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Mexican Organic Market Study (PDF)

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					MEXICO ORGANIC MARKET STUDY

                 May 2009


              Prepared for:
     The Canadian Embassy in Mexico

                   By:
 Comercio e Integración Agropecuaria, S.C.
INDEX

EXECUTIVE SUMMARY ................................................................................................ 4

1) Overview of the organic sector in Mexico ................................................................. 7
   1.1) Mexican organic production .............................................................................. 7
   1.2) Imports of organics.......................................................................................... 9

2) Key players........................................................................................................... 11
   2.1) Domestic producers and processors of organics................................................. 11
   2.2 Importers and distributors of organics ............................................................... 13
   2.3) Main supermarkets and specialty shops that carry organic.................................. 19
     2.3.1) Specialty shops in Mexico City ................................................................... 19
     2.3.2) Specialty shops in Jalisco .......................................................................... 25
     2.3.3) Specialty shops in Nuevo León and Mexican beach areas ............................. 26
     2.3.4) Supermarkets........................................................................................... 27
     2.3.5) Foodservice ............................................................................................. 30

3) Consumption ........................................................................................................ 31
   3.1) Profile of organic consumer ............................................................................. 33
   3.2) Retail sales of organic ..................................................................................... 34

4) Market-entry considerations ................................................................................... 35
   4.1) Mexico’s regulations and certification ................................................................ 36
      4.1.1) Update on the Regulations expected to be issued for the implementation
      of the Mexican Law of Organic Products............................................................... 36
      4.1.2) Equivalency of Mexican organic legislation with Canadian standards ............. 38
      4.1.3) Mexico’s certification process............................................................................. 40
   4.2) Import requirements and implications for Canadian exporters............................. 42
     4.2.1) Recommendations to Canadian exporters ................................................... 43

5) Opportunities for Canadian exporters ...................................................................... 43
   5.1) Main categories of product where opportunities exist ......................................... 44
   5.2) Recommendations to Canadian exporters ......................................................... 45

6) Contacts / resources.............................................................................................. 46
   6.1) Importers and distributors of organic products .................................................. 46
   6.2) Mexican stores that carry organics ................................................................... 49
   6.3) Mexican restaurants that offer organics ............................................................ 53
   6.4) Mexican government resources ........................................................................ 54
   6.5) Industry associations or organizations promoting organics in Mexico ................... 54
   6.6) Promotional events, conferences and tradeshows appropriate for Canadian
   exporters of organics ............................................................................................. 56
   6.7) Private certification agencies for organic products in Mexico ............................... 59
   6.8) Mexican publications specialized in organics ...................................................... 62




                                                                                                                          2
7) Effects of the economic crisis on the demand for organic products ............................ 66
   7.1) Forecast impact of crisis on demand for organics ............................................... 66
     7.1.1) Forecast effect of the financial crisis on production of organics in Mexico ...... 68
     7.1.2) Forecast effect of crisis on imports of organics from the USA and Canada ..... 68
     7.1.3) Forecast impact on price premium demanded by suppliers of organics .......... 69
     7.1.4) Categories of organics most likely to decrease in demand ............................ 69

BIBLIOGRAPHY ......................................................................................................... 71




                                                                                                                       3
EXECUTIVE SUMMARY

Mexico is considered as the 5th largest producer of organic agri-food products in the world.
Approximately 70% of the organic farmers are found in Chiapas and Oaxaca. Some of the
main organic foods produced in Mexico are: coffee, fruits, vegetables, sesame seed, fine
herbs, honey and cocoa. A few processed food products are also starting to be produced.
More than 80% of the organic foods produced in Mexico are exported.

At least 50% of the demand of organics in Mexico is covered by imports. Most of the
imported organic foods available in the market are processed food products, given that
fresh products are mainly supplied by domestic producers. Among the main imported
organic foods available in Mexico are: bakery products, dairy products, beverages,
groceries, desserts and ready-to-eat pulses/seeds. Most imported organic foods are found
in organic specialized stores, health/natural food stores and supermarket stores. The U.S.
is the main foreign supplier of organics to Mexico. Some Canadian organic foods are also
available in the market. Other suppliers are Italy, Spain, Chile and Peru.

Mexican consumers have a positive perception about imported organic foods. There is not
a substantial difference between the prices of imported organic foods vis-à-vis the prices
of organic foods domestically produced. Currently there are at least a dozen qualified
importers and distributors of organic food products in Mexico (led by Aires de Campo),
which have the expertise, resources and contacts to introduce effectively imported organic
foods in the Mexican market. Most of these importers/distributors are located in large
cities and have excellent contacts with Mexican retail stores.

Aires de Campo is the largest importer/distributor of organic foods in Mexico. The
company handles a portfolio of more than 600 organic products, both domestic and
imported. Most of the imported organic products handled by Aires de Campo are from the
U.S., but they also handle some Canadian organic products. Aires de Campo has its own
brand, which is well positioned in the Mexican market. The company has a store called
“BioCentro”, where organic foods are sold directly to the public. Distribuidora Promesa is
another large Mexican importer/distributor of organic foods. Other qualified
importers/distributors of organics are: Smart Holding México, Marinter, Tendencia
Gastronómica, Natucomer, Natural Health, Atari, Tratecom, Ucero, Nutricomercializadora
and Vomac. All these importers distribute organic products to the main specialty,
departmental and supermarket stores in Mexico. These companies have interest in
establishing contact with Canadian suppliers of organics.

Currently there are at least five store chains in Mexico specialized in organics; The Green
Corner is the main one with 4 stores operating in Mexico City. There are some Canadian
organic foods already available at The Green Corner stores. Other Mexican stores
specialized in organics are: Yerbabuenamarket, Orígenes Orgánicos, Ki-An and
Purorganiko. Most of these stores do not import directly; rather they purchase organic
products from local producers and importers/distributors. All types of organic foods can be
found at these stores, including: dairy products, fruits, vegetables, meat, eggs, beverages,
bakery products, groceries, snacks, etc. Approximately 50% of the organic products
available at the stores are imported (especially processed food products). These specialty
stores represent an excellent venue for the sale of Canadian organic foods.


                                                                                          4
Organic foods (both domestic and imported) can also be found in some of the main
Mexican supermarket stores such as Superama (Wal-Mart), City Market (Comercial
Mexicana) and Soriana. The price premium between conventional and organic food
products sold at Mexican supermarkets can go from 20% up to 150% (depending on the
product). Despite the shelf space currently occupied by organics is still not very significant,
it is expected to continue growing in the future. Most supermarket stores (except for
Soriana) do not import directly; they purchase imported organics from local
importers/distributors.

The foodservice sector in Mexico is slightly behind the retail sector in organics, but is
starting to grow. There are a few restaurants in Mexico that offer organic meals. Generally
speaking, the organic food sector is still a niche market in Mexico, representing between
1% and 3% of the total food sector in the country. The largest consumption of organics is
concentrated in large cities. The consumption of organics has been steadily growing, but is
still in its infant stages. One obstacle to more widespread domestic consumption of
organics is a general lack of awareness of the “organic” concept. Impulso Orgánico
Mexicano, A.C., which is an association of Mexican producers of organics is planning to
implement a promotional campaign in 2009 to promote the benefits of organics.

Many Mexican consumers do not understand clearly the difference between organic food
and conventional food. Usually, only Mexican consumers with a high level of education
know what the term “organic food” means and the benefits of consuming these products.
The main consumers of organics in Mexico are educated people from the medium and
high social classes that are concerned about their health and the environment, that
understand the benefits of organics and that have a high purchasing power.
Approximately 700,000 Mexican households spend between 1,000-1,500 Mexican pesos in
the purchase of organic foods on a yearly basis. All the companies interviewed as part of
the study concurred that over the last years the sales of organic foods in Mexico have
been growing and are expected to continue growing.

In February 2006, the Mexican government published its Law of Organic Products with the
purpose of establishing an adequate legal framework for organics in Mexico. The Law
requires that all products “claiming” to be organic be certified by an internationally
recognized organization. In terms of imports, the Law states that the product has to come
from countries where there are organic regulations similar to those existing in Mexico or
that the product be certified by an organic certification agency approved by SAGARPA.
According to the Law, mutual recognition agreements would be pursued with Mexico’s
main trading partners to facilitate international trade of organic products.

The provisions of the Mexican Organics Law cannot be fully implemented until the
corresponding Regulations are published. These Regulations are still under development
and are expected to be published in the near future. Canada has also developed organic
products regulations, scheduled to come into force on June 30, 2009. Once the Mexican
and Canadian Organic Regulations are implemented, it will be important to seek an
equivalency agreement between both countries in order to facilitate the access for
Canadian organics to Mexico. Both regulations have several similarities that should
facilitate the development of a recognition agreement.



                                                                                             5
Currently, there are no specific imposed requirements for importing organic foods into
Mexico. Organic foods only need to comply with the same standards as imports of
conventional foods. According to SENASICA, at this point, any organic certification
provided in Canada would be valid in Mexico. However, this is expected to change once
the Regulations of Mexico’s Organic Products Law comes into force. The Mexican
government is also working on specific technical guidelines to indicate how certain
provisions of the Law and the Regulations would be implemented (including provisions
related to labelling, imports, etc.). These technical guidelines are expected to be issued
after the publication of the Mexican Organic Products Regulations.

The demand for organics is expected to increase as a result of health concerns in Mexico
and Mexico’s growing middle class. These trends should ultimately represent good
opportunities in Mexico for Canadian exporters of organics. Opportunities exist for
processed organic foods that are not domestically produced and where Canada appears to
have a competitive advantage, such as: bakery products, beverages, dairy products,
desserts, dietary supplements, groceries and ready-to-eat pulses/seeds.

Mexican consumers have a positive perception about Canadian made products. Canadian
exporters should take advantage of this leverage to introduce their organic products in
Mexico. Canadian exporters interested in shipping organics to Mexico are advised to
participate in trade shows and visit the market to meet potential partners/clients,
understand import procedures, and develop effective entry strategies. Canadian exporters
are also advised to contact local importers/distributors as a crucial step in their efforts to
establish themselves in the market. A good partner is essential to establish successful
business relationships with local stores specialized in organics and Mexican supermarkets.
In order to be competitive, Canadian exporters should focus on promoting the health
benefits of their organic products, while maintaining a competitive price.

As in any other country in the world, the international financial crisis has affected the
Mexican market. In fact, several of the interviewed companies concurred that the organic
sector in Mexico would not escape from the effects of the international financial crisis.
Some of them indicated that this situation could change the food consumption habits of
Mexican organic consumers, who may substitute some of the organic food products they
use to purchase for conventional foods that are cheaper, and may just purchase those
organic foods that they prefer/need the most. In spite of this, it is important to consider
that the main consumers of organic foods in Mexico are people from the medium-upper
social classes, which are usually less affected by an adverse financial environment and
would still have the purchasing power to buy organic products.

The recent devaluation of the Mexican peso vs. the U.S. dollar (almost 50%) has
increased the cost of food imports from the U.S. and has forced many Mexican
importers/retailers to increase their prices. The devaluation of the Mexican peso vs. the
Canadian dollar has not been as high as the devaluation of the Mexican peso vs. the U.S.
dollar, which actually puts Canada in a better or at least equal position than the U.S. in
terms of competition in the Mexican market. Despite of the adverse financial scenario, it is
expected that the demand for organics in Mexico would be maintained and continue
growing in the future, as the economic conditions in Mexico and the world improve.



                                                                                            6
 1) Overview of the organic sector in Mexico

 1.1) Mexican organic production

 Mexico is considered as the 5th largest producer of organic agri-food products in the world.
 Mexico also holds the 15th rank on organic food production area cultivated worldwide,
 with an estimated annual organic production value of over US$370 million on a land base
 of almost 500,000 hectares (2.3% of the 21.7 million hectares cultivated in Mexico). From
 this total, approximately 80% are certified and the rest are in the process of being
 certified. The Mexican government is helping organic farmers by rebating up to 75% of
 the costs of certification required for organic farming.

                           Economic Importance of Organic Agriculture in Mexico
                                                                                                                   Annual Average
      Concept/Year                    1996          1998           2000            2005             2007
                                                                                                                    Growth Rate
Surface (Has)                         23,265        54,457        102,802         307,692         480,883              31.7%
Number of organic
                                      13,176        27,914         33,587         83,174          114,198                  21.7%
growers
Organic production
                                      34,293        72,000        139,404         270,503         377,844                  24.4%
value (US$1,000)
Source: Center of Economic, Social & Technological Research for Agro-Industry & World Agriculture of the University of Chapingo (CIESTAAM).


 The organic growing boom in Mexico began in the 1980s, when European importers
 discovered the quality of chemical-free Mexican coffee cultivated by peasant farmers in the
 Chiapas and Oaxaca states. At the same time, foreign non-governmental organizations
 and business interests were encouraging small farmers to grow more organic products to
 satisfy increasing world demand. Today, 90% of the nation's over 100,000 organic
 agriculture producers are modest farmers cultivating 3.6 hectares or less, which are
 grouped together in cooperatives to consolidate their crops (usually with the assistance
 from a social or governmental program). The remaining 10% of organic growers is
 comprised of large-scale producers, which are private enterprises that cover between 100
 to 2,000 hectares and operate independently.

 Large scale organic farms from the U.S. (e.g. Earthbound Farm and Natural Selection
 Foods) also use the favorable climate and low production costs in Mexico to grow their
 produce. Mexico is considered to have the greatest number of organic farms in the world.
 Approximately 50% belong to indigenous groups and 70% of the organic farmers are
 found in Chiapas (44.8%) and Oaxaca (25.2%). Other Mexican states where organic
 products are grown are: Chihuahua, Sinaloa, Baja California, Baja California Sur,
 Michoacán, Colima and Veracruz.

 It is estimated that Mexican organic farmers receive a better income (20%-40% higher)
 than the income of farmers of conventional food products. A significant portion of the
 Mexican producers of organic products are part of the fair trade movement. Over the last
 10 years organic farming in Mexico has grown approximately 30% on a yearly basis,
 fueled by an increasing demand for organics in foreign markets. More than 80% of the
 organic food products produced in Mexico are exported abroad. Organic production in
 Mexico is expected to continue increasing as a result of the growing demand for these
 types of products in the international and domestic market.


                                                                                                                                         7
Additionally, many growers in Mexico continue applying traditional production practices, in
which fertilizers, pesticides and chemicals are not used mainly because the growers do not
have the necessary resources to purchase these products, indirectly favoring the
production of organic products.

Coffee is the main organic agri-food product grown in Mexico, representing around 60% of
the total production of organic foods in Mexico. In fact, Mexico is considered as the largest
producer of organic coffee in the world, reaching the world’s biggest supermarkets and
coffee shops. Other organic agri-food products domestically produced are: mango,
bananas, pineapple, avocado, oranges, papaw, tomato, peppers, onion, sesame seed,
corn, maguey, fine herbs, honey and cocoa, among others. A few processed food products
such as meat, sausages, juices, cookies and marmalades are also starting to be produced
in Mexico. However, considering that Mexico exports most of its organic products, Mexico
is mainly focusing on the production of tropical organic products that cannot be produced
in developed countries, which are the largest consumers of organic products.

                Agriculture Organic Surface in Mexico by State and Crop
                                        (2005)
        State        Hectares       %                          Product                    Hectares
Chiapas              86,384.36    29.54          Coffee                                   147,136.74
Oaxaca               52,707.85    18.02          Aromatic and medicinal herbs              30,166.49
Querétaro            30,008.00    10.26          Vegetables                                24,724.86
Guerrero             16,834.00     5.76          Cocoa                                     17,313.86
Tabasco              16,628.86     5.69          Wild grape                                12,032.00
Sinaloa              13,591.35     4.65          Coconut                                    8,400.00
Michoacán            13,245.06     4.53          Maguey                                     5,943.30
Jalisco              13,202.34     4.51          Cactus                                     5,039.07
Baja California Sur   6,217.11     2.13          Corn                                       3,795.47
Veracruz              5,887.32     2.01          Avocado                                    2,652.09
Sonora                5,867.21     2.00          Sesame seed                                2,497.75
Nayarit               5,486.74     1.87          Mango                                      2,132.42
Chihuahua             4,658.41     1.59          Sabila                                     1,888.30
Baja California       3,805.00     1.30          Citrus fruit                               1,608.35
San Luis Potosí       3,305.00     1.13          Olives                                     1,000.00
Colima                3,178.60     1.09          Sugar cane                                  853.00
Tamaulipas            2,315.00     0.79          Safflower                                   662.40
Puebla                2,153.59     0.74          Guava                                       623.50
Hidalgo               1,747.00     0.60          Vanilla                                     571.30
Guanajuato            1,114.86     0.38          Manioc                                      500.00
Estado de México      1,051.74     0.36          Mushrooms                                   384.88
Nuevo León             993.00      0.34          Raspberry                                   263.00
Aguascalientes         633.20      0.22          Apple                                       253.69
Distrito Federal       427.66      0.15          Pineapple                                   252.54
Campeche               300.00      0.10          Cashew nuts                                 242.00
Yucatán                233.00      0.08          Bamboo                                      230.00
Coahuila               201.00      0.07          Blackberry                                  229.00
Tlaxcala               181.50      0.06          Neem                                        213.00
Morelos                 66.50      0.02          Amaranth                                    192.75
National Total      292,459.26   100.00          National Total                          292,459.26
Source: CIESTAAM.



