Mexico Coffee Market Size, Share and Growth Analysis Report - Forecast Trends and Outlook (2024-2032)

Mexico Coffee Market Growth

Coffee is a beverage made by decoction, percolation, or infusion of ground and roasted seeds of the coffee plant. Coffee is also used for making various desserts including opera cake and tiramisu, among others. The caffeine content of the coffee aids in boosting energy levels and acts as a central nervous system stimulant.

The expansion of the food and beverage sector and the increasing establishment of cafeterias and coffee shops is aiding the growth of the Mexico coffee market. The increased demand for coffee can also be attributed to the growing preference for caffeinated beverages and coffee-based desserts and ice creams.

Mexico Coffee Market Trends

The adoption of aggressive marketing and promotional strategies by various key market players to expand their customer base, coupled with easy product availability across different distribution channels is supporting the market expansion. A crucial trend in Mexico coffee market is the marketing and promotional strategies including celebrity endorsements and collaborations with social media creators and influencers, among others.

The increasing demand for organic coffee due to rising concerns about the environment, is providing lucrative growth opportunities to the market. This increased demand can also be attributed to the growing awareness about the various advantages associated with the consumption of organic and sustainable food products and beverages.

Recent Developments

As per the Mexico coffee market dynamics and trends, Nescafe announced the launch of Nescafé Ice Roast, a soluble ice coffee, in April 2023 in China with Mexico next to follow and this coffee can be consumed with cold water or cold milk.

Industry Outlook

As per the Mexico coffee industry analysis, Mexico is one of the largest producers of coffee in the world and most of the coffee imports in the USA and Canada rely on Mexico owing to the high quality of beans. According to the FAS office estimates, the coffee production in Mexico is expected to reach .89 million 60-kilogram bags in the fiscal year of 2024-25. The coffee plantation area is expected to be around 700,000 hectares planted and 660,000 hectares harvested in 2024-25. Shade-grown arabica coffee is expected to be the most popular coffee type planted in the country as it is grown in 14 states.

Moreover, the Chiapas region is known for having the most coffee-growing acreage in México as it produces around 41% of the coffee beans in the country. The presence of volcanic soils and optimal altitude ranging between 1,300 and 1,700 meters makes this region favourable for coffee bean growth. Chiapas Turquesa is a popular sub-variety of coffee which is known for its larger-than-average coffee beans and a buttery smooth flavour, which boosts its demand in the market and further contributes to the growth of the Mexico coffee industry.

Technological Advancements and Expanding Market Reach Are Driving Growth in the Mexican Coffee Market

• Technological advancements in coffee cultivation and processing improving yield and quality.
• Expansion of coffee shop chains and specialty coffee retailers enhancing market growth.
• Growing export market for Mexican coffee, particularly in the United States and Europe aids Mexico coffee demand growth.
• Mexico is one of the largest producers of organic coffee, meeting increasing global demand for organic and sustainably sourced products.
• Mexico's diverse geography and climate allow for the cultivation of a variety of coffee beans, contributing to its strong presence in the specialty coffee market.

Challenges Due to Production Costs and Environmental Impact

• High production costs associated with quality coffee cultivation and processing.
• Environmental challenges such as climate change affecting coffee crop yields and quality.
• The coffee sector is highly susceptible to pests and diseases such as coffee rust, which can devastate crops and reduce output, impacting the Mexico coffee demand forecast.
• Dependence on smallholder farmers who face difficulties in accessing finance and markets.
• Intense competition from other coffee-producing countries in the global market.
• Regulatory changes and compliance requirements posing challenges for coffee exporters.

Sustainable Practices and Strategic Collaborations are Transforming the Coffee Market in Mexico

• Increasing investment in sustainable coffee cultivation practices to meet global demand for eco-friendly products.
• Growing focus on direct trade relationships between coffee producers and international buyers can enhance Mexico coffee market value.
• Mexico's growing tourism industry and the rise of coffee culture present opportunities for the domestic coffee market to expand through coffee-themed experiences and product offerings.
• Potential for collaborations with research institutions to innovate and improve coffee cultivation techniques.

