Rising Bread Prices Reshape Mexico’s Bakery Industry

The price of bread in Mexico has risen by up to 8% annually, leading consumers to reduce their purchasing volume. Factors such as the higher cost of basic ingredients and a growing preference for healthier diets are transforming the market.

According to a study by international market research firm NielsenIQ, Mexican households are spending 8% more on bread purchases compared to last year. This increase has led consumers to cut their purchase volume by 5%, visit bakeries less frequently, and opt for smaller-sized products.

Raquel Jiménez, Director of Customer Success, NielsenIQ, explained that in response to declining demand, the industry is undergoing a reengineering of product sizes in both white and whole wheat bread. This shift has generated a recovery in sales by units, though not in total volume, as smaller sizes gain relevance.

NielsenIQ reported that consumption of packaged bread, which accounts for 61% of the industry’s total sales volume, fell by 2.8%. “The challenge of recovering demand for packaged bread, which is considered a staple product where value-added attributes do not outweigh the importance of family budgets, will require manufacturers to ensure proper execution and adjust formats based on each channel’s role,” Jiménez noted.

In October, several staple foods experienced year-over-year price changes. The cost of wheat flour, milk, eggs, and butter rose by 6.6%, 4.9%, 3.6%, and 2.7%, respectively, while sugar was the only ingredient that became cheaper, dropping 6.4%, according to data from the Agricultural Market Consulting Group (GCMA).

“The inputs that drive the bakery industry suffer constant market distortions. So, when the price of chocolate rises, as it currently has, it certainly affects us due to the increased cost of raw materials,” said Julián Castañón, President, National Chamber of the Bakery, Pastry and Related Industries of Mexico (CANAINPA).

GCMA added that during the week of October 20–26, egg prices saw an additional increase, driven by renewed demand in preparation for the Day of the Dead celebrations. In this context, Castañón noted that an economic impact of over MX$13 billion is expected in Mexico City during the holiday, with MX$1 billion stemming specifically from bread sales.

This year, the average price of a medium-sized pan de muerto (traditional bread of the dead) is approximately MX$220/kg, though the cost varies depending on the ingredients and the bakery. The National Alliance of Small Merchants (ANPEC) reported that pan de muerto prices have increased by an average of 21% compared to last year. Despite this, buyers appear to remain loyal to the tradition. In 2024, ANPEC estimated that prices for pan de muerto rose by as much as 24% compared to 2023.

Meanwhile, consumers’ growing preference for gluten-free diets and awareness of the environmental impact of traditional crops are pushing the baking industry to adopt new ingredients and production processes. Data from Grand View Research show that the global market for alternative flours reached approximately US$8.5 billion in 2021, with a projected compound annual growth rate of between 7% and 8% through 2027.

At the national level, CANAINPA estimates that demand for these products will grow by 4.2% between 2025 and 2026. Moreover, the National Chamber of the Restaurant and Seasoned Food Industry (CANIRAC) has reported a significant increase in menu offerings that incorporate alternative flours. Some supermarket chains have also begun dedicating entire aisles to gluten-free or nontraditional flour-based products.

“The challenge is to adapt to our consumers’ needs; to understand what they want, what they need, and how they can find that evolved demand in the neighborhood bakery, the local large bakery, or even the biggest industrial bakery in the world,” said Castañón.

According to CANAINPA, per capita bread consumption in Mexico is 36kg. Of this total, 81% corresponds to white bread varieties such as bolillos, teleras, and packaged bread, while 19% consists of sweet bread and pastries. The country has over 60,000 bakeries, 97% of which are small, family-owned businesses. The industry directly employs more than 500,000 people and generates an additional 4.5 million indirect jobs linked to the supply chain.