                                                                                           8
In general, prices of Mexican organic food products are between 20% and 150% higher
than prices of Mexican conventional food products. The following organic food products
are within an average price premium between 20%-60% as compared to conventional
food products: vegetable oils, pastas, dressings, tea, coffee and pulses (beans, chickpeas,
etc.). Furthermore, the following organic food products show a higher price premium
(between 70%-150%) as compared to conventional food products: marmalades, ketchup,
alcoholic beverages (wine, beer), rice and dairy products (milk, cheese, etc.). It is
important to mention that prices can vary depending of the product and the demand. The
organic social movement’s hope is that the costs for inputs and certification will decrease;
therefore reducing the prices of organic products and making them more affordable for
the average consumer.

1.2) Imports of organics

There are no Mexican official import figures for organic food products since all of them
enter the country through general tariff codes, making it impossible to determine exact
import figures for organics. However, it is estimated that at least 50% of the domestic
demand of organics is covered by imported organic foods, representing approximately
$380 million Canadian dollars.

As indicated further in the report, the Mexican government is planning to establish in the
near future specific HS Codes for imports of organic food products. This will allow an
easier identification of the volumes and origin of the organic food products imported into
Mexico.

It is worth pointing out that most of the imported organic food products available in the
Mexican market are processed food products, given that fresh products such as organic
fruits, vegetables, meat and eggs are mainly supplied by domestic producers. Organic
coffee and honey are also mainly supplied by domestic producers. Among the main
imported organic food products available in the Mexican market are:

   •   Bakery products (muffin/cake/brownie mixes, bread, pastries, cookies, bars,
       pudding filling mixes)
   •   Dairy products (milk, cheese, butter, yoghurt)
   •   Beverages (juices, lemonade, ice-tea, wine, energy drinks, beer, alcoholic
       beverages)
   •   Groceries (breakfast cereals, sauces, spices, vegetable oils, tofu, jellies, vinegar,
       pastas, soups, ketchup, mayonnaise, mustard, seasonings, baby food, risotto)
   •   Desserts and sweet products (maple syrup, chocolates, candies, ice-creams,
       sorbets, chocolate shakes)
   •   Ready-to-eat pulses and seeds (flax, rice, beans, chickpeas, hempseed, dry roasted
       pumpkin seeds, rye buckwheat kernel)

Most of the imported organic food products available in Mexico are found in organic
specialized stores, health/natural food stores and supermarket stores. The U.S. is by far
the main foreign supplier of organic foods to Mexico. Since most of the imported organic
products come from the U.S., it is very common to see the “USDA Organic” seal in many
packages of the organic products available at Mexican retail stores.



                                                                                          9
Some Canadian organic food products are also available in the market, such as: flax,
breakfast cereal, toaster pastries, tea, cake mixes, pudding mixes and chocolate shakes,
among others, which indicate that Canada is also a foreign supplier of organic foods to
Mexico. Other foreign suppliers of organic foods to Mexico are: Italy, Spain, Chile and
Peru.

As previously indicated, Mexico is an important producer of organic fresh products such as
fruits, vegetables, meat and coffee. However, there are only a few processed organic
foods produced in Mexico. As a result of this, Mexican supermarkets and specialty stores
have to resort to processed organic products from abroad to complement their line of
organics for their clients. This opens the door for foreign suppliers which have the capacity
to export organic processed food products to Mexico, such as Canada.

In general, Mexican consumers have a positive perception about imported organic food
products, especially those certified by internationally recognized certification agencies such
as Bioagricert, OCIA and IMO Control. Nevertheless, many consumers still give preference
to domestic organic food products over imported organics, as an effort to support the
communities of small domestic organic farmers. In spite of this, in many cases these
Mexican consumers do not have other option but to purchase imported organic products,
due to the lack of availability of domestic product.

In terms of prices, as a result of the tours conducted to the different specialty stores and
supermarket stores that carry organics in Mexico, it was found that there is not a
substantial difference between the prices of imported organic food products vis-à-vis the
prices of domestic organic food products. In fact, in some cases it was found that the
prices of domestic organic foods were higher as compared to imported organic foods, as
indicated in the chart below. This indicates that despite of the recent devaluation of the
Mexican peso against foreign currencies (dollar/euro), most imported organic food
products continue to be competitive in terms of price vis-à-vis domestically produced
organic foods.

    Comparative of Prices between domestic organic products vs. imported organic
                      products available in Mexican retail stores

          Product/price        Price – imported          Price – domestic     Difference
                               organic products          organic products        (%)
                                  (Mex pesos)              (Mex pesos)
        Fruit jelly              Dickinson (U.S.)         Rancho El Amate
                                                                                -16%
                                        $42                      $50
        Soy milk (1 lt)             Silk (U.S.)               Boulder
                                                                                 30%
                                        $30                      $23
        Rice (1 kg)              Lundberg (U.S.)         La Granja Orgánica
                                                                                158%
                                        $62                      $24
        Olive oil (500 ml)        Olave (Chile)                Oasis
                                                                                 16%
                                       $121                     $104
        Tea                       United States                Mexico
                                                                                 -9%
                                        $70                      $77
        Source: Tours of the main Mexican retail stores.




                                                                                           10
2) Key players

As part of the research for the study, in-depth interviews were conducted with key players
in the Mexican organic sector, including producers, processors, importers, distributors and
stores that carry organics. The results of these interviews are reflected in the following
sections.

2.1) Domestic producers and processors of organics

Mexico is considered to have the largest number of farmers dedicated to organic farming
in the world. However, as indicated before, most of the Mexican producers of organic food
products are small farmers that group together in cooperatives to consolidate and
commercialize their crops. In addition, these farmers focus in the production of coffee and
organic tropical products that are strongly demanded in export markets such as fruits
(mango, bananas, pineapple, avocado, oranges, papaw), vegetables (tomato, peppers,
onion) and others (maguey, fine herbs, honey and cocoa). Some of the main Mexican
cooperatives of organic producers are:

   •   Unión de Ejidos de la Selva Lacandona.- cooperative of farmers located in
       Chiapas, dedicated to the production of organic coffee.
   •   Mundo Orgánico S.R.P. de R.L.- producers of organic fruits and vegetables.
   •   Comunidades Campesinas en Camino S. S. S.- producers of organic fruits,
       vegetables and sesame seed.
   •   Coordinadora de pequeños productores de café de Chiapas (COOPCAFE).-
       cooperative of organic coffee growers located in Chiapas.
   •   KIEE LU'U.- producers of organic jamaica located in Oaxaca.
   •   Frutos de Tlayacapan.- cooperative of organic fruit growers.
   •   Pro-Orgánico, S.A. de C.V.- producers of organic fruits and vegetables located
       in Nuevo León.
   •   Unión de Ejidos San Fernando, A.C.- cooperative of organic coffee growers
       located in Chiapas.
   •   Babo Yaro.- producers of organic tea.
   •   Tocoringa.- producers and distributors of organic coffee, tea, pineapple, mango
       and cocoa.
   •   Agrorgánicos de México.- growers of organic safflower located in Jalisco.
   •   Eco Rancho Caracha.- producers of organic blackberry.
   •   Frutas y Hortalizas Orgánicas de Michoacán.- growers of organic avocado,
       grapefruit, lime and pepper, located in Michoacán.
   •   Agroproductores Biopremium.- cooperative of growers of organic mushrooms.
   •   Sociedad Cooperativa “Puente El Trabajo”.- producers of organic honey.

In addition, there are a few Mexican processors, which offer value added organic food
products. Some of these processors started as small cooperatives of growers, who decided
to give more value added to their products through processing and the creation of
commercial brands, in order to obtain higher profits.



                                                                                        11
Despite the fact that the number of Mexican processors of organic food products is still
limited, several cooperatives of growers are now realizing about the benefits of offering
value added products, so it is expected that the number of Mexican processors of organic
products continue increasing in the future.

Following is a list of some of the main Mexican processors of organic food products that
currently operate in the market and the types of products they offer, which can be found
in Mexican supermarket stores and retail stores specialized in organics:

   •   Grupo Industrial Cuadritos Biotek.- one of the largest processors of organic
       food products in Mexico. The company manufactures/sells several organic soy-
       based products under the Boulder and Bové brands, such as: soy milk, soy
       mayonnaise and soy cheese. Other organic products sold under the Boulder and
       Bové brands are: dressings, chocolate powder and cookies. Additionally, the
       company imports and distributes U.S. soy milk of the Silk brand.
   •   Comercializadora Agroinpes, S.A. de C.V.- organic cheese, yoghurt and beef.
   •   Grupo Desarrollo Agrícola Mexicano, S.A. de C.V.- specialized services in
       production, processing and trade of organic agricultural products.
   •   Sano Mundo.- organic tofu and rice syrup.
   •   La Rumorosa.- organic beef.
   •   Agroinpes.- organic meat and dairy products.
   •   Finca Las Estrellas.- organic chicken.
   •   Unifoods S.A. de C.V.- organic milk (Biorganic and Del Rancho brand).
   •   Bioagrimex.- organic beef, chicken and produce.
   •   Carnes Orgánicas de México.- organic meats.
   •   GE Organika.- organic meats.
   •   MayaMam.- organic marmalades and fruit spreads.
   •   Cusibani.- organic cocoa candies and toasted sesame seed/sunflower seed
       sweetened with agave syrup.
   •   Sabores de Colores, S.A. de C.V.- organic marmalades, chocolates (fruit de la
       terre brand).
   •   Corporación Proteína Americana S.C. de R.L.- organic snacks.

It is worth noting that as a result of the Mexican Law of Organic Products published in
February 2006 and analyzed further in this study, the Mexican government created an
organization called the National Council of Organic Production (CONAPRO), which is
integrated by representatives from the government (Mexican Secretariat of Agriculture-
SAGARPA, Mexican Secretariat of Environment-SEMARNAT, Mexican Secretariat of
Economy-SE and Mexican Secretariat of Health-SALUD), as well as representatives from
the following sectors: producers, processors, traders, certification agencies and
research/academy. The main objective of this council is to promote and foster the
development and commercialization of organic products and crops in Mexico.

In addition, it is important to mention that lower input costs, government subsidies, and
assistance from social programs are expected to keep down the prices of organic foods
domestically produced. Therefore, Canadian exporters interested in introducing their
organic products to the Mexican market will be forced to compete with lower priced
domestic products.



                                                                                      12
2.2 Importers and distributors of organics

Currently there are at least a dozen qualified importers and distributors of organic food
products in Mexico (led by Aires de Campo), which have the expertise, resources and
contacts to effectively introduce imported organic food products in the Mexican market.
Most of these importers/distributors are located in large cities and have excellent contacts
with Mexican retail stores specialized in organics/health products and Mexican
supermarket stores. Following is a brief profile of each of the main Mexican importers and
distributors of organic food products. Section 6.1 of this study includes the full contact
coordinates for each company.

 Aires de Campo

                     Aires de Campo is the largest importer and distributor of organic food
                     products in Mexico. The company was established in 2001 and has
                     approx. 120 partnering organic farms in the Mexican territory.
                     Currently, Aires de Campo has approx. 50 employees and handles a
portfolio of more than 600 organic food products, both domestic and imported, including:

   •   Fruits and vegetables
   •   Grains and seeds (rice, beans, chickpeas)
   •   Cereals and flours (bars, granola, flax, bread,
       breakfast cereals, pastries, cookies)
   •   Dried fruits
   •   Sauces and spices
   •   Vegetable oils (coconut, olive, sesame)
   •   Eggs
   •   Dairy products (milk, cheese, butter, yoghurt)
   •   Chicken meat
   •   Tofu
   •   Honey, maple syrup and marmalades
   •   Chocolates and candies
   •   Snacks
   •   Ice-creams and sorbets
   •   Beverages (water, juices, lemonade)
   •   Coffee and tea
   •   Amaranth, Jamaica, cactus
   •   Herbs




                                                                                         13
Most of the imported organic food products handled by Aires de Campo are made in the
U.S. Aires de Campo also manages some Canadian products such as:

    •   Organic breakfast cereal and toaster pastries (Canada Nature’s Path)
    •   Organic milled flax (CanMar Grain)
    •   Organic herbed white wine vinegar and garlic oil (Be Organic)
    •   Pure maple syrup (non-organic) (La Ferme Martinette)

A significant portion of the organic products handled by Aires de Campo (both domestic
and imported) are sold under its own private brand. However, Aires de Campo is more
about the concept than the product itself. It is about the system they use and their
ideology. Therefore, the brand is not as important as the concept. Some products would
be more acceptable under the Aires de Campo brand and others would be more
appropriate under their own brand.

                                   Aires de Campo represents and assists organic
                                   producers by helping them to certify and package their
                                   products under the Aires de Campo brand, then
                                   distribute and promote them. Aires de Campo’s
                                   strategy is to work directly with producers and
                                   consumers and take out any intermediaries.

                                 The Aires de Campo brand is well positioned in the
                                 Mexican market and easily recognized by Mexican
                                 consumers of organic food products. Those organic
                                 food products that are not sold under the company’s
                                 private brand bear a seal called Aires de Campo
Selection (Selección Aires de Campo), which certifies that the products are endorsed by
the company and are from high quality organic brands.

Currently, Aires de Campo distributes its organic products to
the main supermarket chains in Mexico, including: Wal-Mart,
Comercial Mexicana, Soriana, CostCo, Superama and
Chedraui. In fact, Aires de Campo has organized the display
of organic products at several of the stores from the
supermarket chains previously indicated. Aires de Campo
also sells to the 2 main departmental stores in Mexico:
Liverpool and Palacio de Hierro.

In addition, Aires de Campo has one store called
“BioCentro” where organic food products are sold directly to
the public (more than 300 SKUs). This store is located in an
upscale neighborhood inside the western part of Mexico City
(Bosques de las Lomas), which is home of well-paid Mexican
consumers with a high purchasing power. According to Aires
de Campo, the organic products that report the largest sales
in the stores are: dairy products, snacks and grain derived products. From this store, Aires
de Campo also provides home-delivery to the west, central and north parts of the city.



                                                                                         14
                                Aires de Campo also has a distribution center located in
                                the south part of Mexico city, which provides home-
                                delivery service to consumers that live in this area.
                                Consumers can place their orders either by phone or by e-
                                mail.

                                The products from Aires de Campo are also available in
                                specialty stores offering healthy and organic food
                                products, such as: Purorganiko, Greenery and The Green
                                Market, among others. Additionally, Aires de Campo also
                                sells organic products in foodservice presentation to
                                several Mexican restaurants with a health/gourmet focus,
                                such as: Orígenes Orgánicos, Dumas Gourmet and Tierra
                                de Vinos.

Aires de Campo is part of CONAPRO, which was described in the previous section. In
addition, Aires de Campo has the ISO-065 certification and is also certified by Bioagicert,
which is an authorized organic certification agency.

Aires de Campo prefers to import directly, but they also purchase organic food products
from local distributors. Aires the Campo is interested in expanding its line of organic food
products from Canada. During the interview conducted with the company, they indicated
interest in tea, baby food, canola oil and innovative products in general. Aires de Campo is
also interested in introducing its products in Canada.

Considering the infrastructure, coverage, expertise and brand recognition that Aires de
Campo has in the Mexican organic market, as well as their interest in Canada, this
company represents an excellent option for the introduction of more Canadian organic
products to the Mexican market. Section 6.1 contains all the contact details for the
company.

 Distribuidora Promesa

                             Distribuidora Promesa is another large Mexican importer and
                             distributor of organic food products, located in Mexicali, Baja
                             California. Distribuidora Promesa has a sister company
                             located in the U.S. called Delta International, LLC. Currently
                             the company distributes in Mexico a broad line of organic
grocery products under the following brands:

   •   Baby’s Only.- baby formula certified organic
   •   Blue Sky.- soft drinks made with organic cane sugar
   •   Bob’s Red Mill.- organic flours, grains and cereals
   •   Butte Creek.- organic beer
   •   Dr. Oetker.- organic flours for cakes and puddings
       (Canadian brand)




                                                                                         15
   •   Eden Foods.- organic soy milk, pasta, flour, canned beans, grains, condiments,
       snacks, fruit juices, fruit sauce, pop corn, oil and vinegar.
   •   Eel River.- organic beer.
   •   Healthy times.- organic food, biscuits and cookies for babies
   •   Lundberg Family Farms.- organic rice and rice cookies
   •   Muir Glen.- organic tomato sauce for pasta, ketchup and
       canned tomatoes
   •   Nutiva.- organic shelled hempseed and chocolate
       hempshake drink mix (Canadian brand)
   •   Organic Food Bar.- organic food bars
   •   Peace Cereal.- organic cereals and granola
   •   Santa Barbara Olives.- organic olives
   •   Soy Dream and Rice Dream.- organic soy milk and rice drink
   •   Spectrum Oils.- organic oils and mayonnaise
   •   Yogi tea.- organic tea

Distribuidora Promesa distributes organic food products to some of the main specialty
stores, departmental stores and supermarket stores in Mexico City and Guadalajara, such
as: The Green Corner, Orígenes Orgánicos, Purorganiko, Superama (Wal Mart) and
Liverpool. Distribuidora Promesa has interest in handling more Canadian organic food
products that have a good quality.

