Table of Contents

Content
1. Executive Summary...........................................................................................................................4
2. Product description............................................................................................................................5
3. Demand analysis................................................................................................................................6
4. Objectives..........................................................................................................................................9
5. Market risks.....................................................................................................................................11
6. Setting prices....................................................................................................................................12
7. Understand the role of trade policy..................................................................................................14
8. Sources.............................................................................................................................................16

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 Table of Figures
Figure 1-Golden Delicious..............................................................................................................5
Figure 2- Proximal Composition.....................................................................................................6
Figure 3- Demand............................................................................................................................6
Figure 4-Population.........................................................................................................................7
Figure 5- Fruits Mexico...................................................................................................................7
Figure 6-Price................................................................................................................................12

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 1. Executive Summary
Exporting apples from Canada to Mexico can have several benefits for both nations. The
principal is the use of the North American free trade agreement by which the importation and
exportation of products can be done much faster and more efficiently. Throughout this document
we will be able to appreciate the different aspects to consider and evaluate in order to carry out
the trade of this product between the two countries, as well as its advantages and the barriers to
overcome. Some other benefits may be the following:
Market diversification: Exporting apples to Mexico allows Canada to diversify its markets and
reduce its dependence on traditional markets, such as the United States.
Capitalize on demand: Mexico is a growing market for fresh and healthy products, such as
apples. By exporting apples to Mexico, Canada can take advantage of this demand and increase
its sales.
Complementarity of the economies: Mexico has a growing food industry and a growing young
population that demands fresh and healthy products. Canada has an advanced agricultural
industry and innovative technologies for apple production. Exporting apples from Canada to
Mexico can be a way to take advantage of the comparative advantages of each country and create
a stronger and more complementary business relationship between the two.
The variety of apple that we use to carry out the analysis is the following: The Golden Delicious
apple, originally from Virginia, United States, is a medium-large fruit with a round, golden
appearance when ripe. It has a sweet, crunchy flavor, juicy meat, and is characterized by its fine
texture and aromatic taste. The demand for apples in Mexico, where the product is intended to be
exported, is significant, with an average consumption of 7 kg per person per year.
The shelf life of apples varies depending on how they are stored, with refrigeration being the
preferred method for transportation. Phytosanitary certificates, export permits, product labeling,
and customs documentation are required for the export of apples, complying with the regulations
of the importing country.
The apples must meet certain quality requirements, including being whole, healthy, clean, and
free of pests and damage. They must also have the characteristic color of the variety and be of a
maturity level that allows for further ripening.
As a conclusion, apples have a good potential for export to Mexico, considering the demand and
the quality requirements of the product. Mexico is one of the largest markets in Latin America
and has a great demand for fresh and healthy products, such as apples. Exporting apples from
Canada to Mexico could meet this market demand and generate profit for Canadian growers. In
general, exporting apples from Canada to Mexico can be a profitable opportunity for Canadian
growers and a way to meet the demand for fresh and healthy apples in the Mexican market.

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 2. Product description

Golden Delicious apple

Country of origin: Virginia (United States)

Origin: Grimes Golden seed, pollinated by Golden Raineta
Color: yellow green – golden yellow
Caliber: medium-medium high
Weight: medium
Harvest: September 15
Quality: delicate, extreme precautions must be taken transport and storage
Acidity: medium
Sugars: medium
Flavor: juicy, slightly acid and aromatic
Texture: fine

When ripe, it is a round, golden apple with a shiny, smooth

yellowish skin. Its color can range from golden yellow to
greenish yellow. It is characterized by having a sweet, crunchy
flavor and being juicy in its meat. It is a medium-large fruit. It
also stands out for containing lenticels on its outer skin, which
are the tiny black dots that allow the fruit to breathe.
This fruit is eaten raw and is also used cooked in a multitude of
cakes, in the oven, etc. It is very aromatic both raw and cooked,
since it oxidizes less than other varieties and supports high
Figure 1-Golden Delicious
temperatures in the oven very well.

