Grupo Sesajal's Grand Vision for Organic Products

Fads can become the new normal with time, which means that a company’s bet on market niches can eventually pay off. However, it is necessary to keep a close eye on the client and on market trends. “The secret is to always maintain a very strong commitment to your product,” says Íñigo González, CEO of Grupo Sesajal.

Grupo Sesajal makes products based on oily seeds grown at farms in Jalisco. Most of its products, which include canned goods, oils, dressings, marinating sauces and mayonnaise, are made from avocado, sesame seeds and peanuts. Grupo Sesajal’s best-selling oil is avocado oil, sold under the brand Inés. “Because our offering comes from harvested goods, there are certain limits to the products we can manufacture,” González says. The company has tried to diversify its portfolio by betting on derivatives for traditional products, for example oils in spray form. Most products are for consumption, although there are some oils for cosmetic or pharmaceutical use.

Grupo Sesajal’s core business is in processed goods but direct sales of harvested prime materials became part of the business model a few years ago. “Combining these models has been a challenge as they are very distinct clients and have different market risks,” González says. However, direct sales of primary products have allowed profits to increase by 20 to 25 percent over the years.

In terms of processed products, the company sells both to wholesalers and supermarkets. Much of Grupo Sesajal’s growth took place in the last five years when the company tripled in size. In 2017, the company bought a majority share in Chosen Foods LLC., an American producer of healthy oils. Having said that, González highlights that the group’s growth was not due to mergers or acquisitions, but through organic growth fueled by a fast rise in popularity of Grupo Sesajal’s products among consumers.  

González has seen the greatest growth in products that are associated with the “conscious” consumer. These “chosen products” are a category that is slightly broader than the better-known superfoods. “They are chosen because people are looking for food with protein, fiber, or a particular type of fat. This rising awareness has led to impressive growth,” he says. Part of this behavior is a desire to replace animal-based products with plant-based products. González specifically points at millennials as a target group for this line of products.

Of Grupo Sesajal’s total sales, 80 percent happens in foreign markets. In Canada, the group’s brands are market leaders with over 90 percent of participation in the chosen product segment. In the US, its products enjoy between 60 and 65 percent share. In Mexico, the broader category of “conscious foods” still only constitutes 3-4 percent of the market. The gap in sales between Mexico and the rest of North America is evident. However, González is still impressed with the rise of this food niche in Mexico. “Avocado oil has moved from a fad to an established product,” he says.

For a company with such a large export volume to Canada and the US, recent tensions over agricultural produce between the US and Mexico may be of concern. However, González believes that they will not have a significant effect, as the company deals with goods that are not produced in the US or Canada. The company is growing its portfolio in the organic niche and 25 percent of its returns come from these products. González explains that organic produce requires an elaborate process that demands the participation of agronomists and inspection bodies. “The organic concept starts with the quality of soil and ends with good certification practices,” he says. The company has its own certification team, which is able to test the products for traces of any form of chemical. “It is not enough to put a label on a product; it needs to be fully verifiable,” González says.

One advantage for Grupo Sesajal is vertical integration. If the company controls the process from beginning to end, it has far better visibility on any problem. “The company has conducted several studies that have demonstrated that the best working relationship with farmers is not necessarily to form an association or union. Instead, it is better to assure farmers directly that you will buy what they produce. Associations can mean extra costs and do not necessarily provide the kind of certainty a farmer seeks,” González says.