The pet food market leader in Mexico, Nestlé Purina PetCare, recently announced a US$160 million investment to expand its production facility located in the municipality of Silao, Guanajuato, Mexico. With the investment, the plant aims to be the most advanced and cutting-edge production facility in the entire Latin America region, according to the company.
Nestlé Purina inaugurated the Silao plant back in 2015 with an investment of US$220 million and the creation of 200 direct jobs. With the announced expansion in October 2020, total accumulated investment in the plant amounts to US$360 million, creating 200 additional direct jobs and a total of 1,700 indirect jobs.
The facility specializes in dry and wet pet food production. According to Forbes Mexico, the plant has a current annual capacity of 25,000 metric tons of wet food; with the expansion, the production capacity of dry food will rise to approximately 285,000 tons per year.
Nestlé Purina is one of the companies with the largest number of pet food registered products in Mexico, with around 280 dog and cat food product registrations with the agriculture secretariat as of 2019. Therefore, the company has increased its market share in recent years, thanks to the constant development and launch of new products.
It is worth noting that Nestlé Purina’s investment decision signals the strong status and promising outlook for the local pet food market amid the COVID-19 pandemic.
The central state of Guanajuato offers a competitive advantage for the company due to the strategic location. Its access to maritime ports and any distribution point in Mexico and Central America facilitates logistics and operations for domestic and foreign markets.
Currently, the state of Jalisco in western Mexico is the biggest pet food hub in Latin America due to multiple pet food production plants of numerous companies. However, in recent years, most pet food market leaders are looking at other territories within Mexico to reach new markets regionally or distribute to other countries.
Iván Franco is the founder of Triplethree International and has collaborated on hundreds of research projects for several consumer goods industries. He was granted the Global Consultant of the Year award by Euromonitor International and authored the book 17 Market Strategies for Growth (in Spanish).
Pet owners want a lot from their pet food brands. They want primary proteins that suit what they believe is best for their animal. They want grains or they don't. They want something customized, but it has to be easy to understand.
Constraints and crises, like those experienced in 2020, help drive innovation and sustainability offers context.