April 22nd, 2010 | By Round Earth Media
Mexico’s markets going mainstream
Visitors to Mexico are charmed by all of the colorful food markets – fruits and vegetables in gorgeous display and, maybe not so appetizing – raw meat hanging from hooks and piled on chopping blocks. But these traditional markets in Mexico are giving way to US-style supermarkets with produce and meat wrapped neatly in plastic. Mary Stucky reports about the recent and dramatic growth of supermarkets in Mexico.
The following is a transcript. To listen to this broadcast, please click on the play button above.
[Sounds from traditional market]
STUCKY: The Martinez de la Torre market is a Mexico City institution.
[Sound of Vazquez interacting with a customer]
STUCKY: Jesus Vazquez Soriano is the third generation of his family to sell fresh produce in this market. It’s all carefully stacked on the tables in front of him – tomatoes, onions, carrots, green beans, avocados and all kinds of colorful peppers.
SORIANO: Speaking Spanish
STUCKY: Just look at the quality – he says. But in spite of that quality, Vazquez says his sales are falling. Why? The answer is across the street.
[Sound from the street and a supermarket]
STUCKY: A new Bodega Aurrera, a mini-supermarket owned by Walmart.
[Sound of the beeping bar code reader]
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STUCKY: Here they take credit cards – unheard of at traditional food markets. Prices at the Bodega Aurrera are also lower. That’s because Walmart buys in volume and bargains down the price, says Thomas Reardon of Michigan State University. He studies the rise of supermarkets in developing countries.
REARDON: A study in 2005 showed that the main fruits and vegetables bought by Mexicans were cheaper in supermarkets and I expect by now the end of the decade we’ll find that it’s even more broad, the advantage of price.
STUCKY: 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. Walmart – now Mexico’s biggest retailer – set up its own system of buying and distributing produce, bypassing traditional wholesalers like those in the vast Central de Abasto – or supply center – in Mexico City.
[Ambi of Central de Abasto]
STUCKY: 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 Walmart but says they were too picky.
GALICIA: They actually chop every single onion in half and if it has a little dot in the middle for example they send them back. 24:00 It’s not even worth it to sell to them.
STUCKY: 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.
REARDON: They essentially continue to be relegated to lower quality produce, without 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 in the economy that increases the challenge for that small farmer population.
STUCKY: But small farmers who produce niche products – like some spices and herbs – are able to sell to Walmart says company spokesman Antonio Ocaranza.
[Walmart, sound of grocery carts, people]
STUCKY: We met at an enormous Walmart in the north of Mexico City. A steady stream of customers came though the doors of this store open around the clock. Floors are clean and highly polished, food neatly packaged, products from washing machines to bicycles all under one roof. Ocaranza says it’s what consumers demand now.
OCARANZA: There is a need to be able to have access to good products at the best prices, with the quality, the warranty and the certainty that modern retail can provide.
STUCKY: And it’s clear that enough customers – like this one – agree with that.
CUSTOMER: It’s kind of nice to go to a supermarket where the people who work there have access to bathrooms and places where they can wash their hands. And there’s some guarantee that health authorities will probably inspect them.
STUCKY: Still, the old system isn’t dead yet. Many Mexicans say they shop at both supermarkets and traditional markets.
[Sound from supermarket]
STUCKY: Back at the Bodega Aurrera – the mini supermarket with the traditional food market across the street – a mother and daughter are shopping for eggs.
CUSTOMER (Speaking Spanish) Eggs are cheaper here in the supermarket. Now we’ll go to the traditional market to buy the rest. That’s where the vegetables are fresher and cheaper.
STUCKY: 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.