Manufacturers can capitalize on the fast growing Mexican confectionery market with functional products that address the nation’s rising obesity epidemic, according to an analyst from Leatherhead Food Research.
Jonathan Thomas, principal market analyst at Leatherhead, told ConfectioneryNews.com “Health is set to shape NPD in the Mexican confectionery market in a big way, given the rising obesity rates in the country,” said Thomas.
“Given the emergence of functional products such as fortified chewing gum, it also seems likely that Mexico will experience a growing demand for confectionery positioned on a functional platform.”
Almost half of Mexicans over 15 are forecast to be obese by 2016, according to Euromonitor.
“As such, we can expect to see greater quantities of sugar-free products appearing in the sugar confectionery sector in particular, as well as in the chewing gum market,” said Thomas.
Confectioners could be on the lookout for other emerging markets beyond the BRIC countries after growth had slowed in China, he said.
“I feel that Mexico will continue to represent an attractive confectionery market – prospects for further economic growth remain good,” he said.
Leatherhead valued the Mexican confectionery market at $2.5bn in 2011 and expects sales to grow by up to 4% over the next few years.
“Mexico also has the advantage of a young population and lower labor/production costs, as has been evidenced by the investments made by various confectionery multinationals,” continued Thomas
Ferrero is currently constructing a $190m plant in Mexico that should be operational by May 2013, while Hershey recently set-up a program to boost the Mexican cocoa supply. Barry Callebaut also invested $40m in a new facility in Mexico in 2009.
The potential of the Mexican market was also recently noted by an analyst from Euromonitor International. See HERE.
Markets share & flavor trends
He said this was likely to be led by multinationals such as Mondelez International.
Mondelez is the market leading sugar confectioner in Mexico and has a 75% share of the chewing gum market.
Nestlé leads the chocolate market ahead of nearest rivals Mars and Hershey.
“Tastes are also likely to influence NPD, with spicy flavors such as chili and cinnamon continuing to feature,” continued Thomas.
Mexico’s chocolate consumption stands at just over 850g per capita and remains well below levels in North America, Western Europe and lower than 2 kg levels observed in other Latin American countries such as Chile and Brazil.
According to Leatherhead, sugar confectionery is higher at 1.3 kg, but is still low by Latin American standards.
Thomas added that consumer spending in Mexico could also be adversely affected by the economy of its major trading partner, the US.