 Smart Holding México

Smart Holding México is a young but dynamic Mexican company established in 2006 in
Jalisco, dedicated to the constant search of innovative products that offer value added to
consumers. The company has 7 employees. The owners of the company introduced the
Red Bull energy drink in Mexico. Currently, Smart Holding México is distributing an
extensive line of leading products in different market segments, including organic foods
and beverages. Currently the company represents/distributes in Mexico several organic
grocery products under the following brands:

   •   Organic Valley.- organic cheeses, milk, meat, butter and
       juice
   •   Organic Prairie.- organic beef, pork and poultry
       products.
   •   Steaz.- organic tea soda and energy drinks.
   •   Crofter’s    Organic.-     organic      fruit  spreads
       (Canadian brand)

Smart Holding Mexico distributes organic food products to some of the main specialty
stores and supermarket stores in Mexico, including: Wal-Mart, Soriana and Comercial
Mexicana, among others. Smart Holding indicated that they would be interested in getting
in touch with new Canadian suppliers of organic food products, given that they are always
looking for new products and represent them in the Mexican territory.




                                                                                       16
 Marinter

Marinter is an importer and distributor of wine, liquors and gourmet food products
established in Mexico City. The company has 110 employees. Since approx. 7 years ago,
Marinter imports and/or distributes in Mexico some organic food groceries from the
following brands:

   •   Santa Cruz.- organic juices and nectars
   •   De Cecco.- organic Italian pasta
   •   Filippo Berio.- organic olive oil
   •   Dickinson’s.- organic marmalade


                                Marinter has its own warehouses and they distribute
                                product to organic specialty stores and supermarket stores
                                in all the Mexican territory, including: The Green Corner,
                                Yerbabuenamarket, Wal-Mart, Comercial Mexicana, etc.

                                When asked about Canadian organic food products,
                                Marinter indicated they are not very familiarized with them,
                                but expressed interest in establishing contact with
                                Canadian suppliers of organics, which in the company’s
                                view are a good option to offer to Mexican consumers.

 Tendencia Gastronómica

Tendencia Gastronómica is a Mexican company specialized in the importation and
distribution of gourmet food products such as vegetable oils, condiments, preserved fruits,
pastas, jellies, seafood products, tea, truffles and vinegars, among others. The company
has 25 employees and annual sales of 56 million pesos. Since 3 years ago, Tendencia
Gastronómica handles some organic products under the Roland brand, such as:

   •   Organic   Dijon mustard
   •   Organic   coconut milk
   •   Organic   noodles
   •   Organic   balsamic vinegar

Tendencia Gastronómica distributes products both for the retail and foodservice sectors in
Mexico. Currently, the organic food products handled by the company are only sold at
stores specialized in organics such as The Green Corner and Bio-Centro (Aires de Campo).
The company is not familiar with Canadian organic food products, but is interested in
exploring what types of organic foods Canada can offer.




                                                                                         17
 Natucomer

Natucomer is a company established in Mexico City that for the last 6 years has been
importing and distributing organic food products such as organic baby food, organic
breakfast cereal, cereal bars and organic chocolate bars, from the U.S. The organic food
products distributed by Natucomer can be found in the main retail stores
(specialty/supermarkets/departmental) in Mexico, such as: The Green Corner, Comercial
Mexicana, Chedraui, Wal-Mart, Superama, Soriana, Liverpool and Palacio de Hierro.
Natucomer is not familiar with Canadian organic food products. However, the company
expressed interest in working with Canadian suppliers, given that according to Natucomer,
Mexican consumers have a positive perception about Canadian products.

 Natural Health

                       Natural Health is a Mexican company established in Guanajuato,
                       which is dedicated to the importation and distribution of
                       natural/healthy food products in Mexico. The company has 108
                       employees. Five years ago the company started importing and
distributing some organic products, including herbs and organic milled flax from Canada.
Natural Health distributes product to supermarket stores and healthy food stores in Mexico
such as Nutrisa. The company is interested in establishing long-term relationships with
Canadian suppliers of organic products.

 Atari

                 Atari is a Mexican company dedicated to the importation and distribution
                 of nutritional supplements and other food products. Since 5 years ago,
                 the company has also being handling organic nutritional supplements,
                 mainly from the U.S.

                   Atari is part of the VALTRA group, which is a consortium based in Nuevo
Léon that handles the GNC store chains in all the Mexican territory, which are stores
specialized in the sale of nutritional supplements. The nutritional supplements imported by
Atari are sold in the GNC stores.

When asked if they knew any organic product from Canada, Atari only mentioned
Canadian flax. Atari also indicated that they would like to have contact with more
Canadian suppliers.




                                                                                        18
 Others

 Importer/Distributor                  Imported products                    Distribution channels
Tratecom                   Organic cereal, bread and sprouted corn       Retail stores specialized in
                           tortillas (Ezekiel 4:9 brand) from the U.S.   organics and supermarkets
Ucero                      Organic wine from Chile                       Retail stores specialized in
                                                                         organics and supermarkets
Nutricomercializadora      Organic dietary supplements from the          Retail stores specialized in
(subsidiary of Nutrisa)    U.S.                                          nutritional supplements
Vomac                      Organic pasta, crackers and other bakery      Retail stores specialized in
                           products from Spain and U.S.                  organics and supermarkets
Olkan Comercializadora     Broad variety of gluten-free organic food     Retail stores specialized in
Import Export              products including: crackers, corn flakes,    organics
                           etc. from the U.S.
Comercializadora México-   Organic breakfast cereals and instant         Wal-Mart and Superama stores
Americana (Wal-Mart        oatmeals from Canada
subsidiary)

2.3) Main supermarkets and specialty shops that carry organic

As part of the information gathering process for the study, visits to specialty and
supermarket stores were also carried out to gather intelligence about the types of organic
food products available in Mexico and opportunities for Canadian organic products.
Currently there are at least five store chains in Mexico specialized in organics and several
other health food stores that also carry organics. In addition, most Mexican supermarket
stores already carry organics, which are gaining more shelf space. The results of these
store tours are described in the following sections.


2.3.1) Specialty shops in Mexico City

 The Green Corner

                           The Green Corner is one of the main store chain in Mexico
                           specialized in organics. This company established 5 years ago
                           and with approximately 100 employees, has 4 mini
                           supermarket stores specialized in organics. These stores are
                           located within areas that are home to well-educated/well-paid
                           residents who are aware of organics and able to afford them.
                           All the stores are built with environment-friendly materials and
have environment-friendly systems for water use and generation of electrical power. The
stores also have a small restaurant inside, where clients can have meals prepared with
organic products. The Green Corner also has home-delivery service. The products can be
ordered by phone or by internet.




                                                                                                19
Most of the food products sold at The Green Corner mini supermarkets are organic, but
there are also a few non-organic products that the company classifies as: natural, ecologic
and biodegradable. Creamy fresh yogurt from hormone-free cows, coffee untainted by
chemicals and avocados plucked from pesticide-free trees line the shelves of The Green
Corner market. At The Green Corner mini supermarkets, consumers can find all the food
products that are usually available in conventional supermarkets including:

   •   Organic dairy products (cheese, butter, soy milk)
   •   Organic fruits and vegetables
   •   Organic meat, eggs and sausages
   •   Organic beverages (juices, beer, wine, energy
       drinks and alcoholic beverages)
   •   Organic bakery products (bread, biscuits,
       cookies, muffins, pudding filling mixes)
   •   Groceries: vegetable oils (canola, sunflower,
       safflower), vinegar, pastas, pasta sauce, cereal,
       soups, ketchup, mayonnaise, mustard, tea,
       coffee, sauces, sugar, seasonings, honey,
       chocolate, baby food, marmalades, etc.
   •   Organic snacks (hempseed, dry roasted pumpkin
       seeds, rye buckwheat kernel)

The Green Corner tries to give preference to domestically produced organic foods.
However, approximately 50% of the organic products available at the stores are imported
(especially processed food products, which are not produced in Mexico). The Green Corner
is working in some projects to help Mexican producers to have access to technologies and
machinery that allow them to manufacture processed food products, so that the company
stops importing processed food products and rather buy them from local producers.
However, this is a long-term project and in the meantime, the Green Corner is planning to
continue importing organic agri-food products.

                             From the imported organic food products available at The
                             Green Corner stores, most of them are originally from the
                             U.S. In addition, there are some products from Italy, Chile,
                             Spain and Canada. Among the Canadian organic products
                             currently available at the Green Corner stores are:

                                •   Tea (Four O’Clock Brand)
                                •   Muffin/cake/brownie mixes (Dr. Oetker Brand)
                                •   Cooked pudding and pie filling mixes (Dr. Oetker
                                    Brand)
                                •   Shelled hempseed and chocolate hempshake drink
                                    mix (Nutiva brand)
                                •   Milled flax (Northern Quinoa brand)

The Green Corner does not import organic products directly; they purchase organic
products from local producers and importers/distributors.



                                                                                        20
In terms of prices, The Green Corner usually adds a 30% margin over the price of the
products. This is a factor to consider when selling product to this chain.

As part of its near future projects, the Green Corner is
planning to open new stores in working-class
neighborhoods in Mexico City, in order to introduce
organics to this sector of the population and avoid that
these products be only for the elite.

The Green Corner represents an excellent venue for the
sale of Canadian organic food products, given that as
indicated before, this is a store chain specialized in
organics, which is growing and is well-known among
the Mexican consumers of organic products. In fact,
during the interview conducted with representatives of
the Green Corner, they expressed interest in handling
more Canadian organic products. Since The Green
Corner does not import directly, Canadian exporters
interested in selling their products to this chain would
have to work with a Mexican importer that can bring
the product into Mexico and then introduce/distribute
the product to the Green Corner stores.

 Yerbabuenamarket

                               Yerbabuenamarket is another Mexican store specialized in
                               organic food products, which is located in the southern part
                               of Mexico City. This store which has a modern/upscale look,
                               is also like a mini supermarket, where consumers can find
all types of organic food products including:

   •   Dairy products
   •   Meat products (beef and poultry)
   •   Fruits and vegetables
   •   Eggs
   •   Beverages (juices, beer, energy drinks, ice tea)
   •   Bakery products (bread, cookies, pudding filling
       mixes)
   •   Groceries (vegetable oils, vinegar, pastas, pasta
       sauce, cereal, tea, coffee, sauces, seasonings,
       honey, chocolate, baby food, marmalades, canned
       beans, risotto, preserved fruit)
   •   Seeds (flaxseed, quinoa)




                                                                                        21
Yerbabuenamarket carries plenty of imported organic food products, mainly from the U.S.
Products from Chile, Peru, Spain and Canada (cake mixes, cooked pudding/pie filling
mixes and tea), can also be found in the store. There are also several domestically
produced organic foods available at the store (fruits, vegetables, eggs and meat).

                                        As in the case of the Green Corner,
                                        Yerbabuenamarket does not import organic
                                        products directly. Therefore, the imported organic
                                        products exhibited at the stores are purchased
                                        from local importers/distributors.

                                        Despite the fact that the Yerbabuenamarket is still
                                        in a growing process (only 1 store opened so far
                                        with a total of 2 employees), it also represents an
                                        excellent venue for the sale of Canadian organic
                                        food products, given that the store is specialized
                                        in organic food products and is well located, close
                                        to one of the most affluent freeways in Mexico
                                        City (Periférico Sur). Canadian exporters
                                        interested in selling their products in this store,
                                        would have to contact first a Mexican company
                                        that can import and distribute the products to
                                        Yerbabuenamarket. For contact details of the
                                        Yerbabuenamarket store, please check section 6.2
of this study.


 Orígenes Orgánicos

                              Orígenes Orgánicos is a Mexican company established in
                              2004, whose purpose is to create ecologic consciousness
                              among Mexicans by offering environment-friendly products
                              such as organics. The company has a mini-market store
                              where there are approximately 500 SKUs, including the
following organic products:

   •   Groceries (vegetable oils, dressings, bars,
       beverages, snacks, coffee, chocolate, pet food,
       preserved foods, candies, cookies, jellies, honey,
       bread, pasta, sauces, tea, etc).
   •   Dairy products (milk, butter, cream, cheese,
       yoghurt, etc.)
   •   Meat (beef and poultry)
   •   Fruits and vegetables
   •   Egg




                                                                                        22
                               Currently, only a few Canadian products are available at
                               Orígenes Orgánicos such as: organic tea (imported by
                               Marcial Fernández) and pure (non-organic) maple syrup
                               (imported by Primex, S.A. de C.V.). Some organic food
                               products imported from other countries such as the U.S.
                               and Spain are also available at the store.

                               Orígenes Orgánicos does not import directly. The imported
                               organic foods that they offer at their store are sourced
                               from local importers.




                                 According to Orígenes
Orgánicos, the organic food products that have larger
sales at its store are vegetables, dairy products and
groceries. In addition, the store includes a small
restaurant that serves full prepared organic meals to
customers. The menu includes: appetizers, soups,
salads, pasta, Mexican dishes, sandwiches, burgers,
juices and pastries. The contact details of the store
can be found in section 6.2 of the study.

 Ki-An

                       Ki-An is a Mexican store opened 2 years ago in the south part of
                       Mexico City, which is specialized in organic and natural food
                       products. A broad range of organic food products (between 250
                       and 300 SKUs) are sold at the store including:

   •   Vegetable oils
   •   Dressings
   •   Rice
   •   Nutritional bars
   •   Juices and lemonade
   •   Coffee
   •   Breakfast cereal
   •   Chocolate (chocolate syrup)
   •   Bakery products (cookies, bread)
   •   Marmalades
   •   Honey
   •   Pasta
   •   Sauce
   •   Tea
   •   Meat (chicken meat and beef)
   •   Dairy products (soy milk, cream, cheese, tofu, yoghurt)



                                                                                     23
Ki-An handles several imported organic food products, mainly from the U.S. The company
also offers home-delivery service within Mexico City.

The representatives from Ki-An indicated they are not aware about Canadian suppliers of
organic food products. However, they indicated interest in knowing more about Canadian
organic products, in order to have more options to offer to their clients.

 Nutrisa and GNC

                                 Nutrisa and GNC are probably the two most significant
                                 health store chains in Mexico with hundreds of stores all
                                 over the Mexican territory, offering a large variety of food
                                 supplements and healthy food products. Nevertheless,
                                 the presence of organic food products at these stores is
                                 limited.

                                Among the few organic food products sold at the Nutrisa
                                stores are: soy milk (product of the U.S.), superberry
                                liquid dietary supplement (product of Chile) and vacuum-
                                packed milled flax (product of Canada).
In the case of GNC the only organic food products found at the stores were: organic fibre
mix (made of flax seed, oat bran and acacia), liquid aloe vera and vacuum-packed milled
flax (product of Canada).

Most of the Nutrisa and GNC stores are well located, usually inside Mexican shopping
malls; however, as previously indicated, currently they only carry a few organic products.
GNC has approximately 900 employees. Despite the fact that both store chains do import
directly, the organic food products sold at their stores are supplied by local
importers/distributors. These stores could be a feasible option for Canadian organic food
supplements and functional/high-fibre products. In fact, both companies expressed
interest in Canadian products. For contact details of these stores, please check section 6.2
of this study.




                                                                                          24
 La Canasta Orgánica

                             On-line store that offers home-delivery service of organic
                             food products in Mexico City and the surrounding areas. The
                             orders are placed by the clients on-line through the
                             company’s website. Among the organic food products sold
                             by this company are: fruits, vegetables, dairy products, eggs,
bakery products, cereals, jellies, soy products, meat, sauces, beverages and nutritional
supplements, among others.

 Other shops in Mexico City that carry organics

   •   Sano Mundo.- Mexican company with more than 10 years dedicated to the
       production, marketing and export of natural/healthy/high quality food products,
       including organics. The company has a store in the south part of Mexico City – Col.
       Del Valle, where products are sold directly to clients.

   •   Shaya Michán.- Shaya Michán is a famous teacher specialized in natural
       medicine. He also practices yoga and promotes a healthy lifestyle based in the
       consumption of natural products. Currently, Shaya Michán has a radio program and
       several stores under his name where natural foods (including organics) are offered.
   •   Centro UK´U´X Nutracéuticos y Orgánicos de México.- UK´U´X is a Mayan
       word that means spring. This is an evironment-friendly center surrounded by
       nature aimed at environment-conscious consumers. Clients can visit the center to
       read, take courses related to astrology, the mayan world, music, etc. or eat
       something at the cafeteria. The center has a store offering natural/healthy food
       products, including organics.
   •   La Buena Nutrición.- store chain specialized in natural/healthy food products.
   •   La Ruta Orgánica.- small store specialized in organics – mainly fresh produce.
   •   Naturalia.- store specialized in natural food products (including organics).
   •   Alimentos orgánicos e integrales.- small store specialized in organic and
       functional food products.

2.3.2) Specialty shops in Jalisco

 Purorganiko

                      Mini supermarket store located in Jalisco specialized in the sale of
                      certified organic food products. There are all kinds of organic food
                      products available at Purorganiko such as: pastas, sweeteners, tea,
                      grains/seeds, seasonings, candies, vegetable oils, dairy products,
                      fruits, vegetables, juices, bakery products, beverages, meat, baby
                      food, dietary supplements, snacks, coffee and dressings, among
others. Purorganiko imports organic foods directly and also purchases organic products
from local importers/distributors. The store also has a special area for reading, where
clients can go to have a coffee/snack and read.




