Peru is one of Latin America’s most dynamic economies, characterized by a rich endowment of natural resources, a growing industrial sector, and increasing global economic integration. However, economic development in Peru is shaped by various factors, including human capital, infrastructure, governance, and technological advancements. This blog post offers an in-depth analysis of Peru’s economic development, examining key variables that shape the country’s growth trajectory.

Natural Resources

Peru boasts abundant natural resources, including vast copper, gold, silver, and natural gas reserves. The mining sector remains a cornerstone of the economy, contributing significantly to GDP and export earnings. Agriculture is another essential sector, with Peru being a leading exporter of coffee, asparagus, avocados, and grapes. However, the country faces challenges in sustainable resource management and reducing environmental degradation caused by extraction industries. The sustainable use of these resources is crucial for Peru’s long-term economic development.

Human Capital

Peru’s labor force is young and growing, with increasing levels of education. Government investment in education and vocational training has improved workforce skills; however, disparities persist between urban and rural areas. High levels of informal employment persist, hindering productivity and wage growth. Enhancing workforce skills, reducing informality, and aligning education with industry needs is crucial for sustained economic development in Peru.

Infrastructure

Infrastructure development is a critical component of economic growth. Peru has made progress in expanding transportation networks, including highways, ports, and airports. However, inadequate infrastructure in rural areas hampers economic integration and development. Energy, telecommunications, and logistics investments are necessary to enhance competitiveness and support industrial growth.

Technological Development

Technological progress is increasingly shaping Peru’s economic landscape. The digital economy is expanding, driven by increasing internet penetration and the growing adoption of e-commerce. However, Peru still lags behind in research and development (R&D) investments and technological innovation. Strengthening digital literacy, fostering tech entrepreneurship, and incentivizing R&D could accelerate technological development.

Quality of Public Institutions

The effectiveness of public institutions is crucial for economic stability. Peru has made efforts to improve governance, but corruption and bureaucratic inefficiencies continue to be significant challenges. Strengthening transparency, reducing red tape, and enhancing judicial independence can improve investor confidence and economic competitiveness.

Economic Policies

Peru has adopted pro-business economic policies, including trade liberalization and fiscal discipline. Macroeconomic stability, low inflation, and prudent fiscal policies have made the country an attractive destination for foreign investment. However, ensuring inclusive growth and addressing income inequality remain key policy challenges.

Level of Industrialization

Peru’s industrial sector is growing but remains underdeveloped compared to its potential. While mining and agribusiness dominate, manufacturing and value-added industries are still emerging. Encouraging industrial diversification and manufacturing investment can enhance economic resilience and reduce reliance on commodity exports.

Access to Capital and Credit

The financial sector in Peru is relatively well-developed, with a robust banking system and growing access to credit. However, small and medium-sized enterprises (SMEs) often struggle to secure financing. Expanding financial inclusion and strengthening capital markets are crucial for fostering business growth and innovation.

Geographic Location

Peru’s strategic location on the Pacific coast provides a gateway to international markets, particularly in Asia and North America. The country benefits from trade agreements and access to regional supply chains. However, geographic challenges, such as the Andes Mountains and the Amazon rainforest, create logistical difficulties for domestic trade and infrastructure development.

Demographics

Peru’s population is youthful, with a median age of around 31. This demographic advantage can drive economic growth through a strong labor force and consumer demand. However, an aging population will require long-term social security and healthcare planning.

Cultural and Social Factors

Cultural diversity is a significant asset for Peru, with influences from Indigenous, Spanish, and Afro-Peruvian cultures shaping the country’s identity. However, social cohesion and inclusion remain challenges, particularly in addressing disparities between urban and rural populations. Improving social mobility and reducing inequalities will support broader economic development.

Global Economic Integration

Peru is highly integrated into the global economy, with trade agreements with major partners like the United States, China, and the European Union. The country’s participation in regional economic blocs, such as the Pacific Alliance, enhances its trade prospects. Strengthening global trade ties and attracting foreign direct investment (FDI) will further support economic development.

