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The price of tortillas keeps rising due to the rising cost of ingredients 400,000
Tortillas, reported under flat bread, have observed consistent price increases since 300,000
2020 and this is seen as a significant issue given this product is the main staple for
Mexican consumers. For the poorest consumers in the country tortillas are sometimes 200,000
their only source of food, alongside some beans. Therefore, the government looked to
intervene by buying over half-a-million tons of white corn flour in early 2022 to try and 100,000
lower the price of tortillas in the country. More than 22 million people in Mexico rely
on its Diconsa rural supply programme (a network of 22,000 stores which provide basic 0
items including food to rural populations) and any significant increase in the price of 2008 2022 2027
tortillas would be very damaging.
Nonetheless, prices continue rising within flat bread despite the efforts seen from the
government. This is in part due to the impact of Russia's invasion of Ukraine, with these Sales Performance of Baked Goods
two countries between them accounting for around a quarter of the world’s wheat % Y-O-Y Retail Value RSP Growth 2008-2027
supply. Given the importance of tortillas in the Mexican diet even a small rise in prices
can have a knock-on effect on the wider economy. Despite the sharp rise in prices seen
in 2022 sales of flat bread still remain above pre-COVID-19 levels despite registering a
12.5% Forecast
20%
small decline in retail volume terms.
The Mexican government has taken several actions during 2022 to try and contain price
increases on basic goods and services. This includes reaching agreements with
suppliers to maintain the prices of specific products and services, and the exemption of 10%
import tariffs on a range of imported food products and livestock. In baked goods these
agreements have included placing a hold on price increases on basic products such as
leavened bread and flat bread. Manufacturers of baked goods are suffering as a result
5%
of rising energy prices, supply shortages and rising prices for key ingredients, and other
factors such as the impact of climate change on harvests. As a result the federal
government has struggled to contain inflation, which has led to a sharp rise in the price
of the basic food basket. 0%
2008 2022 2027
Despite these challenges, sales of bread remained strong in 2022, with it being the
most affordable and popular staple in Mexico. When trying to save on food in
economically challenging situations, people will often substitute meat and poultry for
eggs, potatoes, or beans, but they will usually continue to purchase flat bread. Flat
bread is widely perceived to provide nutritional value by Mexican consumers, and they
are not likely to shift towards other types of products. Unpackaged products continue
to account for the majority of volume sales of bread, with these products being more
affordable.
New legislation to regulate the use of trans fats likely to add weight to Competitive Landscape
the developing health and wellness trend
In September 2021, a group of legislators presented a new law initiative to regulate the Company Shares of Baked Goods
use of trans fats in food and beverages in Mexico. This move came as a result of % Share (NBO) - Retail Value RSP - 2022
growing links between the consumption of trans fats and the increased risk of having a
heart attack, stroke, or developing type 2 diabetes. Trans fats are also linked to high Grupo Bimbo SAB de CV 15.2%
cholesterol levels. Over the forecast period, new regulation regarding the use or Mondelez México S de RL ... 0.5%
disclosure of the use of trans fats can therefore be expected. Cakes and pastries could
be amongst the most impacted categories by any such move with trans fats commonly D'Gari SA de CV 0.5%
appearing in these products. With consumers having become increasingly health Organización Soriana SAB... 0.2%
conscious, especially since the pandemic, manufacturers may need to reformulate their
products to avoid losing sales. Con Alimentos SA de CV 0.1%
General Mills de México ... 0.1%
Several companies in baked goods have already made adjustments in response to the
new black seals labelling that came into effect in 2020, launching smaller portions and La Comer SAB de CV 0.1%
multipacks, but further innovation is expected in response to the changing regulatory
Wal-Mart de México SAB d... 0.0%
environment. Moreover, even beyond the pressures of the regulatory changes, health
and wellness is set to become increasingly influential in terms of new product Artisanal 79.5%
development, with consumers having become increasingly aware of the dangers posed
Others 3.7%
by being overweight or obese. In fact, high obesity levels in Mexico were a key
motivation for the introduction of the new labelling regulation. A greater focus on
health and nutrition is therefore expected as brands within baked goods seek to
improve the perception of their products.
Brand Shares of Baked Goods
Little change expected in the competitive landscape which remains % Share (LBN) - Retail Value RSP - 2022
divided between packaged and unpackaged options
Bimbo 6.8%
Grupo Bimbo SAB de CV is expected to maintain its lead in baked goods in 2022 despite
Tía Rosa 3.3%
continuing to lose share due to growing competition from artisanal products. Grupo
Bimbo benefits from a broad product portfolio within packaged flat bread and packaged Marinela 2.1%
leavened bread, which has enabled it to dominate these two categories. The company
Suandy 0.7%
is expected to work to strengthen its position in packaged bread over the forecast
period through the continued expansion of its geographic reach throughout the country Jell-O 0.5%
and the development of new products tailored to evolving trends, such as the healthy D'Gari 0.5%
eating trend. In terms of unpackaged flat bread and unpackaged leavened bread
artisanal players account for all sales, with these products sold through local bakeries Soriana 0.2%
and tortilla shops, which retain a widespread presence and strong popularity across the Bimbo Cero Cero 0.2%
country.
Milpa Real 0.2%
Pronto 0.1%
Betty Crocker 0.1%
Kirkland 0.1%
Wonder 0.1%
Artisanal 79.5%
Others 5.5%
5-Year Trend
Increasing share Decreasing share No change