                                                                                        25
 Best Health Arquitectos Corporales

                    Store located in Jalisco, specialized in the sale of natural, healthy and
                    organic food products.


2.3.3) Specialty shops in Nuevo León and Mexican beach areas

 The Green Market

                    Boutique store located in Garza García,
                    Nuevo Léon, specialized in natural and
                    healthy organic products. The company
handles both domestic and imported certified organic
products. Besides shopping directly at the stores, consumers
can also place orders via internet and phone (home-delivery).
A significant portion of the organic food products available at
the Green Market store are supplied by Aires de Campo.

 La Manzana Sana and Vegetarian

                 Two small stores located in Nuevo León, which handle organic food
                 products, mainly from Aires de Campo.


 Greenery

                   Retail chain that has stores specialized in gourmet and organic food
                   products, located in Mexican beach areas such as: Cancún, Ixtapa and
                   Mérida. The company is also planning to open soon a store in Playa del
                   Cármen. Both domestic and imported organic food products are sold at
these stores, including several products distributed by Aires de Campo.




                                                                                          26
2.3.4) Supermarkets

 Superama (Wal-Mart)

Superama, which is the upscale format store of the Wal-Mart
supermarket chain, also carries organic food products.Most of the
organic foods available at the store such as vegetable oils, vinegars,
pasta, sauces, juices, marmalades, coffee, honey and ketchup, are
concentrated in a single area. In the old Superama stores, most
organic food products are concentrated in the same section, but it
does not have any special signs and therefore cannot be easily
identified by the consumers. In addition, it is important to mention
that in the old Superama stores, some organic food products such
as fish (tilapia) and fruits/vegetables are located in the same
areas/shelves where conventional foods are located.

                                     On the flip side, the new Superama stores have a larger
                                     section of organics, which is well identified and includes
                                     an extensive variety of products.
                                     Most of the organic food products available at the
                                     Superama stores are imported from the U.S., Chile and
                                     Italy. The only organic food products from Canada that
                                     were identified during the tours of the Superama stores
                                     were breakfast cereals and instant oatmeals from the
                                     Barbara’s Bakery brand, which are imported and
                                     distributed by Comercializadora México-Americana, which
                                     is a subsidiary of Wal-Mart

                                It is important to note that although Superama does
                                import directly, in the case of organic food products,
                                Superama      usually    prefers   to   rely   on    local
                                importers/distributors. Currently, Superama only imports
                                a few organic food products directly, through its
subsidiary Comercializadora México-Americana, as previously indicated. The price premium
between conventional and organic food products sold at the Superama stores can go from
20% up to 150%.

          Average Price Premiums for Organic Food Products sold in Superama

        Product/price       Price – organic    Price - conventional    Price Premium
                             (Mex pesos)           (Mex pesos)              (%)
        Olive oil                 $76                   $62                  23%
        Spaghetti                 $48                   $33                  45%
        Vinegar                   $74                   $56                  32%
        Marmalade                 $45                   $24                  88%
        Ketchup                   $28                   $11                 155%
        Source: Tours of Superama stores.



                                                                                            27
In 2007, Wal-Mart U.S.A. announced plans to double its line of organic products. Wal-Mart
is considered so influential that it not only supplies what consumers demand, but
influences what consumers demand as well. As demand for organics increases in Mexico, it
is likely that the policy established by Wal-Mart U.S.A. also be applied to the Wal-Mart
stores in Mexico in the near future. Considering that Wal-Mart is currently the leading
retailer in the Mexican market, a stronger focus from Wal-Mart Mexico on organics could
change dramatically the sales of organic products in Mexico.

 City Market (Comercial Mexicana)

                                   Organic food products can also be found at City
                                   Market, which is an upscale format store of the
                                   Comercial Mexicana supermarket chain. Currently there
                                   are only 2 City Market
                                   stores in Mexico City, which
                                   carry several gourmet food
                                   products, aimed at medium
                                   and high class consumers.
                                   Most of the organic food
                                   products available at City
                                   Market are concentrated in
                                   a special area within the
store, which although is bigger than the organics area in
Superama, the shelf space occupied by organics is still not
very significant. Some organic food products such as soy milk,
vegetables, butter, cheese and ice-cream are located in the
same shelves where conventional food products are located.

Most of the organic foods available at the City Market stores
are from the Aires de Campo private label. In fact, Aires de
Campo organized the display of the organic foods for sale at the City Market stores.
Both Mexican as well as imported organic food products can be found at the City Market
stores, such as: dressings, tea, coffee, chocolate, honey, nuts, canned chickpeas, granola,
flax, beans, juice, energy drinks and ice tea, among others. Some of the few Canadian
organic food products available at the store are teas and flax. The price premium between
conventional and organic food products sold at the City Market stores is between 40% and
60%.
         Average Price Premiums for Organic Food Products sold in City Market

          Product/price Price – organic Price - conventional Price Premium
                         (Mex pesos)        (Mex pesos)           (%)
          Dressing            $55                $38              45%
          Salad               $30                $19              58%
          Milk                $19                $12              58%
          Tea                 $57                $40              43%
          Coffee              $80                $50              60%
          Source: Tours of City Market stores.




                                                                                        28
                             Considering that City Market is an upscale store aimed at
                             wealthy consumers with a high purchasing power, these
                             stores could also be a good venue for the sale of Canadian
                             organic food products. It is important to mention that City
                             Market as part of Comercial Mexicana does import many
                             products directly. However, for now in the case of organic
                             food products, City Market prefers to go through local
                             distributors instead of importing directly. Therefore, Canadian
                             exporters of organics interested in selling at the City Market
                             stores would have to introduce their products through a local
                             importer/distributor. As indicated before, considering the
                             important presence of the products from Aires de Campo at
                             the stores, it may be a wise decision for the Canadian
exporters to work with Aires de Campo in order to introduce their organic products at the
City Market stores.

 Soriana

Soriana is currently the second largest supermarket chain in
Mexico after they purchased the Gigante retail chain. There
is a special section within the Soriana stores for organic
food products. The section, which is kind of an island in the
middle of an aisle, is not very big, but is well identified/easy
to find. Most of the organic food products available at the
stores are either imported directly by Soriana or supplied by
Aires de Campo. Among the organic products available at
the Soriana stores are: pasta, oregano oil, wine, vinegar,
nectar, juices, rice, beans, chickpeas, jellies, macaroni and
cheese and soy milk. Most of these products are either
domestic or imported from the U.S., except for a few ones
such as pasta (Italy) and wine (Chile). As shown in the next
table, the price premium between conventional and organic
food products sold at the Soriana stores are in a range
between 30% and 100%.

            Average Price Premiums for Organic Food Products sold in Soriana

          Product/price       Price – organic Price – conventional Price Premium
                               (Mex pesos)        (Mex pesos)           (%)
        Wine                       $126                $72               75%
        Rice (1 kg)                 $34                $18               89%
        Beans (1 kg)                $28                $20               40%
        Chickpeas (500 g)           $28                $16               75%
        Pasta                       $50                $37               35%
        Balsamic vinegar            $72                $54               33%
        Milk                        $22                $11              100%
        Source: Tours of Soriana stores.




                                                                                         29
As indicated before, Soriana does import organic
food products directly. Therefore, Canadian
exporters interested in introducing their products to
this supermarket store, may want to establish a
direct business relationship with Soriana. Another
possible strategy to introduce organics into Soriana
may be through Aires de Campo, which as indicated
before also has a significant presence at the Soriana
stores. It is important to point out that as opposed
to Superama and City Market, Soriana is not only
aimed at middle-upper class consumers, but at all
social classes. However, the coverage of Soriana
stores is more extensive, especially with the
purchase of the Gigante retail chain, which allowed
Soriana to open several stores in Mexico City. This
makes Soriana an attractive sales venue for organic
food products in Mexico.

 SAM’s Club

SAM’s Club, which is a club format store owned by Wal-Mart, does not carry many organic
food products. As a result of the visits conducted to SAM’s Club stores, only a few organic
food products were identified such as: spinach, carrots and a soy drink that is sold under
SAM’s Club private label: Member’s Mark. The organic food products are on the same
shelves of conventional food products and therefore are not very easy to identify. The
staff from the store was not very familiar with organics and they didn’t even know what
organic food products were actually available at the store. Considering the above, until
organics have a stronger presence at SAM’s Club stores, at this point SAM’s may not be
the ideal sales venue for Canadian organic food products.


2.3.5) Foodservice

The foodservice sector in Mexico is slightly behind
the retail sector in organics, but is starting to
grow. There is a restaurant in Mexico City
founded in 2004 called Orígenes Orgánicos,
whose menu is 85% organic. The first restaurant
opened by this company is located in one of the
most trendy and bohemian neighborhoods in the
city (La Condesa). In addition, Orígenes
Orgánicos has also opened a new restaurant
called “ECO-Bistrot” located in one of the main
business/commercial neighborhoods in Mexico, which is home to medium and upper class
residents (Polanco). The restaurant also has home-delivery service.




                                                                                        30
The Green Corner also has a small cafeteria within their stores, where they serve meals
prepared with organic products. There are other healthy-oriented Mexican restaurant
chains that offer organic meals in their menus, such as: La Buena Tierra and SAKS.
Currently they don’t promote organic on their menu, except for a small mention that some
products are organic. However, specific products aren’t mentioned in the individual dishes
because production is so unsteady, sometimes they can’t find the organic version and
must buy conventional. These restaurants are interested in introducing more organic
ingredients in their menus and promote the consumption of organics as part of their
marketing strategy. In addition, there are some Mexican hotels such as Misión del Sol,
located in Cuernavaca, Morelos, which is a resort/spa that caters to individuals interested
in healthy activities and offers organic meals in its restaurant menu.

Furthermore, there are some small cafeterias that also offer a few organic products such
as: Cafetería Papalotl and Cafetería Café de Nuestra Tierra. The distribution method for
these restaurants and cafeterias is mostly through local organic producers. Many
restaurants work directly with the producer, visit their farms, and give them unofficial
product certification. Despite of the fact that most of the organic ingredients used by these
restaurants are domestically produced, the restaurants are willing to explore the possibility
of using imported organic food ingredients, provided that the quality and price are right.

3) Consumption

The organic food sector is still a niche market in Mexico, which represents between 1%
and 3% of the total food sector in the country. The market for organics has been growing
but at a slow pace. The largest consumption of organic products in Mexico is concentrated
in large cities such as Mexico City, Guadalajara and Monterrey. Currently, the annual sales
of organic food products in Mexico reach approximately 8.4 billion pesos (CDN$760
million).

The consumption of organic agri-food products in Mexico is growing, but is still not as high
as in Europe, the U.S. or Japan, mainly because of the lack of awareness of these
products. The majority of Mexican agri-food products grown in Mexico are exported to
other countries with a large consumption of organics. According to figures from SAGARPA,
approximately 85% of the organic agri-food products domestically produced is exported,
while only 15% is consumed in the domestic market. Based on figures from organic
certification companies with presence in Mexico, it is estimated that Mexico exports
between US$200 million and US$300 million per year of organic products and the main
export markets are: the U.S., Germany, Italy, the Netherlands, Switzerland, the United
Kingdom and Japan.

The Mexican government has support programs in place to help farmers pay for the
international organic certification needed for export and required by many organic food
stores. Currently, there are more than 15 private organic certification organizations active
in Mexico, including the Organic Crop Improvement Association, Certimex and Naturaland,
among others. When getting certified, farms or producer groups select which countries,
markets, or standards they want to be certified for. For example, for export to Europe, the
certification is for EU Regulation 2092/91, for the U.S., it’s the USDA NOP Final Rule, for
Japan, the Japan Agricultural Standards, for Quebec, the CAQ, etc.



                                                                                          31
As previously indicated, over the last few years the consumption of organic agri-food
products has been steadily growing, but is still in its infant stages. One obstacle to more
widespread domestic consumption of organic food is a general lack of awareness that
organic certification exists and sometimes confusion with regard to the concept of
“organic” among the Mexican population. The concept of organics is relatively new in
Mexico and still not widely known. Many Mexican consumers tend to confuse the term
“organic” with “fat-free”, and do not understand clearly the difference between organic
food and conventional food. Some Mexican lower class consumers even have a negative
connotation with the term “organic”, given that ‘Organico’ is commonly used in Mexico to
label organic chemicals or organic trash. Therefore, language ambiguities and differences
in perception have become an obstacle for Mexican sellers of organics. Usually, only
Mexican consumers with a high level of education know what the term “organic food”
means and the benefits of consuming these types of products.

The low purchasing power and higher prices of organic foods as compared to conventional
foods is another factor that hinders the consumption of agri-food products in Mexico,
especially considering that Mexico is a highly price-driven market. It is estimated that
currently the Mexican domestic market for organic food products amounts to 3 million
people, mostly from the medium and upper classes. In general, products labeled as
“organic” are perceived as healthy by this sector of the Mexican population. It is estimated
that approximately 700,000 Mexican households spend between 1,000 and 1,500 Mexican
pesos (CDN$90 - CDN$140) in the purchase of organic food products, on a yearly basis.

It is estimated that the organic market in Canada is growing at an annual average rate
between 20% and 25%, with annual sales over 3 billion dollars. Currently, the sales of
organics in Canada are considered to be at least 3 times higher than the sales of organics
in Mexico, which are under 1 billion dollars per year. In the U.S., the annual average sales
of organics are estimated at approx. 10 billion dollars.

Impulso Orgánico Mexicano, A.C., which is an association of Mexican producers of organic
products, is planning to implement a government funded promotional campaign in 2009 to
promote the benefits of organics and the consumption of Mexican certified organic
products. The campaign would be aimed towards Mexican housewives and new families
(double income – no kids), from the middle and upper social classes, and would include
promotional activities at points of purchase, billboards, etc. While the campaign will be
mainly focused on Mexican organic products, it would help to increase the awareness in
general about the benefits of organics among the Mexican population, so this would also
be helpful for imported organic food products. For more information about Impulso
Orgánico Mexicano, A.C. and its promotional campaign, please check section 6.5.

According to the Center of Economic, Social & Technological Research for Agro-Industry &
World Agriculture of the University of Chapingo (CIESTAAM), other factors that are
restricting a larger consumption of organics in Mexico are: the lack of culture for a healthy
food consumption and environment protection, and a lack of confidence in the quality of
the products.




                                                                                          32
3.1) Profile of organic consumer

As a result of the research conducted, it was determined that generally speaking, there
are 2 types of consumers of organic products in Mexico:

1. One group is integrated by alternative “hippy” consumers, vegetarians and people with
health issues or special dietary needs. Despite the fact that people in this group prefers
organics, it does not mean that they have the purchasing power to purchase these
products.

2. The second group is integrated by educated adults between 20 and 60 years old from
the medium and high social classes that are concerned about their health, the
environment, the animal welfare and/or the sustainability of the agriculture economy. This
group of consumers believes that food products should be naturally grown, without the
use of pesticides, fertilizers, hormones, antibiotics or any other chemical product, which
they consider harmful for human health. This group of consumers understands the
benefits of organics and has the purchasing power to buy these types of products.
Consumers in this group are prepared to pay premium prices for organics because they
know they are getting premium quality products in return. This is the group of consumers
that are more likely to purchase imported organic food products from Canada.

Some of the companies interviewed as part of the research for the study, such as Aires de
Campo and Atari indicated that in general, Mexican consumers of organic products believe
these are healthier, of a better quality than conventional foods and environmentally
friendly. Some of these consumers also purchase organic products as a sign of solidarity
towards small farmers dedicated to the production of organics. Another company
interviewed (Natucomer) pointed out that Mexican consumers of organics are people
willing to pay a premium price in exchange of maintaining a healthy nutrition.


According to research conducted by the Mexican Organic Production System Committee,
among the main reasons why Mexican consumers buy organic products are:

   •   Consumers feel organic products are good for their families
   •   Organic products have less chemicals
   •   Organics are environmentally friendly
   •   Flavor
   •   Product presentation
   •   Curiosity
   •   Animal welfare

Based on the interviews conducted as part of the study, it was found that on average,
from the total food products purchased on a monthly basis by organic consumers at least
25% are organics. Of course, this percentage goes up to 90-100%, in the case of those
people that only consume organic products.




                                                                                       33
3.2) Retail sales of organic

In Mexico, the commercialization of organic food products is made through traditional
distribution channels, which usually means placing the products on the shelves of the
stores, without a promotional campaign behind to support and point out the competitive
advantages of organic products. This lack of promotional activities is one of the reasons
why the growth in the consumption of organic products in Mexico is lower than the growth
in consumption reported in other markets such as Canada and the U.S.

Figures from the Mexican Organic Production System Committee indicate that the main
sales venues for organic products in Mexico are traditional supermarkets and natural
product stores, and only a small amount is sold directly between the producer and the
consumer, as shown in the following graph.
                    Where are these Organic Products Selling in Mexico
                     Sales venues for organic products in Mexico
                                        Directly betw een
                                          producer and
                                            consumer         Natural products
                                                3%                stores
                                                                   48%




                          Traditional
                        supermarkets
                             49%

Source: Comité Sistema Producto Orgánicos

As previously indicated, there are several stores within major cities, which are specialized
in organics such as: Aires de Campo, The Green Corner, Yerbabuenamarket, Orígenes
Orgánicos, Purorganiko and the Green Market, among others. Usually, the areas where
these stores are located are home to well-educated, well-paid residents who represent the
few Mexicans aware of organics and able to afford them. Some of these stores such as
The Green Corner, give preference to local production and hence if the product is available
domestically, they tend to purchase domestically first. However, these stores also try to
offer a complete line of products to their customers. Therefore, if the product is not
available locally, they are open to purchase imported products. In addition, some
healthy/natural food store chains in Mexico such as: Nutrisa and General Nutrition Center
(GNC), also carry organic products.