Environmental Sustainability

Sustainable development is essential for long-term economic stability. Peru faces challenges in balancing economic growth and environmental conservation, particularly in the mining and deforestation sectors. Government policies promoting renewable energy, conservation initiatives, and responsible resource management are crucial for sustainable development.

Political Stability and Security

Political stability is a key determinant of economic confidence. Peru has experienced significant political volatility in recent years, which has impacted investor sentiment and economic growth. Strengthening democratic institutions, ensuring the rule of law, and fostering political consensus are vital for maintaining a stable business environment.

Innovation and Entrepreneurship

Entrepreneurship is a growing driver of economic development in Peru. Startups and small businesses are expanding, particularly in fintech, agribusiness, and digital services. However, challenges such as regulatory barriers, limited access to venture capital, and bureaucratic hurdles must be addressed to create a thriving entrepreneurial ecosystem.

Conclusion

A complex interplay of natural resources, human capital, infrastructure, and policy frameworks shapes Peru’s economic development. While the country has made significant strides in macroeconomic stability, industrial growth, and global trade integration, challenges such as political uncertainty, income inequality, and technological lag remain. Addressing these issues through strategic investments, policy reforms, and institutional strengthening will ensure sustainable and inclusive economic development in Peru’s future.

Startups in Argentina are experiencing rapid growth, driven by technology that fuels innovative businesses with high scalability potential. Finance, agriculture, medicine, and retail sectors increasingly invest in digital solutions. Just as the best real-money casinos in Argentina offer secure and reliable online options, support from investors, accelerators, and government programs enables Argentine startups to expand and establish themselves in international markets.

Startup Ecosystem: Key Players and Institutions

Argentina boasts a well-developed startup ecosystem comprising venture capital funds, business incubators, accelerators, and universities. Organizations such as InnovaRed, Wayra Argentina, and NXTP Labs play a crucial role in the growth of new tech companies.

Key Players in the Ecosystem:

• Wayra Argentina – An accelerator that supports tech startups.
• NXTP Labs – A venture capital fund focused on Latin American startups.
• Endeavor Argentina – An organization that helps entrepreneurs scale their businesses.
• The University of Buenos Aires – offers educational programs and support for innovative projects.

Technological Trends: From Fintech to Biotechnology

The development of startups in Argentina spans several key areas. One of the most promising sectors is fintech, which provides digital payments, financing, and investment solutions.

Popular Tech Startup Sectors:

• Fintech – Payment services, digital wallets, and cryptocurrencies.
• Agrotech – Solutions for precision agriculture and crop monitoring.
• Biotechnology – Development of medicines, genetic research.
• E-commerce – Marketplaces and logistics solutions.

The Fintech Revolution: Digital Finance in Argentina

Financial technologies have been a driving force behind the country’s economic transformation. Fintech startups offer solutions that make financial services more accessible.

Popular Fintech Solutions:

• Digital payment systems – Simplifying the purchase of goods and services.
• Mobile wallets – Allowing users to manage finances online.
• Loans and investments – Platforms that provide quick access to credit.

Agrotech Innovations: Technology for Agriculture

Argentina is one of the world’s leading agricultural producers, and it is developing agritech solutions. Artificial intelligence, drones, and sensor systems can help improve productivity and reduce costs.

Innovative Agrotech Solutions:

• Drones for Crop Monitoring – Assessing Field Conditions.
• Automated irrigation systems – Efficient water usage.
• Supply Chain Management Platforms – Optimizing Product Distribution

E-Commerce: The Digital Transformation of Retail

The rise of marketplaces and logistics platforms is driving the digitalization of retail. Startups in Argentina, such as Mercado Libre, have revolutionized e-commerce in the region.

Key E-Commerce Trends:

• Logistics automation – Using robotic systems.
• Expansion of local marketplaces – New online sales platforms.
• Delivery process optimization – Reducing costs and improving service.

Biotechnology: Innovation in Medicine and Agriculture

Biotechnology startups in Argentina are making a significant impact in both the health and agricultural sectors. Advances in genetic research and new medical treatments are driving considerable progress.

