
BCS ÖKO Garantie	Germany	2	0.26
LACON	Germany	2	0.26
International Certification Services, Inc. (ICS) - Farm Verified Organic (FVO)	United States	2	0.23
Florida Organic Growers Certified (FOC)	United States	1	0.13
KRAV	Sweden	1	0.13
Organic Forum	United States	1	0.13
Others		1	0.13
TOTAL		756	100.00

Source: CIESTAAM and Certifying Agencies.

4.2) Import requirements and implications for Canadian exporters

Currently, there are no specific imposed requirements for importing organic food products into Mexico. Organic products only need to comply with the same standards as imports of conventional food products. The buyer or Mexican importer is the only one who may require organic certification documentation. 

It is important to mention that the Mexican regulations require that grains and seeds imported in bulk into Mexico be fumigated either at origin or at the point of entry into Mexico. However, if the product is organic it may be exempted from fumigation, as long as a certificate proving that the product is organic is presented to the Mexican agriculture authorities at the border. This is an element to be considered by Canadian exporters interested in shipping organic grains/seeds in bulk to Mexico. 

At this point, any food product that is certified as "organic" by an internationally recognized certifying agency such as those indicated in section 4.1.3, can be sold as organic in Mexico. Additionally, according to SENASICA at this point any organic certification provided in Canada would be valid in Mexico, which basically indicates that currently any food product sold as organic in Canada, could also be sold as organic in Mexico. Additionally, there are no specific labelling requirements for organic foods to be sold in Mexico. These are subject to the same labelling requirements as conventional foods, such as NOM-051-SCFI-1994, which is the Mexican Official Standard for pre-packaged food and non-alcoholic beverages. 

It is important to point out that all the above is expected to change once the Regulation of the Mexico's Organic Products Law comes into force, which is expected to only allow imports of organic food products if they come from countries where there are organic regulations similar than those existing in Mexico or if the products are certified by an organic certification agency approved by SAGARPA. Based on the draft Regulations, any private agencies interested in certifying products to be sold in Mexico as organic, would have to be approved by SAGARPA. The Regulations are expected to describe the approval process that these agencies would have to follow to get approved. Additionally, the draft regulations are also expected to require that imported organic products maintain their integrity from the time of the importation until they reach the final consumer. 

As previously indicated, the Mexican Organic Products Regulations are still under development. These are expected to be published soon, but still there is not a specific publication date defined. The publication of the Regulations is essential, given that despite the fact there is a Mexican Law of Organic Products in place, it cannot be fully implemented until the Regulations are published. The Mexican government (SENASICA) is also working on specific technical guidelines to indicate how certain provisions of the Law and the Regulations would be implemented (including provisions related to labelling, imports, etc.). These technical guidelines are expected to be issued after the Mexican Organic Products Regulations are published.

4.2.1) Recommendations to Canadian exporters

Considering that currently there are no specific Mexican import requirements for organic food products, Canadian exporters interested in shipping organic products to Mexico are only advised to make sure that their products comply with the applicable Mexican import requirements for conventional food. If the product to be exported is a grain or seed to shipped in bulk, Canadian exporters should make sure that a document certifying that the product is organic, is sent together with the shipment, in order to avoid that the product be fumigated at the Mexican border. In light of the fact that Mexican border inspection authorities are not yet very familiar with organic certification documentation or even the "organic" concept, it is recommended that those Canadian exporters of organic bulk commodities send a copy of the organic certificate to his Mexican importer before the shipment is actually sent, so that the importer can show it to the Mexican border authorities and get their approval for importing the shipment without the need for fumigation. 

Canadian exporters of organics are also advised to be constantly monitoring when the Mexican Organic Products Regulations and the technical guidelines are published, given that as previously indicated, these will change the conditions for importing organic food products to Mexico. Therefore, it is very important that Canadian exporters keep abreast of these changes to make sure that their organic products comply with the Mexican regulations. For further information about the Mexican Law of Organic Products and the proposed regulations, Canadian exporters can consult the Mexican government resources included in section 6.4 of this study.

5) Opportunities for Canadian exporters

Obesity and diabetes are important health problems in Mexico. In order to reverse this trend, education and intervention programs have been established to educate Mexicans about the benefits of healthy eating. As a result, Mexicans are starting to turn to foods that are considered healthier, such as organic products. In addition, many Mexican consumers are also starting to demand more organic food because they like the taste and believe normal food stuffs include toxic substances that will affect their health in the long run. 

The demand for organic foods is also expected to increase as a result of Mexico's growing middle class. These trends should ultimately represent great opportunities in the Mexican market for Canadian exporters of organic agri-food products. As previously indicated, a significant number of stores specialized in organic food products are already available in Mexico and it is expected that new stores will continue to be opened in the future, representing excellent sales venues for Canadian organic products. Additionally, most of the Mexican supermarkets already carry organics, which are gaining more and more shelf space, and in some cases have a special section of the store devoted to them.

In light of the fact that organics are at a price premium above the level of the average consumer, it appears that the short term opportunities lie with the middle-upper classes. The fact that Mexico is mainly focused on the production of tropical products also generates opportunities in the Mexican market for cold weather and processed organic products such as those produced in Canada.

5.1) Main categories of product where opportunities exist

As a result of the research conducted, it was found that opportunities exist for basic products that are consumed on a daily basis such as: fruits, vegetables, meat, milk and eggs. Right now organic dairy products are the only ones available on a consistent basis across all markets. Nevertheless, as previously indicated, Mexican organic farmers concentrate in the production of the above listed products and therefore Canadian exporters would face a strong competition from domestic companies. Opportunities also exist for processed organic food products that are not domestically produced/readily available in the market, and where Canada appears to have a competitive advantage as compared to Mexico, such as:

• Bakery products (bars, bread, cake/pudding mixes, cookies, pastries)
• Beverages (alcoholic beverages, beer, energy drinks, ice-tea, juices, lemonade, liquors, wine)
• Desserts and sweet products (candies, chocolates, chocolate shakes, ice-creams, jellies, maple syrup, marmalades, sorbets)
• Dietary supplements (milled flaxseed, flax oil, fibre supplements)
• Groceries (baby food, breakfast cereals, honey, ketchup, mayonnaise, mustard, pastas, risotto, sauces, seasonings, soups, spices, tea, tofu, vegetable oils, vinegar)
• Ready-to-eat pulses and seeds (beans, chickpeas, dry roasted pumpkin seeds, hempseed, rice, rye buckwheat kernel)

