By Marina Mayer
For years, the tortilla category has experienced steady growth. That’s because tortilla producers continue to revamp their portfolios and keep abreast with consumer demands.
Snack Food & Wholesale Bakery interviewed a handful of tortilla manufacturers to discuss market trends, new products and the state of the tortilla industry. Here’s what they had to say.
Snack Food & Wholesale Bakery: What are the latest retail trends impacting tortilla sales? How have these trends changed over the last few years?
Norma Rojas, senior director of marketing, Mission Foods, Irving, Texas: Consumers have modified their purchasing behavior due to the economic recession and have cut back on spending by shopping multiple channels to get the best deal (especially mass and dollar channel), reducing their shopping cart or buying smaller quantities and switching to lower price brands or store brands. Consumers are also looking for healthy yet affordable food products. Omega-3 fatty acids, antioxidants, high fiber, calcium and protein are some of the key benefits that consumers are looking for. Also, one of the biggest trends we have seen in the tortilla industry specifically is the growth of store brands.
Nate Fisher, president and CEO, Don Julio Foods, Inc., Clearfield, Utah: The latest trends that have impacted tortilla sales are products that emphasize fresh, multigrain and whole wheat tortillas. These types of products continue to show strong sales increases year over year and the number of brands and SKUs [stock-keeping units] has increased significantly.
Ricardo Robles, co-owner, Anita’s Mexican Foods Corp., San Bernardino, Calif.: Latest trends in retail continue to have more flavored tortillas available to the public. In a general sense there are more sizes weight and pack sizes that are available to the consumer. The trends are offering the consumers more choices rather than a standard packs, weights and diameters.
Snack Food & Wholesale Bakery: How are these trends different from what’s happening in the foodservice channel?
Rojas: Flavored wraps are big in the foodservice channel. This is where retail actually followed the trend seen in foodservice by introducing flavored wraps. On the other hand, better-for-you tortillas like the Mission Carb Balance and Mission 96% fat-free heart-healthy tortillas don’t seem to do very well unless it is part of a health fad that the public is following. The reason for this could be that consumers see tortillas to be just a food carrier and are not looking for healthier tortilla offerings in the foodservice channel. This is a good example of where the trend in retail did not work well in foodservice.
Fisher: The vast majority of foodservice business focuses on the more traditional tortilla products, however, there has been as of late, an increased emphasis on “fresh” and ready-to-cook tortillas in both regular flour and wheat.
Robles: Foodservice channel also continues to see multiple flavors, however, it is the goal of the foodservice channel to maximize the pack sizes.
Snack Food & Wholesale Bakery: What new products have you introduced in response to these trends?
Rojas: We are constantly looking to provide our consumers with more healthy tortilla options.
In October 2008, we launched Life Balance flour and whole wheat tortillas, which has several Vitamins and minerals including Omega-3 fatty acids, antioxidant Vitamin E, as much calcium as a glass of milk and is a good source of fiber. We took into consideration the product attributes that are important to consumers and created an easy and delicious way for them to get them.
We also recently launched a 100% whole wheat tortilla. USDA’s [U.S. Department of Agriculture] WIC [Women, Infants and Children] food program has added corn and whole wheat tortillas to their food list. This product is a good source of dietary fiber.
Fisher: Don Julio has introduced a line of “un-cooked” (raw) tortillas for retail as well as foodservice that brings that fresh cooked-at-home flavor. Sales on these tortillas are showing very strong growth.
Robles: Multigrain and multi-seeded products and natural tortillas with no preservatives.
Snack Food & Wholesale Bakery: How has the state of the economy impacted the tortilla industry? Have these changes had a positive/negative impact on your business and why?
Rojas: Given the state of the economy, we definitely know that consumers are cooking more at home. They are also looking for value-added, budget-friendly meal ideas. This is where we can help given that we have a wide range of affordable, value-added products to choose from. We are currently running a campaign in Mission’s major markets where we are educating consumers to cook a family meal under $10 using Mission tortillas. We understand the budget constraints that families are going through, and we want to show them that it is not difficult to cook nutritious, delicious and affordable meals at home.
Fisher: For many years, tortillas have shown strong steady growth year after year in the retail. Even with economic challenges, tortilla growth is steady, given more people eating at home, etc.
On the foodservice side, economic woes have certainly had an effect on how often and where people eat out. The Don Julio tortilla business continues to grow year after year in spite of the state of the economy. The introduction of the fresh “uncooked” tortilla for retail and foodservice is helping to contribute to this success.
Robles: The state of the general economy has not impacted our business directly. However, certainly financial institutions are tightening the criterion for lending, which makes it difficult for some businesses. We are impacted more by the world commodity markets than by the U.S. general economy.
Snack Food & Wholesale Bakery: Have you expanded capacity or invested in your operations to adjust to changing marketing conditions or to operate more efficiently? If so, what changes have you made?
Rojas: We have already launched a company-wide sustainability program to reduce waste and help contribute to saving the environment. Our initiatives touch all areas of our organization, like the manufacturing plants where we are now using recyclable cases instead of corrugate boxes and our offices where we have done away with Styrofoam cups and have asked all employees to bring their own personalized coffee mugs instead. Mission’s sustainability efforts are also in the area of waste reduction and new green plant (Panorama plant located in California).
Fisher: Over the past three years, Don Julio has made significant capital investments in more efficient high-velocity equipment, which produce higher yield for less. We have a regular program of equipment upgrades including upgraded food safety equipment.
Robles: Yes, we have invested in packaging equipment to allow us to produce faster and to give us more variety in terms of packs and weights.
To learn more about tortilla trends or to register for the 2011 TIA Convention & Expo, go to www.tortilla-info.com. The show takes place May 16-17, 2011 at Paris Las Vegas.
Also, don’t forget to swing by the Tortilla Industry Association’s booth No. 4035 at IBIE 2010 in Las Vegas.