Figure 2- Proximal Composition

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 3. Demand analysis.
Demand
This statistic shows the volume of fresh apples exported
from Canada from 2010/11 to 2021/22. During the
marketing year 2021/22, Canada exported approximately
54,475 metric tons of fresh apples. This constitutes an
increase of over 37 percent compared to the previous
marketing year.
Therefore, it can be concluded that the production of
apples in Canada has the capacity to satisfy the needs of
our customers.
Figure 3- Demand
Volume of fresh apples exported from Canada from
2010/11 to 2021/22 (in 1,000 metric tons)
Customer profiles

Apples are a widely consumed fruit and are not limited to any particular group. They are popular
with people of all ages and backgrounds. Are eaten by people of all ages, they can be particularly
popular with children due to their sweet taste and easy-to-eat nature.

Apples are grown in a variety of climatic conditions and can be found in many different regions
of the world. However, certain varieties may be better suited to specific climates or geographic
locations, and this may affect their availability and price in different areas. Additionally,
transportation costs and import/export regulations can also affect the availability and price of
apples in different regions.
The apple is the 8th most consumed fruit in Mexican territory with a total of 7 kg per person per
year on average. In addition to this, as we can see in the following graph, the Mexican population
is one of the 10 largest in the world, which is why it is a great market opportunity.
Definitively, the Canadian apple could enter among the group of main exports to Mexico due to
its proximity, trade agreements and the preference of the customers.

Figure 4- Fruits Mexico Figure 5-Population

Product modifications
Here are the approximate shelf lives of apples, depending on how they are prepared and stored:

● On the counter: 5–7 days

● In the pantry: 3 weeks
● In the refrigerator: 4–6 weeks
● Once cut: 3–5 days in the fridge, 8 months in the freezer

The higher the holding temperature, the greater the softening and respiration rate and the sooner
the quality becomes unacceptable. Apples respire and degrade about twice as fast at 4°C as at
0°C. At 15°C they will respire and degrade more than six times faster. The optimum storage
temperature for apples depends on the variety, but all are within the range from -1°C to +4°C.

Transportation
For our product we will choose the refrigerated container. This container is equipped with a
refrigerating motor that depends on an external power source that can be the connections present
on the ships or in the terminals or through generators called gen sets placed on the trucks or
platforms. Normally the most used for fruit and vegetables is the 40' one.
Documents that must accompany the shipment:

Phytosanitary certificates: These are official documents that verify that the apples being exported
meet the phytosanitary requirements of the importing country. This typically involves inspection
and testing of the apples to ensure that they are free from pests and diseases.

Export permits: Some countries may require an export permit to be obtained before apples can be
shipped to that country. This permit may require documentation of various aspects of the
production process, such as the use of pesticides, as well as compliance with any relevant food
safety standards.

Product labeling: The labeling of the apples being exported may need to comply with specific
regulations in the importing country. This may include requirements related to the country of
origin, weight, grade, and other product specifications.

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Customs documentation: There will be customs documentation that is necessary for the export of
apples. This can include commercial invoices, packing lists, and bills of lading, which will vary
depending on the specific requirements of the importing country.

Requirements

In all categories, subject to the special provisions for each category and tolerances allowed,
apples must:

 Be whole, the stem may be absent, as long as the cut is clean and the skin adjacent is
not damaged.
 Be healthy, and free of rottenness or deterioration that make them unfit for
consumption.
 Be of firm consistency
 Be clean, and practically free of any visible foreign matter.
 Be practically free of pests, and damage caused by them, that affect the general
appearance of the product.
 Be free of abnormal external humidity, except for condensation resulting from its
removal from a cold room.
 Be free of any strange smell and/or taste.
 Be free of damage caused by low and/or high temperatures.
 Be practically free of signs of dehydration.

The apples must have the characteristic color of the variety and the area in which they are
produced.

The development and condition of the apples must be such as to enable them:

 Withstand transport and handling; and

 Arrive in satisfactory condition at the place of destination.

