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International Resources: Global Market Profile: Mexico
As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Mexico from Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.
Table of Contents
Fresh Fruit, Vegetable, and Flower Market
Fruit and Vegetable Market
The primary products originating in Mexico are grapes, avocados, and guavas. Mexico is competitive with the United States in grapes, lemons and limes, watermelons, strawberries, and other melons, but supplies the U.S. with many fruit and vegetables during the country’s off-season. Other Mexican fruit commodities include papaya and mangos.
Mexico is the world’s largest supplier of avocado. Major vegetable commodities include tomatoes, sweet corn, green beans, cucumbers, peppers, and eggplant. Mexico is the primary supplier of fresh vegetables to the United States.
Canada is a major importer of Mexican fresh produce as are Japan and the European Union. Mexico’s increase in exports to Japan has risen rapidly (43% in 2004). Mexico is also a large importer of fruits, especially from the United States and Chile. Mexico imports apples, grapes, pears and strawberries.
Currently agriculture counts for 3.9% of Mexico’s GDP and 18% of the country’s labor.
Fresh Flower Market
The leading states for floriculture are Morelos, Mexico, Puebla, Guerrero, Michoacán and Querétaro.
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Consumer Trends
Higher educated and higher class citizens often avoid smaller “mom and pop” stores and instead shop at retail stores. There is a growing number of Mexicans who use supermarkets. More consumers are demanding organic foods, and upper class citizens will spend more on foods that are healthier and safe. Age, gender, education, children, and income are all factors that determine what food to buy. Consumers are demanding quality and freshness, variety, novelty, convenience, safety, and reasonable prices.
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Entering the Mexican Market
The best way to understand the Mexican market is to visit the marketplace and to talk to buyers, retailers, distributors, and other players to prepare a more effective entry strategy. Exporters must do their research not only in terms of typical market research but also finding appropriate business contacts and thoroughly reviewing Mexican import regulations to successfully seize market opportunities and overcome market challenges.
Exporters should consider contacting local distributors/importers as an important early step in their efforts to establish themselves in the Mexican market. A good distributor should promote sales and make sure that the imported products are available at points of sale. It is essential to maintain close contact with your representative, especially regarding changes in import procedures and documentation.
An affordable way to investigate the market is to participate in and/or attend Mexican trade shows, particularly country pavilions organized at selected shows. A show can serve as a way to contact local distributors/sales agents, buyers, and businesspersons, and to become familiarized with local competition. In the case of new-to-market companies, be prepared to provide support for in-store and media promotions to familiarize consumers with your products. If possible, develop product information/promotional pamphlets in Spanish.
Mexican businesses conduct business from 9:00 a.m. until 6:00 p.m. Monday through Friday. The best time for meetings is between 10:00 a.m. and 1:00 p.m; try to avoid meetings between 2:00 and 5:00 p.m. because this is siesta time.
Annual Exporter Guide for Mexico (2005), from a U.S. perspective
http://www.fas.usda.gov/gainfiles/200512/146131696.doc
Information regarding:
a) marketing structure/trends in Mexico available on page 4 of the guide
b) food processing sector on page 7 of the guide
c) key trade and demographic information on page 16 of the guide
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Trade Agreements
Mexico is the country with the most free trade agreements in the world. Currently Mexico has free trade agreements with the following countries:
Free Trade Agreements with pending ratification:
- Mercosur Free Trade Agreement
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Food Standards and Regulations
Sanitary and phytosanitary requirements:
Mexico has regulations in place to prevent the introduction of diseases. Importers of agri-food products are subject to Mexican official standards (NOMs) that must be followed in order to enter the market. These NOMs can be consulted in Spanishat: http://www.economia-noms.gob.mx.
The ministries that regulate imports of agri-food products are: the Ministry of Agriculture (SAGARPA), http://www.sagarpa.gob.mx, responsible for regulations on the import of plant, animal and fish products; the Ministry of Health (SSA), http://www.ssa.gob.mx, responsible for regulating imports of processed food and beverages; the Ministry of the Economy (SE), http://www.economia.gob.mx, responsible for establishing the tariff treatment and labelling conditions for imported products; and the Ministry of the Environment (SEMARNAT), http://www.semarnat.gob.mx/wps/portal, responsible for regulations on the import of forestry products.