Several of the companies interviewed as part of the research for the study, including Aires de Campo, The Green Corner, Distribuidora Promesa and Smart Holding México, pointed out that organic dairy products (soy milk, cheese, butter, etc.), are the organic food products with the highest demand in Mexico. In fact, according to Natucomer organic dairy products represent almost 60% of the Mexican organics market. Unfortunately, Canada is not in a position to take advantage of opportunities for organic dairy products, since these products are subject to high tariffs, given that Canadian dairy products were excluded from NAFTA, because of Canada´s supply management system. Other organic food products that according to the companies interviewed have a high demand in Mexico are: coffee, cereals, vegetables and groceries. As further explained in the study, currently (March 2009) the exchange rate of the Mexican peso vs. the Canadian dollar is more favorable for Mexicans (CDN$1 dlr/MX$11.5 pesos) than the exchange rate of the Mexican peso vs. the U.S. dollar (US$1 dlr/MX$15.0 pesos). This can help Canada to compete with U.S. products in the Mexican market.

There are other factors that need to be considered in the equation, such as transportation costs, which of course are lower for product going from the U.S. to Mexico than product going form Canada to Mexico, but this could be somewhat offset by the differences in exchange rates explained above. Therefore, the current exchange rate scenario is an opportunity that Canadian exporters should take advantage of, in order to introduce their organic food products to the Mexican market. In addition, Canada and Canadian products enjoy a good reputation in the Mexican market. Mexican consumers usually associate Canada with nature, quality and wholesomeness. Therefore, Canadian exporters of organics should build on this good reputation to take advantage of the business opportunities that are offered by the Mexican market.

5.2) Recommendations to Canadian exporters

Entering into the Mexican marketplace requires some investment in time and money, and requires a long-term vision. Although the Mexican organics market is still behind more developed countries, the rate of growth and acceptance will likely proceed more rapidly. This is because it is already a trend in many developed markets and the Mexicans are simply following their lead for certification programs, advertising, processes and procedures. In addition, middle and upper class Mexican citizens are traveling to other countries and seeing the organic phenomenon firsthand, so acceptance may come more rapidly. 

Canadian exporters interested in introducing their organic products in the Mexican market are advised to participate in trade shows and visit the market to meet potential partners/clients, understand import procedures, and develop effective entry strategies. Promotional activities done in co-operation with Mexican retailers are another way to gain exposure and to better understand the competitive Mexican market. 

Canadian exporters are advised to contact local distributors and importers of organic food products such as: Aires de Campo, Distribuidora Promesa, Smart Holding Mexico and Marinter, as a crucial step in their efforts to establish themselves in the Mexican market. Knowing the rules and working with them is not sufficient to bring an organic product successfully onto the Mexican market. A partner in Mexico that has experience and contacts in the market and the resources to take care of the import procedures for organics can be very helpful to introduce Canadian organic products in the Mexican market. Additionally, a good partner is essential to establish successful business relationships with local stores specialized in organics such as Green Corner, Yerbabuenamarket, Ki-An, and Mexican supermarket chains that do not import directly. 

In general, Mexican consumers have a positive perception about Canada and Canadian made products. Therefore, Canadian exporters should take advantage of this leverage to introduce their organic products in Mexico. In order to be competitive in the Mexican market, Canadian exporters should focus on promoting the health benefits and trendy nature of their organic products, while maintaining a competitive price, given that Mexican customers usually look at the price to quality relationship.

Marketing with a clearly targeted strategy is a must for organic products. The organic market is a special one, partly because premium prices are involved. It requires a special effort. Considering the strong competition in the Mexican market, it can also be concluded that on average, Canadian exporters should try to maintain the premium price for their organic products in a range between 20% and 30% above the price of conventional food products, in order to be competitive in the market. This percentage of premium price could of course vary depending of the product, but Canadian exporters could use the said range as a reference. 

Whenever possible, Canadian exporters should join any campaigns implemented by key players in the Mexican organic market such as Aires de Campo and The Green Corner, to increase the awareness about the benefits of organics and promote their consumption. Despite these campaigns are not focused on promoting specifically Canadian organic products, Canada's participation would show the country's interest in developing the Mexican organics market and at the end, an increase in the consumption of organics in Mexico would also be positive for Canada's business interests in the market.

6) Contacts / resources

6.1) Importers and distributors of organic products

Aires de Campo, S.A. de C.V. 
Contact: Erika Schlebach, Purchase Manger or Roberto Latapí, Director 
Address: Av. San Antonio 16-2, Col. San Pedro de los Pinos 
Tel: 2614-0122 Ext 235 
Fax: 26140122 Ext 243
E-mail: erika@airesdecampo.com / rlg@airesdecampo.com
Website: www.airesdecampo.com  

ATARI, S.A. de C.V. 
Contact: Karina Ríos, Manager 
Address: Manuel Gómez Morín 300, Col. Del Valle, San Pedro García, Nuevo León 
Tel: (52-81) 8356-4898 
Fax: (52-81) 8363-1705
E-mail: krios@valtra.com.mx
Website: www.valtra.com.mx  

Comercializadora e Importadora y Exportadora VOMAC, S.A. de C.V. 
Contact: Lic. Patricia Carachards 
Title: General Manager 
Address: Calle Tekal Mz 73 Lt , Fraccionamiento Pedregal de San Nicolas, Del. Tlalpan, México, D.F. 
Tel: (52-55) 5644-6512 
Fax: (52-55) 5644-2927
E-mail: vomac@prodigy.net.mx

Comercializadora Mexico-Americana, S.A. de C.V. 
Contact: Beatriz Tellez, Imports Manager 
Address: Av. Nextengo No. 78 Col. Santa Cruz Acayucan C.P. 02770, México, D.F. 
Tel. (52-55) 5371-3117
E-mail: mbtellez@wal-mart.com

Distribuidora Promesa, S.A. de C.V. 
Contact: Carlos Fuentes Arestegui 
Title: Purchase Manager 
Address: Av. Madero 1590, Altos, CP 21100, Col. Nueva Mexicali, B.C. 
Tel. (686) 555-7105
E-mail: info@diproworldorganic.com
Website: www.diproworldorganic.com  

