Valentina Meneses
Sr. Analyst
AMI
Diego Rodríguez Paez
Director of Logistics and Industry Practice
AMI
The food and beverage industry in Latin America is facing a pivotal moment. The recent diplomatic tensions between the U.S. and Colombia and the looming 25% tariff threats have created significant uncertainty for exporters in Colombia and Mexico. However, this challenge also presents a unique opportunity for these nations to rethink their trade strategies, diversify and pivot to new markets, and strengthen their regional positions.
Rather than viewing the U.S. market uncertainty as a setback, Mexico and Colombia can leverage their robust food sector manufacturing capabilities to explore new markets within Latin America. By focusing on intra-regional trade expansion and forming strategic partnerships with retailers and regional distributors, companies can grow their pipelines and mirror the intra-regional trade success seen in Asia during the past decades. This shift could also spur innovation in logistics and supply chain services, creating demand for tailored cross-border trucking solutions, integrated ocean services better connecting the region, and digital platforms for trade facilitation.
1. The U.S. Trade Uncertainty: A Catalyst for Change
The U.S. has long been a key trading partner for Mexico and Colombia. However, the recent diplomatic tensions and the threat of 25% tariffs have introduced unpredictability that could disrupt established trade flows. For exporters, this means:
Higher Costs: Tariffs would make Colombian and Mexican products less competitive in the U.S. market, forcing companies to absorb the costs and pass them on to consumers or find alternative suppliers for products to avoid tariffs.
Market Volatility: The unpredictability of U.S. trade policy makes long-term planning difficult, discouraging investment and innovation.
Over-Reliance on a Single Market: Dependence on the U.S. exposes exporters to significant risks as Trump uses the economy as a negotiation tool to achieve its political goals.
2. The Opportunity: Intra-Regional Trade as a Growth Engine
Latin America’s intra-regional trade in the food and beverage sector currently accounts for just 22% of all trade, compared to nearly 45% in Asia. This gap represents a significant growth opportunity for Mexico and Colombia. Here’s how they can capitalize on it:
Growing Regional Demand: Latin America’s expanding middle class drives demand for high-quality, affordable foods, vitamins, and healthy snacks. Mexican and Colombian manufacturers, with their competitive production costs and cultural familiarity with regional tastes, are well-positioned to meet the demand, but understanding the size of potential markets and competitive pricing will be key to accelerate go to market strategy.
Strategic Partnerships: Medium-size exporters can expand their reach and grow their pipelines by identifying regional retailers and distributors interested in expanding their product offerings. These partnerships can help businesses navigate local markets, comply with regulations, build brand loyalty, and accelerate entering new markets.
We recommend that exporters identify and sell directly to major retail brands in the region, as this increases the chances of selling larger volumes in new markets and allows them to offer more competitive prices by bypassing the margins charged by distributors. The reality is that major retailers are very familiar with the import process and want to minimize product costs by working directly with manufacturers.
Geographic Proximity: For Caribbean islands or South American nations, importing products from Latin America may be faster and more cost-effective than importing from distant markets like Europe or the US.
3. Risks and Challenges
While the opportunities are compelling, some significant risks and challenges must be addressed:
Service Gaps: Logistics services in Latin America are primarily tailored for east-to-west and north-to-south routes instead of intra-regional trade. This disconnects between service offerings and regional demand reveals a significant gap. These gaps can raise costs and delay shipments, eroding the region’s competitiveness.
Regulatory Barriers: Latin American countries encourage exports but restrict competing product imports, placing excessive regulatory hurdles despite existing trade agreements. Regulatory differences between countries can create friction, slowing cross-border trade and increasing compliance costs.
Here is an example of the requirement to import goods in three large, mid-size markets in South & Central America and the Caribbean:
Colombia- Import process1
| Steps | Description | |
|---|---|---|
| 1 | Import Registration | Register on the web page “Registro de Usuarios de la Ventanilla Única de Comercio Exterior-VUCE”. File the “online application for import license or registration” form. Approval: Address the registration to INVIMA. |
| 2 | Free Sale Certification (CVL) | Certifies the product is fit for human consumption and allowed to be freely distributed and sold within national territory, without any restriction. |
| 3 | Sanitary Registration, Permit, Notification or Authorization (NSO) | Pay the processing fee, fill out the NSO form, attach the 12 required documents, send documentation to the authorities via e-mail, and establish a legal representative in Colombia. |
Guatemala- Import process2
| Steps | Description | |
|---|---|---|
| 1 | Sanitary Registration | Importers must obtain a Sanitary Registration from the Ministry of Public Health and Social Assistance (MSPAS) for processed foods and beverages. This involves evaluating and certifying the product’s safety and quality standards. |
| 2 | Import Permit | An Import Sanitary Permit must be requested using the form A-AS-G-001, available on the MSPAS website. |
| 3 | Company Registration | Importers should be registered with the Tax Administration Superintendence (SAT) and have an updated Unified Tax Registry3 (RTU)4. |
| 4 | Product Labeling | Labels must comply with local regulations, including product name, ingredient list, net content, manufacturer’s information, and expiration date in Spanish. |
| 5 | Documentation | Required documents include the commercial invoice, bill of lading or airway bill, packing list, and certificates of origin if applicable. |
| 6 | Tariffs and Taxes | Importers must pay the applicable customs duties (up to 10% or exempt from Colombia,5 and up to 13% or exempt from Mexico6) and the 12% value-added tax (VAT) upon the entry of goods. |
| 7 | Inspection | Imported food products are subject to inspection by the Department of Food Regulation and Control to ensure compliance with health standards. |
Dominican Republic – Import process7
| Steps | Description | |
|---|---|---|
| 1 | Sanitary Registration | Importers are required to obtain a Sanitary Registration from the Ministry of Public Health for imported food and beverages. This process ensures that products meet the country’s health and safety standards.8 |
| 2 | Import Permit | Importers need to obtain an import authorization for food products by completing a detailed application about the products to be imported9 with the Ministry of Public Health and Social Assistance (MSP), through the General Directorate of Medicines, Food and Health Products (DIGEMAPS). |
| 3 | Company Registration | Importers must be registered with the National Taxpayers Registry (RNC) and the General Directorate of Customs (DGA).10 |
| 4 | Product Labeling | Labels should adhere to Dominican regulations, ensuring clarity and accuracy in product information, including details like product name, ingredients, and expiration date. |
| 5 | Documentation | Necessary documents encompass the commercial invoice, bill of lading or airway bill, packing list, and any required sanitary or phytosanitary certificates.11 |
| 6 | Tariffs and Taxes | Importers are obligated to pay relevant customs duties (between 8% and 40% for Mexican and Colombian products12) and taxes as determined by the DGA and the 18% value-added tax (VAT).13 |
| 7 | Inspection | The Ministry of Agriculture conducts inspections to verify that imported food products meet sanitary and phytosanitary requirements.14 |
Competition from Global Players: As medium and small manufacturing players seek to expand their regional presence; they will face competition from established global brands and imported products from outside the region. Thus, understanding where products are price-competitive is paramount to prioritize efforts.
