Nogales More Than Just Vegetables

Reducing water-intensive crops and increasing investment in protected agriculture have created new opportunities.

Nogales, AZ, has been a major commercial hub for fresh fruits and — especially — vegetables entering the U.S. from Mexico for generations, and a casual glance at a map makes it clear why. Located considerably further west than other ports, such as Pharr, TX, Nogales is well-positioned for reaching huge western and central sections of the country, and is also ideally situated for key production regions in northern Mexico, notably Sonora and Sinaloa.

According to the Fresh Produce Association of the Americas (FPAA), an importer-focused industry advocacy group headquartered in Nogales, vegetables and tomatoes are the key products coming through the city’s Mariposa Port of Entry. However, there has been a recent expansion into other items, notably berries.

And the numbers aren’t small. The city handles around 37% of all produce shipped from Mexico to the U.S., with an estimated worth of $3.4 billion (USA trade data, 2021). Of that total, $2.2 billion was accounted for by vegetables and $1.2 billion by fruit imports.

On the traditional, vegetable-importer side, SunFed, based north of Nogales in Rio Rico, experienced “another banner year of growth” in 2024, according to Vice President of Sales and Marketing J.C. Myers. The company, he says, strengthened its position as a leader in the squash, cucumber, eggplant, and bell pepper categories. SunFed’s range of imported products also includes watermelons and tomatoes.

Aside from pure sales data, one major trend in Mexican production this period has been a noticeable reduction in water-intensive crops, as well as an increased investment in protected agriculture, Myers says.

This development, he believes, has opened up opportunities for importers to expand their offerings, although he also urges retailers to work more closely with growers, packers and shippers to plan production needs.

Proving that Nogales is more than just vegetables, mango specialist Ciruli Brothers, which also imports cucumbers, bell peppers, eggplant, and soft and hard squash, has thrived over the past 12 months.

“Imports from Mexico continue to increase, and the increase is not during our traditional winter season, but rather it is spread across the year,” says Chief Operating Officer Chris Ciruli. “We expect this trend to continue, driven by customer demand for wholesome, quality products year-round.”

“Imports from Mexico continue to increase, and the increase is not during our traditional winter season, but rather it is spread across the year.”
— Chris Ciruli, Ciruli Brothers, Nogales, AZ

Ciruli says the company’s main accomplishments over the last 12 months have been centered around improving service levels with customers, as well as introducing more mango varieties at different times of the year.

“We make it a point to offer our customers the best possible variety at the time of the year in which they are available and keep them apprised of peak volume and special promotional opportunities,” he says. “We have also developed specialized POS (point-of-sale) material for targeted mango promotions during peak periods.”

On the vegetable side, Ciruli says the company has been able to increase production of key items, including eggplant, cucumber, green bell pepper and squash by expanding its growing season across different production regions in Mexico, including Sinaloa, Sonora and Baja California.

To support this growth, Ciruli has invested in its Golden West and Pueblo’s Pride legacy brands with “retro artwork” inspired by 1940s produce labels. The company is also finding success with its organics range, which is marketed under the Rowdy Rabbit Organics brand by PennRose Farms.

AN EVOLVING BUSINESS

Although based in Nogales, importer Divine Flavor’s roots can be traced to Grupo Alta, a grower-exporter from Sonora, Mexico, that produces a wide range of products, from table grapes and watermelons to pecans and peaches.

According to Chief Marketing Officer Alan Aguirre Camou, Divine Flavor is one of the largest table grape importers into the U.S., with products including favorite Autumn Crisp and top-seller Sweet Globe.

Aguirre also points to Cotton Candy (“a product we have positioned very well as a grower and an importer”) and Candy Dreams, marketed as Jelly Berries, in particular. Muscat Beauty — a high-flavor, purple grape imported from Peru — is also making waves in the U.S. market, he says.

For Nogales-based IPR Fresh, developing strategic partnerships with Mexican growers has enabled the company to increase its availability of bell peppers. It has also introduced and grown a new organic lime business over the past two years.

