Mexican Produce Volume Increases to Meet Retailer Needs

Proximity, logistical benefits help fill North American produce appetites.

Originally printed in the December 2021 issue of Produce Business.

Mexico is expanding the volume of fruits and vegetables it ships to the U.S. and Canada. Retailers in Mexico’s North American neighbors can capitalize on growing consumer demand and work to increase sales of the peppers, cucumbers, avocados, squash, tomatoes and mangoes that cross the U.S. and Canadian borders daily.

“Mexican produce is a key part of a retailers’ selling repertoire, because when the U.S. is not in season, most generally Mexico is,” notes Lance Jungmeyer, president of the Fresh Produce Association of the Americas (FPAA), based in Nogales, AZ. “Retailers are able to rely on Mexican produce because of the high quality standards, such as with Mexican Super Select cucumbers, or vine-ripened tomatoes that consistently deliver the true tomato flavor.”

In 2020, Mexican produce exports to the U.S. were 2.11 million 10,000 pounds, double from 2009’s 1 million, according to the U.S. Department of Agriculture’s Agricultural Marketing Service. Exports steadily increased over the years, to 1.5 million in 2014 and 1.9 million in 2019.

“Where the Mexico advantage really comes in, as an international sourcing point, is the response time and savings in transportation costs as opposed to offshore programs,” says Dante Galeazzi, president and chief executive officer of the Texas International Produce Association, which is headquartered in Mission, TX.

“Once a container hits the water, there is a limited scope of adjustments that can be made,” Galeazzi adds. “However, working with Mexico means changes can be incorporated and those impacts felt by the U.S. purchasers within as little as a week — as opposed to the several weeks it may take to see improvements or changes in transcontinental shipments. And fewer problems tend to lead to higher, more frequent sales.”

According to the USDA, the leading fresh fruits and vegetables shipped to the U.S. are, in descending order, tomatoes (all types), peppers (all types), cucumbers, avocados and squash. While harvesting seasons vary by item, generally, the majority of vegetables ship to the U.S. October through May while mangoes are shipped January through fall, with large volumes during the summer.

CRUCIAL PART OF FOOD CHAIN

Mexican produce helps keep retail shelves stocked and quality has improved the last couple of years, says Sal Selletto, produce manager at the Super Foodtown of Sea Girt, NJ, a part of the Middletown, NJ, Food Circus/Foodtown. “When you source it (produce) from those areas, it’s not much of a letdown. They have upped the quality of everything, especially vegetables, over the last couple of years. When you can’t get Florida or local product, they will send you the Mexican eggplant, green squash and other vegetables.”

“The quality of Mexican produce has increased greatly from what was 10 years ago,” agrees National Produce Marketing’s Vince Formusa. “Because of their microclimates, southern to northern Mexico is able to grow a variety of items. They’re beginning to diversify as well because of changing market needs.”

Formusa notes Mexican growers are now producing more lemons, apples and potatoes, items they didn’t necessarily rely on as much in the past.

Mexican exports to the U.S. are at record levels. In the second quarter of 2021, reported shipments of fruits and vegetables by refrigerated truck from Mexico to the U.S. totaled 3.51 million tons, up 20% from 2020. The sum of the top five commodities — tomatoes (all types), peppers (all types), cucumbers, avocados and squash — increased by 206,000 tons, or 18%, according to the USDA’s Mexico Transport Cost Indicator Report, published in September 2021.

From 2010 to 2020, the number of fresh fruit and vegetable truckloads from Mexico has grown around 215%, reports Galeazzi.

As for the perception of Mexico-grown produce in the U.S. marketplace, consumers have acquired a taste for these items, he says. “Most U.S. consumers would struggle to remember a time when grocery store shelves were limited to seasonal offerings. That means consumers expect to visit a grocery store and find their produce available 12 months out of the year. To make that possible, many commercial buyers likely already rely on a portion of their program to arrive from Mexico.”

Canadian importers and wholesalers, which rely on fresh produce imports from Mexico and the U.S. for up to three-fourths of its produce supplies, also value Mexican product.

“A large part of our product offerings is from Mexico,” says Vince Formusa, vice president/director of marketing and business development for National Produce Marketing Inc., Toronto, ON. “Mexico, as a whole, is becoming a really crucial part of the food chain for Canada and the U.S.”

That importance is magnified by ongoing problems in California, including droughts and fires, he says.

Mexican growers remain committed to improving the quality of their crops, according to Jungmeyer.

“Investments in protected agriculture by Mexican farmers has resulted in more uniform fresh produce, in longer growing seasons, with less chemical input and reduced water usage,” he says. “This checks all the boxes for buyers.”

IDEAL CLIMATE

Mexico’s weather is favorable to growing crops. “Mexico’s importance in North American fresh produce markets lies in the region’s climate,” Galeazzi points out. “The country’s winters are far less harsh than the U.S. or Canada. This means the seasonal windows for growing and harvest are significantly longer in more parts of the country. That extended duration lends to higher utilization and efficiencies from a single production location.”

Additionally, the tropical weather patterns in parts of Mexico mean better growing environments for the tropical category of items, such as coconuts, mangoes and pineapples.

“For commercial produce buyers, adding Mexico production to a sourcing mix can facilitate a year-round program for certain commodities,” adds Galeazzi.

Mexico helps many growers and distributors, including Little Bear Produce, based in Edinburg, TX, complete their year-round programs. “Mexico is important because it completes that 52-week program,” says Jeff Brechler, salesman. “Especially with the way transportation is now, where drivers don’t want to run around and make multiple pickups for the same customer.”

