Cheese in Mexico

Euromonitor International
September 2021
CHEESE IN MEXICO Passport i

LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2021 DEVELOPMENTS ............................................................................................................... 1
Despite drop in sales, retail demand remains above pre-pandemic levels ............................... 1
Return to foodservice results in weaker performance for retail ................................................. 2
Two main leaders in A fairly fragmented competitive landscape .............................................. 2
PROSPECTS AND OPPORTUNITIES......................................................................................... 2
Foodservice to continue to gain momentum over forecast period ............................................ 2
Strongest performance for packaged hard cheese driven by convenience .............................. 3
New packaging requirements may lead to players reformulating current lines ......................... 3
CATEGORY DATA ....................................................................................................................... 3
Table 1 Sales of Cheese by Category: Volume 2016-2021 ...................................... 3
Table 2 Sales of Cheese by Category: Value 2016-2021 ......................................... 4
Table 3 Sales of Cheese by Category: % Volume Growth 2016-2021 ...................... 4
Table 4 Sales of Cheese by Category: % Value Growth 2016-2021 ......................... 4
Table 5 Sales of Spreadable Processed Cheese by Type: % Value 2016-2021 ....... 4
Table 6 Sales of Soft Cheese by Type: % Value 2016-2021 .................................... 5
Table 7 Sales of Hard Cheese by Type: % Value 2016-2021 ................................... 5
Table 8 NBO Company Shares of Cheese: % Value 2017-2021 .............................. 5
Table 9 LBN Brand Shares of Cheese: % Value 2018-2021 ..................................... 6
Table 10 Distribution of Cheese by Format: % Value 2016-2021................................ 7
Table 11 Forecast Sales of Cheese by Category: Volume 2021-2026........................ 7
Table 12 Forecast Sales of Cheese by Category: Value 2021-2026........................... 8
Table 13 Forecast Sales of Cheese by Category: % Volume Growth 2021-2026 ....... 8
Table 14 Forecast Sales of Cheese by Category: % Value Growth 2021-2026 .......... 8

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CHEESE IN MEXICO Passport 1

CHEESE IN MEXICO
KEY DATA FINDINGS
▪ Shift towards foodservice as consumers gradually return to eating out in 2021, but retail
volume sales remain higher than pre-pandemic levels
▪ Cheese records marginal current value growth to reach MXN80 billion, while declining by 4%
in retail volume terms in 2021, falling to 377,000 tonnes
▪ Processed cheese excl spreadable records highest current value growth of 3% in 2021 to
reach MXN2.2 billion
▪ Average unit price increases by 4% in current value terms in 2021
▪ Sigma Alimentos SA de CV retains leadership of cheese in 2021 with a 16% value share
▪ Over the forecast period, cheese is predicted to record a 5% current value CAGR (a 2% value
CAGR at constant 2021 prices)

2021 DEVELOPMENTS

Despite drop in sales, retail demand remains above pre-pandemic

levels
Compared to 2020 when the emergence of the pandemic saw lockdowns and home seclusion
with many consumers stockpiling essential groceries, demand for cheese through retail during
2021 is set to drop. However, volume sales through this channel will remain much higher
compared to pre-pandemic levels as many Mexicans have remained cautious with the virus still
in circulation, and in some regions seeing another wave in cases. Therefore, many consumers
are continuing to stay at home for longer periods of time, a particularly noticeable trend during
the first half of the year, and as a result, cooking at home remains an important sales driver of
cheese as the latter is used as a staple for many Mexican dishes, in addition to being a popular
indulgent snack. With lingering price sensitivity amongst some consumers, demand for cheese
through retail is also being driven by its greater affordability as an alternative option to other
types of protein such as meat or seafood.
While experiencing a surge in demand in 2020 due to heightened hygiene awareness
following the emergence of the pandemic, packaged cheese is set to experience higher declines
compared to the unpackaged format, as the latter offers greater affordability during a period of
prolonged price sensitivity and is therefore set to see much slower retail volume declines during
2021. Soft cheese including Panela and Fresco, will remain the largest retail volume category as
well as predictions that it will record the overall lowest volume decline over the year. In addition
to having a much lower average unit price compared to hard cheese, soft cheese is perceived
as being lower in fat in comparison, and therefore has generally continued to be benefit from
rising health-consciousness among Mexicans, supported by the growing availability of lactose-
free variants. In addition, in line with a move away from animal-based protein in the country, free
from dairy cheese is set to double its value share over the year; while retaining a low presence
within the category, its value sales are predicted to see another year of double-digit growth
during 2021.

