The U.S. Dairy Exporter Blog: Market Analysis, Research & News
  • Tapping a new dairy ingredient growth market in Mexico

    By Paul Rogers March 7, 2022

    Educational opportunities lay the foundation for U.S. dairy ingredient growth in Mexico. 

    Mexico is home to hundreds of small and mid-size cheese manufacturers making popular local varieties like Panela, Oaxaca, Asadero, Añejo and Ranchero. The situation is similar in the bakery sector: Thousands of medium-sized bakeries are producing Mexican-style breads like Trenza, Bizcocho, Concha and special seasonal items like Pan de Muerto, made specifically for Day of the Dead festivities.

    Those local cheesemakers and bakers, when grouped with their peers, are sizable markets. In either sector, however, marketing individually to small and mid-size buyers with minimal knowledge of dairy ingredient benefits and functionality is quite a challenge.

    A few years ago, the U.S. Dairy Export Council’s (USDEC’s) Ingredients Team sat down with USDEC’s Mexico team to figure out how to meet that challenge, and the results have been quite promising.

    “We saw an opportunity not only because these small and mid-size companies were often overlooked by suppliers, but also because we knew greater engagement would lead to mutual benefits,” says Terri Rexroat, USDEC vice president, Global Ingredients Marketing. “Collectively, the business of these companies would mean incremental growth opportunities for U.S. dairy exports. On the other side, U.S. dairy ingredient solutions would help those Mexican manufacturers save money, improve their end products, help them better meet customers’ expectations and grow their businesses.”

    Reaching the manufacturers was the challenge. To do so, USDEC developed a plan that centers on education, bringing together cheesemakers and bakers for sector-specific U.S.-dairy-ingredient-training workshops in partnership with regional universities and Mexican dairy and baking associations.

    The workshops are structured as a mix of classroom and hands-on instruction, covering a range of U.S. dairy ingredients: nonfat dry milk/skim milk powder (NDM/SMP), whey protein concentrate (WPC), milk protein concentrate (MPC), sweet whey powder and lactose.

    “The response was tremendous,” says Rodrigo Fernandez, director of the USDEC Mexico office. “In fact, there was so much demand that we significantly expanded the program dates to offer additional opportunities for people to attend.”

    Mexico pic6

    USDEC’s ingredient workshops for small and mid-size cheese and bakery manufacturers combine classroom and hands-on training. Here, instructor Gerardo Avena addresses a group of bakers at Universidad del Valle de Mexico in Mexico City.

    What started as six planned workshops in the fall of 2020 grew into 50 in 2021—31 for cheesemakers and 19 for bakers. This aggressive in-person program was realized despite the limitations of the pandemic.

    Workshops took place in nine Mexican cities in partnership with 11 institutions. More than 940 people attended, primarily cheese and bakery company representatives, but also professors, instructors and students from the partner institutions. Moving forward, USDEC is planning a strong program of workshops for additional participants for 2022 in several Mexican cities as well as expanding to Guatemala and the Dominican Republic.

    “Many of the companies participating in the workshops had never been contacted by a supplier before,” said Rexroat. “So these workshops opened the door to a brand new and reliable customer audience for U.S. dairy ingredients. We see the effort as a path to building loyal customers and sustainable long-term business in Mexico.”

    On top of that, the program led to two unique developments that were not even part of the original plan.

    Official curriculum

    The first development was with one of the schools that hosted the workshops: Tec de Monterrey, one of Mexico’s leading food technology schools. Starting in February 2022, Tec de Monterrey is incorporating U.S. dairy ingredients into its curriculum. It will offer for the first time a for-credit class to teach students how to use U.S. dairy ingredients in the manufacture of native Mexican cheeses.

    The idea for creating an official for-credit class to train students stems directly from the workshop series.

    Mexico pic2Mexican cheesemakers incorporate NDM into hot water during the manufacture of fresh cheese at a USDEC workshop at the Tec de Monterrey pilot plant in Queretaro, Mexico.

    Mexico pic3

    Mexican bakers make mini Pan de Muerto using U.S. NDM and sweet whey powder at a USDEC workshop at Universidad del Valle de Mexico, Mexico City.