Innovations in Biotechnology:

• Drug Development – New Solutions for Disease Treatment.
• Genetic research – Enhancing crops.
• Bioinformatics – Data analysis in medicine and agriculture.

Challenges and Opportunities: Growing the Startup Ecosystem

Despite Argentina’s rapid growth of startups, the sector faces specific challenges. The main obstacles include limited access to financing, economic instability, and a shortage of skilled talent.

Key Challenges in the Startup Ecosystem:

• Attracting investment – Venture capital is primarily available for more established companies.
• Education and Talent Development – A Lack of Technology Specialists.
• Regulatory barriers – Complexity in obtaining licenses and permits.

Argentine Startups as Drivers of Innovation

Tech startups in Argentina are crucial in driving economic development and innovation, leading to advances in multiple strategic sectors. With a constantly evolving ecosystem, the country has positioned itself as a reference hub in Latin America, fostering emerging companies that offer disruptive solutions in fintech, agrotech, digital health, and e-commerce. Thanks to a combination of local talent, foreign investment, and incentive policies, startups in Argentina continue to expand and make their mark in the global market.

Government support has been a determining factor in the sector’s growth. Programs like the Entrepreneurial Capital Fund and Argentina Emprende have provided funding and guidance to early-stage companies, enabling many startups to scale and consolidate. Additionally, the creation of coworking spaces, incubators, and tech accelerators has strengthened the entrepreneurial ecosystem, offering access to mentorship, networking, and new business opportunities.

Another key element has been international investment. Venture capital funds and major corporations have begun to see Argentina as a hub of innovative talent. Companies like MercadoLibre, Ualá, and Globant have demonstrated that global growth is achievable from Argentina, attracting investors eager to replicate their success with new startups. Moreover, partnerships with foreign companies have facilitated knowledge transfer and the adoption of cutting-edge technologies, further accelerating the sector’s competitiveness.

Despite the country’s macroeconomic challenges, the tech startup ecosystem remains resilient and continues to strengthen. The growing digitalization and adoption of new technologies have increased the demand for innovative solutions, presenting a significant opportunity for Argentine entrepreneurs. With an expanding market and a highly skilled developer community, the future of startups in Argentina looks promising, solidifying the country’s role as a key player in Latin America’s technological revolution.

While Latin America is regaining appeal for startup investment, Ecuador remains off the radar for Venture Capital (VC) for the time being. Excessive state regulation deters capital and hampers the growth of the entrepreneurial ecosystem, thereby preventing the country from capitalizing on the global interest in Latin American innovation. The issue extends beyond capital access—it reflects a systemic problem that stifles entrepreneurship in Ecuador, leaving startups struggling to survive in a competitive global market.

Despite the growth of risk capital in Latin America, Ecuador continues to fail to capture the attention of venture capital (VC) investors. While Colombia has positioned itself as the second most attractive destination for these funds, Ecuador still lacks a solid ecosystem to attract investment. For entrepreneurship in Ecuador to thrive, the country must address fundamental policy and economic constraints that deter investors.

Venture Capital, or risk capital, is a form of financing in which investors provide funds to high-growth potential startups in exchange for equity. This type of investment is crucial for developing technology companies that require significant capital in their early stages. Without access to VC, entrepreneurship in Ecuador remains fragile as startups struggle to secure the necessary resources to scale their businesses effectively.

Latin America’s VC Investment Landscape

According to the VC Report 2024 by Endeavor and Glisco Partners, venture capital investment in the region fell by more than 80% between 2021 and 2023 but rebounded by 30% in the first half of 2024. However, Brazil, Mexico, and especially Colombia are the countries capitalizing on this recovery, which now captures 29% of VC capital in the region. Ecuador does not appear on the list, highlighting its marginal role in the regional investment ecosystem.

Despite having a unicorn like Kushki, Ecuador has been unable to replicate these success stories. According to economist Andrés Rodríguez, the main problem is a state that does not facilitate but overregulates and imposes obstacles to innovation. The lack of regulatory clarity and incentives discourages investment, forcing Ecuadorian entrepreneurs to seek opportunities in other countries.

What Is Colombia Doing Better?