Marinter, S.A. de C.V. 
Contact: Miguel Angel Rivas 
Title: General Manager 
ddress: Paseo de las Jacarandas# 328, Col. Santa María Insurgentes, C.P. 06430, México, D.F. 
Tel: (52-55) 1946-0440 
ax: (52-55) 1946-0445
E-mail: mrivas@marinter.com.mx
Website: www.marinter.com.mx  

Natucomer S.A. de C.V. 
Contact: Ing. Carlos Gallardo 
Address: Bosques de Ciruelos 186 piso 12, Bosques de las Lomas, C.P. 11700, México, D.F. 
Tel. (52-55) 5251-4786 
Fax. (52-55) 5251-4787
E-mail: cgallardo@natucomer.com

Natural Health, S.A. de C.V. 
Contact: Ing. Alberto Mares 
Title: General Manager 
Address: Av. Avellano 697, Col. Bajada de San Martín, Irapuato Guanajuato, México 
Tel. (52-462) 626-5850 
Fax. (52-462) 626-5851
E-mail: contacto@naturalhealth.com.mx
Website: www.naturalhealth.com.mx

Nutricomercializadora, S.A. de C.V. 
Subsidiary of Nutrisa (please check the contact information of Nutrisa)

Olkan Comercializadora Import Export, S.A. de C.V.
Contact: Juan Hernández
Title: Director General 
Address: Sor Juana Inés de la Cruz No.19333-06, Col. Otay C.P. 22500, Nueva Tijuana, B.C. 
Tel. (52) 664-607-9616
E-mail: amaralolkan_imp_exp@prodigy.net.mx  

Smart Holding Mexico S. de R.L. de C.V. 
Contact: Manuel Aceves or Jorge García de León Gutiérrez, 
Title: Sales Manager 
Address: Paseo de los Pinos No. 20, Fracc. El Manantial, Tlajomulco de Zuñiga, Jalisco 
Tel: (52-33) 3770-2310
E-mail: info@smartmexico.com.mx
Website: www.smartmexico.com.mx  

Tendencia Gastronómica 
Contact: Juan Peña or Omar Pineda 
Title: Finance Manager 
Address: Av. 1ero. de mayo 226-bis Col. San Andrés Atoto, Naucalpan 
Tel: (52-55) 2122-7100 Ext 336 
Fax: (52-55) 2122-7100 Ext 317 y 378
E-mail: ventas@t-g.com.mx
Website: www.t-g.com.mx

Tratecom, S.A. de C.V. 
Contact: Lic. Dinora Domínguez 
Title: Import Manager 
Address: Mazatlán 152 Int. 1 Col. Condesa, México, D.F. 
Tel. (52-55) 5286-9627
E-mail: ddominguez@foodforlife.com  

Ucero 
Contact: Ismael Ochoa, Director General 
Address: Xochicalco 447 Col. Narvarte 03020 México, D.F. 
Tel: (52-55) 5669-3305
E.mail:info@iducero.com.mx  
Website: http://iducero.com.mx

6.2) Mexican stores that carry organics

Greenery 
Contact: Francisco Espinal 
Title: Director General
Address: Plaza Vivendi Américas" Local 1, Av. Bonampak Cancún, Quintana Roo 
Tel: (52-998) 883-2839
E-mail: info@greeney.com.mx  
Website: www.greenery.com.mx

Ki-An 
Contact: Irma Jiménez, Director 
Address: Ferrocarril de Cuernavaca 2807, Col. San Jerónimo Lídice, C.P. 10200, México, D.F.
Tel. (52-55) 1520-1849 / 5683-2764 
E-mail: g.lopez@ki-an.com.mx 
Website: www.ki-an.com.mx  

La Buena Nutrición 
Contact: Guillermina Olivares 
Title: Manager 
Address: Parroquia 302-B, Esq. San Francisco, Col. Del Valle, CP 03100, México, D.F. 
Tel. (52-55) 5534-5245 

La Canasta Orgánica 
Contact: Gilberto Rustrian Title: Director General 
Address: 21 de Marzo No. 1 Col. Villa San José 
Tel: (52-55) 5523 3738 / (52-55) 8501-3354 
E-mail: mollisdere@yahoo.com
Website: www.lacanastaorganica.com.mx  

La Manzana Sana 
Contact: Adriana Rodriguez 
Title: Manager
Monterrey, Nuevo León 
Tel: (52-81) 8315-3900 
E-mail: adrianarodriguez@lamanzanasana.com  

La Ruta Orgánica 
Contact: Yolanda Kelly
Address: Mina 46 Col. del Carmen, Coyoacán 
Tel. (52-55) 5484-8303 
E-mail: rutaorganica@prodigy.net.mx

Naturalia 
Contact: Oscar Moctezuma 
Title: Director General 
Address: Petén 437, Col. Narvarte CP 03300, México, D.F. 
Tel: (52-55) 5559-6330
E-mail: info@naturalia.org.mx  

Nutrisa
Contact: Gerardo del Olmo 
Title: Purchase Manager 
Address: Periferico Sur 5482, Col. Pedregal de Carrasco CP 04700, México, D.F. 
Tel. (52-55) 5665-5802 ext. 6637 
Fax. (52-55) 5665-9248
E-mail: mkt@nutrisa.com / ghmartinez@nutrisa.com
Website: www.nutrisa.com

Orígenes Orgánicos, S.A. de .C.V
Contact: Florencia Santini Title: Manager 
Address: Plaza Popocatepetl 41, Col. Condesa, México, D.F. 
Tel: (52-55) 5208-6678 Tel: (52-55) 5525-9359
E-mail: contacto@origenesorganicos.com
Website: www.origenesorganicos.com

Purorganiko 
Contact: Adriana Vázquez Title: Owner 
Address: Juan Sebastián Bach 5036, Col. La Estancia, CP 45030, Zapopan, Jalisco 
Tel: (52-33) 3629-1910 info@purorganiko.com.mx  
Website: www.purorganiko.com.mx  

Sano Mundo 
Contact: Laura Sosa 
Title: Manager 
Address: Cerrada de Felix Cuevas No. 52 Col. Del Valle, México, D.F. 
Tel: (52-55) 5575-2329
E-mail: info@sanomundo.com.mx
Website: www.sanomundo.com.mx