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CHEESE IN MEXICO Passport 2

Return to foodservice results in weaker performance for retail

Independent small grocers remains the leading distribution channel for retail sales of cheese,
offering a wide network of outlets to serve local communities, although modern grocery retailers
including convenience stores, hypermarkets and supermarkets amongst others, remains a
viable distribution channel, with share gain in 2020 driven by increasing demand amongst local
consumers for convenient packaged hard cheese. On the other hand, e-commerce is a
negligible distribution channel for cheese in Mexico and is set to lose share and sales compared
to 2020 when consumers added this product to their online grocery baskets. Nevertheless,
many local consumers still like to inspect the different cheese varieties before making a
purchase in addition to concerns over the freshness of the product during transit offered by
home delivery.
However, retailing as a whole is predicted to see low growth or declining value sales during
2021 in line with a slight drop in demand for cheese compared to a surge in sales the previous
year. This is in stark contrast to the dynamic growth predicted for cheese sales through
foodservice due to the partial recovery of this channel as restaurants, bars and hotels are
allowed to operate again. The ongoing rollout of the country’s vaccination programme and long
periods of home confinement mean that consumers are increasingly willing to eat out, resulting
in a notable shift away from retail sales and predicted double-digit volume growth for
foodservice over 2021.

Two main leaders in A fairly fragmented competitive landscape

Sigma Alimentos and Grupo Lala SAB de CV are predicted to retain their overall leading
positions within cheese in current value terms in 2021 in an otherwise fairly fragmented
competitive landscape, offering well-positioned brands and large distribution networks. Sigma
Alimentos benefits from a broad portfolio that spans several categories and includes the well-
established brands Noche Buena, Fud and Franja. Noche Buena is by far the most popular of
these brands, maintaining a clear lead in hard cheese and ranking fourth in soft cheese.
Despite rising price-sensitivity amongst Mexicans during the pandemic, private label
continues to hold low value share. Price-sensitive consumers were increasingly drawn to private
label towards the end of the review period as tariffs had driven up the cost of cheese brands
imported by the US. Private label is set to gain further value share within unpackaged hard
cheese, one of the better performing categories for 2021, while the likes of Great Value from
Walmart have started to emerge in addition to the retailer’s already established Extra Special
range offering Brie, Emmental, Provolone and Camembert. Improvements in quality standards
and the addition of more cheese varieties to private label lines are helping to boost demand.

PROSPECTS AND OPPORTUNITIES

Foodservice to continue to gain momentum over forecast period

As consumers gradually return to the workplace and spend longer outside of the home as the
threat of the virus wanes, the frequency and amount of home cooking is expected to decrease.
This is predicted to have a further negative impact on retail sales of cheese over the early part
of the forecast period. However, the affordability of cheese compared to other types of protein
could sustain its growth in the context of tough economic conditions, and while retail volume
sales are likely to remain lower compared to 2020 when they were supported by the home
seclusion trend and cooking from scratch in addition to snacking, they will remain much higher
compared to pre-pandemic levels by 2026.

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CHEESE IN MEXICO Passport 3

On the other hand, a further switch towards cheese consumption through foodservice is
expected over the forecast period in line with greater consumer confidence and rising
disposable incomes, driving both eat-in options and takeout or home delivery as Mexicans
resume their busy lifestyles and reducing the time allocated for preparing meals. Volume sales
of cheese through foodservice, are therefore expected to fully recover to pre-pandemic levels by
2024.

Strongest performance for packaged hard cheese driven by

convenience
Packaged hard cheese is predicted to record the strongest retail volume growth over the
forecast period as the category starts to recover towards the end of 2022 in line with
strengthening consumer sentiment and purchasing confidence. Demand for packaged cheese
will be driven by increasing appreciation for the convenience of this format, particularly among
consumers with busy lifestyles as they return to their daily routines in terms of work or school.
While some local consumers may continue to experiment with different cheese varieties offered
by unpackaged formats, players are likely to continue to introduce more convenient sliced or
grated products such as squared slices to fit sandwich bread and rounded slices to fit tortillas,
which offer time-saving attributes.
The higher than average unit price of packaged hard cheese will ensure that more positive
growth momentum over the forecast period will support a full recovery in terms of value sales (at
constant 2021 prices), supported by the convenience trend and further development along the
lines of easy-open and resealable packaging formats as offered by Fud, Lala and Noche Buena
which all produce grated cheese products in resealable packaging formats that keep the
contents fresh after opening.