                                                                                         34
Organic food products (both domestic and imported) are also gaining shelf space within
Mexican supermarkets. Some upscale supermarket stores in Mexico such as Superama and
City Market offer organic food products within their stores. Organic food products (both
domestic and imported) can also be found in the gourmet section of the main
departmental stores in Mexico such as Palacio de Hierro and Liverpool.

There are also some informal organic markets and street markets (tianguis) that offer
organic products, such as: Tianguis del Círculo de Producción y Consumo Responsable in
Guadalajara, Jalisco; Mercado Ecológico Ocelotl, in Xalapa, Veracruz.; Expo Venta de
Productos Orgánicos y Naturales “El Pochote”, in Oaxaca; Tianguis Orgánico Chapingo in
Estado de México; Granja Orgánica, Comercio Justo México and Red Bioplaneta in Mexico
City. However, most of the organic products sold in these markets are local and they only
carry very few imported organic food products.

According to data from the Mexican Consumer Protection Agency (PROFECO), among the
organic agri-food products with higher demand in Mexico are: fruits, vegetables,
chocolate, dairy products, herbs, tea, cereals, coffee, rice, juice, preserved fruits and
meat. Domestic production supplies a significant portion of the Mexican organic consumer
market (especially fresh produce, meat, eggs, coffee and honey). However, the presence
of imported organic products in the Mexican market is also significant and is growing
(especially processed organic food products). In fact, one of the imported organic food
products most commonly found in Mexican health stores is Canadian organic flax.

Basically all the companies interviewed as part of the study concurred that over the last
years the sales of organic food products in Mexico have been growing and are expected to
continue growing towards the future. Some companies such as Aires de Campo, The
Green Corner, Ki-An and Orígenes Orgánicos indicated that sales of organics have grown
because more Mexican consumers are becoming conscious about their health and the
environment. Others like Impulso Orgánico attribute the growth in sales of organics to the
activities implemented by associations and the government to promote organics.


4) Market-entry considerations

The research process of the study also included in-depth interviews with organic
certification agencies with presence in Mexico and government agencies involved in the
regulation of organics. These interviews were useful to gather information about the
current and upcoming regulations for organics in Mexico, as well as the certification
process for organics. The following sections reflect the information gathered through these
interviews, as well as the consultations and analysis made of the organic legislation both
in Mexico and in Canada.




                                                                                        35
4.1) Mexico’s regulations and certification

4.1.1) Update on the Regulations expected to be issued for the implementation
of the Mexican Law of Organic Products

Mexico’s regulatory efforts related to organic production began in 1995 with the
publication of the Mexican Official Standard: NOM-037-FITO-1995, which establishes
specifications for organic agricultural production and processing. Following its publication,
however, the Mexican government concentrated its efforts on marketing and promotion
strategies despite the fact that they had yet to establish a legal framework for regulating
organic production. On practice, NOM-037 was never really enforced or recognized. In
fact, based on the provisions of the revised Mexican Plant Health Law, which was
published a few years ago, this Standard is no longer in effect. Due to the lack of a legal
framework for organics, several food products were sold in Mexico (and in some cases
continue to be sold) as “organic”, without having a proper organic certification.

With the purpose of establishing an adequate legal framework for organics in Mexico, on
February 7, 2006, the Mexican government published its Law of Organic Products, after
years of legislative revisions. The new law creates a regulated framework for the
conversion, production, processing, manufacturing, preparation, storage, identification,
packaging, labeling, distribution, transport, commercialization, verification and certification
of organic products. SAGARPA is assigned as the government department in charge of
verifying compliance with and enforcing the Law. One of the main objectives of the Law is
to address the need of establishing control and supervision of organic certification, in
order to provide certainty to the consumers that the organic products they purchase are
really organic, establishing economic sanctions to companies/individuals that sell products
as organic, without complying with the provisions of the Law.

The Mexican Organics Law requires that all products “claiming” to be organic be certified
by an internationally recognized organization. In addition, the Law indicates that mutual
recognition agreements would be pursued with Mexico’s main trading partners to facilitate
international trade of organic products. The government’s goal is to develop a program
that complies with all of their trading partners’ regulations (U.S., Japan, Europe, Canada,
etc.).

Additionally, the Law calls for the creation of specific HS Codes to identify imports of
organic products and the creation of a Mexican organic seal to identify those organic
products that comply with the Law. The Law also created a National Council of Organic
Production, integrated by government, producers, processors, traders, certification
agencies and researchers, with the purpose of fostering the development and
commercialization of organic products and crops in Mexico. Furthermore, the Law
establishes the basis for a national promotional campaign of organic foods and support
campaigns that encourage the constant supply and diversity of organic products in the
domestic market.




                                                                                            36
In terms of imports, the Law states that when a product labeled as organic wants to be
imported into Mexico, it has to come from countries where there are organic regulations
similar to those existing in Mexico or that the products be certified by an organic
certification agency approved by SAGARPA. The Law also indicates that imported organic
products must maintain their integrity from the time of the importation until they reach
the final consumer.

Mexico’s Organics Products Law is an effort to organize and regulate organic production in
Mexico. Based on traditional Mexican law development, the new Organics Law sets the
grounds for a series of complementary additional Regulations and Standards that will need
to be developed to achieve the objectives defined in the Law. In fact, the Regulations
(Reglamento) of the Organic Products Law are currently under development and is
expected to be published in the near future. In general, the purpose of the proposed
regulations is to establish specifics for the implementation of the provisions included in the
Law. It is important to point out that without these regulations the provisions of the Law
cannot be fully implemented.

The draft regulations establish the basis for the coordination of SAGARPA with other
government departments such as the Mexican Secretariat of Environment (SEMARNAT),
for the implementation of the Law. One of the objectives of the proposed regulations is to
guarantee the organic identity of products and define the criteria for those agencies
interested in being approved to conduct the certification of organic products. The draft
regulations also establish the characteristics of the certificate to be granted to organic
products and the description of those documents that must be used to facilitate the
traceability of organic products both in the domestic and the international market.

In addition, the draft regulations specify the conditions for the use of the Mexican organic
seal, the specifications for the promotion of organic production/marketing, and the
treatment to be applied to imported organic product to preserve their organic integrity. In
this subject, the draft regulations state that only in those cases where there are no
applicable measures for the organic production that guarantee the integrity of the organic
products or those measures applied are not sufficient, appropriate security measures
would be taken for imported organic products.

The draft regulations have been already approved by the Mexican Federal Commission of
Regulatory Improvement (COFEMER); however, the draft regulations are still under review
of the Mexican Sanitary, Food Safety and Food Quality National Service (SENASICA), which
is the agency within SAGARPA responsible for the oversight of organics. It is expected that
the regulations be published/enforced soon; however, there is still not a specific date.

In the case of Canada, currently the provinces of British Columbia and Quebec have
regulations in place governing organic production systems. For the remaining provinces,
voluntary systems are relied upon. Therefore, multiple organic standards are currently
used to certify products as organic in Canada and organic producers frequently pay
multiple fees for several different certification systems.




                                                                                           37
As an effort to establish a single Canada National Organic Regime, Canada has developed
organic products regulations that will incorporate the current voluntary system into a
federally regulated framework establishing mandatory provisions for the production and
trade of organic products.

The purpose of the regulations is to establish a system by which the CFIA as competent
authority will regulate the use of the “Canada Organic” agricultural product legend.
Additionally, consumers would be protected from deceptive and misleading labeling
practices through regulatory controls. The CFIA will verify compliance with and enforce the
regulations.

Canada’s Organic Products Regulations were published in December 2006 and were
supposed to come into effect in December 2008. However, the regulations were opened
again for review. The revised Regulations were published on February 14, 2009, providing
a 75-day period so that any interested persons can make representations concerning the
proposed Regulations, which are scheduled to come into force on June 30, 2009. It is
worth mentioning that under the Regulations, Canadian organic producers are also
required to comply with certain Canadian Standards.


4.1.2) Equivalency of Mexican organic legislation with Canadian standards

Once the Mexican Organic Products Regulations and the Canadian Organic Products
Regulations are implemented, it will be important to seek an equivalency agreement
between both countries to recognize each other’s system, in order to facilitate the access
for Canadian organic products to Mexico. In fact, this is an objective set out in both
regulations. This equivalency agreement would have to be negotiated by the competent
authorities of both countries. The ultimate goal of this equivalency agreement would be
that the Canada organic logo be accepted and recognized by the Mexican authorities as a
valid certification for Canadian organic products to be sold in Mexico.

It is important to mention that both the Mexican and Canadian draft organic products
regulations have several similarities that should facilitate the development of a recognition
agreement. Following is a comparative analysis of the similarities between both
regulations that could be used as a reference for the negotiation of the recognition
agreement.




                                                                                          38
                           Similarities between the Mexican and Canadian draft
                                        organic products regulations

          Subject                Mexican Law and draft regulations                  Canadian draft regulations
Distinctive organic seal       Contemplates the creation of a Mexican         Contemplates the creation of a “Canada
                               organic seal to identify those products that   organic regime” logo to identify those
                               are really organic. The organic seal can       products that are certified as organic.
                               only be used by those products that            Any organic product may bear the
                               contain at least 95% of certified organic      agricultural product legend except for a
                               ingredients.                                   multi-ingredient product that contains
                                                                              less than 95% organic products.
Organic certification bodies   Contemplates federal regulation of organic     Contemplates federal regulation of
                               products with certification delivered by       organic products with accreditation and
                               accredited private certification agencies.     certification delivered by accredited
                               The draft regulations describe the criteria    certificated bodies, including the criteria
                               for the approval, suspension and               to be applied for the accreditation,
                               cancellation of private agencies interested    suspension and cancellation of
                               in certifying products as organic. The         certification bodies.
                               approvals of the certification agencies
                               would be valid for 1 year and could be
                               subject to renewal.
Certification process          Indicates that those individuals interested    Indicates that a person who wishes to
                               in having their products certified as          have an agricultural product certified as
                               organic would have to request such             organic shall apply in writing to a
                               certification from an accredited/approved      certification body for a certificate
                               certification agency, describes the            confirming that the product is an
                               information that the organic certification     organic product, within 12 months
                               should include, and states that such           before the day on which the product is
                               certificate would be valid for one year.       expected to be marketed. A person who
                                                                              wishes to package and label an organic
                                                                              product shall also apply for a certificate
                                                                              from a certification body. It also
                                                                              indicates that the organic product
                                                                              packaging and labelling certification
                                                                              remains in effect for a period of 12
                                                                              months.
International marketing        Indicates that when a product labeled as       Indicates that a product may be
                               organic wants to be imported into Mexico,      imported and marketed in Canada as
                               it has to come from countries where there      organic if it meets either of these
                               are organic regulations similar to those       requirements: 1) It is an organic
                               existing in Mexico or that the products be     product under the Regulations 2) In the
                               certified by an organic certification agency   case of a product originating from a
                               approved by SAGARPA. The regulations           country with which the CFIA has
                               also indicate that imported organic            entered into an agreement for
                               products must maintain their integrity from    imports/exports of organics, that it is
                               the time of the importation until they reach   certified in accordance with the
                               the final consumer.                            agreement by a certification body
                                                                              recognized by that country. If it comes
                                                                              from a country that has not an
                                                                              agreement with Canada, it can be
                                                                              imported if certified by a certification
                                                                              body recognized by a country with
                                                                              whom Canada has an agreement.



                                                                                                            39
            Subject          Mexican Law and draft regulations                    Canadian draft regulations
Labelling                  Indicate that only those products that          Indicates that the labels or if applicable
                           comply with the Mexican organics                the advertisement for an organic
                           legislation would be able to be identified as   product may contain the words:
                           organic in their labels or advertisement        “organic”, “organically grown”,
                           material. The label must state the number       “organically raised”, “organically
                           of organic certificate, the identification      produced” or similar words, and shall
                           number of the organic certification             contain the name of the certification
                           organization that issued the certificate, as    body that has certified the product. In
                           well as a statement saying that the             the case of an imported product for
                           product is free of genetically modified         which the Canada Organic logo is used,
                           organisms.                                      the statement “Product of” or
                                                                           “Imported” must also be included in the
                                                                           label.
Equivalency agreements     Contemplates the pursue of equivalency          Contemplates the pursuit of recognition
                           agreements for the recognition of the           agreements with trading partners to
                           Mexican organics control system in order        facilitate fair and equitable trade.
                           to facilitate exports of Mexican organic
                           products and assess the organics control
                           system applied in those countries
                           requesting equivalency agreements with
                           Mexico. Points out that the National
                           Council of Organic Production would
                           collaborate with SAGARPA in the
                           development of the said equivalency
                           agreements.

       As previously indicated both the Canadian and Mexican organic products regulations are
       still under review and are yet to be enforced. Therefore, the draft regulations may still be
       subject to changes; however, it appears that the basic principles of both regulations are
       the same, which should facilitate the development of an equivalency agreement.


       4.1.3) Mexico’s certification process

       In order to be certified as organic, food products have to comply with strict standards
       established by internationally recognized organizations such as the International
       Federation of Organic Agriculture Movements (IFOAM). In order to certify the compliance
       with these standards, the producers are subject to a process of analysis and tests, through
       which approved certification agencies monitor and confirm that the products comply with
       applicable standards.

       The certification process of organic products includes a thorough analysis of water, soil,
       handling practices, manufacturing practices, among others and the organic certification is
       not provided until all the requirements are properly fulfilled, which in some cases can take
       several years. The certification agencies have to comply with the ISO Guide 65 and be
       approved by IFOAM.




                                                                                                         40
Most of the internationally recognized certifying agencies in Mexico are foreign, except for
one Mexican certifying agency called CERTIMEX. Some certifiers travel from the host
country to certify, but now many have certified third parties in Mexico City to act on their
behalf. The producer chooses a certification program based on which country they plan to
export their products. For example, if their customer is in the U.S., they will use a program
such as OCIA, QAI or OTCO. Section 6.7 of this study includes a list of approved organic
certification agencies that operate in Mexico.

         Importance of the organic certifying agencies that operate in Mexico,
                             by country of origin (2005)

                                                          Certified Production Units
          Certifying Agency           Country of Origin             (2005)
                                                           Number            %
       Bioagricert                            Italy          259           34.26
       Certificadora Mexicana de
       Productos y Procesos                                  168           22.22
                                             Mexico
       Ecológicos, S.C.
       (CERTIMEX, S. C.)
       Organic Crop Improvement
                                          United States      109           14.42
       International (OCIA)
       Institute for Marketecology
                                           Switzerland       84            11.11
       (IMO Control)
       Naturland                            Germany          61             8.07
       Quality Assurance
                                          United States      26             3.44
       Internacional (QAI)
       Oregon Tilth Certified
                                          United States      23             3.04
       Organic (OTCO)
       IMO Control Bolivia                   Bolivia          5             0.66
       Aurora Certified Organic
                                          United States       4             0.53
       (ACO)
       Guaranteed Organic
       Certification Agency               United States       3             0.40
       (GOCA)
       Demeter Bund                         Germany           2             0.26
       California Certified Organic
                                          United States       2             0.26
       Farmers (CCOF)
       BCS ÖKO Garantie                     Germany           2             0.26
       LACON                                Germany           2             0.26
       International Certification
       Services, Inc. (ICS) - Farm        United States       2             0.23
       Verified Organic (FVO)
       Florida Organic Growers
                                          United States       1             0.13
       Certified (FOC)
       KRAV                                 Sweden            1            0.13
       Organic Forum                      United States       1            0.13
       Others                                                 1            0.13
       TOTAL                                                 756          100.00
       Source: CIESTAAM and Certifying Agencies.




                                                                                          41
4.2) Import requirements and implications for Canadian exporters

Currently, there are no specific imposed requirements for importing organic food products
into Mexico. Organic products only need to comply with the same standards as imports of
conventional food products. The buyer or Mexican importer is the only one who may
require organic certification documentation.

It is important to mention that the Mexican regulations require that grains and seeds
imported in bulk into Mexico be fumigated either at origin or at the point of entry into
Mexico. However, if the product is organic it may be exempted from fumigation, as long as
a certificate proving that the product is organic is presented to the Mexican agriculture
authorities at the border. This is an element to be considered by Canadian exporters
interested in shipping organic grains/seeds in bulk to Mexico.

At this point, any food product that is certified as “organic” by an internationally
recognized certifying agency such as those indicated in section 4.1.3, can be sold as
organic in Mexico. Additionally, according to SENASICA at this point any organic
certification provided in Canada would be valid in Mexico, which basically indicates that
currently any food product sold as organic in Canada, could also be sold as organic in
Mexico. Additionally, there are no specific labelling requirements for organic foods to be
sold in Mexico. These are subject to the same labelling requirements as conventional
foods, such as NOM-051-SCFI-1994, which is the Mexican Official Standard for pre-
packaged food and non-alcoholic beverages.