Shaya Michán 
Contact: Mauricio Vaca Title: Manager 
Address: Av. División del Norte No. 997, Col. Del Valle, CP 03100, México, D.F. 
Tel. (52-55) 5669-0455
Website: www.shayamichan.org

Soriana 
Contact: Lic. Ricardo Martín Bringas 
Title: Director General 
Address: Alejandro de Rodas 3102-A Col. Cumbres 8vo Sector C.P. 64610, Monterrey, N.L. 
Tel. (52-81) 8329-9000 / (52-81) 8329-9004
E-mail: rmartin@soriana.com.mx  
Website: www1.soriana.com

Superama (Wal-Mart) 
Contact: Lic. Federico Javier Arceo 
Title: Director of Operations 
Address: Boulevard Manuel Ávila Camacho No. 647 Col. Periodista, México, D.F. 
Tel. (52-55) 2629-9202
E-mail: mfarceo@wal-mart.com
Website: www.superama.com.mx  

The Green Corner 
Contact: Bensi Levy, Director General 
Tel: (52-55) 1054-7699 / (52-55) 5286-3939 
Fax: (52-55) 1054-7662
Website: www.thegreencorner.org

Condesa store 
Address: Mazatlán Num. 81 locales 1, 2, y 3 Esq. Fernando Montes de Oca Col. Condesa. México, D.F.

Polanco store 
Address: Homero 1210 Casi esquina con Moliere Col. Polanco. México, D.F.

Coyoacán store 
Address: Av. Miguel Angel Quevedo No. 353 Esq. Prolongación Zaragoza Col. Romero de Terreros. México, D.F.

Cuajimalpa store 
Address: José Ma. Castorena No. 395 3er. Piso, Plaza Cuajimalpa Col. Cuajimalpa Centro. México, D.F.

The Green Market Nutrición Gourmet 
Address: Ave. Vasconcelos 345-local 123 y 124 Plaza TANARAH, Garza García N.L.
E-mail: comentarios@thegreenmarket.com.mx
Website: www.thegreenmarket.com.mx  

Vegetarian 
Contact: Ignacio Samper 
Title: Owner 
Address: San Pedro Garza García, Nuevo León 
Tel: (52-81) 8114-9811 

Yerbabuena Market 
Contact: Erika Florurnoy 
Title: Manager 
Address: Plaza Santa Teresa, Periferico Sur 4020 loc. 1a secc. B, México, Distrito Federal 
Tel. (52-55) 5568-1313 / (52-55) 5568-0800

6.3) Mexican restaurants that offer organics

Cafetería Café de Nuestra Tierra 
Address: Álvaro Obregón # 100 Col. Roma México, D.F. 
Tel: (52-55) 5564-8034

Cafetería Papalotl 
Address: Comercio y Administración # 40, Col. Copilco, Universidad México, D.F. 
Tel: (52-55) 5658-7510 

ECO-Bistrot 
Address: Virgilio 9, Local 9 (entrada por Oscar Wilde) Col. Polanco, México, D.F. 
Tel. (52-55) 5281-5080
Website: www.ecobistrot.com  

La Buena Tierra 
Address: Atlixco 94 local A Col. Condesa, México, D.F. 
Tel. (52-55) 5211-4242
Website: www.labuenatierra.com

Misión del Sol 
Address: Av. Gral. Diego Diaz Gonzalez 31 Col. Parres C.P. 62550 Cuernavaca, Mor., Mexico 
Toll Free. (866) 875 0380
Website: www.misiondelsol.com  

SAKS 
Address: Insurgentes Sur 1641, Col. San José Insurgentes, México, D.F. 
Tel. (52-55) 5615-1500
E-mail: info@saks.com.mx
Website: www.saks.com.mx

6.4) Mexican government resources

Ing. Lidia Barrios 
División de Orgánicos (Organics Division) 
Dirección General de Inocuidad Agroalimentaria, Acuícola y Pesquera 
SENASICA, SAGARPA 
Guillermo Pérez Valenzuela 127, Col. Del Carmen Coyoacan C.P. 04100, Mexico, D.F. 
Tel. (52-55) 5905-1000 ext. 51511
E-mail: lidia.barrios@senasica.gob.mx
www.senasica.gob.mx

Mexican Law of Organic Products 
http://www.diputados.gob.mx/LeyesBiblio/pdf/LPO.pdf

Draft Regulations of the Organic Products Law 
http://www.cofemermir.gob.mx/inc_lectura_regioncontentall_text.asp?submitid=14702

6.5) Industry associations or organizations promoting organics in Mexico

Impulso Orgánico Mexicano, A.C.

Impulso Orgánico Mexicano, A.C. is an association of Mexican producers of organic products established in May 2008, with the purpose of developing consumption markets for Mexican organic products (either fresh or processed), both at a domestic and international level. In order to achieve this goal, Impulso Orgánico Mexicano conducts promotional activities to allow the easy identification of organic products in final points of sale, as well as publicity activities aimed at generating interest among Mexican and international consumers to purchase Mexican organic products. Impulso Orgánico Mexicano, A.C. is planning to implement a promotional campaign for Mexican organic products with government funds from the Mexican Secretariat of Agriculture, aimed at accomplishing the following objectives:

• Disseminate the benefits of the “organic” concept and the advantages that these products offer for human health and the environment
• Secure spaces for Mexican organic products and increase the variety of Mexican organic products available
• Increase the sales of Mexican organic products
• Easy identification by the consumers of Mexican certified organic products
• Introduce a “Mexican Organic Supreme Quality Brand”

The campaign would be aimed towards Mexican housewives and new families with double income – no kids (DINK), from the A, B and C+ social classes. The basic premise of the campaign would be: If is Organic….it's Healthy.

The campaign would include activities at the points of purchase of organic products, including graphic materials to be placed at the shelves where organic products are exhibited for sale (stoppers, headings, banners, etc) and in the parking lot of the store; hostesses at the stores that explain the benefits of Mexican organic products; flyers; billboards; website with information about the concept of "organic", Mexican organic products etc. 

