In retaliation for US tariffs on Mexican aluminium and steel, in June 2018 Mexico began imposing a tariff of 25% on imported cheese products from the US. This tariff continued to drive up unit prices in 2019, which bolstered cheese current value sales but constrained growth in retail volume sales.
Packaged cheese products continued to gain ground at the expense of unpackaged varieties in 2019. This trend, which looks set to persist over the forecast period, is partly driven by increasing appreciation for the convenience of packaged cheese, particularly among consumers with busy lifestyles.
2019 saw soft cheese outperform hard cheese in retail volume and current value growth terms for the second year in a row. This was partly explained by the fact that hard cheese was most affected by the tariff on US imports, and therefore experienced steeper price hikes.
Sigma Alimentos maintained its overall lead in cheese in value terms in 2019 with a broad portfolio that spans several categories and includes the well-established brands Noche Buena, Fud and Franja. Noche Buena remained by far the most popular of these brands, maintaining a clear lead in hard cheese and placing fourth in soft cheese.
While their overall aggregate value share remained low, private label products continued to perform well in cheese in 2019. Consumer appreciation for the competitive prices of private label lines increased towards the end of the review period as tariffs drove up the cost of cheese brands imported from the US.
Convenience was a focal point for innovation in cheese over 2018-2019, with many players introducing sliced and grated products. These included products with squared slices to fit sandwich bread and rounded slices to fit tortillas.
Other milk alternatives remained by far the most dynamic drinking milk category in Mexico in retail volume and current value growth terms in 2019. While this was partly because sales were emerging from a comparatively low base, the category’s performance was also bolstered by the launch of several new products towards the end of the review period.
Fresh milk continued to benefit from the positive performance of the Lala 100 brand in 2019. Introduced by Grupo Lala during the review period, this health-orientated brand is available in two varieties: Lala 100 Proteina, which contains 70% more protein and 30% more calcium than standard fresh milk products, and lactose-free variant Lala 100 Sin Lactosa.
The flavoured milk drinks category in Mexico is mainly represented by products targeting children. Such products typically come in 250ml packs and have packaging designs that feature cartoon characters.
Grupo Lala continued to lead drinking milk products in value terms in 2019. The company maintains a broad portfolio that covers multiple categories, and its products are available nationwide in Mexico.
The economy price segment in milk witnessed several new launches towards the end of the review period. These included products from brands such as Leche Yaqui, Leche Bell, and Forti Leche, as well as new variants added to Walmart’s Great Value private label line.
Lechera Guadalajara SA de CV expanded its Sello Rojo drinking milk range in 2019 with a new product made from a mixture of milk and oats. Intended to compete with flavoured milk drinks and drinking yoghurt brands, this product is positioned as a nutritious choice that is also convenient for on-the-go consumption.
Health and wellness was a central theme in terms of innovation in yoghurt and sour milk products over 2018-2019. Many brands introduced new probiotic, reduced sugar and reduced fat variants, as well as products made from milk alternatives.
Recent years have seen a number of well-established milk brands in Mexico attempt to leverage their popularity by entering the yoghurt category. For example, the review period saw the launch of Nutri Yoghurt, an extension of Grupo Lala’s milk brand Nutri Leche.
In line with rising health-consciousness, many Mexican consumers are now paying closer attention to factors such as fat and sugar content when buying yoghurt products. Recent years have seen a number of brands address these concerns by introducing reduced fat and reduced sugar variants.
Yoghurt and sour milk products remained highly concentrated in 2019, with the top four players accounting for the lion’s share of total current value sales. Grupo Lala was the overall leader, closely followed by Danone de México and Yakult SA de CV.
While health and wellness was a focal point for innovation in yoghurt over 2018-2019, several brands also sought to differentiate new ranges by offering more novel and exotic flavours. For example, the range of non-dairy drinking and spoonable yoghurt products launched under the Silk brand includes mango, pineapple, berries and apple flavour variants, among others.
Following in the steps of other brands such as Lala, towards the end of the review period Yoplait expanded its Yoplait Placer range of indulgence-orientated yoghurt products. This range offers more luxurious flavours such as lemon pie, cookies and cream and crunchy vanilla.
The health and wellness trend continued to have a major influence on new product development activity in other dairy categories in 2019. Several players introduced lactose-free and reduced fat products, for example.
With maturity, increasing competition and rising health-consciousness among consumers limiting the potential for volume sales growth, towards the end of the review period a number of players in cream sought to stimulate demand for their products by introducing larger pack sizes that offer better value for money. The Alpura and Carranco brands were made available in 900g packs, for example, as were private label cream products in Walmart’s Aurrera range.
Similar to the case with larger pack sizes in cream, rising demand for multipacks helped to boost volume sales growth for the chilled dairy desserts category in 2019. These included 6- and 8-unit multipacks of flan (crème caramel) products offered under the Danette and Lala brands, respectively, as well as a 4-unit multipack of rice pudding (arroz con leche) products from Danette.
Nestlé remained the overall leader in other dairy in value terms in 2019. The company’s portfolio covers several categories, and includes well-established and widely distributed brands such as Carnation, La Lechera and Coffee-mate.
Industrias Cor SA de CV expanded its Lyncott cottage cheese range in 2019 with the launch of two new functional products. One of these products is made with oats and amaranth, and positioned as having an energy-boosting effect.
The latter part of the review period saw several leading drinking milk brands in Mexico attempt to leverage their popularity by diversifying into other dairy categories such as cream and condensed milk. This strategy was pursued by the Sello Rojo and San Marcos brands, for instance, while Walmart’s Great Value private label range was also expanded via the addition of other dairy product types.
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Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Mexico with research from Euromonitor's team of in-country analysts.
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This industry report originates from Passport, our Packaged Food market research database.