Maturity Requirements.

The apples must have a degree of development that allows them to continue the process of
maturation and reach the degree of maturity characteristic of the variety.

To verify the minimum maturity requirements, various parameters may be considered, such as:
morphological aspects, firmness and refractometric index.

Local representative

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With the objective of carrying out the commercial exchange with the Mexican market, a team of
local professional collaborators with extensive knowledge and experience within the industry
will be integrated, through which we will be able to distribute our product in the markets and
local supply centers.
For the team of collaborators, professionals with extensive knowledge and experience will be
sought both in our product and in the distribution and consumption market of our target market.
It will not be necessary to establish a commercial premises to serve our clients, this service will
be carried out personally with our staff available in the country and remotely with our team
within Canada.

4. Objectives
The main objective for the realization of the project is the application of different tools that allow
a better understanding of the current conditions of the fruit sector in Canada, the main actors that
compose it and the existing relationships between them. In this way, we hope to design a
business plan for this project as an alternative to generate value and orient commercial efforts
towards the export of apples.
General Objectives
- Determine the technical and financial probability of fresh apple marketing.
- To introduce the origin of apples and their varieties currently commercialized in the different
markets.
- To show the current regulations for apple commercialization in the external market.
Specific objectives
- To understand the behavior of the Mexican market and the consumer in relation to the
consumption of fruits and the variety to be commercialized.
- To propose logistic and marketing strategies, with the objective of achieving the most favorable
conditions in the operation and in the marketing in which it is thought to incursion.
- Support the current financial statements, incorporating the new business opportunity and make
the pertinent conclusions by means of a scenario analysis.
- To analyze the production, destination, and consumption of apples, obtaining a SWOT analysis
for each case.
- To analyze the international context of apple production.
- To study the behavior of apple exports from Canada and Mexico.
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- To analyze export and domestic apple prices.
- To evaluate the national apple production in terms of yield and area produced.
- Analyze the apple production chain.
- Demonstrate and interpret the econometric application of the variables to be explained.
What is required to succeed in the international marketplace?

Success in the international market is influenced by many factors, including the political
environment. However, among different factors, culture, market selection as well as internal
capabilities are considered important because they contribute to the success of international
business. Entrepreneurs also need a solid launch pad with strong internal management to handle
the influx of new responsibilities. Good timing, international competence and integration into a
different culture are also critical to this process. Any role or function in international business
means working in a diverse workplace with people from a different country or experience than
your own. Successful networking can also open the door to unexpected business opportunities
abroad, with some reports claiming that up to 80% of jobs are now sourced through networking.
While online platforms such as LinkedIn make it easy to find and maintain professional
connections abroad, excellent in-person networking skills remain one of the key skills for
success in international business. It requires working well with others, because the ability to
collaborate and work together for a common purpose is critical in the business world, it requires
humility, allowing others to take the initiative and share credit for success. It also requires
confidence to address problems, give and receive feedback, and respectfully fight for your cause.
In an international business environment, collaborating with team members from other cultures
is especially beneficial. The ability to influence others is critical to business success, whether you
are trying to persuade an investor for funding or a new venture, encourage an employee to adopt
a new way of working or convince a customer to buy the product. The best business leaders gain
influence by developing good professional relationships and building respect. Adaptive thinkers
thrive in a constantly changing environment, which positions them for success. Strong emotional
intelligence stands out as a critical skill when it comes to how to do international business, that's
because it influences almost every aspect of business interaction, as these people are self-aware
and in control of their emotions, which means they are better able to react calmly in critical or
stressful business situations and adapt flexibly to change. They can also work together
effectively, collaborating and communicating well thanks to their above-average interpersonal
skills and strong sense of empathy. Mental toughness and resilience are unequivocally required.
On a practical level, working across time zones and cultures involves long hours, failure and
setbacks are also a fact of life in the business world, but defeat is not.