Impulso Orgánico Mexicano, A.C. 
Contact: José Ortiz Haro 
Address: Av. Insurgentes Sur 1971, Col. Guadalupe Inn, México, D.F. 
Tel. (52-55) 5523-9685 
Fax. (52-55) 5523-9686 
E-mail: johb@fvtcom.com 
www.impulsoorganicomexicano.com

Asociación de DANA, A.C.

Non-profit organization established in 1987 in San Cristobal de Las Casas, Chiapas. Their mission is to support sustainable productivity in small farms. They not only produce organic food products but also offer consultancy and guidance to establish organic farms. DANA has established several small vegetable producing areas in Chalco and Tlahuac, near Mexico City. The organization also purchases other organic foods to sell at "La Granja Orgánica" store, which is located within the Ecological Park of Loreto y Peña Pobre. 

DANA 
Address: San Fernando 765 local 4c, Col. Peña Pobre 
Tel: (52-55) 5666-7366 
Fax: (52-55) 5666-7367
E-mail: danad@mail.internet.com.mx

ANIPRON

ANIPRON is the National Association of the Natural Products Industry, which is the most important association in Mexico committed with the growth of the natural product market. One of the main objectives of ANIPRON is to promote the commercial exchange and to broaden the consumption of natural products among the population, including organic products. 

ANIPRON 
Contact: Lic. Silvia Alvarez, Executive Manager 
Tel. (52-55) 5663-1295 
Fax. (52-55) 5662-2221
E-mail: gerencia@anipron.org.mx
www.anipron.org.mx

México Calidad Suprema, A.C.

Mexico Calidad Suprema is an organization that promotes the use of an official seal developed by the Mexican government to identify high quality Mexican food products in the domestic and international markets. This association is constantly developing activities to promote Mexican organic food products. 

México Calidad Suprema, A.C. 
Contact: Lizet Quintero 
Tel. (52-55) 5900-3055
E-mail: rsandoval@mexicocalidadsuprema.com.mx
www.mexicocalidadsuprema.com.mx

6.6) Promotional events, conferences and tradeshows appropriate for Canadian exporters of organics

Exporgánicos

Exporganicos is the main event in Mexico for organic agri-food products. The event is organized every year (between October and November), by the Agriculture Marketing Support and Services Agency (ASERCA), which is part of SAGARPA. The venue of the event has been rotated among different Mexican states; however, the last 2 editions have been celebrated in Mexico City. The event includes an exhibition area (approx. 100 booths) where Mexican organic companies exhibit their products. In some cases an exhibition area has been set where organic food products from other companies are exhibited. The event also includes taste demos so that visitors can taste the organic products exhibited. Additionally, the event includes a series of conferences and sessions on relevant topics related to organics.

The event has an affluence of approximately 5,000 visitors, including technical people, national/international buyers of organic products and general public. The last Exporganicos (7th edition), took place from November 24-26, 2008 in Mexico City. The dates for the 8th edition of Exporganicos have not been established yet, but will likely take place at the end of 2009. Although Exporganicos is an event mainly focused on promoting Mexican organic products, it is a good venue for Canadian organic exporters to meet with Mexican buyers of organic products and get familiarized with the market.

Exporganicos 
Contact: Ms. Arely Flores 
Tel. (52-55) 3871-7300 ext. 50143 / 50148
E-mail: arely.flores@aserca.gob.mx

Expo Internacional Naturista

Expo Internacional Naturista is a show organized by the National Association of the Natural Products Industry (ANIPRON). This expo is a unique show for all the natural products companies. The 2008 edition of the show reported an attendance of 23,250 visitors including 1,600 buyers. The show is a good opportunity to have direct contact with qualified Mexican buyers from important retail and specialty stores, and to launch new products in the Mexican market.

XII Expo Internacional Naturista Anipron
Date: February 13-15,2009
Venue: World Trade Center, Salón Maya 1, Mexico City
Tel. (52-55) 5663-1300 / (52-55) 5663-1295
Fax. (52-55) 5662-2221 
E-mail: eventos@anipron.org.mx / contacto@anipron.org.mx  
Website: www.anipron.org.mx

Alimentaria Mexico

Alimentaria is the largest international food and beverage show in Mexico. The show is carried out in Mexico City, with an exhibition area of 12,000 m2, more than 400 exhibitors and more than 10,000 visitors. This trade show is a good alternative for exhibiting and establishing business contacts, given that many of the visitors to the show are professional food importers/distributors, as well as buyers from the retail, foodservice and food processing sectors in Mexico. According to stats from the show organizers, approximately 70% of the professional distributors/buyers that attend Alimentaria recommend or make food purchase decisions. In addition, approx. 50% of the exhibitors are international companies that are usually grouped by country/pavilion. Since Alimentaria was first established in Mexico, there has been presence of Canadian companies at the show.

During the past 2 editions of Alimentaria there was a special section where organic food products were exhibited and the 2009 edition will also have a special pavilion for organics. 

Alimentaria Mexico 2009
Date: June 2-4, 2009 
Venue: Centro Banamex, Mexico City 
or information please contact: E.J. Krause & Associates Inc. 6550 Rock Spring Dr. 500 Bethesda, MD 20817-1126, USA Shane Poblete 
Tel. (301) 493-5500 
Fax. (301) 493-5705
E-mail: poblete@ejkrause.com
www.alimentaria-mexico.com

Expo ANTAD

Expo ANTAD is a trade show organized by the National Association of Retailers and Departmental Stores and is the largest show in Mexico aimed at the retail sector. The show has three main pavilions: fresh products, SMEs and international, where more than 30 countries (including Canada) exhibit their products. According to figures from ANTAD, there are approx. 30,000 visitors that participate in the show. Food buyers from all the retailers and departmental stores that are members of ANTAD attend the show, so it is an excellent opportunity to get to know this people and pursue potential business opportunities.

