Tortillas are fast becoming the bread of choice for all Americans.

It might look delicate, but don’t be fooled: The tortilla has strong-armed its way from the center of the Mexican dinner table onto the tables of American culture with relative ease, and flexibility has been the bread’s biggest selling point over many traditional American bread products.

Tortillas have been all the rage in culinary circles in the United States since crossing over from Mexican culture years ago. No longer do consumers have to go to the “international foods” aisle at the local grocery store to buy them. They’re right in the bread aisle, competing with once-unbeatable white bread for the consumer’s eye. It is that exposure and mainstreaming that has kept tortilla sales growth on the upswing.

In fact, according to the most recent research available from the Tortilla Industry Association (TIA), tortilla sales were only 2% behind that of white bread in the United States in 2002. If the trend continues, the tortilla should surpass white bread as our bread of choice during the next couple of years.

And seemingly few obstacles threaten the tortilla’s continued growth. Not even trends toward low-carb products have been able to keep consumers from wrapping and rolling a wide variety of ingredients, such as spinach, pesto and dried tomatoes, into tortillas. The tortilla business might have made it onto the low-carb table later than most other sectors of the baking industry, but it finally is stepping up and taking advantage of the trend.

The industry is perfectly aligned to catch the positive windfall of the low-carb movement, since tortillas don’t contain a lot of carbs to begin with. Consumers often turn to tortillas to replace white bread, transforming once-carb-laden sandwiches into healthy and just-as-convenient wraps, according to Ken Levitt, president of Milwaukee-based Mexican Accent, Inc.

“[Tortillas are] a very low-cost alternative to a loaf of bread,” Levitt says. “People are using tortillas to make sandwiches on an everyday basis versus a loaf of bread. And I think that’s really growing because you see all of the [restaurant] chains — even the sub-chains — they all have wraps.”

The tortilla industry has answered the call of carb counters with innovation — especially in the realm of flavor, where many consumers have been left with a bad taste in their mouths.

Irvine, Texas-based Mission Foods has had fun catering to the low-carb populace and rolling out its new low-carb products, according to Asima Syed, the company’s senior vice president of marketing.

“When we talked to consumers in focus groups, they told us their belief was that most low-carb products tasted like cardboard,” Syed says. “So we had some fun, comparing a dish made with tortillas to a dish made with other products that may not have the same great taste. And our tagline for that was: ‘Lower Your Carbs, Not Your Expectations.’”

Brian Jacobs, vice president of Los Angeles-based Tumaro’s Inc., agrees that “low carb” doesn’t have to translate to “lack of flavor,” especially when it comes to tortillas, which offer a distinct edge in the carb-cutting production process.

“The advantage with tortillas is that, unlike a bread product, you don’t need the leavening,” Jacobs explains, “so you can use more ingredients that you can’t use in bread.”
Tumaro’s, which Jacobs says is well-known for its flavors, began adding them to the low-carb products to improve taste.

“That’s really what’s going to keep a person coming back and buying another package: the quality and consistency of the product, the health attributes of them and the flavor profile,” says Jacobs. “If you have all those together, then you have a winner.”

In most industries, being late to address a consumer trend might sink the ship. That’s not happening with low-carb in the tortilla industry, but Helen Chavez-Hansen, president of Fresno, Calif.-based La Tapatia Tortilleria Inc. says the low-carb trend certainly cannot be ignored.

“It’s not going to go away overnight,” Chavez-Hansen says. “[Low-carb is] going to be one of those items like whole wheat: You have to have it. It’s never going to be your No. 1 seller, but it definitely complements the line.”
Still, hope may be on the horizon for those wholesale bakers who have been battered by the low-carb lifestyle, according to Syed.

“One of the things we believe will happen is that the low-carb trend will moderate itself,” Syed explains, “and that it won’t stay or become a ‘no-carb’ trend, because carbs are part of what makes you healthy. The key is moderation with everything, and I think we’re going to see a return to a more-balanced nutritional profile.”

Navigating the taste-versus-low-carb maze isn’t the only challenge to hit tortilla manufacturers recently. Like many other industries, delivery hurdles have arisen in the form of higher costs for packaging, delivery and fuel. It makes it especially tough on the smaller, more local businesses like La Tapatia, which has worldwide capabilities via the Internet but caters mostly to the local market.

Prices should have gone up according to the cost of living, says Chavez-Hansen, but someone is keeping the prices down, controlling that market and forcing companies such as La Tapatia to keep their prices down. Although she says she would love to see prices go up, she’s afraid the company would price itself out of the market.

Distribution expenses certainly make it more difficult for tortilla companies in general, but it also makes it tougher to cater to both Hispanic and non-Hispanic consumers.