Colombia has managed to attract more investment in startups due to several factors:

• Clear public policies to attract investment in technology.
• Public-private co-investment funds that foster startup growth.
• Tax incentives and access to international markets.
• A solid ecosystem with accelerators, incubators, and available capital at all stages.

This has allowed the average size of investment rounds in Colombia to be 3.5 times larger than in other countries in the region, demonstrating investor confidence. The country’s ability to foster entrepreneurship and create an environment conducive to VC investment has strengthened its innovation ecosystem.

The Colombian fintech sector secured $405.4 million in venture capital in the first half of 2024, with startups such as Nu Colombia and Simetrik standing out. The United States was the primary investor, contributing over 38% of the capital. This demonstrates that international funds view Colombia as a viable destination for technology-driven investments, a status that Ecuador has yet to achieve.

Ecuador Needs Clear Rules and Investment

Ecuador, on the other hand, lacks:

• State policies to foster Venture Capital.
• Financing programs that facilitate startup growth.
• An attractive investment ecosystem for international funds.

Instead of encouraging investment in innovation, the state imposes bureaucracy and barriers that make access to capital difficult. Without clear rules and legal security, investors opt for other countries with better conditions. The challenges in entrepreneurship in Ecuador are deeply rooted in a regulatory framework that fails to incentivize innovation and risk-taking.

Colombia has implemented favorable regulations for startups, including regulatory sandboxes. These policies enable companies to test innovative products and business models without immediately facing full regulatory consequences, creating a nurturing environment for fintech and other high-tech startups to experiment and grow.

In contrast, Ecuador passed the Organic Law on Entrepreneurship and Innovation in 2020, which mentions venture capital funds; however, it still faces challenges in its effective implementation. The regulatory hurdles remain a significant obstacle, and many startups struggle to navigate the complex legal landscape.

Entrepreneurs developing a fintech platform in Colombia can access a regulatory sandbox to test their product in a controlled environment and receive feedback from authorities. Additionally, they can access multiple active Venture Capital funds in the country. In Ecuador, the same entrepreneur would face a stricter regulatory environment and fewer financing options, making it harder for their startup to grow.

“These differences highlight the need for Ecuador to implement more favorable policies to attract investment and foster technological entrepreneurship,” said economist and entrepreneur Carla Pérez. If Ecuador is serious about developing a thriving startup ecosystem, it must create conditions similar to those in Colombia and Mexico.

Startups Fail Within Three Years

Ecuador faces significant challenges in technological entrepreneurship. It is estimated that approximately 80% of startups in the country fail to survive beyond their third year of operation, primarily due to a lack of profitability and inadequate financing. This high failure rate reflects the broader economic instability and lack of support for emerging businesses.

Additionally, there is a considerable gap in the training of technology professionals; each year, approximately 9,000 technology experts are needed, but Ecuadorian universities graduate only 100 to 200, limiting innovation and sector development. This talent shortage further weakens the country’s ability to develop a robust entrepreneurial ecosystem.

A study by EAFIT University in Colombia concluded that companies financed by venture capital are significant job creators and drivers of economic growth. Specifically, venture capital-backed companies tend to experience faster revenue and employment growth compared to those that do not receive such funding. Additionally, these companies typically achieve higher sales volumes and lower bankruptcy rates, suggesting that venture capital drives business growth and contributes to economic stability and job creation.

Ecuador misses out on all these benefits. On average, its economy has grown by less than 2% over the past decade, which explains the country’s increasing informality and unemployment rates. A lack of entrepreneurship in Ecuador means fewer startups reach maturity, resulting in fewer job opportunities and reduced economic diversification.

The Path Forward

For Ecuador to revitalize its startup ecosystem and attract venture capital, it must prioritize key reforms:

• Regulatory Improvements: Simplify and clarify regulations to make it easier for investors and entrepreneurs to navigate the legal landscape.
• Tax Incentives: Implement tax benefits for startups and investors to encourage investment in innovation.
• Public-Private Partnerships: Foster collaboration between government institutions, private investors, and international funds.
• Investment in Education: Expand university programs to produce more qualified technology professionals.
• Accelerators and Incubators: Develop programs that provide mentorship, networking, and capital access to support early-stage startups.