New packaging requirements may lead to players reformulating current

lines
The perception of cheese has the potential to be affected by the new labelling requirements
under NOM-051 that entered into force in Mexico in October 2020. The regulation requires
manufacturers to highlight excess quantities of certain ingredients such as fat, sugar, and
sodium with front-facing black seals printed on the packaging. As a result, some players may
look to reformulate their products in terms of fat or salt in particular, which could lead to an
overall greater awareness of contents amongst local consumers.

CATEGORY DATA
Table 1 Sales of Cheese by Category: Volume 2016-2021

'000 tonnes
2016 2017 2018 2019 2020 2021

Cheese 302.2 320.4 324.9 340.6 391.9 377.3

- Spreadable Cheese 14.8 15.6 16.3 16.9 18.5 18.0
- Processed Cheese excl 13.5 13.6 13.8 14.1 14.9 14.5
Spreadable
- Soft Cheese 154.1 159.9 166.9 176.9 199.4 194.6
- Hard Cheese 119.9 131.3 127.8 132.7 159.1 150.1
-- Packaged Hard Cheese 77.5 85.0 82.7 86.1 104.1 96.7
-- Unpackaged Hard Cheese 42.5 46.3 45.1 46.6 55.0 53.4

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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Sales of Cheese by Category: Value 2016-2021

MXN million
2016 2017 2018 2019 2020 2021

Cheese 50,042.5 56,964.8 60,684.2 65,887.4 79,658.6 79,945.5

- Spreadable Cheese 1,974.2 2,236.4 2,470.8 2,665.1 3,034.7 3,109.0
- Processed Cheese excl 1,586.0 1,720.2 1,845.4 1,955.8 2,150.2 2,205.0
Spreadable
- Soft Cheese 20,953.2 23,096.8 25,431.8 27,942.0 32,806.7 33,571.1
- Hard Cheese 25,529.1 29,911.5 30,936.1 33,324.6 41,667.1 41,060.4
-- Packaged Hard Cheese 19,103.6 22,410.5 23,143.3 24,983.2 31,421.3 30,613.8
-- Unpackaged Hard Cheese 6,425.5 7,501.0 7,792.8 8,341.4 10,245.8 10,446.6
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Sales of Cheese by Category: % Volume Growth 2016-2021

% volume growth
2020/21 2016-21 CAGR 2016/21 Total

Cheese -3.7 4.5 24.8

- Spreadable Cheese -2.7 4.0 21.7
- Processed Cheese excl Spreadable -2.5 1.5 7.7
- Soft Cheese -2.4 4.8 26.3
- Hard Cheese -5.7 4.6 25.2
-- Packaged Hard Cheese -7.1 4.5 24.8
-- Unpackaged Hard Cheese -2.9 4.7 25.9
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Sales of Cheese by Category: % Value Growth 2016-2021

% current value growth

2020/21 2016-21 CAGR 2016/21 Total

Cheese 0.4 9.8 59.8

- Spreadable Cheese 2.5 9.5 57.5
- Processed Cheese excl Spreadable 2.6 6.8 39.0
- Soft Cheese 2.3 9.9 60.2
- Hard Cheese -1.5 10.0 60.8
-- Packaged Hard Cheese -2.6 9.9 60.3
-- Unpackaged Hard Cheese 2.0 10.2 62.6
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 Sales of Spreadable Processed Cheese by Type: % Value 2016-2021

% retail value rsp

2016 2017 2018 2019 2020 2021

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Cream Cheese 82.1 81.9 81.8 81.8 81.8 81.8

Reconstituted Cheese 17.9 18.1 18.2 18.2 18.2 18.2
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6 Sales of Soft Cheese by Type: % Value 2016-2021

% retail value rsp

2016 2017 2018 2019 2020 2021

Fresco 12.5 12.6 12.7 12.7 12.7 12.7

Oaxaca/Asadero 12.6 13.3 13.3 13.3 13.3 13.3
Panela 15.5 15.4 15.4 15.4 15.4 15.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 Sales of Hard Cheese by Type: % Value 2016-2021

% retail value rsp

2016 2017 2018 2019 2020 2021

Chihuahua 10.8 11.3 11.3 11.3 11.3 11.3

Manchego 17.4 16.8 16.8 16.8 16.8 16.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8 NBO Company Shares of Cheese: % Value 2017-2021