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 5. Market risks
Mexico has signed 13 Free Trade Agreements, which give it access to more than 50 countries.
But one of the main risks that large exporting companies face is that they do not have full control
of the operation, which means that by leaving the business in the hands of the customs broker,
they can fail to comply with some customs or tax obligations. Another common risk is the
logistical part that causes problems of time delays, reception of imported products or inputs
entering Mexico. Stability has been faltering in recent years. First, because of the threat of the
United States abandoning NAFTA, which has been detrimental to trade in the country. The
Canada-Mexico relationship has been characterized by the development of strong cultural
connections, growing trade and investment in a variety of sectors. Mexico is a priority market for
Export Development Canada (EDC) given the abundant prospects for the Canadian companies
we serve.

Credit and currency risks

Fluctuations in the value of currencies have a major impact on exports and imports. With a
devalued currency, products are cheaper and foreign trade increases. There is also a credit risk in
the event of non-payment by Mexican customers to importing companies. Mexico has a flexible
or free-floating exchange rate regime; this implies that the exchange rate depends on supply and
demand in the foreign exchange market. And one of the most worrisome risks is Mexico's peso,
one of the main thermometers of the country's risks, because it is the currency with the greatest
appreciation since April within a sample of 25 emerging currencies followed.

Political and other risks

Mexican exchange rate policy seeks to influence the value of the national currency. That is, it is
the set of decisions made to control the value of the currency, always in relation to other foreign
currencies.

Many efforts have been made in Mexico to improve the rapprochement of the public sector with
the private sector", and that this "leads to greater investment" at a local and international level.

6. Setting prices.
Canada

0808.10.01.00

UOM: Kg

Treatment: Canada

Duty: Ex.

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Treatment: Tariff - Import (IGI)

Duty: Ex. Until 2023-12-31 after 20

Treatment: CPTPP - Canada

Duty: Nota CPTPP

Figure 6-Price

Insurance
The cost of insurance for transporting a standard container of apples from Montreal, Canada to
Chihuahua, Mexico can vary depending on various factors such as the value of the shipment, the
mode of transportation, the type of insurance coverage, and the provider of the insurance.
It's recommended that you consult with a licensed insurance provider or insurance broker who
specializes in cargo insurance to obtain an accurate estimate of the insurance cost for your
specific shipment. Typically, insurance costs for transporting goods via sea can range from about
0.2%-0.3% of the value of the shipment, while insurance costs for air transportation can range
from about 0.5%-1% of the value of the shipment. However, these are general industry standards
and may not be applicable to your specific shipment.

Calculate the transportation costs.

The cost of transporting a standard container of apples from Montreal, Canada to Chihuahua,
Mexico can vary depending on multiple factors such as the distance, mode of transportation,
weight, volume, and customs regulations. It may also depend on the provider of the freight
transport service.
According to Freightos, a logistics and freight marketplace, the cost of shipping a 20ft container
from Montreal to Chihuahua via sea can range from about $3,600 to $3,900, while shipping the
same container from Montreal to Chihuahua via air can cost between about $5,900 and $6,400.
However, it is important to note that these estimates are subject to change, and the actual cost
may vary depending on the specific details of the shipment.

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It would be best to consult with a logistics or transportation provider for a more accurate cost
estimate, based on your particular needs and the specifics of the shipment.

Exchange rates and fluctuations.

The exchange rate and currency fluctuations between the Mexican Peso and Canadian Dollar can
vary depending on various economic factors such as inflation, interest rates, political events, and
global economic trends. It's worth noting that the exchange rate between two currencies is
constantly changing based on market demand and supply, and it can vary significantly within a
short period.
According to Bank of Canada, as of April 18, 2023, 1 Canadian Dollar is equivalent to 13.80
Mexican Peso. However, this exchange rate is subject to change due to various economic factors
and market trends, and it is recommended to regularly monitor exchange rates when conducting
international transactions or investments involving these currencies.
According to historical data from xe.com, a currency conversion and exchange rate website, the
Mexican Peso to Canadian Dollar currency exchange rate has fluctuated between approximately
0.075 CAD to 0.080 CAD per Mexican Peso over the past month.
It's worth noting that exchange rates are subject to various economic and geopolitical factors
such as interest rates, inflation, and political events, which can cause fluctuations in the currency
markets.