By addressing these challenges, Ecuador could position itself as a competitive destination for venture capital and high-growth startups. Otherwise, entrepreneurship in Ecuador will continue to lag behind its regional peers, and the country will miss out on the economic benefits that a thriving innovation ecosystem can provide.

Uruguay, the second-smallest country in South America in terms of land area, has positioned itself as one of the continent’s strongest economies, boasting the highest quality of life. With a population of just 3.5 million, this nation has earned the nickname “The Switzerland of South America” due to its political stability, low levels of corruption, and advanced democratic system—characteristics that resemble those of the European country.

The World Bank has highlighted Uruguayan economic growth as one of the most outstanding in 2024, with a projected increase of 2.6% for 2025. This performance is driven by several key factors, including significant investment in renewable energy, a robust agricultural sector, and public policies that foster sustainable development. Uruguayan economic growth and stability are driven by long-term strategic planning, responsible governance, and an open approach to international trade.

An Economy Driven by the Agricultural Sector

One of the fundamental pillars of Uruguay’s economy is its agricultural sector. The country is home to more than six million sheep and approximately twelve million head of cattle—nearly four times its population. This industry not only supplies the domestic market but also serves as one of the country’s primary sources of exports, with products such as beef, wool, and dairy reaching international markets.

Additionally, Uruguay’s production model has prioritized quality certification and traceability in beef production, allowing its livestock products to be recognized for their excellence in various global markets. This strategy has positioned Uruguay as a leader in the meat industry and has facilitated trade agreements with countries such as China and members of the European Union. The commitment to high standards ensures that Uruguayan economic growth remains competitive while promoting sustainable agricultural practices.

Beyond livestock, Uruguay is a major producer of soybeans, rice, and other grains, making its agricultural sector a critical driver of economic stability. The country’s focus on agro-industrial innovation has contributed to Uruguayan economic growth, with the adoption of new technologies enhancing productivity and sustainability in farming.

Leadership in Renewable Energy and Sustainable Development

Uruguay has also established itself as a leader in renewable energy within the region. According to the International Renewable Energy Agency (IRENA), over 90% of the country’s electricity is generated from clean sources, including wind, solar, and hydroelectric power. This model has been recognized internationally as a success story, enabling Uruguay to diversify its energy matrix without requiring direct subsidies, thanks to a bidding system promoted by the state-owned energy company, UTE.

The private sector’s participation in energy generation through sustainable investment and promotion schemes has made Uruguay a global benchmark in energy transition. This has reduced dependence on fossil fuels, stabilized electricity costs, and attracted foreign investment. The country’s commitment to sustainable energy has made it a key player in Latin America’s efforts to combat climate change.

Moreover, Uruguay invests in green hydrogen, an emerging sector with significant growth potential. The government has outlined plans to develop renewable hydrogen production, which could open new opportunities for export markets. By focusing on clean energy solutions, Uruguayan economic growth is further strengthened through environmental responsibility and innovation.

Uruguay: A Costly Country in the Region

Despite its economic stability and high quality of life, Uruguay is recognized as one of the most expensive countries in Latin America. A 2024 study by the Center for Development Studies (CED) revealed that prices for essential products in Uruguayan supermarkets are, on average, 27% higher than those in some European countries, such as Germany and France.

Compared to its neighbors, prices in Uruguay exceed those in Mexico by 80% and those in Argentina and Brazil by 20%. This difference is due primarily to the tax structure, logistical costs, and the small scale of the domestic market. While these factors contribute to Uruguay’s reputation as an exclusive country within the region, they also present challenges for competitiveness and citizens’ purchasing power.

One reason for Uruguay’s high cost of living is its strong regulatory framework, which ensures fair labor practices and social protections but also increases operational costs for businesses. Additionally, import tariffs and logistical expenses increase prices for goods and services. As the country continues to pursue economic growth, addressing these challenges will be crucial to maintaining stability while ensuring affordability for its citizens.

