Mario Vazquez
General Manager
Ach Foods México
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View from the Top

Communication, Lesser-Known Brands Are Cornerstones for Growth

Sat, 10/06/2018 - 11:23

Q: ACH Foods México is part of ACH Foods Company and Associated British Foods (ABF). How does your business in Mexico add to the global operations of ACH Foods?
A: ABF Group is among the Top 10 most important food companies globally. ACH Foods belongs to the groceries division within ABF. We are a diverse and successful group that is always looking for additional business opportunities.
Mexico’s potential is much greater than our current market share. We want to grow and we believe the country represents the perfect opportunity to expand our business toward the Latin American market. Mexico is an important business region for the group but our current position is not even close to what the group believes we can be in the medium term.
Q: ACH Foods has built a portfolio of local and international brands. How do you approach these to ensure growth?
A: Within our portfolio of oils and fats, we have well-known prestigious brands that are already mature in their segment, which makes growth a challenge. Our most important brand in the oils and fats segment in terms of sales volume is Capullo, which participates in a category that continues to grow but not as fast as others. Our best opportunity is with brands that are not as known as we would like or that are in under-developed market segments. For instance, peanut butter, in which we are leaders, is a category that is just starting to become popular in Mexico and is now growing at a double-digit rate on a year-on-year basis. Tea is a similar example. Our Twinings brand participates in this segment and is well-positioned in the market but not to the level we want it to be. The plan is to grow our brands by communicating with the consumer. We have a good balance and can easily implement the strategies required to boost growth in these segments.
Q: How do you market your foreign brands in the Mexican market and do they need to be adapted to local tastes?
A: We position our brands through communication, particularly in categories that are not well-known in the country, such as peanut butter. Our goal is to make them relevant to consumers and we use a variety of communication channels, including advertising at points of sale, digital media, television and billboards. You have to find a way to let consumers know that the product is a good and healthy alternative. Twinings, for instance, is a leader in the segment of premium teas and we do not want to compete in any other category. This is a very clear strategy for the ABF Group.
Q: What makes Mexico an interesting market for ACH Foods and what conditions have allowed the company to grow?
A: Mexico is an attractive country for foreign capital. When you look at other countries in the region, you see that there is much uncertainty. Mexico has a significant market size, with a growing population that has particular consumption habits in the food segment. Mexicans are willing to sacrifice many things but not food or flavor. This gives our company many growth opportunities.
The oils category is large, with many players, and is still growing in revenue rather than volume. Categories in Mexico shift constantly and are very dynamic, while consumers are high-minded. This is what makes the country attractive as a foreign investment destination.
Q: What consumer trends are you discerning in the national market and how is ACH Foods working to position its products given these new trends?
A: Mexico tends to follow US trends. For instance, gluten-free products are in strong demand in the US and they are starting to become popular in Mexico. Increasingly, there are more gluten-free products and consumers are willing to pay more for them. As a result, it has become a more profitable category that is experiencing high double-digit growth rates. Organic products are also growing in popularity, along with products that come in biodegradable containers. The industry needs to move at the speed consumers want us to. We are creating a joint group between Mexico and the US to either develop or acquire products in line with these new trends.

 

ACH Foods México is a subsidiary of Associated British Foods. The company started operating in Mexico in February 2004 and manages well-established brands, such as Capullo, Twinings, Karo, Mazola, Inca and Aladino