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Mexico’s markets going mainstream

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Mexico’s open food markets are giving way to US style supermarkets with produce and meat wrapped neatly in plastic. Reporter Mary Stucky finds out what’s behind the trend.

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JEB SHARP: I’m Jeb Sharp and this is The World.  Among the attractions Mexico offers visitors are it’s colorful food markets.  You’ll find fruits and vegetables there in gorgeous display and maybe not as appetizing raw meat hanging from hooks and piled on chopping blocks.  But these traditional Mexican markets are giving way to US style supermarkets with product and meat wrapped neatly in plastic.  Reporter Mary Stucky tells us what’s behind the trend.

MARY STUCKY: The Martinez de la Torre Market is a Mexico City institution.  Jesus Vasquez Soriano is the third generation of his family to see fresh produce in this market.  Tomatoes, onions, carrots, green beans, avocados, and all kinds of colorful peppers.

JESUS VASQUEZ: [SPANISH]

MARY: Just look at the quality he says.  But in spite of that quality Vasquez says his sales are falling.  Why?  The answer is across the street.  A new Bodega Aurrera.  A mini-supermarket owned by Wall-Mart.  Here they take credit cards, unheard of at traditional food markets.  Prices at the Bodega Aurrera are also generally lower.  That’s because Wall-Mart buys in volume and bargains down the price, says Thomas Reardon of Michigan State University.  He studies the rise of supermarkets in developing countries.

THOMAS REARDON: The study in 2005 showed that ten of the seventeen main fruits and vegetables that were bought by Mexicans were cheaper in supermarkets and that was in 2005.  I expect that by now at the end of the decade we’ll find that it’s even more broad, the advantage of price.

MARY: US style supermarkets aren’t new in Mexico.  They’ve been around for decades.  But there’s more of them than ever.  Reardon says when NAFTA opened Mexico to free trade supermarkets dramatically took off.  Wal-Mart, now Mexico’s biggest retailer set up it’s own system of buying and distributing produce, bypassing traditional wholesalers like those in the vast central de abasto or supply center in Mexico City.  Ignacio Galicia runs a wholesale business in the central de abasto selling onions, which he buys directly from farmers large and small.  He sells his onions to traditional neighborhood food markets and food factories.  Galicia tried selling to Wal-Mart but says they were too picky.

IGNACIO GALICIA: They actually chopped every single onion in half.  And then if they have a little dot in the middle, for example, they send it back.  It’s not even worth it to sell them the onions to them.

MARY: But losing the supermarket business has hurt traditional food wholesalers.  Some have seen sales cut in half in recent years according to Thomas Reardon.  He says the rise of the supermarket has also been bad news for small farmers, the majority of all farmers in Mexico.

THOMAS: They essentially continue to function relegated to the lower quality produce without having the ability to grade and sort their produce to be able to get incentive prices for quality.  That means that you’re adding one more major force within the economy that increases the challenge for that small farmer population.

MARY: But small farmers who produce niche products like some spices and herbs are able to sell to Wal-Mart says company spokesman Antonio Ocaranza.  We met at an enormous Wal-Mart in the north of Mexico City.  A steady stream of customers came through the doors of the store open around the clock.  Products from washing machines to bicycles, all under one roof.  Ocaranza says it’s what consumers demand now.

ANTONIO OCARANZA: There’s a need on the part of the people in Latin America and obviously we see it in our clients to be able to have access to good products at the best prices with the quality, the warrantee, and the certainty that modern retail can provide.

MARY: And it’s clear that enough customers like this one agree with that.

FEMALE: It is kind of nice to go to a supermarket where you have there’s some guarantee that the people who work there have access to bathrooms and places where they can wash their hands and there is some guarantee that eventually the health authorities will probably inspect them.

MARY: Still the old system isn’t dead yet.  Many Mexicans say they shop at both supermarkets and traditional markets.  Back at the Bodega Aurrera, the mini supermarket with the traditional food market across the street.  A mother and daughter are shopping for eggs.

FEMALE: [SPANISH]

TRANSLATOR: Eggs are cheaper here in the supermarket.  Next we’ll go to the traditional market across the street to buy the rest.  That’s where the vegetables are fresher and cheaper.

MARY:  And so at least for now consumers in Mexico can choose between traditional markets and supermarkets.  How much longer both will exist is anyone’s guess.  For The World, I’m Mary Stucky in Mexico City.

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