Nogales and Pharr, TX, are the principal import points for Mexican produce, and the country offers location advantages.

“It’s proximity,” notes Brechler. “You’re at a transportation advantage because you’re off the water and you’re on land. We have access and availability. It seems to be a little easier transporting product from the interior of Mexico to the interior of the states, whether that be in the (Rio Grande) Valley, Laredo, El Paso, Nogales or California.”

Those transportation benefits are significant, says Galeazzi.

“Over 50% of the fresh produce grown in Mexico crosses in Texas, and since Texas is right in the middle of the country, shipments loaded in South Texas can reach nearly all U.S. destinations within four days, and most Canadian destinations in five days,” he says. “Not only does the shorter transit increase shelf life, it also offers significant savings in freight as opposed to sending a truck from coast to coast.”

Because Mexico grows such a wide range of commodities, the distribution of that produce is national. Each commodity’s reach is based on consumer profile for a region, as well as the availability of locally, domestically grown product to that region/marketplace, explains Galeazzi.

Mexican growers will ship mangoes, avocados and limes, for example, to all corners of the U.S., whereas onions from Mexico tend to be sent predominantly to the Midwest and Southeast since U.S. storage onions typically dominate the West Coast and Northeast during that season, says Galeazzi.

HUGE SUPPLIER

“Avocados From Mexico are the only brand of avocados available all year long,” says Alvaro Luque, president and chief executive officer of Avocados From Mexico (AFM). “This is due to the unique microclimate of the Mexican state, Michoacan. Michoacan is the only place in the world where avocados grow year-round and can meet the U.S. demand for avocados, due to its rich volcanic soil, natural irrigation and unique topography.”

Mexican growers send an estimated 1,200 truckloads a week across the borders. “If you take the year 2000, Mexico was coming into the U.S. with a very anemic amount of avocados,” says Dan Acevedo, director of business development for GreenFruit Avocados LLC, Newport Beach, CA, which grows, packs and ships Hass avocados worldwide.

In 2000, California shipped 350 million to 400 million pounds. In 2021, California ended its season shipping around 250 million pounds, with Mexico shipping 2.4 billion pounds.

“It’s pretty dramatic to think about the amount of avocados that cross the border into the U.S.,” says Acevedo. “When you think of avocados being one of the top 5 produce items at most retailers, and Mexico having an 85% share of the market, it’s pretty big. When you look at the taste, quality and flavor profiles of Mexican avocados during their peak harvesting period, it’s one of the best.”

Mexico offers continuous avocado supplies. “AFM’s supply opportunity is year-round and Avocados From Mexico are able fill the pipeline for consumer demand,” says Luque. “We have doubled our supply from 1.2 billion to 2.4 billion pounds over the last seven years, consolidating Mexico as the leader in the category. and today, eight out of 10 avocados in the U.S. come from Mexico.”

Luque adds the year-round avocado industry in Mexico is committed to exporting quality avocados. “In the journey from the orchards in Michoacan to the U.S. consumer, Avocados From Mexico go through a comprehensive process of inspections and controls to ensure the highest quality, food safety and freshness.”

Mexican mangoes are another big mover and a commodity that has recently increased volume. “They’re doing a lot of promotions and sales with them,” says Foodtown’s Sal Selletto. “We have had some good ad programs with mangoes, and have done more sales the last couple of years with mangoes. The Mexican mangoes have helped us improve sales.”

SEE FOR YOURSELF

Buyers should remember Mexico isn’t a monolithic growing region. “Mexico is more than just one region,” says FPAA’s Jungmeyer. “With the many microclimates and rich soils, Mexico is able to produce fresh fruits and vegetables to meet practically any market need, any time of the year.”

As buyers expand their own palates for fresh fruits and vegetables from Mexico, Galeazzi advises buyers to visit their suppliers about the regions of Mexico.

“Many U.S.-based entities forget there are 32 states in the country, and Mexico is three times the size of Texas,” he says. “The country has geographic climate zones that vary widely, even within each of those states. Understanding how the weather and challenges in each of those growing regions impact commodities could not only avoid problems in the season, but may even produce synergies that would go unrecognized without that knowledge.”

U.S. supermarkets likely depend on Mexican shipments. “Without Mexico and their products not available from other regions, you may not have staple items like eggplants, green peppers and squash,” notes Foodtown’s Selletto. “If we didn’t have Mexican product when the other areas are not available or aren’t shipping, you would have some empty shelves.”

The face of Mexican produce handling operations is also changing. “While many imports are handled by third- and fourth-generation American family distributors such as we see in Nogales, increasingly many other growers and distributors are expanding their investments in Mexico,” says Jungmeyer. “Mexico is a trusted source for U.S. growers who want to be in the game year-round.”

Water remains a key part of the Mexican produce puzzle. “As with all of agriculture, Mexico will have to focus on making the most of its limited resources,” says Jungmeyer. “Water is the key to life and without the water in our fresh fruits and vegetables, all of us undoubtedly would lead much poorer lives. Mexican farmers have been working in arid regions for decades, perfecting methods of water conservation. It’s a matter of survival for all of us.”

Increasing Mexican production should help fuel expanding retail produce aisles. “With new store openings and increased volume with existing customers, yes, we are increasing our Mexican volume,” says Little Bear’s Brechler. “We are keeping pace with the movement.”