% retail value rsp

Company 2017 2018 2019 2020 2021

Sigma Alimentos SA de CV 15.8 15.8 15.7 15.9 15.9

Grupo Lala SAB de CV 14.4 14.6 14.7 14.5 14.5
Lactalis Alimentos 7.9 7.9 8.0 8.0 8.0
México S de RL
Ganaderos Productores 3.7 4.7 4.8 4.8 4.9
de Leche Pura SA de CV
Mondelez México S de RL 4.3 4.4 4.4 4.2 4.2
de CV
Qualtia Alimentos SA de 3.3 3.3 3.2 3.3 3.2
CV
Chilchota Alimentos SA 2.1 2.2 2.2 2.1 2.2
de CV
La Campesina Holandesa 1.6 1.5 1.5 1.5 1.5
SA de CV
Industrias Cor SA de CV 0.1 0.1 0.1 0.1 0.1
Nestlé México SA de CV - - - - -
Kraft Foods de México S - - - - -
de RL de CV
Derivados de Leche La - - - - -
Esmeralda SA de CV
Private Label 0.2 0.2 0.2 0.2 0.2
Others 46.6 45.3 45.1 45.3 45.1
Total 100.0 100.0 100.0 100.0 100.0

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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 9 LBN Brand Shares of Cheese: % Value 2018-2021

% retail value rsp

Brand (GBO) Company (NBO) 2018 2019 2020 2021

Noche Buena Sigma Alimentos SA de CV 11.9 11.8 12.0 12.0

La Esmeralda Lactalis Alimentos 7.9 8.0 8.0 8.0
(Lactalis, Groupe) México S de RL
Lala Grupo Lala SAB de CV 7.1 7.2 7.1 7.1
Los Volcanes Grupo Lala SAB de CV 4.3 4.3 4.2 4.2
Alpura Ganaderos Productores 3.7 3.7 3.6 3.6
de Leche Pura SA de CV
Caperucita Qualtia Alimentos SA de 3.3 3.2 3.3 3.2
(Pilgrim's Pride CV
Corp)
Fud Sigma Alimentos SA de CV 2.9 3.0 2.9 3.0
Philadelphia (Kraft Mondelez México S de RL 2.4 2.4 2.3 2.3
Heinz Co) de CV
Chilchota Chilchota Alimentos SA 2.2 2.2 2.1 2.2
de CV
La Campesina La Campesina Holandesa 1.5 1.5 1.5 1.5
Holandesa SA de CV
Nestlé (Nestlé SA) Grupo Lala SAB de CV 1.4 1.4 1.5 1.4
Carranco Ganaderos Productores 1.0 1.1 1.2 1.3
de Leche Pura SA de CV
Svelty (Nestlé SA) Grupo Lala SAB de CV 1.1 1.1 1.2 1.1
Kraft Singles Mondelez México S de RL 1.1 1.1 1.0 1.0
(Kraft Heinz Co) de CV
Franja Sigma Alimentos SA de CV 1.0 0.9 1.0 1.0
Fiorello (Nestlé SA) Grupo Lala SAB de CV 0.7 0.7 0.6 0.6
Kraft (Kraft Heinz Mondelez México S de RL 0.6 0.6 0.6 0.6
Co) de CV
Cheez Whiz (Kraft Mondelez México S de RL 0.4 0.4 0.3 0.3
Heinz Co) de CV
Lyncott Industrias Cor SA de CV 0.1 0.1 0.1 0.1
La Esmeralda Derivados de Leche La - - - -
Esmeralda SA de CV
Cheez Whiz (Kraft Kraft Foods de México S - - - -
Foods Group Inc) de RL de CV
Kraft (Kraft Foods Kraft Foods de México S - - - -
Group Inc) de RL de CV
Kraft Singles Kraft Foods de México S - - - -
(Kraft Foods Group de RL de CV
Inc)
Cheez Whiz (Kraft Mondelez México S de RL - - - -
Foods Group Inc) de CV
Kraft (Kraft Foods Mondelez México S de RL - - - -
Group Inc) de CV
Kraft Singles Mondelez México S de RL - - - -
(Kraft Foods Group de CV
Inc)
Fiorello (Nestlé SA) Nestlé México SA de CV - - - -
Nestlé (Nestlé SA) Nestlé México SA de CV - - - -
Caperucita Qualtia Alimentos SA de - - - -
(Hillshire Brands Co) CV
Chalet Sigma Alimentos SA de CV - - - -

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Private label Private Label 0.2 0.2 0.2 0.2

Others Others 45.3 45.1 45.3 45.1
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 10 Distribution of Cheese by Format: % Value 2016-2021