If you have many competitors in a foreign market, you may have the going price to win a share
of the market.
In a competitive foreign fresh apple market, the going price plays a crucial role in winning a
share of the market. Pricing strategy is an important factor that can affect a company's
competitiveness and market share.
When facing competition in a foreign fresh apple market, companies may adopt various pricing
strategies to gain a foothold in the market. Some possible strategies include:
Competitive Pricing: Setting prices that are comparable or slightly lower than those of
competitors to attract customers and gain market share. This strategy may be effective in price-
sensitive markets where customers are price-conscious and tend to choose lower-priced products.
Differentiated Pricing: Setting prices based on unique product features, quality, or branding to
position the apples as premium or high-end products. This strategy may be effective in markets
where customers are willing to pay a premium for premium-quality or unique apples.
Promotional Pricing: Offering temporary price discounts, promotions, or special deals to
incentivize customers to choose the apples over competitors' offerings. This strategy may be
effective in driving short-term sales and gaining market share.

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Value-Based Pricing: Setting prices based on the perceived value of the apples in the foreign
market, taking into account factors such as taste, freshness, nutritional value, and brand
reputation. This strategy may be effective in markets where customers value quality and are
willing to pay a higher price for superior apples.
Dynamic Pricing: Adjusting prices based on market conditions, demand-supply dynamics, and
competitor pricing strategies. This strategy may involve frequent price monitoring and
adjustments to stay competitive in a rapidly changing market.
It's important to note that pricing strategies should be aligned with the company's overall
business objectives, target market segments, and competitive positioning. Market research,
understanding customer preferences, and monitoring competitor pricing are key in determining
the most effective pricing strategy to win a share of the foreign fresh apple market.

7. Understand the role of trade policy.

Market Policy.
Canada continues to have a liberal trade policy. There are no limitations on foreign exchange,
and only a small number of items need import permits. Import duties are typically applied to
imports.
For items covered by the Export and Import Permits Act, import licences are necessary. The Act
lists numerous textile and garment articles, a number of agricultural products (poultry, eggs, and
dairy products), as well as a few steel and aluminium products.
However, importation of several items is strictly regulated. Food products, medications, medical
equipment, toxic products, some offensive weapons and firearms, endangered animals, and
automobiles are a few examples of things that must be regulated.
The transaction value, which includes commission, brokerage, packaging, royalties, and
transportation to the Canada point, is the sum actually paid or payable for the products.
All tariffs on the machinery, equipment, and inputs used in the industrial manufacturing sector
have been erased in Canada in an effort to increase productivity and strengthen local enterprises'
overall competitiveness.
Controls on Imports and Licencing
Most products can be imported into Canada without facing any obstacles. But although some
goods are governed by the Export and Import Permits Act, others are forbidden from entry under
the terms of the Canadian Customs Tariff regulations. Various agricultural products (poultry,
eggs, and dairy products) as well as some textiles, clothes, and certain steel and aluminium
products are included in the regulated categories.