Expo ANTAD 2009 
Date: March 11-13, 2009 
Venue: Guadalajara, Jalisco 
For information please contact: Manuel Alvarez, Conventions Manager Horacio No. 1855, 6to piso, Col. Chapultepec Morales C.P. 11570, México, D.F. 
Tel (55) 5580-1772 ext. 214 
Fax: (55) 5580-1772 ext. 263
Email: malvarez@antad.org.mx.
Website: www.antad.org.mx

6.7) Private certification agencies for organic products in Mexico

Certificadora Mexicana de Productos y Procesos Ecológicos, S.C. (Certimex) 
Ing. Taurino Reyes Avenida Oaxaca 210-A 
Fracc. San José La Noria 
Oaxaca, Oaxaca 
Tel/Fax: (52-951) 520-2687
Email: certimexsc@prodigy.net.mx
www.certimexsc.com  

OCIA-México Ing. Homero Blas / Ing. Rodolfo García / Julio González 
H. Escuela Naval Militar 621-203 
Col. Reforma 
C.P. 68050, Oaxaca, Oaxaca 
Tel/Fax: (52-951) 520-2250 / (52-951) 508-9003
Email: ocia@prodigy.net.mx
www.ocia.org  

OCIA –Latinoamérica 
Ing. Homero Blas Bustamante 
Emilio Portes Gil No. 117. 
C.P. 68274, Pueblo Nuevo, Oaxaca 
Tel/Fax: (52-951) 512-5128 

OCIA Internacional, INC. 
Mario Mena /Levi Pérez 
6400 Cornhusker, Suite 125 
Lincoln, Nebraska C.P. 68507, USA 
Tel.: 402-477-2323 
Fax: 402-477-4325 E
E-mail: info@ocia.org

Bioagricert (BAC) 
Fulvio Gioanetto 
2ª Calle, Comunidad Indígena de Nirio, Mpio. de Paracho, Mich. México 
Tel/Fax: (52-423) 594-6036 
Email: lichen@mailcity.com, lichen@lycos.com

Oregon Tilth (OTCO) 
Ing. Ernesto de la Rosa 
Morelos 
Tel.: (52-735) 357-7000
Email: edelarosas@homail.com

Quality Assurance International (QAI) 
Beatríz Kiziroglou 
9191 Towne Centre Drive Suite 510 San Diego, CA 92122, USA 
Tel.: 858.792.3531 
Fax: 858.792.8665
Email: qai@qai-inc.com, beatriz@qai-inc.com  

Farm Verified Organic-International Certification Services, Inc. (FVO) 
301 5th Ave SE Medina, ND 58467 USA 
Tel.: +701-486-3578 
Fax: +701-486-3580
Email: info@ics-intl.com, rsimmons@ics-intl.com

BCS OEKO Garantie
 Ing. Víctor Cruz 
Texcoco, Edo. de Mèxico 
Tel.: (52-595) 955-8106 
Tel/Fax. (52-595) 955-8106 
Email: bcsm@prodigy.net.mx

IMO Control
Oficina en México
Gerardo Dromundo Texcoco, Edo. de México 
Tel. (52-595) 925-1331
Email: imomexico@yahoo.com.mx
www.imo.ch

Naturland 
Peter Ganz, Representantive in Mexico Morelos 
Tel.: (52-777) 102-9392 
Email: mexico@naturland.de 
www.naturland.de

California Certified Organic Farmers (CCOF)
1115 Mission Street, Santa Cruz, CA 95060, USA 
Tel.: (831) 423-2263 
Fax: (831) 423-4528 
Email: ccof@ccof.org, brian@ccof.org 

Guaranteed Organic Certification Agency (GOCA) 
Charly Heermans 5464 Eighth St. Fallbrook, CA 92028 
Tel.: 760-731-0496 
Fax 760-731-0498 E
mail: heermans@tfb.com 

Aurora Certified Organic
25844 Butler Road Junction City, OR 97448-8525, USA 
Tel.: (541) 998-5691 
Fax: (541) 998-5694 
Email: certification@demeter-usa.org

Demeter-International e. V. 
Agricultura biodinamica 
Ute Bucholski Brandschneise 1 D-64295 Darmstadt Germany 
Tel.: +49-6155-8469-99 
Fax ++49-6155-8469-11 
Email: ute.bucholski@demeter.de

Organic Forum International, Inc. 
Debra Johnson 37189 532nd Aven 
Paynesville, MN 56362 
320 2768760 USA 
Tel.: 320-276-8760 
Fax: 320-726-8587
Email: ojohnson@midstate.tds.net

Control Union Certifications 
Lázaro Escalante Chiapas 
Tel. (52-992) 655-0144
Email: lescalante@controlunion.com
www.controlunion.com  

Ceres Ing. 
Víctor Cruz Estado de México 
Tel. (52-595) 955-8106
Email: ceres.mex@gmail.com / ceres_mex@yahoo.com
www.ceres-cert.com  

Mayacert México Ing. Francisco Aldaz Oaxaca 
Tel. (52-951) 522-9667
Email: mayacert@yahoo.com.mx
www.mayacert.com

6.8) Mexican publications specialized in organics

Cultura Orgánica

Cultura Orgánica is the only Mexican magazine specialized in organics. The magazine is published on a bi-monthly basis and is mainly focused on organic production. The content of the magazine includes articles related to domestic organic production, distribution channels for domestic organic products, organization of domestic organic growers and relevant international news related to organics. Several domestic organic companies advertise their products/services in the magazine. Despite the fact that this is the only Mexican magazine specialized in organics, its main target audience is the domestic organic industry. Therefore, this may not be the best alternative to advertise imported organic food products. 

Editorial Agro Síntesis, S.A. de C.V. 
Contact: Lic. Adrián González 
Tel. (52-55) 5669-3125 
Fax. (52-55) 5543-3476
E-mail: agonzalez@culturaorganica.com
www.culturaorganica.com

Imagen Agropecuaria

Imagen Agropecuaria is a Mexican bulletin published on the internet specialized in the agri-food sector. Sometimes the bulletin is printed and distributed freely. The bulletin is constantly publishing articles related to organic agriculture and organic food products (mainly domestically produced). The purpose of the bulletin is to be an information reference for companies, government institutions, agriculture producers, food processors, exporters, traders, investors, research centers and universities involved in the agri-food sector. The bulletin is mainly focused on the domestic agri-food industry, so despite the fact it is constantly addressing issues related to organics, again it may not be the best alternative for advertising imported organic food products.

www.imagenagropecuaria.com
editor@imagenagropecuaria.com

Revista 2000 Agro

Revista 2000 Agro is a Mexican magazine specialized in the agriculture sector with 13 years in circulation. The magazine is distributed on a national level to the private sector, government institutions, agriculture research institutions, universities, consultants, producers, farmers, packers, etc. Among the topics addressed by the magazine are: new technologies, ag machinery, fertilizers, biologic control methods, greenhouses, etc. Articles related to organics are published on a periodic basis. The magazine has a circulation of 25,000 prints and is published on a bi-monthly basis. The magazine is distributed in various points of sale, including magazine shops and libraries. 