Foreign Investment and Business Environment

Uruguay has developed a reputation as a reliable destination for foreign direct investment (FDI), thanks to its legal transparency, strong institutions, and investor-friendly policies. The country offers a stable macroeconomic environment, clear regulatory frameworks, and incentives for technology, finance, and manufacturing industries.

Montevideo, the capital and financial hub, has become a center for regional business operations. It hosts multinational corporations that leverage Uruguay’s tax benefits and strategic location. Free trade zones (FTZs) provide attractive benefits, including tax exemptions and streamlined business processes, making Uruguay an appealing destination for international investors.

Another factor boosting investor confidence is Uruguay’s advanced digital infrastructure. The country ranks among the highest in Latin America for internet penetration and digital services, which has fostered the growth of e-commerce and tech-based enterprises. The government’s proactive approach to digital transformation further reinforces Uruguayan economic growth by modernizing key sectors of the economy.

Challenges and Future Prospects

Uruguay has achieved sustained economic growth based on stability policies and productive diversification. However, it faces challenges such as reducing the cost of living, enhancing the competitiveness of its productive sectors, and maintaining its attractiveness to foreign investment. The government continues to explore strategies for economic diversification, particularly in technology and high-value-added industries, to ensure long-term prosperity.

The country aims to strengthen its sustainable development model, consolidate its position as an exporter of high-quality food, and continue innovating in the renewable energy sector. Efforts to improve infrastructure, such as expanding transportation networks and modernizing ports, will be crucial in maintaining economic momentum. Additionally, Uruguay is exploring new trade agreements to expand its global reach and reduce dependency on traditional markets.

As Uruguay navigates these economic opportunities and challenges, the country remains a model of governance and economic resilience in Latin America. With an expanding economy and a solid institutional framework, Uruguayan economic growth will depend on innovation, investment, and forward-thinking policies that sustain its position as a regional leader.

The food industry in Central America remains active with the development of large investments that promise to generate significant changes in a sector that is adopting technology and seeking to trigger more efficiencies, key strategies to gain more space in the shopping carts of increasingly demanding consumers and become the kings of Central American plates.

The protagonists in the food industry in Central America moved their pieces in 2024 and are preparing for a market reconfiguration in 2025. Expansions, new investments, and incursions have characterized the development of this dynamic sector.

These strategies are reflected in the investment plans of large companies in the sector, such as Bimbo, Nestlé, Corporación Multi Inversiones, Cargill, Vitali Alimentos, and Castillo Hermanos, which take advantage of the potential of serving an integrated regional market with a diverse commercial proposal that seeks to conquer more tables and plates.

The investments underway range from increasing the geographical footprint and developing new products to installing new production plants, as in the case of the Mexican company Bimbo (the world’s largest bakery group), which is investing US$200 million in the construction of a new factory in El Salvador (which is expected to be operational in the second half of 2025) and with which it plans to meet the growing demand for its products in the food industry in Central America.

However, investments are not limited to an increase in capacity per se. They also include improvements in efficiencies and technology. The Swiss multinational Nestlé inaugurated its Data Analysis and Artificial Intelligence Center (CADIA) in February, a technological complex in zone 12 of Guatemala City, where the company invested US$5 million and which promises to create synergies between data analysis and commercial management through the use of AI and machine learning to optimize sales, marketing, and service processes.

“CADIA represents a qualitative leap in how we utilize technology to enhance our impact on the industry and people’s lives,” said Patricio Astolfi, General Director of Nestlé Guatemala.

Meanwhile, at the start of the year, the Guatemalan company Castillo Hermanos inaugurated the expansion of its La Italiana ice cream production plant in Panama, in the town of Pacora, as part of reinforcing its broad product portfolio in the indulgence segment and its growth strategy in that market.

NEW TRENDS

Juan Pablo Mancilla, executive director of the Food and Beverage Guild (GREMAB) attached to the Chamber of Industry of Guatemala, explains that the regional panorama is marked by a growth pattern driven by a market evolution enhanced by the adoption of new consumer trends.

