A Bumpy Year for Mexican Produce

Can Mexico overcome the challenges and remain top of the tree in the US?

From tomatoes and bell peppers to table grapes, mangos and avocados, the ubiquity of Mexican produce in U.S. grocery retail stores can often be easy to overlook. After all, the country supplied an estimated 63% of vegetable imports and 47% of fruit and nut imports in 2023, according to U.S. Department of Agriculture (USDA) figures.

At the same time, Mexican exporters and U.S. importers specializing in produce from south of the border faced challenging times of late, exacerbated by factors that often have little to do with the actual business of producing fruits and vegetables.

Although these challenges are real, industry optimism remains strong, with some companies looking to new ways of growing and marketing as the best means of overcoming the difficulties, and ensuring Mexican produce remains at the top of the grocery display.

CONSUMERS WANT IT ALL

Now in its 70th year of business, family-owned Malena Produce, based in Nogales, AZ, has focused on importing Mexican-grown produce since its inception. Primarily sourcing from the northern regions of Sonora and Sinaloa, Malena supplies a range of hothouse-grown tomatoes, bell peppers, Italian squash, green beans and pickles, among other products.

Although best-known in the industry as an eggplant producer, Malena’s biggest crop is round and Roma tomatoes, according to Director of Sales John Davidson, who sees room for growth by expanding its tomato offering.

“There’s opportunity now for new products at retail because retailers and consumers are looking for new and different items,” he says, explaining that Malena has recently added grapes and medley tomatoes to its range.

“The U.S. market depends on Mexico, and that’s true of most of the major retailers,” says Tony Incaviglia, vice president of sales and marketing at McAllen, TX-headquartered GR Fresh.

“The U.S. market depends on Mexico, and that’s true of most of the major retailers.”
— Tony Incaviglia, GR Fresh, McAllen, TX

“When we think about tomatoes, although we’ve had the Mexico vs. Florida thing, we’ve actually increased the demand in the country. We’re developing and getting better, and are able to grow very nice, vine-ripe tomatoes in Mexico now.”

In Incaviglia’s view, the Tomato Suspension Agreement is not so much about fair trade, and more about the fact that some growers on the East Coast, and especially in Florida, have a hard time competing with Mexico.

MEXICO EXPANDS AVAILABILITY

As one of the biggest produce grower-importers, not just from Mexico, but across the entirety of Latin America, Oxnard, CA-headquartered Mission Produce is well-placed to comment on the current state of sourcing from the United States’ southern neighbor.

According to Senior Vice President of Sales Brooke Becker, the company, which sources year-round avocados through a grower network in the states of Michoacán and Jalisco, is expanding its sourcing capabilities, both in Mexico and offshore.

Mission also sources mangos from Mexico between February and September, focusing on several varieties, including Honeys (Ataulfo), Hadens, Tommy Atkins, Kents and Keitts, she says. “Mexico produces many of the top mango varieties during a large portion of the year, and we see great opportunities for mangos from Mexico to grow in the U.S. market.”

“Ripe mangos from Mexico have great potential to drive sales in the U.S. market,” says Becker, adding that Mission has invested in developing nationwide, customer-tailored ripe mango programs that have achieved results for its partners.

“One of our partners on a ripe mango program experienced an increase in both household penetration and purchase frequency, compared to their divisions without a ripe mango program,” she explains.

Citing data from the Hass Avocado Board, Becker says a large majority (about 80%) of avocados in the U.S. come from Mexico, and U.S. consumers are accustomed to the look, feel and flavor of Mexican fruit.

“A major benefit of sourcing avocados from Mexico are the short transit times to the U.S., compared to other countries of origin,” she says. “Avocados from Mexico can arrive to our forward distribution center in Laredo, TX, in as little as two days. Because of this, there is often greater opportunity and more flexibility to pull avocados from Mexico into market programs.”