% retail value rsp

2016 2017 2018 2019 2020 2021

Store-Based Retailing 100.0 100.0 100.0 100.0 99.8 99.9

- Grocery Retailers 94.1 94.0 93.9 93.8 94.2 94.1
-- Modern Grocery 35.9 36.9 36.9 37.2 38.0 37.5
Retailers
--- Convenience Stores 9.8 10.3 10.3 10.3 10.3 10.3
--- Discounters 9.4 9.7 9.7 9.7 9.9 9.9
--- Forecourt Retailers 1.5 1.6 1.6 1.6 1.6 1.6
--- Hypermarkets 9.4 9.6 9.6 9.6 10.2 9.9
--- Supermarkets 5.8 5.8 5.8 5.8 6.0 5.9
-- Traditional Grocery 58.2 57.1 57.0 56.7 56.2 56.6
Retailers
--- Food/drink/tobacco 3.0 3.0 3.1 3.1 2.9 2.9
specialists
--- Independent Small 43.9 43.0 42.9 42.5 42.6 42.6
Grocers
--- Other Grocery 11.2 11.1 11.0 11.1 10.7 11.1
Retailers
- Non-Grocery Specialists - 0.0 0.0 0.0 - 0.0
-- Health and Beauty - - - - - -
Specialist Retailers
-- Other Foods Non- - 0.0 0.0 0.0 - 0.0
Grocery Specialists
- Mixed Retailers 5.9 5.9 6.0 6.1 5.7 5.7
Non-Store Retailing 0.0 0.0 0.0 0.0 0.2 0.1
- Vending - - - - - -
- Homeshopping - - - - - -
- E-Commerce 0.0 0.0 0.0 0.0 0.2 0.1
- Direct Selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 11 Forecast Sales of Cheese by Category: Volume 2021-2026

'000 tonnes
2021 2022 2023 2024 2025 2026

Cheese 377.3 370.6 369.7 371.8 376.5 383.3

- Spreadable Cheese 18.0 17.6 17.3 17.1 17.0 17.0
- Processed Cheese excl 14.5 14.3 14.3 14.4 14.6 14.8
Spreadable
- Soft Cheese 194.6 192.4 191.9 192.6 194.6 198.0
- Hard Cheese 150.1 146.3 146.1 147.7 150.4 153.6
-- Packaged Hard Cheese 96.7 94.2 95.1 97.4 100.5 103.9
-- Unpackaged Hard Cheese 53.4 52.0 51.0 50.3 49.9 49.7

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Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 12 Forecast Sales of Cheese by Category: Value 2021-2026

MXN million
2021 2022 2023 2024 2025 2026

Cheese 79,945.5 79,423.6 80,312.3 81,927.7 84,059.5 86,590.2

- Spreadable Cheese 3,109.0 3,068.4 3,050.3 3,054.2 3,073.6 3,106.5
- Processed Cheese excl 2,205.0 2,199.0 2,220.2 2,260.1 2,310.7 2,370.2
Spreadable
- Soft Cheese 33,571.1 33,656.8 34,029.7 34,579.5 35,336.9 36,304.5
- Hard Cheese 41,060.4 40,499.4 41,012.1 42,033.9 43,338.1 44,809.0
-- Packaged Hard Cheese 30,613.8 30,198.1 30,806.7 31,865.7 33,169.5 34,602.9
-- Unpackaged Hard Cheese 10,446.6 10,301.3 10,205.5 10,168.3 10,168.7 10,206.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 13 Forecast Sales of Cheese by Category: % Volume Growth 2021-2026

% volume growth
2021/22 2021-26 CAGR 2021/26 Total

Cheese -1.8 0.3 1.6

- Spreadable Cheese -2.4 -1.2 -5.9
- Processed Cheese excl Spreadable -1.2 0.4 1.8
- Soft Cheese -1.1 0.3 1.7
- Hard Cheese -2.6 0.5 2.3
-- Packaged Hard Cheese -2.5 1.4 7.4
-- Unpackaged Hard Cheese -2.6 -1.4 -6.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 14 Forecast Sales of Cheese by Category: % Value Growth 2021-2026

% constant value growth

2021/2022 2021-26 CAGR 2021/26 Total

Cheese -0.7 1.6 8.3

- Spreadable Cheese -1.3 0.0 -0.1
- Processed Cheese excl Spreadable -0.3 1.5 7.5
- Soft Cheese 0.3 1.6 8.1
- Hard Cheese -1.4 1.8 9.1
-- Packaged Hard Cheese -1.4 2.5 13.0
-- Unpackaged Hard Cheese -1.4 -0.5 -2.3
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

© Euromonitor International