Revista 2000 Agro 
Contact: Laura Rosas 
Tel. (52-55) 5660-3235 / (52-55) 5660-1947
E-mail: exposyeventos@3wmexico.com
www.2000agro.com.mx  

There are other publications (magazines) aimed at young consumers from the middle-upper classes, concerned about their health, nutrition and image, which periodically publish articles related to the benefits of organic food products. The target audience of these magazines is mainly women, given that women have a strong influence in the food purchasing decisions of Mexican households. In light of the target audience and broad circulation of these magazines, they could be good alternatives for advertising imported organic food products. Some of these magazines are:

Balance

Purpose: To provide information about fitness, welfare, health, nutrition and beauty, for the audience of highest socioeconomic status in Mexico.
Target audience: Women (and men) between 25-45 years from middle-upper and upper classes, who are concerned about their health and wellbeing, and who exercise regularly. Businesswomen/businessmen, executives, members of the Sport City Club and Golden clients of GNC.
Circulation numbers: 55,000
Frequency of the publication: Monthly
Publishing house/host: Grupo Editorial Expansión, S.A. de C.V.
Contact: Liora Mishkin A.
Address: Av.- Constituyentes No. 95, Col. Lomas Altas, México D.F., C.P. 11950 
Tel: +5255 9177-4100 Fax:+5255 9177-4300
E-mail: lmishkin@expansion.com.mx
Website: www.gee.com.mx

Familia Saludable

Purpose: To encourage readers to have a healthy life through the practice of healthy habits. The magazine provides information about health, sport, yoga, beauty and nutrition.
Target audience: Women between 19-34 years from the middle and upper-middle classes
Circulation numbers: 60,000
Frequency of the publication: Monthly
Publishing house/host: Editorial Televisa, S.A. de C.V.
Contact: Bertha Garabana
Address: Av. Vasco de Quiroga 2000, Building E 3rd floor, Col. Santa Fe, C.P. 01210, México, D.F.
Tel: +5255 5261-2600
Fax:+5255 5261-2600
E-mail: saludable@editorial.televisa.com.mx
Website: www.editorialtelevisa.com.mx

EnForma

Purpose: Magazine aimed at women who want to look and feel good. The magazine contains tips about exercise, health and beauty. Includes recommendations for a healthy diet, medicine, fitness, wellness, etc.
Target audience: Women between 19-34 years from the middle and upper classes
Circulation numbers: 75,000
Frequency of the publication: Monthly
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Purpose: To provide tips for women's health, news and medical discoveries, alternative healing therapies, news on vitamins and nutrition for a healthy lifestyle.
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Purpose: This magazine is aimed at women who want simple and innovative ideas to prepare tasty and nutritive dishes made with selected products. The magazine includes a compendium of different recipes for several types of meals.
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7) Effects of the economic crisis on the demand for organic products

7.1) Forecast impact of crisis on demand for organics

As in any other country in the world, the international financial crisis has affected the Mexican market, especially considering the strong economic ties that Mexico has with the U.S. The growth of the Mexican economy reached barely 2% in 2008, given in part to the slowdown of the U.S. economy. In addition, the inflation in Mexico during 2008 reached 6.5%, which surpassed the expected inflation by Mexico's Central Bank (BANXICO). Furthermore, the current international financial crisis has obliged large corporations with presence in Mexico to dismiss a significant number of employees. 

The international financial crisis has also affected international exchange rates. According to figures from BANXICO, from Sept. 2008 to March 2009, the exchange rate of the Mexican peso vs. the U.S. dollar experienced a devaluation of almost 50%, moving from approx. $10.30 pesos/dlr to approx. $15.30 pesos/dlr. The devaluation of the exchange rate of the Mexican peso vs. the Canadian dollar has not been as significant as in the case of the U.S. dollar. Figures from BANXICO indicate that from Sept. 2008 to March 2009, the exchange rate of the Mexican peso vs. the Canadian dollar experienced a devaluation of approx. 22%, moving from approx. $9.7 pesos/dlr to approx. $11.9 pesos/dlr.

Contrary to previous economic crisis scenarios, this time the crisis comes from outside and not from the Mexican economy itself, which despite the current conditions is proving to be more stable and better prepared to face these types of adverse conditions than in the past.

The effects of the international financial crisis have been reflected in the Mexican retail sector. Comercial Mexicana is a Mexican supermarket chain that has felt strong effects of the international financial crisis. Comercial Mexicana registered massive losses in its financial derivatives linked to the Mexican peso/U.S. dollar exchange rate. Comercial Mexicana had seen a great opportunity to increase its profit through operations in financial derivatives linked to the exchange rate, and not only as coverage to endorse the imports of food products for its supermarket stores. However, the company did not foresee the high volatility of the exchange rate and with the recent devaluation of the Mexican peso vs. the U.S. dollar, the debts of the company increased so much that now they are having difficulties to face these debts with Mexican financial institutions, estimated at approximately US$2 billion. In spite of the above, it appears that Comercial Mexicana has been managing to obtain financing to cover these debts and they have not announced any plans to sell or close their retail stores in Mexico. 

Despite of the fact that Soriana is in a much better financial condition than Comercial Mexicana, it has also made some adjustments to face the current economic scenario. Soriana has joined other Mexican companies such as Grupo Maseca and Cemex, which have requested support from government financial institutions to cover part of its debts. Currently, Wal-Mart is the Mexican supermarket chain with the healthiest financial condition and which probably will take advantage of the financial situation of its competitors to continue growing and consolidating as the largest retail chain in Mexico.

As in any adverse financial scenario, Mexican consumers have reduced their expenditures, due to fears about the future economic conditions and a limited purchasing power. According to figures from ANTAD, over the last few months, the sales of retail and departmental stores in Mexico have reported a fall of up to 10% as compared to last year. The Mexican government also estimates that in these types of economic conditions, the consumption of some food products such as meat, milk, eggs and beverages, tends to reduce in Mexico. Despite this, Mexican consumers continue focusing their expenditures to cover their basic needs, such as food products. 

