Profitable food businesses in Mexico
Are you considering starting a food business? You are probably wondering how viable it is and how profitable it will be, once it is already in operation. Therefore, we have prepared some data that can serve as an answer and as a guide in the world of entrepreneurship in Mexico.
Food and beverage preparation in our country is one of the strongest business lines, along with manufacturing industries and retail businesses. That is because food services are an industry that is growing quickly according to INEGI censuses.
Based on the economic census conducted in 2019, there are 584,023 businesses dedicated to the food and beverage preparation, which combined generated 247.36 billion pesos, representing 1.1% of the country's total GDP in the same year.
Of course, this growth indicates that other entrepreneurs are finding their market. The same census data shows that businesses dedicated to food and beverages are divided between those with fixed installations, which are 434,030 businesses (74.3%); those that offer food inside a home, which contributed 15.2% of the units and, finally, but not less important, are those with semi-fixed premises, which contributed 10.5% of the economic units.
What is the food business profit?
The 2019 economic census showed that in 2018, the average annual remuneration paid to employed personnel paid in the restaurant sector nationwide was 54,316 pesos per year; that is, on average at the national level, an employee in this sector earned about 4,526 pesos per month.
However, in Mexico City this average grows with 62,201 pesos per year, which means that the monthly salary is around 5,181 pesos per month. In the state of Nuevo Leon, salaries are approximately 5,163 pesos per month and in Quintana Roo around 5,017 pesos monthly.
It is important to keep in mind that this is an average salary per person working in this sector and it includes tips.
From 2013 to 2018, the restaurant industry, presented an increase in average remuneration, as it went from 42 871 to 53 152 pesos per person per year, where food preparation services and alcoholic and non-alcoholic beverages was the economic activity with the highest average and variation, going from 46 062 to 53 501 pesos per person per year.
Over the same period, food preparation services on demand, the average annual remuneration had a decrease in the period from 2013 to 2018, going from 74 484 to 73 937 pesos per person per year.
Profitable food businesses in Mexico
If you are looking to find out which food businesses are profitable to start, we found the answer in some data from an analysis conducted by INEGI on the restaurant industry in 2014.
Please note that to determine this, INEGI calculated profitability as a percentage based on the division of the total census income by the sum of expenses and remunerations, multiplied by 100.
Pambazos, gorditas and quesadillas are a great example of Mexican food. It is therefore not surprising that, in the mentioned analysis, these businesses have a profitability of 146.7% and occupy the second place with the highest number of facilities in the country. In other words, for every 100 pesos invested, they receive a profit of 146.7 pesos.
These spaces serve food on the spot and the customer orders through a counter, bar or by telephone, according to a menu and following specific instructions. Homemade take-out food is the most important service, showing a profitability of 146.2%.
Pizzas, hamburgers, hot dogs
As far as this industry is concerned, there is not much to explain, since it encompasses businesses that offer this type of food and according to the census; they have a return on investment of 145.1%.
Even though it does not necessarily mean that all of this is received in money, since these profits have to be reinvested in raw materials, rents, fixed service expenses and salaries; it is certain that they are sufficiently profitable to be found on the streets frequently.
Consider entrepreneurship with a different approach
It is fine to investigate profitability if you are going to start a food-related business, but the figures cited in the previous paragraphs reveal something worrying about the diet of Mexicans, which is high in sugar, fat, and carbohydrates.
You might consider a healthier approach to solve several health problems that are generated by this type of eating habits. For example, consider implementing a food business with more biodiversity in seeds, sprouts, vegetables, plants, cereals. By doing so, you can be innovative and add value to what you sell.
I already have a business, how can I improve it?
Although most of the food businesses in Mexico are known by their location, the truth is that many are migrating to digital spaces, allowing them to be known by more people and not only by those who pass in front of the store. So the question is, how do you become a successful business?
It is a good idea to implement a digital marketing plan, because using digital media to boost the business is always worthwhile, as most food businesses are not aware of the power of social media.
If you own a restaurant, you need to ask for the help of digital marketing professionals, as they will help you chart a correct path towards your goals, besides building trust among your customers; considering that more than 50% of millennial people say that their food and beverage purchases are inspired or influenced by the images they see on social networks, this is very important for today's customers.
For this reason, being socially active on social networks is a great strategy, since appearing in people's feed, they will not be able to resist trying your products. People act according to their instinct when it comes to food, which for your food business could mean great sales.
Luckily, food is now " instagrammable" and people want to share the dishes they try, making it possible for people to generate content for free, plus, there is never a shortage of "foodies" (food lovers) spreading the word about their experiences online.
Remember to share different photos of food prepared from your kitchen doors, post your stories frequently, and keep the interaction with the customer reliable, genuine and authentic. This will positively elevate your brand on social media.
Social networks are not all the digital world is about
It is very easy to create connections with people through the internet, if you are making extraordinary food you will find many proposals from people like foodies who are willing to show your customers that they are a good option to eat; however, you should be careful because you may find along the way people who are only looking to eat for free.
Your best bet, if you are starting out and if you know that your food is spectacular, is to let people comment for themselves how good your business is and as time goes by, word-of-mouth advertising could grow. However, to achieve this you need a little bit of luck, this is possible and we have a clear case with Chubbies Burger who we interviewed and who told us about their way to achieve it.
Sometimes, people are not willing to share or be part of the conversation, you could "force" them a little bit through "foodies" who would be happy to give a good review about your restaurant, food or special ways of presentation that you have. Contact them, and if you don't want to completely give them the food for free, offer them a discount or coupons so that the next time they eat you can give them something for free, in exchange simply ask them to share the experience.
However, it is important to look for foodies according to your business, they can be those who specialize in your type of food, the ones who specialize in certain neighborhoods, the ones who exclusively go to talk about local businesses and once you have identified those who can help you, contact them and reach an agreement.
What are other trends I can apply?
There are always giveaways you can offer, although as we have already said, you will have to think about this strategy because it can be a little more expensive than you expect. To add value to people's lives is one of the major principles of launching any business. In this age of social media, one can easily add value through interactions, create connections and share secrets of success.
New social networks such as Tik Tok, Snapchat, Instagram Reels or Youtube shorts, may help you to reach thousands of people through small videos showing how you prepare food, remember that the heart follows the eye and you can achieve your goals.
Finally, one of the ideas we would like to share with you is a trend of ideas that you can implement, in which we talk about diversifying the menu, if it is or not a good idea to join the delivery apps, as well as implementing unique initiatives and even social initiatives to promote a benefit in your community.
Managing a food business is not an easy game, because the competition is growing more and more, just in Mexico City every corner you can find a food stall, but also people's trends, as in this case we could talk about a trend about hamburgers and the competition keeps growing.
Covid-19 made the point that the food industry requires a competitive spirit to succeed. So, emerging businesses in the food industry have to look for the tricks, trade and widely explore the tools available to establish your business.
Remember that the profitability of a business does not only depend on trends and what has worked for others; it is about the planning and monitoring you do. You may also find the guide to launching profitable businesses that we created helpful.
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