    Tec de Monterrey educators sat in on some of the cheesemaking workshops and liked what they saw. While the university has a distinguished food science program, keeping up with the latest dairy ingredient developments proved a challenging task, in part due to insufficient domestic Mexican manufacturing capacity for such ingredients. The educators saw that the type of information the workshops were providing could help fill learning gaps.

    “Mexican food science students are looking to learn about dairy ingredient innovations, new applications, functionality, cost-efficiency and nutrition, among other information,” said Dr. Ruben Zarraga, dairy science director and professor in charge of the Queretaro campus of Tec de Monterrey. “These students will be working with these ingredients in the future, so it is very important to have them ready for their professional challenges.”

    The USDEC Mexico office talked with the university about the U.S. dairy portfolio and innovation capacity, emphasizing the strong U.S. position in the market as well as the ability to expand the market with new applications. (The U.S. has a 99% share of Mexico’s NDM imports, around 90% of its MPC and 80-85% of whey proteins.) In addition, they discussed the idea of converting aspects of the training to student-level learning. USDEC offered to support the efforts and is providing technical materials like monographs, brochures and the USDEC Milk Powder and Whey Proteins Reference Manuals for students.

    “The university wants to keep students current on industry advances in food production technology—in this case for cheesemaking,” says Fernandez. “The university is planning for the future and understands that U.S. dairy ingredients are playing a key role in supplying an important portion of the dairy proteins and dairy solids in the Mexican market.”

    There is also a direct commercial benefit to USDEC strengthening ties with Tec de Monterrey: The university offers consulting services to Mexico’s food processing sector, potentially exposing U.S. dairy ingredients and expertise to a larger food and beverage manufacturing audience.

    Mexico pic4 (2)

    Panela and ranchero cheeses made at USDEC ingredient workshops in Mexico using NDM and MPC 70%.

    Mexico pic5

    Trenza, a traditional Mexican braided bread, made at USDEC ingredient workshops using NDM and sweet whey.

    New buying groups

    The second development stemming from the workshop series is the creation of buying coalitions.

    “A mid-size Mexican cheesemaker and distributor that participated in the workshops and saw the benefits of incorporating U.S. dairy ingredients in cheese manufacturing wanted to move forward and begin using U.S. milk powder and MPC,” explains Fernandez. “But buying individually in smaller quantities than major food and beverage processors, particularly at today’s prices and with an unfavorable exchange rate, would be difficult.”

    The cheesemaker got together with peers to form buying coalitions in three regions in Mexico. The groups hope to buy in larger quantities, making purchases more economical.

    “USDEC helped put the groups in touch with a list of importers and trading companies to facilitate business, and we know they have been in talks and even closed some deals,” says Fernandez.

    Positioning for growth

    The programs are making a difference. U.S. dairy ingredient exports to Mexico surged in 2021 compared to the previous year. U.S. NDM, MPC and WPC grew by double digits. It was a successful year, even though the gains were so sizable in part because of the large drop-off in U.S. shipments to Mexico in 2020, when demand and buying power were hit by the dual challenge of recession and pandemic.

    The big gains in 2021 almost brought volumes back to pre-recession, pre-pandemic highs. And now U.S. dairy suppliers are well-placed for further growth.

    “The strong U.S. market presence, the broad U.S. dairy ingredient portfolio, cutting-edge U.S. innovation capacity and the dedication of U.S. suppliers put us in a strong position in Mexico,” says Rexroat. “We know that activities like the workshops—and the cheesemakers and bakers they train—as well as the new for-credit university course and the buying coalitions are already paying dividends. And we believe they will help lay the groundwork for continuing, long-term demand growth for U.S. dairy ingredients in the years ahead.”

    Paul Rogers is a correspondent for the U.S. Dairy Export Council who has covered the dairy industry for 25 years. 


    Subscribe to the U.S. Dairy Exporter Blog    

    The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.  

    Cheese Mexico Dairy Ingredients
subscribe to blog1

10 Most Recent Posts

Most Popular Posts in Past Year

Index of Posts by Topic

Index of Posts by Date, Author

Archives (by date)

+ more archives