Coffee Production in Mexico

• 90% of Mexico's coffee is produced in four southern states: Chiapas (44%), Oaxaca (11%), Veracruz (29%), and Puebla (11%).
• More than 500,000 farmers grow coffee in Mexico, with 70% being smallholders with less than 10 hectares of land, which can increase Mexico coffee market revenue.
• Large estates are rare, with only 0.06% of farms being larger than 50 hectares.
• Nearly 97% of the country's coffee production is Arabica, primarily traditional varieties like Garnica, Typica, and Bourbon. 

Mexico Coffee Industry Segmentations

“Mexico Coffee Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Product Type

• Whole-Bean 
• Ground Coffee 
• Instant Coffee 
• Coffee Pods and Capsules

Market Breakup by Distribution Channel

• Supermarkets and Hypermarkets 
• Convenience Stores 
• Speciality Stores 
• Online 
• Others

Market Breakup by Region

• Baja California 
• Northern Mexico 
• The Bajío 
• Central Mexico 
• Pacific Coast 
• Yucatan Peninsula

Mexico Coffee Market Share

By Product Type

Whole beans account for a significant coffee market share in Mexico, as they offer much more potent aroma and flavour as compared to ground beans. This happens because as soon as the grounding process is initiated, oxidation begins, causing the loss of flavour and aroma much quicker. Whole beans also allow the production of a fine cup of coffee as the consumers and baristas are able to adjust the size of the beans as per their requirements and match the grind with the brewing method.

By Distribution Channel

Online distribution channels are expected to witness significant growth over the forecast period. This growth can be attributed to the availability of different types of coffee across online retail platforms, including whole beans, instant coffee, ground coffee, and coffee capsules and pods. They also offer a wide range of brands and ensure the delivery of the product in a convenient and timely manner, which further aids the demand of Mexico coffee market. The availability of lucrative discounts and coupons along with the provision of free shipping are supporting the segment growth. The rising consumption of coffee and increasing preference for coffee-based desserts is further boosting the market demand.

Competitive Landscape

Volcanica Coffee Company is a speciality retailer that provides exotic coffee and is committed towards ensuring the provision of the highest quality of products to their customers. The company was founded in 2004 and is headquartered in Georgia, United States.

New Mexico Piñon Coffee, a family owned and operated business in Mexico coffee industry, is one of the largest coffee roasters in New Mexico. The products provided by the company include cold brew, coconut almond delight, biscochito, maple walnut, Mexican spiced chocolate, and pumpkin spice, among others.

Starbucks Corp. is a multinational chain of roastery reserves and coffee houses, that specialises in micro-ground instant coffee, café lattes, espressos, Frappuccino, smoothies, tea, and juices, among others. The company was founded in 1971 and is headquartered in Washington, United States.

Other Mexico coffee market key players include Marcas Nestlé, SA de CV, Louis Dreyfus Company B.V., Café Algraná SA DE CV, The Cabo Coffee Company, Ruta Maya Coffee, Don Pepe Coffee S.A. de C.V., and Cafe Arrebol, among others.

Mexico Coffee Market Regional Analysis

Veracruz, Chiapas, and Oaxaca are three prominent regions of coffee production in Mexico as they account for around 80% of the total output of the country and have provided a protected status to the coffee, which can enhance the overall Mexico coffee demand.

Key Indicators of Prices in the Coffee Market in Mexico

• Global Coffee Prices: Fluctuations in global coffee prices due to changes in supply and demand dynamics impact local prices in Mexico. 
• Climate Conditions: Variations in climate affect coffee crop yields and quality, influencing the cost and prices of coffee produced in Mexico.
• Transportation Costs: Changes in transportation and logistics costs for coffee export and distribution affect overall pricing in the Mexico coffee industry.
• Certification Costs: Expenses related to certification and compliance for specialty and sustainable coffee production affect the prices of premium coffee in Mexico.

Key Indicators of Demand in the Mexico Coffee Market

• Domestic Consumption: Increasing coffee consumption driven by lifestyle changes and urbanization is boosting demand in Mexico. 
• Middle Class Expansion: Growth in the middle class with higher disposable incomes supports increased purchases of premium coffee in Mexico.
• Ethical Sourcing: Rising consumer awareness and demand for ethically sourced and sustainable coffee products are shaping the Mexico coffee industry trends.
• Economic Factors: Economic growth and stability enhance consumer confidence, leading to increased spending on coffee products.
• Seasonal and Cultural Factors: Seasonal variations and cultural events influence coffee consumption patterns and demand throughout the year.