It is important to point out that all the above is expected to change once the Regulation of
the Mexico’s Organic Products Law comes into force, which is expected to only allow
imports of organic food products if they come from countries where there are organic
regulations similar than those existing in Mexico or if the products are certified by an
organic certification agency approved by SAGARPA. Based on the draft Regulations, any
private agencies interested in certifying products to be sold in Mexico as organic, would
have to be approved by SAGARPA. The Regulations are expected to describe the approval
process that these agencies would have to follow to get approved. Additionally, the draft
regulations are also expected to require that imported organic products maintain their
integrity from the time of the importation until they reach the final consumer.

As previously indicated, the Mexican Organic Products Regulations are still under
development. These are expected to be published soon, but still there is not a specific
publication date defined. The publication of the Regulations is essential, given that despite
the fact there is a Mexican Law of Organic Products in place, it cannot be fully
implemented until the Regulations are published. The Mexican government (SENASICA) is
also working on specific technical guidelines to indicate how certain provisions of the Law
and the Regulations would be implemented (including provisions related to labelling,
imports, etc.). These technical guidelines are expected to be issued after the Mexican
Organic Products Regulations are published.




                                                                                          42
4.2.1) Recommendations to Canadian exporters

Considering that currently there are no specific Mexican import requirements for organic
food products, Canadian exporters interested in shipping organic products to Mexico are
only advised to make sure that their products comply with the applicable Mexican import
requirements for conventional food. If the product to be exported is a grain or seed to
shipped in bulk, Canadian exporters should make sure that a document certifying that the
product is organic, is sent together with the shipment, in order to avoid that the product
be fumigated at the Mexican border. In light of the fact that Mexican border inspection
authorities are not yet very familiar with organic certification documentation or even the
“organic” concept, it is recommended that those Canadian exporters of organic bulk
commodities send a copy of the organic certificate to his Mexican importer before the
shipment is actually sent, so that the importer can show it to the Mexican border
authorities and get their approval for importing the shipment without the need for
fumigation.

Canadian exporters of organics are also advised to be constantly monitoring when the
Mexican Organic Products Regulations and the technical guidelines are published, given
that as previously indicated, these will change the conditions for importing organic food
products to Mexico. Therefore, it is very important that Canadian exporters keep abreast
of these changes to make sure that their organic products comply with the Mexican
regulations. For further information about the Mexican Law of Organic Products and the
proposed regulations, Canadian exporters can consult the Mexican government resources
included in section 6.4 of this study.

5) Opportunities for Canadian exporters

Obesity and diabetes are important health problems in Mexico. In order to reverse this
trend, education and intervention programs have been established to educate Mexicans
about the benefits of healthy eating. As a result, Mexicans are starting to turn to foods
that are considered healthier, such as organic products. In addition, many Mexican
consumers are also starting to demand more organic food because they like the taste and
believe normal food stuffs include toxic substances that will affect their health in the long
run.

The demand for organic foods is also expected to increase as a result of Mexico’s growing
middle class. These trends should ultimately represent great opportunities in the Mexican
market for Canadian exporters of organic agri-food products.

As previously indicated, a significant number of stores specialized in organic food products
are already available in Mexico and it is expected that new stores will continue to be
opened in the future, representing excellent sales venues for Canadian organic products.
Additionally, most of the Mexican supermarkets already carry organics, which are gaining
more and more shelf space, and in some cases have a special section of the store devoted
to them.




                                                                                          43
In light of the fact that organics are at a price premium above the level of the average
consumer, it appears that the short term opportunities lie with the middle-upper classes.
The fact that Mexico is mainly focused on the production of tropical products also
generates opportunities in the Mexican market for cold weather and processed organic
products such as those produced in Canada.

5.1) Main categories of product where opportunities exist

As a result of the research conducted, it was found that opportunities exist for basic
products that are consumed on a daily basis such as: fruits, vegetables, meat, milk and
eggs. Right now organic dairy products are the only ones available on a consistent basis
across all markets. Nevertheless, as previously indicated, Mexican organic farmers
concentrate in the production of the above listed products and therefore Canadian
exporters would face a strong competition from domestic companies.

Opportunities also exist for processed organic food products that are not domestically
produced/readily available in the market, and where Canada appears to have a
competitive advantage as compared to Mexico, such as:

   •   Bakery products (bars, bread, cake/pudding mixes, cookies, pastries)
   •   Beverages (alcoholic beverages, beer, energy drinks, ice-tea, juices, lemonade,
       liquors, wine)
   •   Desserts and sweet products (candies, chocolates, chocolate shakes, ice-creams,
       jellies, maple syrup, marmalades, sorbets)
   •   Dietary supplements (milled flaxseed, flax oil, fibre supplements)
   •   Groceries (baby food, breakfast cereals, honey, ketchup, mayonnaise, mustard,
       pastas, risotto, sauces, seasonings, soups, spices, tea, tofu, vegetable oils,
       vinegar)
   •   Ready-to-eat pulses and seeds (beans, chickpeas, dry roasted pumpkin seeds,
       hempseed, rice, rye buckwheat kernel)

Several of the companies interviewed as part of the research for the study, including Aires
de Campo, The Green Corner, Distribuidora Promesa and Smart Holding México, pointed
out that organic dairy products (soy milk, cheese, butter, etc.), are the organic food
products with the highest demand in Mexico. In fact, according to Natucomer organic
dairy products represent almost 60% of the Mexican organics market. Unfortunately,
Canada is not in a position to take advantage of opportunities for organic dairy products,
since these products are subject to high tariffs, given that Canadian dairy products were
excluded from NAFTA, because of Canada´s supply management system. Other organic
food products that according to the companies interviewed have a high demand in Mexico
are: coffee, cereals, vegetables and groceries.

As further explained in the study, currently (March 2009) the exchange rate of the
Mexican peso vs. the Canadian dollar is more favorable for Mexicans (CDN$1 dlr/MX$11.5
pesos) than the exchange rate of the Mexican peso vs. the U.S. dollar (US$1 dlr/MX$15.0
pesos). This can help Canada to compete with U.S. products in the Mexican market.




                                                                                        44
There are other factors that need to be considered in the equation, such as transportation
costs, which of course are lower for product going from the U.S. to Mexico than product
going form Canada to Mexico, but this could be somewhat offset by the differences in
exchange rates explained above. Therefore, the current exchange rate scenario is an
opportunity that Canadian exporters should take advantage of, in order to introduce their
organic food products to the Mexican market.

In addition, Canada and Canadian products enjoy a good reputation in the Mexican
market. Mexican consumers usually associate Canada with nature, quality and
wholesomeness. Therefore, Canadian exporters of organics should build on this good
reputation to take advantage of the business opportunities that are offered by the Mexican
market.

5.2) Recommendations to Canadian exporters

Entering into the Mexican marketplace requires some investment in time and money, and
requires a long-term vision. Although the Mexican organics market is still behind more
developed countries, the rate of growth and acceptance will likely proceed more rapidly.
This is because it is already a trend in many developed markets and the Mexicans are
simply following their lead for certification programs, advertising, processes and
procedures. In addition, middle and upper class Mexican citizens are traveling to other
countries and seeing the organic phenomenon firsthand, so acceptance may come more
rapidly.

Canadian exporters interested in introducing their organic products in the Mexican market
are advised to participate in trade shows and visit the market to meet potential
partners/clients, understand import procedures, and develop effective entry strategies.
Promotional activities done in co-operation with Mexican retailers are another way to gain
exposure and to better understand the competitive Mexican market.

Canadian exporters are advised to contact local distributors and importers of organic food
products such as: Aires de Campo, Distribuidora Promesa, Smart Holding Mexico and
Marinter, as a crucial step in their efforts to establish themselves in the Mexican market.
Knowing the rules and working with them is not sufficient to bring an organic product
successfully onto the Mexican market. A partner in Mexico that has experience and
contacts in the market and the resources to take care of the import procedures for
organics can be very helpful to introduce Canadian organic products in the Mexican
market. Additionally, a good partner is essential to establish successful business
relationships with local stores specialized in organics such as Green Corner,
Yerbabuenamarket, Ki-An, and Mexican supermarket chains that do not import directly.

In general, Mexican consumers have a positive perception about Canada and Canadian
made products. Therefore, Canadian exporters should take advantage of this leverage to
introduce their organic products in Mexico. In order to be competitive in the Mexican
market, Canadian exporters should focus on promoting the health benefits and trendy
nature of their organic products, while maintaining a competitive price, given that Mexican
customers usually look at the price to quality relationship.



                                                                                        45
Marketing with a clearly targeted strategy is a must for organic products. The organic
market is a special one, partly because premium prices are involved. It requires a special
effort. Considering the strong competition in the Mexican market, it can also be concluded
that on average, Canadian exporters should try to maintain the premium price for their
organic products in a range between 20% and 30% above the price of conventional food
products, in order to be competitive in the market. This percentage of premium price
could of course vary depending of the product, but Canadian exporters could use the said
range as a reference.

Whenever possible, Canadian exporters should join any campaigns implemented by key
players in the Mexican organic market such as Aires de Campo and The Green Corner, to
increase the awareness about the benefits of organics and promote their consumption.
Despite these campaigns are not focused on promoting specifically Canadian organic
products, Canada’s participation would show the country’s interest in developing the
Mexican organics market and at the end, an increase in the consumption of organics in
Mexico would also be positive for Canada’s business interests in the market.

6) Contacts / resources

6.1) Importers and distributors of organic products

Aires de Campo, S.A. de C.V.
Contact: Erika Schlebach, Purchase Manger or Roberto Latapí, Director
Address: Av. San Antonio 16-2, Col. San Pedro de los Pinos
Tel: 2614-0122 Ext 235
Fax: 26140122 Ext 243
E-mail: erika@airesdecampo.com / rlg@airesdecampo.com
Website: www.airesdecampo.com

ATARI, S.A. de C.V.
Contact: Karina Ríos, Manager
Address: Manuel Gómez Morín 300, Col. Del Valle,
San Pedro García, Nuevo León
Tel: (52-81) 8356-4898
Fax: (52-81) 8363-1705
E-mail: krios@valtra.com.mx
Website: www.valtra.com.mx

Comercializadora e Importadora y Exportadora VOMAC, S.A. de C.V.
Contact: Lic. Patricia Carachards
Title: General Manager
Address: Calle Tekal Mz 73 Lt , Fraccionamiento Pedregal de San Nicolas,
Del. Tlalpan, México, D.F.
Tel: (52-55) 5644-6512
Fax: (52-55) 5644-2927
E-mail: vomac@prodigy.net.mx




                                                                                       46
Comercializadora Mexico-Americana, S.A. de C.V.
Contact: Beatriz Tellez, Imports Manager
Address: Av. Nextengo No. 78
Col. Santa Cruz Acayucan
C.P. 02770, México, D.F.
Tel. (52-55) 5371-3117
E-mail: mbtellez@wal-mart.com

Distribuidora Promesa, S.A. de C.V.
Contact: Carlos Fuentes Arestegui
Title: Purchase Manager
Address: Av. Madero 1590, Altos,
CP 21100, Col. Nueva Mexicali, B.C.
Tel. (686) 555-7105
E-mail: info@diproworldorganic.com
Website: www.diproworldorganic.com

Marinter, S.A. de C.V.
Contact: Miguel Angel Rivas
Title: General Manager
Address: Paseo de las Jacarandas# 328, Col. Santa María Insurgentes,
C.P. 06430, México, D.F.
Tel: (52-55) 1946-0440
Fax: (52-55) 1946-0445
E-mail: mrivas@marinter.com.mx
Website: www.marinter.com.mx

Natucomer S.A. de C.V.
Contact: Ing. Carlos Gallardo
Address: Bosques de Ciruelos 186 piso 12, Bosques de las Lomas,
C.P. 11700, México, D.F.
Tel. (52-55) 5251-4786
Fax. (52-55) 5251-4787
E-mail: cgallardo@natucomer.com

Natural Health, S.A. de C.V.
Contact: Ing. Alberto Mares
Title: General Manager
Address: Av. Avellano 697, Col. Bajada de San Martín,
Irapuato Guanajuato, México
Tel. (52-462) 626-5850
Fax. (52-462) 626-5851
E-mail: contacto@naturalhealth.com.mx
Website: www.naturalhealth.com.mx




                                                                       47
Nutricomercializadora, S.A. de C.V.
Subsidiary of Nutrisa (please check the contact information of Nutrisa)

Olkan Comercializadora Import Export, S.A. de C.V.
Contact: Juan HernándezTitle: Director General
Address: Sor Juana Inés de la Cruz No.19333-06, Col. Otay
C.P. 22500, Nueva Tijuana, B.C.
Tel. (52) 664-607-9616
E-mail: amaralolkan_imp_exp@prodigy.net.mx

Smart Holding Mexico S. de R.L. de C.V.
Contact: Manuel Aceves or Jorge García de León Gutiérrez,
Title: Sales Manager
Address: Paseo de los Pinos No. 20, Fracc. El Manantial,
Tlajomulco de Zuñiga, Jalisco
Tel: (52-33) 3770-2310
E-mail: info@smartmexico.com.mx
Website: www.smartmexico.com.mx

Tendencia Gastronómica
Contact: Juan Peña or Omar Pineda
Title: Finance Manager
Address: Av. 1ero. de mayo 226-bis
Col. San Andrés Atoto, Naucalpan
Tel: (52-55) 2122-7100 Ext 336
Fax: (52-55) 2122-7100 Ext 317 y 378
E-mail: ventas@t-g.com.mx
Website: www.t-g.com.mx

Tratecom, S.A. de C.V.
Contact: Lic. Dinora Domínguez
Title: Import Manager
Address: Mazatlán 152 Int. 1
Col. Condesa, México, D.F.
Tel. (52-55) 5286-9627
E-mail: ddominguez@foodforlife.com

Ucero
Contact: Ismael Ochoa, Director General
Address: Xochicalco 447
Col. Narvarte
03020 México, D.F.
Tel: (52-55) 5669-3305
E.mail:info@iducero.com.mx
Website: http://iducero.com.mx




                                                                          48
                                                               


6.2) Mexican stores that carry organics

Alimentos orgánicos e integrales
Contact: Gabriela Jiménez
Title: Organics Specialist
Address: Laura 83, Col. Villa de Cortés,
CP. 03500, México, D.F
Tel: (52-55) 5579 2525

Best Health Arquitectos Corporales
Address: Av. Patria 520-A
Zapopan, Jalisco
Tel: (52-33) 3610-2361
E-mail: yael@besthealth.com.mx
Website: www.besthealth.com.mx

Centro UK´U´X Nutracéuticos y Orgánicos de México
Address: Río San Angel 69, Col. Guadalupe Inn,
Del. Alvaro Obregon, México, D.F.
Tel. (52-55) 5661-1519
E-mail: centroukux@alestra.net.mx
Website: www.centroukux.com

City Market (Comercial Mexicana)
Contact: Lic. Santiago García
Title: Director
Contact: Ivonne Herrera
Title: Organics Supervisor
Address: AV. Adolfo López Mateos No. 201
Col. Santa Cruz Acatlán
Cabeza de Juárez, Edo. De México
Tel. (52-55) 5270-9145
Website: www.citymarket.com.mx

General Nutrition Center
Contact: Marco Antonio Canavate
Title: Manager
Address: Altamirano No.46 Loc. 4-K
Col. Tizapan
C.P. 01090, México, D.F.
Tel. 01800-462-8483
sugerencias@gnc.com.mx
 

 



                                                           
                                                    49 
Greenery
Contact: Francisco Espinal
Title: Director GeneralAddress: Plaza Vivendi Américas"
Local 1, Av. Bonampak
Cancún, Quintana Roo
Tel: (52-998) 883-2839
E-mail: info@greeney.com.mx
Website: www.greenery.com.mx

Ki-An
Contact: Irma Jiménez, Director
Address: Ferrocarril de Cuernavaca 2807, Col. San Jerónimo Lídice,
C.P. 10200, México, D.F.
Tel. (52-55) 1520-1849 / 5683-2764
E-mail: g.lopez@ki-an.com.mx
www.ki-an.com.mx

La Buena Nutrición
Contact: Guillermina Olivares
Title: Manager
Address: Parroquia 302-B, Esq. San Francisco,
Col. Del Valle, CP 03100,
México, D.F.
Tel. (52-55) 5534-5245

La Canasta Orgánica
Contact: Gilberto Rustrian
Title: Director General
Address: 21 de Marzo No. 1 Col. Villa San José
Tel: (52-55) 5523 3738 / (52-55) 8501-3354
E-mail: mollisdere@yahoo.com
Website: www.lacanastaorganica.com.mx

La Manzana Sana
Contact: Adriana Rodriguez
Title: Manager
Monterrey, Nuevo León
Tel: (52-81) 8315-3900
E-mail: adrianarodriguez@lamanzanasana.com

La Ruta Orgánica
Contact: Yolanda Kelly
Address: Mina 46
Col. del Carmen, Coyoacán
Tel. (52-55) 5484-8303
E-mail: rutaorganica@prodigy.net.mx




                                                                     50
Naturalia
Contact: Oscar Moctezuma
Title: Director General
Address: Petén 437, Col. Narvarte
CP 03300, México, D.F.
Tel: (52-55) 5559-6330
E-mail: info@naturalia.org.mx