THE CENTRAL CHALLENGES

According to Lance Jungmeyer, president of the Nogales, AZ-based Fresh Produce Association of the Americas (FPAA), from a cross-border trade point of view, 2024 saw less produce being imported into the U.S. from Mexico due to several factors.

Although the currency has since experienced a downturn, the strength of the Mexican peso during the past two years had two major impacts. Firstly, growers in Mexico received less for their produce, and secondly — as a result — less was planted heading into the new cycle.

Another negative influencing factor is the shortage of water in key production areas of northern Mexico, notably Sinaloa and Sonora, where reservoirs are reportedly under 30% capacity and cattle ranchers are also competing for the valuable resource.

A further element to add to the mix is labor. The relocation of manufacturing facilities to many areas of Mexico has had a knock-on impact on the availability of agricultural labor, with Mexican growers now having to look to Central America to compensate for the shortfall.

Jungmeyer estimates that the consequence of such factors has been a drop in Mexican winter vegetable production by as much as 5% year-on-year.

Although there is concern over whether the incoming Trump administration will resort to import tariffs for protectionist measures, Jungmeyer says there are also concerns about the direction of travel of the recently elected Mexican government.

“Much of the business sector is not happy about the reforms of the judicial system, which the new Mexican government has initiated,” he explains. “It will reduce confidence in having contracts in Mexico.”

Jungmeyer says new U.S. tariffs on fruits and vegetables would be counterproductive. “We can’t cut prices if you are putting tariffs on fruit and vegetable imports, which was one of his key campaign pledges.”

“In the short-term, there’s a lot of uncertainty about the new administration in the U.S., especially talking about tariffs,” says Davidson at Malena Produce. “There’s also the usual constraints in terms of labor and logistics, where the increasing cost of fuel is still an issue. California is going ahead with another fuel tax, which will impact our customers there.”

IDENTIFYING OPPORTUNITIES

Snacking has become a potential area of the market that many Mexican produce importers are looking to access with packaged, convenient options aimed at consumers seeking a healthier alternative to processed snack foods.

A prime example is Malena Produce, which launched a new brand in October 2024, called “All Day,” aimed at persuading consumers that items, such as grape tomatoes, mini bell peppers and green beans, are great items for snacking no matter the time of day.

Similarly, Mission Produce recently introduced “Retail Ready Mango Bags,” an innovative 4-count value pack of snacking mangos, according to Brooke.

“We say ‘retail-ready’ because the bag was designed for the retailer to easily merchandise in-store and for the shopper to easily grab and go,” she says. “It’s a high-graphic, stand-up pouch with on-pack education and a QR code that easily directs shoppers to delicious recipes, perfect for both the seasoned mango shopper and newcomers to the category.”

Brooke says Mission devised the product in response to the significant amount of mango purchases at club stores. “It’s clear that mango shoppers are looking for value pack opportunities, so we’ve brought the benefits of convenience and value to mango shoppers in our mission to drive the category forward,” she says.

“We’ve seen the success of bags in the avocado category — since 2019, bags have driven 100% of avocado volume growth — so we’re excited to launch a product that has the opportunity to impact the mango category similarly.”

Jungmeyer sees new, preferred varieties as one area of opportunity for Mexican produce in the U.S. As an example, he singles out the continuing potential offered in newer, high-sugar table grape varieties, while on the vegetable side, Jungmeyer believes greenhouse produce (such as tomatoes, bell peppers and cucumbers) can offer blemish-free products with uniform coloring that open-field production often struggles to match.

For Davidson, the most important element of promoting Mexican — and indeed all produce — is having a product that can reach consumers through promotions. “It’s about getting your product in front of consumers and getting them open to the thought of trying something new,” he says. “We use social media channels and influencers, and try to use funny ways to eat tomatoes and eggplant.”

“We say to retailers, ‘make a statement,’ so when consumers walk in, they say, ‘wow,’” adds Incaviglia at GR Fresh. “You want your products to make an impact at a retail level.”