Market Trends

Mexico’s Rise in the Global Table Grape Market

The industry is adapting to market and environmental challenges through innovations like expanding the shipping season, developing superior grape varieties, diversifying exports, addressing labor issues and focusing on sustainability.

by Colin Fain at Agronometrics
Mexican table grape

The Mexican table grape industry has undergone a remarkable evolution over recent decades, positioning itself as a formidable player in the global market. Mexico’s geographic proximity to the United States, facilitated by the United States-Mexico-Canada Agreement (USMCA), provides the impetus for the country’s grape industry to flourish. 

With the implementation of the North American Free Trade Agreement (NAFTA) in 1994 — later replaced by USMCA in 2020, which facilitated trade between Mexico, the United States and Canada — Mexican grape producers were afforded significant opportunities to enhance their competitiveness, expand production and capitalize on a lucrative market niche. Mexico continues to excel, with its innovative growers independently enhancing their standing through entrepreneurial skills and strategic initiatives, unaffected by Peru’s seasonal market entry.

The climate conditions in Sonora, bordering the U.S. states of Arizona and New Mexico, are particularly conducive for grape cultivation during May and June, offering a prime window for exports to the lucrative market north of the border. Sonora has previously accounted for as much as 90% of Mexico’s table grape area and production, but cultivation has now expanded in several other states. Principal grape varieties produced in Sonora are Superior Seedless or Sugraone, Flame, Perlette and Red Globe. In recent years, strategic expansions into regions such as Jalisco have extended Mexico’s shipping period, aligning with the demand peak of late March and April in the U.S. market.

Central to Mexico’s success story in the grape industry is the proactive adoption of innovative technologies by growers and breeders. New vineyards in Jalisco, equipped with advanced growing technologies, have not only extended the shipping period but also enhanced product quality and shelf life. Moreover, partnerships with leading breeders such as IFG and Sun World International have enabled the development of superior grape varieties tailored to Mexico’s climate and market preferences, gradually replacing traditional varieties and bolstering competitiveness.

While the United States remains the primary market for Mexican table grapes, efforts to diversify export destinations are gaining traction. Offshore markets offer the potential for higher prices and expanded market reach, with Asia, Europe and the UK emerging as promising targets. However, logistical challenges, including limited ocean cargo connections necessitate strategic investments and collaborations to capitalize on these opportunities. Nonetheless, sustained growth in export volumes underscores Mexico’s commitment to market diversification and sustained competitiveness.

Labor remains a perennial challenge for the Mexican grape industry, with concerns over rising costs and seasonal fluctuations. Despite efforts to improve labor conditions and invest in social welfare, securing a stable workforce remains a key priority for growers. Moreover, sustainability considerations, including water scarcity and climate change-related pressures, necessitate proactive measures to enhance resource efficiency and resilience. Innovations in mechanization and labor-saving techniques offer potential solutions to mitigate these challenges and improve operational efficiency.

The USDA Foreign Agricultural Service forecast for the 2023/24 season anticipates a marginal increase in planted area, reaching 24,000 hectares, driven primarily by Sonora, Mexico’s largest table grape-producing state. Despite challenges related to funding constraints and technological adoption, growers are expected to maintain production levels, with a projected output of 386,000 metric tons. Sonora’s dominance in table grape production is underscored by its geographical advantage and export-oriented focus, with other states like Zacatecas and Baja California contributing to the industry’s diversity.

Amidst high inflation and fluctuating consumer demand, the market outlook for the 2023-24 season remains nuanced. Limited growth in domestic consumption coupled with high import prices and purchasing power constraints pose challenges for market expansion. However, strategic initiatives to diversify export markets and capitalize on offshore opportunities offer potential avenues for growth. Partnerships with international stakeholders and investments in market intelligence will be instrumental in navigating market dynamics and maximizing export potential.

From its historical reliance on a single variety, Flame Seedless, to a diversified landscape led by world-class growers, Mexico’s grape industry has undergone a profound evolution. 

The emergence of dominant growers, setting high standards and fostering collaboration across all scales of production, signifies a shift towards excellence and collective advancement. By embracing innovation and adopting newer, more market-friendly varieties, growers are not only enhancing productivity but also driving positive change throughout the industry. 

This collaborative spirit, coupled with a commitment to quality and food safety, positions Mexico to sustain its upward trajectory, potentially surpassing production milestones. Achieving this growth will rely not only on expanding vineyard acreage but also on strategic replacement of older varieties with high-yielding, grower-friendly alternatives. As Mexico continues to cultivate better varieties and elevate industry standards, its journey toward greater success appears both promising and attainable. 

  • Agronometrics is a market intelligence platform that collects, standardizes and presents prices & volumes for agricultural commodities.