The intermediate operations can serve both the traditional markets and international

markets, but their true niche is the middle of the domestic market. The Mexican middle class

is interested in quality and marketing services to some degree but is unable or unwilling to pay

the prices that the top-of-the-line produce commands. These firms size, clean, and package their

produce but they often don't have as modern facilities as the industry leaders. Moreover, they

may not have the same degree of coordination between the farm and the packing house as the

industry leaders, so their supply tends to be relatively small and of less consistent quality.


Canning, Freezing, and other Processing Operations

 One way to reduce the perishability of a product is to process it. For fruits and

vegetables, this usually involves canning or freezing. With canning, the product becomes

nonperishable and with freezing the product becomes nonperishable if it is kept frozen.

 Canned fruit and vegetables have never been as important in Mexico as in the United

States, at least in part because the climate allows fresh production of most products throughout

the year. Nevertheless, Mexico's largest fruit and vegetable canner, Herdez, had gross sales in

1993 of 924,077 New Pesos, or about $300 million. Frozen vegetables are becoming an

important product, primarily for export to the United States, though domestic consumption is

also expanding. Other important frozen products are strawberries, avocado mix, and frozen

concentrated orange juice. The longer production year and lower labor costs tend to offset the

higher transportation costs to U.S. markets, relative to U.S. competitors. Most of the plants

geared for exporting were set up by U.S. companies, such as Green Giant and Birds Eye, with

U.S. grade machinery and are built to U.S. standards.