Nutrisa
Contact: Gerardo del Olmo
Title: Purchase Manager
Address: Periferico Sur 5482, Col. Pedregal de Carrasco
CP 04700, México, D.F.
Tel. (52-55) 5665-5802 ext. 6637
Fax. (52-55) 5665-9248
E-mail: mkt@nutrisa.com / ghmartinez@nutrisa.com
Website: www.nutrisa.com

Orígenes Orgánicos, S.A. de .C.V
Contact: Florencia Santini
Title: Manager
Address: Plaza Popocatepetl 41,
Col. Condesa, México, D.F.
Tel: (52-55) 5208-6678
Tel: (52-55) 5525-9359
E-mail: contacto@origenesorganicos.com
Website: www.origenesorganicos.com

Purorganiko
Contact: Adriana Vázquez
Title: Owner
Address: Juan Sebastián Bach 5036,
Col. La Estancia, CP 45030,
Zapopan, Jalisco
Tel: (52-33) 3629-1910
info@purorganiko.com.mx
Website: www.purorganiko.com.mx

Sano Mundo
Contact: Laura Sosa
Title: Manager
Address: Cerrada de Felix Cuevas No. 52
Col. Del Valle, México, D.F.
Tel: (52-55) 5575-2329
E-mail: info@sanomundo.com.mx
Website: www.sanomundo.com.mx




                                                          51
Shaya Michán
Contact: Mauricio Vaca
Title: Manager
Address: Av. División del Norte No. 997,
Col. Del Valle, CP 03100, México, D.F.
Tel. (52-55) 5669-0455
Website: www.shayamichan.org

Soriana
Contact: Lic. Ricardo Martín Bringas
Title: Director General
Address: Alejandro de Rodas 3102-A
Col. Cumbres 8vo Sector
C.P. 64610, Monterrey, N.L.
Tel. (52-81) 8329-9000 / (52-81) 8329-9004
E-mail: rmartin@soriana.com.mx
Website: www1.soriana.com

Superama (Wal-Mart)
Contact: Lic. Federico Javier Arceo
Title: Director of Operations
Address: Boulevard Manuel Ávila Camacho No. 647
Col. Periodista, México, D.F.
Tel. (52-55) 2629-9202
E-mail: mfarceo@wal-mart.com
Website: www.superama.com.mx

The Green Corner
Contact: Bensi Levy, Director General
Tel: (52-55) 1054-7699 / (52-55) 5286-3939
Fax: (52-55) 1054-7662
Website: www.thegreencorner.org

Condesa store                                Polanco store
Address: Mazatlán Num. 81                    Address: Homero 1210
locales 1, 2, y 3                            Casi esquina con Moliere
Esq. Fernando Montes de Oca                  Col. Polanco.
Col. Condesa.                                México, D.F.
México, D.F.

Coyoacán store                               Cuajimalpa store
Address: Av. Miguel Angel Quevedo No.        Address: José Ma. Castorena No. 395
353                                          3er. Piso, Plaza Cuajimalpa
Esq. Prolongación Zaragoza                   Col. Cuajimalpa Centro.
Col. Romero de Terreros.                     México, D.F.
México, D.F.




                                                                                   52
The Green Market Nutrición Gourmet
Address: Ave. Vasconcelos 345-local 123 y 124
Plaza TANARAH, Garza García N.L.
E-mail: comentarios@thegreenmarket.com.mx
Website: www.thegreenmarket.com.mx

Vegetarian
Contact: Ignacio Samper
Title: Owner
Address: San Pedro Garza García, Nuevo León
Tel: (52-81) 8114-9811

Yerbabuena Market
Contact: Erika Florurnoy
Title: Manager
Address: Plaza Santa Teresa,
Periferico Sur 4020 loc. 1a secc. B,
México, Distrito Federal
Tel. (52-55) 5568-1313 / (52-55) 5568-0800


6.3) Mexican restaurants that offer organics

Cafetería Café de Nuestra Tierra
Address: Álvaro Obregón # 100 Col. Roma
México, D.F.
Tel: (52-55) 5564-8034

Cafetería Papalotl
Address: Comercio y Administración # 40, Col. Copilco, Universidad
México, D.F.
Tel: (52-55) 5658-7510

ECO-Bistrot
Address: Virgilio 9, Local 9 (entrada por Oscar Wilde)
Col. Polanco, México, D.F.
Tel. (52-55) 5281-5080
Website: www.ecobistrot.com

La Buena Tierra
Address: Atlixco 94 local A
Col. Condesa, México, D.F.
Tel. (52-55) 5211-4242
Website: www.labuenatierra.com




                                                                     53
Misión del Sol
Address: Av. Gral. Diego Diaz Gonzalez 31
Col. Parres C.P. 62550
Cuernavaca, Mor., Mexico
Toll Free. (866) 875 0380
Website: www.misiondelsol.com

SAKS
Address: Insurgentes Sur 1641,
Col. San José Insurgentes, México, D.F.
Tel. (52-55) 5615-1500
E-mail: info@saks.com.mx
Website: www.saks.com.mx

6.4) Mexican government resources

Ing. Lidia Barrios
División de Orgánicos (Organics Division)
Dirección General de Inocuidad Agroalimentaria, Acuícola y Pesquera
SENASICA, SAGARPA
Guillermo Pérez Valenzuela 127,
Col. Del Carmen Coyoacan
C.P. 04100, Mexico, D.F.
Tel. (52-55) 5905-1000 ext. 51511
E-mail: lidia.barrios@senasica.gob.mx
www.senasica.gob.mx

Mexican Law of Organic Products http://www.diputados.gob.mx/LeyesBiblio/pdf/LPO.pdf

Draft Regulations of the Organic Products Law
http://www.cofemermir.gob.mx/inc_lectura_regioncontentall_text.asp?submitid=14702

6.5) Industry associations or organizations promoting organics in Mexico

 Impulso Orgánico Mexicano, A.C.

Impulso Orgánico Mexicano, A.C. is an association of Mexican producers of organic
products established in May 2008, with the purpose of developing consumption markets
for Mexican organic products (either fresh or processed), both at a domestic and
international level. In order to achieve this goal, Impulso Orgánico Mexicano conducts
promotional activities to allow the easy identification of organic products in final points of
sale, as well as publicity activities aimed at generating interest among Mexican and
international consumers to purchase Mexican organic products.

Impulso Orgánico Mexicano, A.C. is planning to implement a promotional campaign for
Mexican organic products with government funds from the Mexican Secretariat of
Agriculture, aimed at accomplishing the following objectives:



                                                                                           54
   •   Disseminate the benefits of the “organic” concept and the advantages that these
       products offer for human health and the environment
   •   Secure spaces for Mexican organic products and increase the variety of Mexican
       organic products available
   •   Increase the sales of Mexican organic products
   •   Easy identification by the consumers of Mexican certified organic products
   •   Introduce a “Mexican Organic Supreme Quality Brand”

The campaign would be aimed towards Mexican housewives and new families with double
income – no kids (DINK), from the A, B and C+ social classes. The basic premise of the
campaign would be: If is Organic….it’s Healthy.

The campaign would include activities at the points of purchase of organic products,
including graphic materials to be placed at the shelves where organic products are
exhibited for sale (stoppers, headings, banners, etc) and in the parking lot of the store;
hostesses at the stores that explain the benefits of Mexican organic products; flyers;
billboards; website with information about the concept of “organic”, Mexican organic
products etc.

Impulso Orgánico Mexicano, A.C.
Contact: José Ortiz Haro
Address: Av. Insurgentes Sur 1971, Col. Guadalupe Inn,
México, D.F.
Tel. (52-55) 5523-9685
Fax. (52-55) 5523-9686
E-mail: johb@fvtcom.com
www.impulsoorganicomexicano.com

 Asociación de DANA, A.C.

Non-profit organization established in 1987 in San Cristobal de Las Casas, Chiapas. Their
mission is to support sustainable productivity in small farms. They not only produce
organic food products but also offer consultancy and guidance to establish organic farms.
DANA has established several small vegetable producing areas in Chalco and Tlahuac,
near Mexico City. The organization also purchases other organic foods to sell at “La Granja
Orgánica” store, which is located within the Ecological Park of Loreto y Peña Pobre.

DANA
Address: San Fernando 765 local 4c, Col. Peña Pobre
Tel: (52-55) 5666-7366
Fax: (52-55) 5666-7367
E-mail: danad@mail.internet.com.mx




                                                                                        55
 ANIPRON

ANIPRON is the National Association of the Natural Products Industry, which is the most
important association in Mexico committed with the growth of the natural product
market. One of the main objectives of ANIPRON is to promote the commercial exchange
and to broaden the consumption of natural products among the population, including
organic products.

ANIPRON
Contact: Lic. Silvia Alvarez, Executive Manager
Tel. (52-55) 5663-1295
Fax. (52-55) 5662-2221
E-mail: gerencia@anipron.org.mx
www.anipron.org.mx

 México Calidad Suprema, A.C.

Mexico Calidad Suprema is an organization that promotes the use of an official seal
developed by the Mexican government to identify high quality Mexican food products in
the domestic and international markets. This association is constantly developing activities
to promote Mexican organic food products.

México Calidad Suprema, A.C.
Contact: Lizet Quintero
Tel. (52-55) 5900-3055
E-mail: rsandoval@mexicocalidadsuprema.com.mx
www.mexicocalidadsuprema.com.mx


6.6) Promotional events, conferences and tradeshows appropriate for Canadian
exporters of organics

 Exporgánicos

Exporganicos is the main event in Mexico for organic agri-food products. The event is
organized every year (between October and November), by the Agriculture Marketing
Support and Services Agency (ASERCA), which is part of SAGARPA. The venue of the
event has been rotated among different Mexican states; however, the last 2 editions have
been celebrated in Mexico City.

The event includes an exhibition area (approx. 100 booths) where Mexican organic
companies exhibit their products. In some cases an exhibition area has been set where
organic food products from other companies are exhibited. The event also includes taste
demos so that visitors can taste the organic products exhibited. Additionally, the event
includes a series of conferences and sessions on relevant topics related to organics.




                                                                                         56
The event has an affluence of approximately 5,000 visitors, including technical people,
national/international buyers of organic products and general public. The last Exporganicos
(7th edition), took place from November 24-26, 2008 in Mexico City. The dates for the 8th
edition of Exporganicos have not been established yet, but will likely take place at the end
of 2009.

Although Exporganicos is an event mainly focused on promoting Mexican organic
products, it is a good venue for Canadian organic exporters to meet with Mexican buyers
of organic products and get familiarized with the market.

Exporganicos
Contact: Ms. Arely Flores
Tel. (52-55) 3871-7300 ext. 50143 / 50148
E-mail: arely.flores@aserca.gob.mx


 Expo Internacional Naturista

Expo Internacional Naturista is a show organized by the
National Association of the Natural Products Industry
(ANIPRON). This expo is a unique show for all the natural
products companies. The 2008 edition of the show reported
an attendance of 23,250 visitors including 1,600 buyers. The
show is a good opportunity to have direct contact with
qualified Mexican buyers from important retail and specialty
stores, and to launch new products in the Mexican market.

XII Expo Internacional Naturista Anipron
Date: February 13-15,2009
Venue: World Trade Center, Salón Maya 1, Mexico City
Tel. (52-55) 5663-1300 / (52-55) 5663-1295
Fax. (52-55) 5662-2221
E-mail: eventos@anipron.org.mx / contacto@anipron.org.mx
Website: www.anipron.org.mx

 Alimentaria Mexico

Alimentaria is the largest international food and beverage show in Mexico. The show is
carried out in Mexico City, with an exhibition area of 12,000 m2, more than 400 exhibitors
and more than 10,000 visitors. This trade show is a good alternative for exhibiting and
establishing business contacts, given that many of the visitors to the show are professional
food importers/distributors, as well as buyers from the retail, foodservice and food
processing sectors in Mexico. According to stats from the show organizers, approximately
70% of the professional distributors/buyers that attend Alimentaria recommend or make
food purchase decisions. In addition, approx. 50% of the exhibitors are international
companies that are usually grouped by country/pavilion. Since Alimentaria was first
established in Mexico, there has been presence of Canadian companies at the show.




                                                                                         57
During the past 2 editions of Alimentaria there was a special section where organic food
products were exhibited and the 2009 edition will also have a special pavilion for organics.

Alimentaria Mexico 2009
Date: June 2-4, 2009
Venue: Centro Banamex, Mexico City
For information please contact:
E.J. Krause & Associates Inc.
6550 Rock Spring Dr. 500
Bethesda, MD 20817-1126, USA
Shane Poblete
Tel. (301) 493-5500
Fax. (301) 493-5705
E-mail: poblete@ejkrause.com
www.alimentaria-mexico.com

 Expo ANTAD

Expo ANTAD is a trade show organized by the National Association of Retailers and
Departmental Stores and is the largest show in Mexico aimed at the retail sector. The
show has three main pavilions: fresh products, SMEs and international, where more than
30 countries (including Canada) exhibit their products. According to figures from ANTAD,
there are approx. 30,000 visitors that participate in the show. Food buyers from all the
retailers and departmental stores that are members of ANTAD attend the show, so it is an
excellent opportunity to get to know this people and pursue potential business
opportunities.

Expo ANTAD 2009
Date: March 11-13, 2009
Venue: Guadalajara, Jalisco
For information please contact:
Manuel Alvarez, Conventions Manager
Horacio No. 1855, 6to piso,
Col. Chapultepec Morales
C.P. 11570, México, D.F.
Tel (55) 5580-1772 ext. 214
Fax: (55) 5580-1772 ext. 263
Email: malvarez@antad.org.mx.
Website: www.antad.org.mx




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6.7) Private certification agencies for organic products in Mexico

Certificadora Mexicana de Productos y Procesos Ecológicos, S.C. (Certimex)
Ing. Taurino Reyes
Avenida Oaxaca 210-A
Fracc. San José La Noria
Oaxaca, Oaxaca
Tel/Fax: (52-951) 520-2687
Email: certimexsc@prodigy.net.mx
www.certimexsc.com

OCIA-México
Ing. Homero Blas / Ing. Rodolfo García / Julio González
H. Escuela Naval Militar 621-203
Col. Reforma
C.P. 68050, Oaxaca, Oaxaca
Tel/Fax: (52-951) 520-2250 / (52-951) 508-9003
Email: ocia@prodigy.net.mx
www.ocia.org

OCIA –Latinoamérica
Ing. Homero Blas Bustamante
Emilio Portes Gil No. 117.
C.P. 68274, Pueblo Nuevo, Oaxaca
Tel/Fax: (52-951) 512-5128

OCIA Internacional, INC.
Mario Mena /Levi Pérez
6400 Cornhusker, Suite 125
Lincoln, Nebraska
C.P. 68507, USA
Tel.: 402-477-2323
Fax: 402-477-4325
Email: info@ocia.org

Bioagricert (BAC)
Fulvio Gioanetto
2ª Calle,
Comunidad Indígena de Nirio,
Mpio. de Paracho, Mich. México
Tel/Fax: (52-423) 594-6036
Email: lichen@mailcity.com, lichen@lycos.com




                                                                             59
Oregon Tilth (OTCO)
Ing. Ernesto de la Rosa
Morelos
Tel.: (52-735) 357-7000
Email: edelarosas@homail.com

Quality Assurance International (QAI)
Beatríz Kiziroglou
9191 Towne Centre Drive
Suite 510
San Diego, CA 92122, USA
Tel.: 858.792.3531
Fax: 858.792.8665
Email: qai@qai-inc.com, beatriz@qai-inc.com

Farm Verified Organic-International Certification Services, Inc. (FVO)
301 5th Ave SE
Medina, ND 58467
USA
Tel.: +701-486-3578
Fax: +701-486-3580
Email: info@ics-intl.com, rsimmons@ics-intl.com

BCS OEKO Garantie
Ing. Víctor Cruz
Texcoco, Edo. de Mèxico
Tel.: (52-595) 955-8106
Tel/Fax. (52-595) 955-8106
Email: bcsm@prodigy.net.mx

IMO Control
Oficina en México
Gerardo Dromundo
Texcoco, Edo. de México
Tel. (52-595) 925-1331
Email: imomexico@yahoo.com.mx
www.imo.ch

Naturland
Peter Ganz, Representantive in Mexico
Morelos
Tel.: (52-777) 102-9392
Email: mexico@naturland.de
www.naturland.de




                                                                         60
California Certified Organic Farmers (CCOF)
1115 Mission Street,
Santa Cruz, CA 95060, USA
Tel.: (831) 423-2263
Fax: (831) 423-4528
Email: ccof@ccof.org, brian@ccof.org

Guaranteed Organic Certification Agency (GOCA)
Charly Heermans
5464 Eighth St.
Fallbrook, CA 92028
Tel.: 760-731-0496
Fax 760-731-0498
Email: heermans@tfb.com

Aurora Certified Organic
25844 Butler Road
Junction City, OR 97448-8525, USA
Tel.: (541) 998-5691
Fax: (541) 998-5694
Email: certification@demeter-usa.org

Demeter-International e. V.
Agricultura biodinamica
Ute Bucholski
Brandschneise 1
D-64295 Darmstadt
Germany
Tel.: +49-6155-8469-99
Fax ++49-6155-8469-11
Email: ute.bucholski@demeter.de

Organic Forum International, Inc.
Debra Johnson
37189 532nd Aven
Paynesville, MN 56362
320 2768760
USA
Tel.: 320-276-8760
Fax: 320-726-8587
Email: ojohnson@midstate.tds.net




                                                 61
Control Union Certifications
Lázaro Escalante
Chiapas
Tel. (52-992) 655-0144
Email: lescalante@controlunion.com
www.controlunion.com

Ceres
Ing. Víctor Cruz
Estado de México
Tel. (52-595) 955-8106
Email: ceres.mex@gmail.com / ceres_mex@yahoo.com
www.ceres-cert.com

Mayacert México
Ing. Francisco Aldaz
Oaxaca
Tel. (52-951) 522-9667
Email: mayacert@yahoo.com.mx
www.mayacert.com

6.8) Mexican publications specialized in organics

 Cultura Orgánica

Cultura Orgánica is the only Mexican
magazine specialized in organics. The
magazine is published on a bi-monthly
basis and is mainly focused on organic
production. The content of the magazine
includes articles related to domestic
organic production, distribution channels
for     domestic     organic     products,
organization of domestic organic growers
and relevant international news related to
organics.   Several    domestic    organic
companies advertise their products/services in the magazine. Despite the fact that this is
the only Mexican magazine specialized in organics, its main target audience is the
domestic organic industry. Therefore, this may not be the best alternative to advertise
imported organic food products.