Potential Regional Distributors:15
Colombia
Company specializing in the wholesale and retail of healthy foods, focusing on minimally processed, primarily plant-based products.
Store offering over 800 healthy, organic, and natural products, with home delivery service.
Company dedicated to designing and manufacturing functional foods using high-quality ingredients like quinoa.
A company of natural foods, offering products such as nuts, granolas, oats, soy, peanuts, and bee honey.
Company offering a wide range of healthy products, including flours, nuts, seeds, plant proteins, salts and seasonings, breads and pastas, snacks, cereals, and arepas.
Guatemala
Company specializing in healthy food products.
Company specializing in olive oils and other healthy products.
Company focusing on natural and healthy food products such quinoa.
Company providing innovative products in the health and nutrition field, committed to offering therapeutic solutions for a healthier life.
Company focusing on natural and healthy food products.
Dominican Republic
A company that distributes food products, including a range of healthy options.
Company focusing on natural and healthy food products such as extra virgin olive oil.
Company that distributes food products including Santiveri foods, diet products, and nutrition supplements.
4. The Role of Logistics in Unlocking Regional Trade Potential
Value of food exports from Colombia and Mexico to trade partners
| Exports (USD billion) | U.S | LAC | China | Rest of the world | Total |
|---|---|---|---|---|---|
Colombia16
| US$2.5 |
US$1.7 |
US$0.2 |
US$3.7 |
US$8.0 |
|
| Mexico17 | US$40.2 | US$4.2 | US$9.2 | US$3.0 | US$56.6 |
The success of the intra-regional trade ambitions will depend heavily on the availability of tailored logistics solutions. Key areas of focus include:
Cross-Border Trucking: Enhancing service reliability, providing greater shipment traceability for trucking services, and streamlining customs support can lower transit times and costs for cross-border shipments.
Ocean Services: Enhancing maritime routes and connectivity within the Caribbean and South and Central America can facilitate the movement of goods between countries.
Cold Chain Logistics: Enhancing the offering and reliability of temperature-controlled transportation services is crucial. Clients also expect carriers to adhere to delivery and loading times when transporting products with a short shelf life (fresh), along with the development of online tools to monitor temperatures for better shipment visibility.
Digital Platforms: Leveraging technology to create a digital trade platform for manufacturers to offer products, lead times, certifications, prices, and ingredients can make doing business as simple as buying on Amazon.
Conclusion
While diplomatic tensions between the U.S., Colombia, and Mexico are challenging, they offer a unique opportunity for Mexico and Colombia to redefine their roles in the global food and beverage trade. By focusing on intra-regional trade, these nations can reduce their dependence on the U.S. market, unlock new growth opportunities, and build a more resilient and sustainable trade network.
However, realizing this vision will require overcoming significant challenges, from logistics service gaps to regulatory barriers. For businesses, the time to identify opportunities is now, as diversification is critical, and exploring new partnerships can turn the current uncertainty into a catalyst for long-term success.
Sources:
- AMI interviews 2023 & INVIMA ↩︎
- Guatemala Gov. ↩︎
- SAT: The Unified Tax Registry (RTU) is the system managed by the Superintendency of Tax Administration (SAT) that registers all individuals and entities required to comply with tax obligations in the country. Upon registering with the RTU, taxpayers receive a Tax Identification Number (NIT), which is essential for conducting formal economic activities and fulfilling tax responsibilities. ↩︎
- Data export, 2022 ↩︎
- Guatemala Gov. ↩︎
- Guatemala Gov. ↩︎
- DR GOV. ↩︎
- DR GOV. ↩︎
- Contadores Dominicanos ↩︎
- DR, Gov ↩︎
- Contadores Dominicanos ↩︎
- DR, Gov. ↩︎
- Contadores Dominicanos ↩︎
- DR GOV. ↩︎
- Each distributor website ↩︎
- DIAN, Arancelary departures 2,3,4,5,7,8,9,10,11,12,15,16,17,18,19,20,21 and 22. ↩︎
- Banxico, Arancelary departures 2,3,4,5,7,8,9,10,11,12,15,16,17,18,19,20,21 and 22. ↩︎
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