Tumaro’s has had success across the board recently with its flavored tortilla line, says Jacobs, where the search for a good-tasting low-carb product has allowed the company to attract a consumer base across cultural lines. As a result of its reaction to the low-carb trend, Tumaro’s is growing its general-market base. It’s not just Hispanics who are buying tortillas nowadays, and Jacobs credits that development to flavor innovation.

“We’re seeing that the demand for flavored tortillas is crossing over into more international areas,” Jacobs says. “And one thing that we’re recommending is to use flavored tortillas with traditional ingredients. Make a traditional burrito, make a traditional quesadilla, or make a chimichanga with the sun-dried tomato tortilla. By using authentic ingredients, [it] helps to expand the usage of tortillas into different cultures.”

Although growing the non-Hispanic tortilla consumer base and educating non-Hispanic consumers on tortilla use are both very important to industry survival, companies cannot afford to lose sight of the ever-growing Hispanic market.

A big positive for the tortilla industry, particularly the corn-tortilla category, according to Syed, is the fact that immigration has continued into the 21st century at a very strong pace.

“Immigrant, or less-acculturated Hispanics, eat far more tortillas than do more-acculturated Hispanics,” Syed says. “Those Hispanics are discovering a wider variety of foods as they get more acculturated, and as they do, their share of stomach space for tortillas tends to go down over time.”

A growing U.S. Hispanic population might have been enough to ensure success for tortilla companies in the past. But the landscape has changed dramatically since then. Companies that will enjoy continued success in the booming tortilla industry will be the ones that are keeping Hispanic consumers happy while finding new and innovative ways to attract non-Hispanic consumers.

As manufacturers are finding out, there are several ways to attract those consumers right now, whether it is through the desire for specialty flavors, authenticity or the healthy-lifestyle benefits that the tortilla offers. But when looking to the future, tortilla manufacturers must heed the most important lesson of all, one that can be learned from the very product that they sell: Flexibility brings consumers.

THE TOP 10 BRANDS
Hard/Soft Tortillas/Taco Kits (For 52 weeks ending June 13, 2004)
Rank	Brand	Dollar Volume (in millions)	% Change	Dollar Share	Unit Sales (in millions)	% Change
1	Guerrero	$148.5	+9.1	19.3	71.4	+9.6
2	Old El Paso	$124.6	-4.2	16.2	57.8	-3.8
3	Private Label	$79.6	+4.1	10.3	60.0	+2.1
4	Tia Rosa	$36.9	-2.8	4.8	21.0	-3.4
5	La Tortilla Factory	$29.7	+190.5	3.8	9.8	+135.9
6	Taco Bell Home Originals	$28.0	-1.8	3.6	11.5	-2.0
7	Ortega	$27.5	-3.2	3.6	13.3	-5.1
8	Diane’s	$25.3	+0.5	3.3	12.2	-3.7
9	La Banderita	$23.0	+40.9	3.0	12.5	+42.3
10	Mission Estilo Casero	$16.1	-10.0	2.1	6.3	-10.1
	TOTAL*	$770.9	+4.6	100.0	431.2	+2.1
*Including brands not shown SOURCE: Information Resources Inc., Supermarkets, Drug Stores and Mass Merchandisers, excluding Wal-Mart
THE TOP 10 VENDORS
Hard/Soft Tortillas/Taco Kits (For 52 weeks ending June 13, 2004)
Rank	Brand	Dollar Volume (in millions)	% Change	Dollar Share	Unit Sales (in millions)	% Change
1	Guerrero	$148.5	+9.1	19.3	71.4	+9.6
2	General Mills	$124.6	-4.2	16.2	57.8	-3.8
3	Private Label	$79.7	+4.1	10.3	60.0	+2.1
4	Kraft Foods Inc.	$41.2	-6.5	5.3	17.9	-6.7
5	Bimbo Bakeries USA	$37.8	-1.6	4.9	21.6	-1.6
6	La Tortilla Factory Inc.	$29.7	+190.3	3.9	9.8	+135.7
7	Ole Mexican Foods Inc.	$28.9	+34.5	3.8	16.1	+35.0
8	Nestle USA Inc.	$27.5	-3.2	3.6	13.3	-5.1
9	Mission Foods Inc.	$27.3	+16.6	3.5	10.9	+8.1
10	Diane’s Foods Inc.	$25.3	+0.5	3.3	12.2	-3.7
	TOTAL*	$770.9	+4.6	100.0	431.2	+2.1
*Including brands not shown SOURCE: Information Resources Inc., Supermarkets, Drug Stores and Mass Merchandisers, excluding Wal-Mart