“We have added new growers to our lineup, while continuing our relationships with existing growers, plus importing product from Holland during the summer,” says Jose Luis Obregon.

According to Obregon, the increasing Mexican food offering throughout the U.S. has boosted demand for products such as hot chiles, which he believes “has only been a good thing.” At the same time, he says importers are benefiting from growing demand for exotics, including papayas.

Bell peppers are a signature product for IPR, followed by European greenhouse cucumbers, as well as smaller volumes of sweet corn and watermelons. “We’re continuing to bring in a good amount of bell peppers, and we’ll have a consistent supply from Sinaloa until the end of June,” says Obregon. “After June, we move to overseas until August before Jalisco comes in, which gives us year-round bell peppers.”

A CHALLENGING OUTLOOK?

Despite expecting a growing demand for imported products, Aguirre sees an increase in some tariffs as inevitable, and here he believes the role of groups, such as the FPAA in protecting importers’ interests, will be vital.

“There is a minimum price that we have to sell Mexican produce at that we can’t go below in terms of the cost of manpower and transportation,” he explains.

Predicting further consolidation for the industry over the next two years, Myers at SunFed warns that new trade barriers and tariffs will likely impact prices, quality, and the availability of imported produce, adding to already existing pressures. “Labor is the leading driver of increased costs, and that is already impacting prices,” he says.

For his part, Ciruli says his company is hopeful the incoming U.S. administration will focus on border security and that the tariffs will not come to fruition.

Despite this optimism, Ciruli also expects to see continued upward pressure across many costs, especially labor. “Mexico recently announced a minimum wage increase for 2025. We expect these costs to eventually be transferred to the end customer.”

He also warns of likely weather-related challenges over the coming months. “As a supplier during the colder months, mainly December through March, we see many challenges, mainly on account of weather. This makes sales and marketing both exciting and demanding depending on the situation, and every year is different.”

Despite the challenges, Divine Flavor shows no signs of slowing down.

The company plans to continue its long-running “Better Grower” supplier forums, which are aimed at helping allied producers improve quality, food safety and sustainability standards, with five new events for table grape and vegetable growers. In purely production terms, parent company Grupo Alta has plans to increase its table grape acreage in Jalisco.

Ciruli also sees a real opportunity for the industry in delivering consistent supplies of shade house-grown products. Utilizing protected agriculture and diversified growing operations across multiple regions, he believes, will help guarantee both stellar quality for customers, and an expanded season from Mexico.

Ciruli encourages retailers to develop an understanding of where product is grown and when, and pair with a reliable supplier who has infrastructure and can deliver from each of the different grow regions. “This will allow for more consistent supplies and fewer interruptions across the year.”

WHERE THE INDUSTRY GOES NEXT

Looking ahead, Obregon from IPR Fresh predicts counting growth in organic and specialty produce, as well as a greater focus on sustainability. “I think there will be more advancements in growing and special packaging; maybe also some shift in trade policies,” he forecasts.

However, he sounds a note of caution when it comes to the direction this shift could take, especially if they take the form of new tariffs for Mexican produce entering the U.S. “Tariffs will mean more costs for importers and retailers, and they will impact competitiveness,” he warns.

“Costs will have to be passed on to the retailers and the consumers. This means consumers might not be able to buy quality produce because of the tariffs, which isn’t fair. If prices go up, maybe consumers will choose cheaper, less healthy products.”
— Jose Luis Obregon, IPR Fresh, Nogales, AZ

“Costs will have to be passed on to the retailers and the consumers. This means consumers might not be able to buy quality produce because of the tariffs, which isn’t fair. If prices go up, maybe consumers will choose cheaper, less healthy products.”

Ciruli, on the other hand, has a more optimistic take. “What helps drive farming in general is the availability of water and labor,” he says. “We expect to see more volume from Mexico from growers who are adding acreage and investing in water infrastructure to increase production in Sinaloa and further south.

“For the 2025 season, we also expect the new administration to focus on labor law enforcement, which may impact the amount of overtime hours worked in the agricultural sector.”