Standards:
Mexico imposes standards on a variety of products. Product standards can be either mandatory or voluntary. Mandatory Normas oficiales Mexicanas (NOMs) technical regulations apply to imported products as well as domestically produced goods and are enforced at the border. Voluntary standards are known as Normas Mexicanas (NMXs).
For a summary of Mexico's standards procedures, please visit: http://www.mac.doc.gov/nafta/9000.htm.
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Business Protocol
- One must know a person before doing business with him or her, and the only way to know a person in Mexico is to know the family. Personal relationships are the key to business success. To make this connection intermediaries are used. It is critical, especially for a high-ranking meeting, to use a person who is known to the Mexican businessman or woman you are meeting. This is your "business family" connection, the person who will introduce you. This person is the bridge that builds the trust necessary to do business in Mexico.
- Dress is conservative. Men wear ties and dark suits, normally classic cuts in navy or gray paired with a white (more formal) or light blue shirt. Women should wear a dress or skirt and blouse; a classic suit is acceptable. Colors in gray, navy, white and ivory are common. Jeans and tight or low-cut clothing are not appropriate.
- Attempting Spanish is always appreciated. Even if you speak poorly, your efforts are valued. When speaking English, speak slowly and without slang or idioms. Also try to use correct grammar.
- Appointments are required and should be made two weeks in advance. It is beneficial to have an executive in your group; Mexican businesspeople are status-conscious.
- Be punctual, even though your counterpart will most likely be late.
- Try to provide written information and copies of your presentations; preferably in both English and Spanish. Also an interpreter is always a handy choice.
- Carry an ample amount of business cards to be exchanged immediately during a greeting. Cards do not need to be translated, but doing so leaves a good impression. Always include official title and degrees, because they are important in Mexico.
- Mexicans attach great importance to courtesy in all business endeavors. Many will not want to do business, regardless of the viability of the project, with someone who does not practice general courtesy or is considered rude or disrespectful.
- A warm handshake combined with conversation about the person’s well-being, family, or other similar topics prior to launching into any business conversation is considered a common courtesy. Meetings normally begin with a discussion of personal background and interests.
- If meeting with a female, wait for her to present her hand to shake.
- Many meetings may be scheduled at the same time. It is a sign of power to make others wait, so when going to a meeting, bring a book or something to occupy your waiting time.
- Small talk is a good way to increase your business relationship. Being knowledgeable about Mexican history, culture and art will help make favorable impressions. Avoid topics involving the Mexican-American war, poverty, immigration, or earthquakes.
- Do not refer to U.S. citizens as “Americans”, because Mexican citizens consider themselves Americans as well. Mexico’s official name is the United States of Mexico.
- Be prepared to hug on subsequent meetings. Mexicans are very friendly, and a hug shows a good relationship.
- Businesswomen might encounter some hardships while doing business in Mexico. Women have not risen to high ranks, so there may be an initial lack of respect for women business partners.
- The concept that “time is money” should not be valued; though Mexican businesses are conscious of the bottom line, courtesy and diplomacy are more important values to most Mexicans rather than getting immediately “down to business.”
- Negotiations take several meetings. It is better to have meetings in person rather than ones on the phone. Negotiations include lots of haggling so never begin with your best offer. Do not include an attorney in your negotiation meetings; it is looked down upon.
- Decisions are made at the top levels of a company after consultation with subordinates. Be patient.
- It is wise to take an emotional approach while negotiating. Stress the values and benefits to the person, his or her family, and their pride. Try to emphasize trust and mutual compatibility.
- Visuals are very good resources to use while meeting and negotiating in Mexico.
- It is considered rude to end a conversation early by announcing you have other obligations or meetings.
- Business lunches are widely used. They normally begin around 2:00 or 3:00 p.m. and last for three to four hours. Not much time will be devoted to business, but the lunch is important for creating a good relationship. Working breakfasts are also used and last for two hours or so beginning around 8:00 a.m. at your hotel.