Editorial Agro Síntesis, S.A. de C.V.
Contact: Lic. Adrián González
Tel. (52-55) 5669-3125
Fax. (52-55) 5543-3476
E-mail: agonzalez@culturaorganica.com
www.culturaorganica.com



                                                                                       62
 Imagen Agropecuaria

Imagen Agropecuaria is a Mexican
bulletin published on the internet
specialized in the agri-food sector.
Sometimes the bulletin is printed and
distributed freely. The bulletin is
constantly publishing articles related to
organic agriculture and organic food
products        (mainly       domestically
produced). The purpose of the bulletin
is to be an information reference for
companies, government institutions,
agriculture producers, food processors,
exporters, traders, investors, research centers and universities involved in the agri-food
sector. The bulletin is mainly focused on the domestic agri-food industry, so despite the
fact it is constantly addressing issues related to organics, again it may not be the best
alternative for advertising imported organic food products.

www.imagenagropecuaria.com
editor@imagenagropecuaria.com

 Revista 2000 Agro

Revista 2000 Agro is a Mexican magazine specialized in the agriculture sector with 13
years in circulation. The magazine is distributed on a national level to the private sector,
government institutions, agriculture research institutions, universities, consultants,
producers, farmers, packers, etc. Among the topics addressed by the magazine are: new
technologies, ag machinery, fertilizers, biologic control methods, greenhouses, etc. Articles
related to organics are published on a periodic basis. The magazine has a circulation of
25,000 prints and is published on a bi-monthly basis. The magazine is distributed in
various points of sale, including magazine shops and libraries.

Revista 2000 Agro
Contact: Laura Rosas
Tel. (52-55) 5660-3235 / (52-55) 5660-1947
E-mail: exposyeventos@3wmexico.com
www.2000agro.com.mx

There are other publications (magazines) aimed at young consumers from the middle-
upper classes, concerned about their health, nutrition and image, which periodically
publish articles related to the benefits of organic food products. The target audience of
these magazines is mainly women, given that women have a strong influence in the food
purchasing decisions of Mexican households. In light of the target audience and broad
circulation of these magazines, they could be good alternatives for advertising imported
organic food products. Some of these magazines are:




                                                                                          63
 Balance

Purpose: To provide information about fitness, welfare,
health, nutrition and beauty, for the audience of highest
socioeconomic status in Mexico.
Target audience: Women (and men) between 25-45
years from middle-upper and upper classes, who are
concerned about their health and wellbeing, and who
exercise      regularly.   Businesswomen/businessmen,
executives, members of the Sport City Club and Golden
clients of GNC.
Circulation numbers: 55,000
Frequency of the publication: Monthly
Publishing house/host: Grupo Editorial Expansión,
S.A. de C.V.
Contact: Liora Mishkin A.
Address: Av.- Constituyentes No. 95, Col. Lomas Altas,
México D.F., C.P. 11950
Tel: +5255 9177-4100
Fax:+5255 9177-4300
E-mail: lmishkin@expansion.com.mx
Website: www.gee.com.mx


 Familia Saludable

Purpose: To encourage readers to have a healthy life
through the practice of healthy habits. The magazine
provides information about health, sport, yoga, beauty
and nutrition.
Target audience: Women between 19-34 years from
the middle and upper-middle classes
Circulation numbers: 60,000
Frequency of the publication: Monthly
Publishing house/host: Editorial Televisa, S.A. de C.V.
Contact: Bertha Garabana
Address: Av. Vasco de Quiroga 2000, Building E 3rd floor,
Col. Santa Fe, C.P. 01210, México, D.F.
Tel: +5255 5261-2600
Fax:+5255 5261-2600
E-mail: saludable@editorial.televisa.com.mx
Website: www.editorialtelevisa.com.mx




                                                            64
 EnForma

Purpose: Magazine aimed at women who want to look
and feel good. The magazine contains tips about exercise,
health and beauty. Includes recommendations for a
healthy diet, medicine, fitness, wellness, etc.
Target audience: Women between 19-34 years from the
middle and upper classes
Circulation numbers: 75,000
Frequency of the publication: Monthly
Publishing house/host: Editorial Televisa, S.A. de C.V.
Contact: Gabriela Luna
Address: Av. Vasco de Quiroga 2000, Building E 2nd floor,
Col. Santa Fe, C.P. 01210, México, D.F.
Tel: +5255 5261-2603
Fax:+5255 52612701
E-mail: dcepedae@editorial.televisa.com.mx
Website: www.editorialtelevisa.com.mx


 Prevention

Purpose: To provide tips for women's health, news and
medical discoveries, alternative healing therapies, news
on vitamins and nutrition for a healthy lifestyle.
Target audience: Women between 25 and 50 years old
from the middle and upper classes.
Circulation numbers: 10,000
Frequency of the publication: Monthly
Publishing        house/host:         Editorial    Televisa
Internacional, S.A. de C.V.
Contact: Gabriela luna
Address: Av. Vasco de Quiroga 2000-E, Col. Santa Fe,
Del. Alvaro Obregón, C.P. 01210, México, D.F.
Tel: +5255 5261-2609
Fax:+5255 5261-2600
E-mail: gluna@editorial.televisa.com.mx
Website: www.esmas.com/editorialtelevisa/




                                                              65
 Cocina Fácil

Purpose: This magazine is aimed at women who want
simple and innovative ideas to prepare tasty and nutritive
dishes made with selected products. The magazine
includes a compendium of different recipes for several
types of meals.
Target audience: Women between 25-64 years from
the middle and upper classes
Circulation numbers: 155,000
Frequency of the publication: Monthly
Publishing house/host: Editorial Televisa, S.A. de C.V.
Contact: Enrique Matarredona
Address: Av. Vasco de Quiroga 2000, Building E 3rd floor,
Col. Santa Fe, C.P. 01210, México, D.F.
Tel: +5255 5261-2603
Fax:+5255 52612701
E-mail: zhelina@editorial.televisa.com.mx
Website: www.editorialtelevisa.com.mx

7) Effects of the economic crisis on the demand for organic products

7.1) Forecast impact of crisis on demand for organics

As in any other country in the world, the international financial crisis has affected the
Mexican market, especially considering the strong economic ties that Mexico has with the
U.S. The growth of the Mexican economy reached barely 2% in 2008, given in part to the
slowdown of the U.S. economy. In addition, the inflation in Mexico during 2008 reached
6.5%, which surpassed the expected inflation by Mexico’s Central Bank (BANXICO).
Furthermore, the current international financial crisis has obliged large corporations with
presence in Mexico to dismiss a significant number of employees.

The international financial crisis has also affected international exchange rates. According
to figures from BANXICO, from Sept. 2008 to March 2009, the exchange rate of the
Mexican peso vs. the U.S. dollar experienced a devaluation of almost 50%, moving from
approx. $10.30 pesos/dlr to approx. $15.30 pesos/dlr. The devaluation of the exchange
rate of the Mexican peso vs. the Canadian dollar has not been as significant as in the case
of the U.S. dollar. Figures from BANXICO indicate that from Sept. 2008 to March 2009, the
exchange rate of the Mexican peso vs. the Canadian dollar experienced a devaluation of
approx. 22%, moving from approx. $9.7 pesos/dlr to approx. $11.9 pesos/dlr.

Contrary to previous economic crisis scenarios, this time the crisis comes from outside and
not from the Mexican economy itself, which despite the current conditions is proving to be
more stable and better prepared to face these types of adverse conditions than in the
past.



                                                                                         66
The effects of the international financial crisis have been reflected in the Mexican retail
sector. Comercial Mexicana is a Mexican supermarket chain that has felt strong effects of
the international financial crisis. Comercial Mexicana registered massive losses in its
financial derivatives linked to the Mexican peso/U.S. dollar exchange rate. Comercial
Mexicana had seen a great opportunity to increase its profit through operations in financial
derivatives linked to the exchange rate, and not only as coverage to endorse the imports
of food products for its supermarket stores. However, the company did not foresee the
high volatility of the exchange rate and with the recent devaluation of the Mexican peso
vs. the U.S. dollar, the debts of the company increased so much that now they are having
difficulties to face these debts with Mexican financial institutions, estimated at
approximately US$2 billion. In spite of the above, it appears that Comercial Mexicana has
been managing to obtain financing to cover these debts and they have not announced any
plans to sell or close their retail stores in Mexico.

Despite of the fact that Soriana is in a much better financial condition than Comercial
Mexicana, it has also made some adjustments to face the current economic scenario.
Soriana has joined other Mexican companies such as Grupo Maseca and Cemex, which
have requested support from government financial institutions to cover part of its debts.
Currently, Wal-Mart is the Mexican supermarket chain with the healthiest financial
condition and which probably will take advantage of the financial situation of its
competitors to continue growing and consolidating as the largest retail chain in Mexico.

As in any adverse financial scenario, Mexican consumers have reduced their expenditures,
due to fears about the future economic conditions and a limited purchasing power.
According to figures from ANTAD, over the last few months, the sales of retail and
departmental stores in Mexico have reported a fall of up to 10% as compared to last year.
The Mexican government also estimates that in these types of economic conditions, the
consumption of some food products such as meat, milk, eggs and beverages, tends to
reduce in Mexico. Despite this, Mexican consumers continue focusing their expenditures to
cover their basic needs, such as food products.

The international financial crisis has also been felt in the Mexican agri-food sector. In
general, food prices increased approx. 10% as compared to last year (it is also important
to consider that the financial crisis occurred just after the rise of international prices of
food commodities). Nevertheless, the Mexican government has implemented several
measures to help to avoid as much as possible increases in the price of staple foods
(tortilla, beans, milk, etc.), arguing that the international prices of grains, oilseeds, milk
and meat have been reducing over the last weeks and therefore there is no justification
for a drastic increase of food prices in Mexico.

In addition, the Mexican Secretariat of Agriculture (SAGARPA) is implementing three
strategies to face the adverse financial situation: an investment of 30 billion pesos
(approx. US$1.9 billion) for the creation of jobs in the poorest rural areas; 8 billion pesos
(approx. US$500 million) for the acquisition of productive assets; and 24 billion pesos
(US$1.5 billion) to guarantee credits for low income farmers. These investments include
the development of irrigation infrastructure, the building of new meat federal inspected
plants and infrastructure for horticulture and livestock production.



                                                                                           67
Several of the companies interviewed as part of the research for the study, such as Aires
de Campo, The Green Corner, Marinter and Vomac, concurred that the organic sector in
Mexico would not escape from the effects of the international financial crisis. Some of
them indicated that this situation could change the food consumption habits of Mexican
organic consumers, who may substitute some of the organic food products they used to
purchase for conventional food products that are cheaper, and may just purchase those
organic food products that they prefer/need the most.

In spite of the above, it is important to consider that the main consumers of organic food
products in Mexico are people from the medium and upper social classes, which are
usually less affected by an adverse financial environment than people from the lower
social classes. Therefore, despite the fact that the demand of organics from this group
may be somewhat reduced as a result of the crisis, most of them would still have the
purchasing power to buy organic products.

7.1.1) Forecast effect of the financial crisis on production of organics in Mexico

Based on consultations conducted with key players involved in the Mexican organic
industry, it is estimated that the international financial crisis may also affect the production
of organics in Mexico. This is mainly explained by the fact that more than 80% of the
organic foods produced in Mexico are exported abroad (mainly to the U.S.). Therefore, a
reduction in the demand for organics from U.S. consumers due to the prevailing economic
conditions in that country generates a reduction in the production of organics in Mexico,
which as indicated before are mostly exported to that market.

Considering the above, the Mexican government is increasing its support to organic
farming, through the rebating of certification costs for organic farming, the provision of
subsidies and facilities for the organization of cooperatives, so that the Mexican growers
can consolidate their crops and get better sales conditions for their products. Additionally,
SAGARPA is promoting a diversification of export destinations for organic food products, to
avoid the concentration of most of the Mexican organic exports in the U.S. market.
SAGARPA is promoting exports of Mexican organic food products to Asian countries,
mainly to Japan, Korea and Singapore; as well as Russia and the European Union.

The effect of the financial crisis on the domestic production of organics is still not very
evident because the production cycles take several months. However, if the international
financial crisis continues, the production of organics in Mexico could show negative trends
in the long run.

7.1.2) Forecast effect of crisis on imports of organics from the USA and Canada

The devaluation of the Mexican peso vs. the U.S. dollar has increased the cost of food
imports from the U.S., including imports of U.S. organic food products. In spite of this, as
previously indicated, most of the imported organic food products currently available at the
Mexican retail stores are still from the U.S.




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The devaluation of the Mexican peso vs. the Canadian dollar has not been as high as the
devaluation of the Mexican peso vs. the U.S. dollar. This puts Canada in a better or at
least equal position than the U.S. in terms of competition in the Mexican market.

The higher costs for the transportation of products from Canada to Mexico as compared to
the transportation costs for product going from the U.S. to Mexico, currently is somewhat
compensated with the lower exchange rate/price in Mexico of Canadian dollars vs. U.S.
dollars.

Considering the factors mentioned above, the only factor that could hinder the imports of
Canadian organic food products in Mexico is an overall reduction in demand of organics
due to the limited purchasing power of Mexican consumers. However, currently Canadian
organic food products are in a good position to compete with other significant foreign
suppliers of organics to Mexico such as the U.S. and European countries (the Mexican
peso has also experienced a significant devaluation vs. euro: approx. 30%, moving from
MX$15.12 in Sep. 2008 to MX$19.35 in Mar. 2009).


7.1.3) Forecast impact on price premium demanded by suppliers of organics

Basically all the companies interviewed as part of the study indicated that the international
financial crisis certainly has an impact on the price premium demanded by suppliers of
organics. Several of them such as Aires de Campo, Ki-An, Distribuidora Promesa and
Tendencia Gastronómica indicated that the prices of organic food products have increased
or are increasing as a result of the international financial scenario.

Natucomer explained that considering that many of the organic food products available in
Mexico are imported, the recent devaluation of the Mexican peso vs. the U.S. dollar has
forced Mexican importers to increase the prices of organic food products. Others like
Smart Holding Mexico pointed out that since the international prices of commodities and
food ingredients have been increasing, this is also reflected in the prices of processed
organic food products.

Other companies like Marinter and Nutrisa pointed out that despite of the adjustments in
prices, they may be forced to sacrifice part of their profits to maintain a competitive price
and keep selling.

7.1.4) Categories of organics most likely to decrease in demand

Consumers of organic food products in Mexico usually give preference to 1st need food
products that are essential for a healthy nutrition, such as: fruits, vegetables, dairy
products, bread, meat and eggs. Considering this, if the purchasing power of Mexican
consumers is limited, it is more likely that the categories of organics which could
experience a decrease in demand are 2nd need goods or luxury food products that are not
really essential for nutrition, such as:




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   •   Beverages (beer, wine, energy drinks, liquors and alcoholic beverages)
   •   Bakery products (biscuits, cookies, muffins, etc)
   •   Groceries (pastas, sauces, ketchup, mayonnaise, mustard, tea, sauces, seasonings,
       chocolate, marmalades, etc.)
   •   Snacks

In spite of the above, as previously indicated, people from the middle-upper classes are
the main consumers of organic food products in Mexico. Despite the international financial
crisis has an effect in all sectors of the population, it is estimated that the effect is less
significant in this sector of the population than in lower class sectors. Therefore, despite of
the adverse financial scenario, it is expected that the demand for organic foods in Mexico
would be maintained and continue growing in the future, as the economic conditions in
Mexico and the world improve.




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BIBLIOGRAPHY

2000 Agro, Revista Industrial del Campo,
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OTA Market Overview, Mexican Organic Market, April 2004, Landry Consulting, LLC

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The Organic Products Market in Mexico, Alimentaria Exhibitions, S.A.

The World of Organic Agriculture – Statistics and Emerging Trends 2007, International
Federation of Organic Agriculture Movements, IFOAM




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