“Regional consumption shows a trend of openness to a diversity of lifestyles, driven by various factors such as age, habits, socioeconomic levels, and culture, among others,” said Mancilla, who believes this has generated a demand for varied products aligned with emerging consumer preferences.

In recent years, companies in the food industry in Central America have taken a step forward in developing innovative products that cater to a new consumer eager for modern and practical solutions, benefiting partly from the opening of supply in other latitudes.

This is evident in developing proposals, such as the Guatemalan company Vitali Alimentos, which launched the SOMOS brand last year, aiming to consolidate itself as a leading player in the food service market.

In November 2024, Andrés Barrios, the company’s business manager, emphasized that the company’s objective with this development is not only to offer protein-based products but also to provide all the foods that comprise a dish, from side dishes to sauces.

Mancilla of GREMAB emphasizes that, in general, the food industry in Central America exhibits greater sophistication. The regional and extra-regional supply has evolved with greater diversification and innovation, adapting products to meet the different needs of the market. This has enabled it to enhance the consumer experience, facilitating its integration into various lifestyles.

MORE CONSCIOUS CONSUMERS

Rafael Murillo, senior manager of Strategy and Transactions at EY Central America, Panama, and the Dominican Republic, explains that one of the most marked trends in the region is the intention to adopt healthier lifestyles. This leads to a greater demand for fresh, high-nutrient-value, and even organic foods, which are gaining prominence in the portfolios of companies in the sector.

The specialist notes that, in parallel, consumers are concerned about making “more conscious” price selections and managing their household budgets, a trend that balances business bets.

“In summary, it is the search for a good quality-price ratio. Although each market in Central America and outside the region has its particularities, these trends are highly generalized globally,” says the EY specialist.

Xavier Vargas, CEO of Cargill Food Latin America, offers insights into this search for efficiency. They have recently expressed that they are advancing in consolidating their units, a strategy to increase their presence and business with the final consumer across a large region, from Mexico to Brazil. Central America stands out as a region that provides high returns.

The company’s objective is to consolidate its Central American operation (where its businesses in Honduras, Nicaragua, and Costa Rica stand out) but with a commitment to the development of the Guatemalan and El Salvadoran markets, where they are already considering the development of new investments, options that include the possibility of acquiring companies in the food industry in Central America or building their units from scratch.

IN SEARCH OF MORE EFFICIENCIES

Murillo believes that the business environment is key. Among the primary challenges facing the food industry in Central America are cost volatility and deficiencies in regional infrastructure, which sometimes limit performance in production processes and the supply chain.

However, he values that this is compensated— in part —by a vision of scale, something that, while generating opportunities, also represents challenges. “The size of individual markets in Central American countries introduces an additional complexity, as it requires addressing multiple factors for each of them while simultaneously achieving a reasonable scale at the regional level,” says the analyst.

He adds that other emerging factors also pose challenges, highlighting global geopolitical dynamics that introduce uncertainty.

At the start of the year, the Trump administration’s tariff policy generated concerns about its impact on productive activities, which could affect food manufacturing.

However, Murillo maintains that, in the sum of factors, the region continues to be full of opportunities, as there are countries and regions with untapped potential that can benefit from the arrival of foreign investment and the expansion in dynamic sectors such as technology and financial services.

“One of the main opportunities in our region is to exploit adaptive innovation, with products that offer alternatives to traditional consumption such as fortified or nutritionally beneficial products, the implementation of sustainable or more economical packaging, ‘sachetization’—with economical versions of premium products or smaller presentations—and the use of waste or automation,” he reiterates.

MULTILATINAS IN EXPANSION

The incursion of the Guatemalan company CMI into the US market in 2024 was one of Central America’s most ambitious business moves, but it is not entirely a surprise.

The company announced in November an agreement to acquire a majority stake in Del Real Foods, which gives it control of a leading Hispanic food brand. In addition, in February of this year, it celebrated the opening of the 122nd restaurant of its Pollo Campero chain in New York, USA.

Murillo, of EY, maintains that both CMI’s move in the United States and Bimbo’s case in El Salvador are clear examples of the dynamism characteristic of the food industry in Central America in recent years, as well as how multilatina companies continue to expand rapidly.