The international financial crisis has also been felt in the Mexican agri-food sector. In general, food prices increased approx. 10% as compared to last year (it is also important to consider that the financial crisis occurred just after the rise of international prices of food commodities). Nevertheless, the Mexican government has implemented several measures to help to avoid as much as possible increases in the price of staple foods (tortilla, beans, milk, etc.), arguing that the international prices of grains, oilseeds, milk and meat have been reducing over the last weeks and therefore there is no justification for a drastic increase of food prices in Mexico. 

In addition, the Mexican Secretariat of Agriculture (SAGARPA) is implementing three strategies to face the adverse financial situation: an investment of 30 billion pesos (approx. US$1.9 billion) for the creation of jobs in the poorest rural areas; 8 billion pesos (approx. US$500 million) for the acquisition of productive assets; and 24 billion pesos (US$1.5 billion) to guarantee credits for low income farmers. These investments include the development of irrigation infrastructure, the building of new meat federal inspected plants and infrastructure for horticulture and livestock production.

Several of the companies interviewed as part of the research for the study, such as Aires de Campo, The Green Corner, Marinter and Vomac, concurred that the organic sector in Mexico would not escape from the effects of the international financial crisis. Some of them indicated that this situation could change the food consumption habits of Mexican organic consumers, who may substitute some of the organic food products they used to purchase for conventional food products that are cheaper, and may just purchase those organic food products that they prefer/need the most.

In spite of the above, it is important to consider that the main consumers of organic food products in Mexico are people from the medium and upper social classes, which are usually less affected by an adverse financial environment than people from the lower social classes. Therefore, despite the fact that the demand of organics from this group may be somewhat reduced as a result of the crisis, most of them would still have the purchasing power to buy organic products.

7.1.1) Forecast effect of the financial crisis on production of organics in Mexico

Based on consultations conducted with key players involved in the Mexican organic industry, it is estimated that the international financial crisis may also affect the production of organics in Mexico. This is mainly explained by the fact that more than 80% of the organic foods produced in Mexico are exported abroad (mainly to the U.S.). Therefore, a reduction in the demand for organics from U.S. consumers due to the prevailing economic conditions in that country generates a reduction in the production of organics in Mexico, which as indicated before are mostly exported to that market. 

Considering the above, the Mexican government is increasing its support to organic farming, through the rebating of certification costs for organic farming, the provision of subsidies and facilities for the organization of cooperatives, so that the Mexican growers can consolidate their crops and get better sales conditions for their products. Additionally, SAGARPA is promoting a diversification of export destinations for organic food products, to avoid the concentration of most of the Mexican organic exports in the U.S. market. SAGARPA is promoting exports of Mexican organic food products to Asian countries, mainly to Japan, Korea and Singapore; as well as Russia and the European Union. 

The effect of the financial crisis on the domestic production of organics is still not very evident because the production cycles take several months. However, if the international financial crisis continues, the production of organics in Mexico could show negative trends in the long run.

7.1.2) Forecast effect of crisis on imports of organics from the USA and Canada

The devaluation of the Mexican peso vs. the U.S. dollar has increased the cost of food imports from the U.S., including imports of U.S. organic food products. In spite of this, as previously indicated, most of the imported organic food products currently available at the Mexican retail stores are still from the U.S.

The devaluation of the Mexican peso vs. the Canadian dollar has not been as high as the devaluation of the Mexican peso vs. the U.S. dollar. This puts Canada in a better or at least equal position than the U.S. in terms of competition in the Mexican market. 

The higher costs for the transportation of products from Canada to Mexico as compared to the transportation costs for product going from the U.S. to Mexico, currently is somewhat compensated with the lower exchange rate/price in Mexico of Canadian dollars vs. U.S. dollars. 

Considering the factors mentioned above, the only factor that could hinder the imports of Canadian organic food products in Mexico is an overall reduction in demand of organics due to the limited purchasing power of Mexican consumers. However, currently Canadian organic food products are in a good position to compete with other significant foreign suppliers of organics to Mexico such as the U.S. and European countries (the Mexican peso has also experienced a significant devaluation vs. euro: approx. 30%, moving from MX$15.12 in Sep. 2008 to MX$19.35 in Mar. 2009).

7.1.3) Forecast impact on price premium demanded by suppliers of organics

Basically all the companies interviewed as part of the study indicated that the international financial crisis certainly has an impact on the price premium demanded by suppliers of organics. Several of them such as Aires de Campo, Ki-An, Distribuidora Promesa and Tendencia Gastronómica indicated that the prices of organic food products have increased or are increasing as a result of the international financial scenario. 

Natucomer explained that considering that many of the organic food products available in Mexico are imported, the recent devaluation of the Mexican peso vs. the U.S. dollar has forced Mexican importers to increase the prices of organic food products. Others like Smart Holding Mexico pointed out that since the international prices of commodities and food ingredients have been increasing, this is also reflected in the prices of processed organic food products. Other companies like Marinter and Nutrisa pointed out that despite of the adjustments in prices, they may be forced to sacrifice part of their profits to maintain a competitive price and keep selling.

7.1.4) Categories of organics most likely to decrease in demand

Consumers of organic food products in Mexico usually give preference to 1st need food products that are essential for a healthy nutrition, such as: fruits, vegetables, dairy products, bread, meat and eggs. Considering this, if the purchasing power of Mexican consumers is limited, it is more likely that the categories of organics which could experience a decrease in demand are 2nd need goods or luxury food products that are not really essential for nutrition, such as:

• Beverages (beer, wine, energy drinks, liquors and alcoholic beverages)
• Bakery products (biscuits, cookies, muffins, etc)
• Groceries (pastas, sauces, ketchup, mayonnaise, mustard, tea, sauces, seasonings, chocolate, marmalades, etc.)
• Snacks

In spite of the above, as previously indicated, people from the middle-upper classes are the main consumers of organic food products in Mexico. Despite the international financial crisis has an effect in all sectors of the population, it is estimated that the effect is less significant in this sector of the population than in lower class sectors. Therefore, despite of the adverse financial scenario, it is expected that the demand for organic foods in Mexico would be maintained and continue growing in the future, as the economic conditions in Mexico and the world improve.

BIBLIOGRAPHY

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