Nearshoring in Mexico: The New North American Model

There’s a growing trend in the food and beverage industry – and it’s directly related to the U.S. neighbor south of the border. More food shippers are looking to “nearshoring” in Mexico.

The proximity to markets is a primary benefit of nearshoring for manufacturers of food and beverage products. Food companies can readily reach new markets and customers by shifting their operations to a nearby nation without incurring transportation or logistics-related costs. Food companies that depend on perishable goods and need to maintain the quality and freshness of their products may find this to be of significant benefit.

According to Alberto Villarreal, Managing Director of Nepanoa, Mexico offers a strategic location with easy access to North and South America, Pacific and Atlantic Oceans. Nepanoa is a consulting firm that partners with international companies to implement transcendent change across their U.S. and Latin America operations by providing an unrivaled collaborative experience and guidance.

Other highlights to consider when nearshoring in Mexico? According to Villarreal, Mexico:

• Has a highly skilled and cost-competitive workforce
• Has trade agreements with more than 50 countries, making it an ideal export hub
• USMCA provides a favorable legal and regulatory environment for foreign operations in Mexico, protecting investments and intellectual property
• The U.S borders with Mexico and Canada are the two busiest land crossings in the world, with economic trading surpassing U.S. $150 million per hour.

Using regional expertise is another significant benefit. Food companies can profit from their understanding of regional preferences and laws by collaborating with regional suppliers, manufacturers, and distributors. This can assist food businesses in effectively customizing their products and marketing approaches to local consumers' requirements and expectations.

Lastly, nearshoring can assist food companies to minimize risks and maintain business continuity. Food companies can lessen their reliance on a single market and prevent disruptions brought on by political unrest, natural disasters or other external factors by spreading their operations throughout several nations.

Top Food Companies With Operations in Mexico

Many food and beverage companies today have significant established operations in Mexico, and several of these are members of Food Shippers of America (FSA). It's an indicator that there is strong business rationale for food companies to be successful in operations south of the border. Here are the Top 10 Food and Beverage companies with operations today in Mexico, based upon number of employees (in May 2023), according to ZoomInfo:

FEMSA, with 323,993 employees, headquarters in Monterrey, Nuevo Leon, generating $29.1 billion in annual revenue.

Grupo Bimbo, with 141,000 employees, headquarters in Mexico City, Mexico, generating $21.8 billion in annual revenue.

Coca-Cola FEMSA, with 80,000 employees, headquarters in Cuajimalpa, Mexico, generating $10.1 billion in annual revenue.

Arca Continental, with 62,857 employees, headquarters in Monterrey, Mexico, generating U.S. $9.6 billion in annual revenue.

Sigma Alimentos, with 44,000 employees, headquarters in Garza Garcia, Mexico, generating U.S. $7 billion in annual revenue.

Grupo Lala S.A.B., with 40,000 employees, headquarters in Mexico City, Mexico, generating U.S. $4.2 billion in annual revenue.

Bachoco, with 33,721 employees, headquarters in de Carmargo, Guanajuato, Mexico, generating U.S. $4.4 billion in annual revenue.

Grupo Modelo, with 28,556 employees, headquarters in Mexico City, Mexico generating U.S. $15.4 billion in annual revenue.

Gruma, with 23,500 employees, headquarters in Del Valle, San Pedro Garza Garcia, NI, Mexico, generating U.S. $4.9 billion in annual revenue.

Heineken Mexico, with 18,907 employees, headquarters in Monterrey, Mexico, generating U.S. $3.8 billion in annual revenue.

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