- Mexican men will attempt to pay for meals, even if you are the host. A good option for dining is to eat at your hotel and pre-arrange the meal to be charged to your room. Also tipping is appropriate and expected.
- Business deals are normally not discussed at executive lunches.
- Mexicans speak in close proximity, and stepping back is considered unfriendly. Also physical contact between men is not uncommon.
- In the face of a disagreement, Mexicans tend to be skilled at diplomacy and choose to avoid confrontation and loss of face. In a potential confrontation they strive to reach a consensus without having clearly defined winners and losers. These skills of diplomacy are important when approaching all forms of business in Mexico.
- Personally visit your Mexican clients in Mexico. If a Mexican client visits you, you are expected to wine and dine him/her. You will be accorded similar treatment when visiting Mexico.
- Titles are to be used when know (Doctor is a physician or Ph.D. Profesor it the title for a teacher. Ingeniero is an engineer. Arquitecto is an architect. Abogado is a lawyer), but people without professional titles are addressed using Mr., Mrs., or Miss and his or her surname. Señor is Mr., Señora is Mrs., and Señorita is Miss.
- It is common for Hispanics to have two surnames, the first from the father and the second from the mother. It is appropriate to use the father’s surname.
- Do not use red ink, especially if writing someone’s name.
- If invited to over to a home for a meal, arrive 30 minutes late (arrive later if appropriate). Arriving early is inappropriate. Sit where you are told to sit and keep your hands above the table. Toasts are only given by men, and do not begin eating until the hostess has. Leaving some food on your plate after a meal is considered polite, and to signify you are done place your fork facing down and napkin on your plate.
- Gift giving is not required; however, small items with a company logo are often appreciated on an initial visit. Gifts are not required of dinner guests, but are appreciated as well. Good choices are candy, flowers (sent ahead of time) or local crafts from your home. Do not give gifts of silver; they are associated with trinkets sold to tourists. Marigolds are a sign of death and red flowers have a negative connotation. White flowers are the best choice. Gifts are opened immediately and if you are given a gift you should do the same and act appreciative and enthusiastic.
- Do not stand with your hands on your hips or in your pockets. It is considered aggressive and impolite.
- Forming the American ‘ok’ sign is an offensive gesture.
- If a Mexican counterpart does not look you in the eye, it is a sign of respect.
- Mexican men are very friendly and often make contact while having a conversation. Withdrawing from these friendly gestures is considered insulting.
- Mexicans often use a “psst” sound to get someone’s attention.
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Export Business Reminders
- Build at least a minimum team within your company to help on the Mexican market.
- Use metric terms.
- Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance and respond to such requests with diligence and in a timely fashion.
- Use letters of credit to reduce risk.
- Hedge export values with your bank if you are concerned about exchange rate risk.
- Set up wire transfers for payments.
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Related Links and Government Resources
Currency - the currency ofMexico is known as thePeso. Use the free currency converter to compare to dollars, Great British Pounds, etc.
Weather - visit Yahoo!'s up to date Weather for Mexico.
Translation Services - do you need aSpanishTranslation Service?
News - check out all the latest Google news on Mexico.
Intercultural Know-how - use the Intercultural Business Communication tool for tips on doing business in Mexico.
Dialing Code - the international dialing code for Mexico is +52.
Time - Mexico is -6 hours GMT. Find out the current time.
History - read about the long and rich history of Mexico.
Government Resources:
Food and Agricultural Import Regulations and Standards http://www.mexico-usato.com/documents/FAIRS-MX6059.pdf
Mexican Agriculture and Rural Development Ministry (SAGAR): http://www.sagarpa.gob.mx/ (in Spanish) (in English)
The Mexican Ministry of the Economy can be found at http://www.economia.gob.mx.
For additional statistics about Mexico, please consult the National Institute for Statistics: http://www.inegi.gob.mx.
Foreign Embassies and Consulates in Mexico (in Spanish) http://www.mex4all.com/directorio/politica-gobierno/embajadas-extranjeras-mexico.htm
SENASICA is the regulatory body for animal and plant health.
Background Notes on Mexico.
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