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NSA Explores Mexican Market

Saturday, March 1, 1997
filed under: Utilization/Trade

With its large population and liberalized import policy, Mexico has become an attractive market for U.S. exporters of food and agricultural products — including sunflower oil and kernel.

The current Mexican population of 90 million should reach 100 million by the year 2000. Amazingly, 50 percent of the population is 18 years of age and younger.

Mexico is a developing nation with a large share of its population having very limited incomes. However, a significant — and growing — number of households (20 million people, or about 22 percent of the population) have the purchasing power to buy packaged consumer products on a regular basis. That’s where U.S. sunflower enters into the equation.

Historically, a large portion of the sunflower oil refined and consumed in Mexico has come from imported U.S. seed and crude oil. During the mid-1890s, the United States supplied a significant share of the Mexican market for both sun oil and oil-type seed. By the early 1990s, however, competition from highly subsidized European oil and oilseeds had forced that market share down to almost zero.

Within recent years, the United States has regained much of that lost market share — thanks to the SOAP program, intensified marketing promotion and an increase in U.S. price competitiveness. The passage of NAFTA and tariff advantages also are improving the trade environment in vegetable oils between the United States and Mexico.

Sunflower oil is the cooking oil of choice among Mexican consumers. Mexico is the largest single export market for U.S. sun oil, accounting for 36 percent of exports during the 1995/96 marketing year. Those 102,542 metric tons, worth more than $61 million, represented about 50 percent of all Mexican sunflower oil imports in that period.

In an effort to further increase U.S. market share, the National Sunflower Association has been conducting an aggressive sunflower oil advertising campaign directed at Mexican consumers. Funding for the program has come from the USDA Foreign Market Development Program and the Market Access Program. Since 1995, magazine and television advertisements have told Mexicans that “consuming sunflower oil is good for you.” The ads have promoted sun oil’s health benefits, flavor and cooking qualities.

To help Mexican consumers identify pure sunflower oil products, NSA also created the “Puro de Girasol” (“pure sunflower”) logo. The Puro de Girasol logo is available to Mexican bottlers only for products which contain 100 percent sunflower oil. The logo — and sun oil’s positive attributes — are featured in the above-noted television and magazine ads.

From March through May, NSA is sponsoring point-of-purchase displays in regional and national supermarket chains scattered throughout major population centers such as Mexico City, Monterrey and Guadalajara. These displays are designed to catch vegetable oil buyers’ attention, provide information about the benefits of pure sunflower oil in one’s diet, and to influence the purchase decision.

The primary point-of-purchase theme — i.e., that consumers should include 100-percent sunflower oil in a healthy diet — is emphasized throughout the promotion program. This message also is used in the mass media advertising. Utilizing this theme consistently serves to attract the consumers’ attention, educate those consumers, reinforce their beliefs — and encourage their purchases of sunflower oil.

The 1996 campaign was very successful, with participating supermarkets reporting an average 40-percent increase in sales of sunflower oil. That compares to a 14-percent increase during the same time period in 1995.

NSA regularly evaluates the progress of its promotion program. A recent survey found that 97 percent of Mexican consumers have a favorable image of sunflower oil and are likely to purchase sun oil over competing products.

Sunflower oil isn’t the only U.S. sunflower product presently being promoted in Mexico by the National Sunflower Association.

Mexican consumers love all kinds of bakery products — from the basic bread roll to a vast variety of sweet breads and rolls, cakes and cookies. It’s estimated that 600 types of bakery products can be found throughout Mexico. It’s also known that 40 percent of Mexican consumers purchase bread on a daily basis.

Add in the fact that Mexicans also are avid consumers of seeds and salted snack products, and it’s apparent Mexico offers an excellent market opportunity for U.S. exporters of confection sunflower kernel.

During the 1995/96 marketing year, the U.S. sunflower industry shipped nearly $2.5 million of confection sunflower products to Mexico. While that amount seems small in comparison to exports of sunflower oil, it does represent an increase of 11 percent over the previous year. The value of exports of sunflower kernel specifically was up 46 percent over 1994/95. These sorts of increases suggested “market opportunity,” so NSA decided to investigate ways of bolstering sales of confection kernel to Mexico.

In January, NSA contracted with a research firm to conduct consumer test panels in Mexico to determine consumption and snack habits of that nation’s consumers. Respondents also were asked for their spontaneous perceptions about eating confection sunflower kernels. Test panels were given choices of bread, cookies, brittle, brownies and cake (all containing sunflower kernel) in addition to roasted and salted kernel.

After trying all these kernel-containing products, the consumers on the test panels overwhelmingly believed the products would be purchased if available in the Mexican market. Also, both adults and adolescents were of the opinion that all the products would fit into the diets of their respective locales.

To capitalize on this prospective market, NSA will be conducting seminars to show bakers how to incorporate confection sunflower kernel into a variety of baked food products. The target audience will be large commercial bakers, with the seminars taking place in Mexico City during April. NSA also will offer technical assistance to those Mexican bakers wishing to develop products that use confection sunflower kernel.

In addition, NSA will be initiating advertising in a trade magazine for Mexican bakers. These advertisements will educate this influential audience about the many uses for confection sunflower kernel.

Ways to introduce roasted and salted sunflower kernel as a new snack food in Mexico also will be investigated by NSA. Flavoring kernels to local tastes will be a consideration.

This growth of imports of U.S. sun oil and confection kernel is being driven by the increased openness of the Mexican market and by the rising affluence and changing tastes of its consumers. With more than half of the Mexican population being age 18 or younger, U.S. farmers and exporters are afforded an excellent opportunity to build consumer preference for U.S. sunflower products.

Mexico will continue to be a very important market for U.S. sunflower products — and the National Sunflower Association will be at the forefront of efforts to develop that market.
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