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The Export and Import Permits Act is administered by the Trade Controls Bureau (TID). In
contrast to the Export Controls List, which includes items like forest products, agricultural and
food products, textiles and clothing, vehicles, weapons, nuclear energy materials and technology,
etc., the Import Controls List includes items like textiles and clothing, agricultural products, steel
and aluminium products, and weapons.
It is prohibited to import or sell food in Canada that is identified or promoted to the general
public as a therapy for any illnesses or physical ailments. The use of food additives is highly
regulated.
Numerous alcoholic beverages have minimum drinking age limits, are governed by provincial
laws, and must be imported by the province's liquor commission.
A new cosmetic product must file a Cosmetics Notification Form to Health Canada within 10
days of its initial sale to show that it conforms with all applicable regulations.
Pharmaceuticals, veterinary goods, insecticides, and disinfectants that are limited or controlled
by import licences are subject to extensive drug laws in Canada.
The Canadian Environment Protection Act and the novel compounds Notification Regulations
govern the import, manufacturing, and use of potentially harmful compounds, including novel
chemicals, polymers, and biotechnology products.
Any assertions that a product (or the materials used in its packaging) is "environmentally
friendly" must be true and compliant with all applicable laws. Claims that are unclear, false,
irrelevant, or lacking in supporting evidence shouldn't be used.
Product Requirements and Standards
The system for creating, promoting, and putting standards into practise in Canada is called the
National Standards System. If a product needs certification, it should receive it before being
imported into Canada. The provincial level may apply additional criteria and rules. The
Standards Council of Canada is the place to go in Canada for questions about product standards
and requirements.
Labelling and Marking
For the majority of products, Canada mandates bilingual (English and French) labelling.
According to the federal Consumer Packaging and Labelling Act, the generic name must be
designated in both languages on the majority of pre-packaged consumer goods. According to this
Act, a consumer's package or label must include the product identification declaration, net
quantity declaration, dealer's name, and principal place of business.
The Canada Border Services Agency, which is in charge of inspecting imports, also demands
that various classifications of imported items display the nation of origin. When goods are not
appropriately tagged, Canada Customs will not release the goods. Environmental statements that
are unclear, deceptive, irrelevant, or that cannot be supported generally shouldn't be utilised.
Tax and Customs Regulations

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The Harmonised System (HS) of the Tariff Schedules is adopted by Canada. Unless exempted,
all commercial imports are subject to sales tax and customs duties. Other taxes might be
applicable depending on the commodities or their value, such as an excise tax on some petroleum
products, fuel-inefficient cars, and car air conditioners. The transaction value, which includes
commission, brokerage, packaging, royalties, and transportation to the Canada point, is the sum
actually paid or payable for the products.
On top of the 5% GST, all sales to Saskatchewan (6%), British Columbia (7%), Manitoba (7%),
and Quebec (9.975%) are subject to a provincial sales tax (PST/RST/QST). The harmonised
sales tax (HST), a combination of GST and PST, will apply to sales to other provinces. The most
recent GST/HST rates are available here. Furthermore, excise taxes are levied on some
petroleum items, fuelefficient vehicles, and automotive air conditioners, and excise charges are
levied on Canadian beer, wine, liquor, tobacco products, and cannabis products.
Canada may levy antidumping (AD) taxes on imports that are priced lower than the "normal"
price charged in the exporter's domestic market and have caused serious harm to the Canadian
sector. Furthermore, if a country is determined to be unfairly subsidising its exporters, Canada
has the authority to levy a countervailing (CV) duty equal to the amount of the subsidy stated as
a percentage of the items' export price. These duties are valid for five years and can be renewed
for another five years.
Canada now applies AD and/or CV taxes on a variety of imports from mainland China, including
flat hotrolled carbon and alloy steel sheet and strips, steel plates, container chassis, oil country
tubular goods and long line pipe, pup joints and silicon metal. The most recent antidumping and
countervailing measures are available here. Meanwhile, Canada puts AD charges on some Hong
Kong-made concrete reinforcing bars.

8. Sources.
“The Statistics Portal.” Statista. Accessed April 23, 2023. https://www.statista.com/markets/.

“Country and Market Info | EDC.” n.d. Www.edc.ca. https://www.edc.ca/en/country-

info.html.

World Population Review. 2022. “2022 World Population by Country.”

https://worldpopulationreview.com/.

“‌ Consumo Anual per Cápita de Frutas En México, Por Tipo.” n.d. Statista.
https://es.statista.com/estadisticas/592164/consumo-anual-percapita-de-las-principales-frutas-
en-mexico/.

“HKTDC Research.” Research.hktdc.com,

research.hktdc.com/en/article/MzM0NTA3Njc0#:~:text=Trade%20Policy.

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