Milling & Baking News - June 7, 2016 - 32

Tortilla Update X

Milestone moment for
tortilla category
Unit sales in hard/soft tortillas/taco kits segment exceed 1 billion

here may not have been thunderous applause or loud sirens
to mark the milestone, but for
the tortilla industry, 2016 has been
a banner year. Unit sales in the fresh
hard/soft tortillas/taco kits category
have eclipsed 1 billion units, according to Information Resources, Inc., a
Chicago-based market research firm.
The milestone was inevitable for a
category that has been growing at a
steady clip for the past several years.
Following two years of growth exceeding 5%, dollar sales in the fresh
hard/soft tortillas/taco kits category
increased 3.4% in the 52 weeks ended
May 15, exceeding $2.3 billion in sales,
according to I.R.I.
Mexico City-based Gruma S.A.B.
de C.V. continues to see strong sales
in its Gruma business as well as its
subsidiary, Mission Foods Inc. In the
52 weeks ended May 15, dollar sales
for Mission Foods in the fresh hard/
soft tortillas/taco kits category totaled $711,875,968, up nearly 7% from
the same period a year ago, while

dollar sales for Gruma Corp. in the
category grew 5% to $390,989,248, according to I.R.I.
In an April 21 conference call with
analysts, Raul Cavazos, chief financial
officer at Gruma, said Gruma believes
there still are further opportunities
in the U.S. division to grow revenues
and enhance profitability. To that end,
he said the company expects margins
could be expanded to a range of 18%
to 19% in the mid-term.
Asked how Gruma expects to
achieve those margins, Mr. Cavazos
responded, "One, we are quite confident that the strength the company
has developed over time - the strong
brand recognition, our leadership position in the market, the economy of
scale and the distribution capabilities
we have in Gruma Corp., as well as
the innovation in products ... - all
of this, among others, are basically
the way to support the strategy we
are following in Gruma Corp. Then,
we are quite comfortable that we
will be in the same trend. Of course,

New tortilla technology on the horizon
NEW YORK - For years, consumers have had access to a quicker, more consistent cup of coffee
thanks to the Keurig machine and similar products. Now, that innovation appears headed for the
tortilla industry.
Zurich, Switzerland-based flatev GmbH has partnered with the engineering and manufacturing team behind Nespresso and Jura Coffee machines to launch a campaign on Kickstarter to raise capital for a tortilla
machine. The machine takes small, organic pods and transforms them into fresh tortillas within one minute.
flatev's tortillas are produced without preservatives and artificial colors or flavors.
Consumers are expected to have a wide
variety of pods to choose from, including
basic corn tortillas, dessert honey tortillas
and spicy chili tortillas. The dough that
comes within the pods is made with fresh
and natural ingredients, according to flatev.
"This stout little machine was inspired
by the simple tools and traditions of home
cooking around the world," said Fred Bould,
designer of the flatev. "The soft, sculpted
form invites you to interact with it as well as
making it easy to pick up and clean."
flatev has raised more than $5 million in
seed round money thus far and won multiple start-up competitions worldwide, including Venture Kick
in Switzerland, MassChallenge in the United States and the European Food Venture Forum in Denmark.
flatev plans to roll out its product in the United States in 2017. MBN

as everybody can think, once you are
improving the margins at this level,
always it is going to be a little bit more
complicated to improve it. But in our
plans, we have contemplated that, we
have considered, and again we are
quite confident that we have room for
growth, and this is going to be something in-between 18% to 19%."
Gruma also plans to further reduce
its s.k.u.s to focus on higher-margin
products. Mr. Cavazos said the company has about 550 to 600 s.k.u.s but
hopes to trim that number to about
400 by the end of 2016 or beginning
of 2017.
Another way Gruma expects to
achieve higher margins is by cutting
freight costs. Mr. Cavazos said the
company is experiencing additional
freight expenses because it is running
at max capacity at some of its plants.
The company is building new plants
that will ease some of the capacity
restraints, leading Gruma to be more
efficient on transportation and freight
costs, he said.
General Mills, Minneapolis, and Ole
Mexican Foods Inc., Norcross, Ga.,
also have experienced sales gains over
the past year.
Tortilla dollar sales at General Mills
increased 4% to $263,024,464 in the 52
weeks ended May 15, according to I.R.I.,
boosted by a 16% increase in sales of
Old El Paso Stand 'N Stuff taco shells.
At Ole Mexican Foods, dollar sales
increased nearly 7% behind an 8% gain
in sales of the company's La Banderita
brand, to $176,533,056. Ole Mexican
Foods also experienced a nearly 4% increase in dollar sales in its Ole Xtreme
Wellness brand of tortillas, which includes tortilla wraps in such varieties as
high fiber, fat-free, spinach and herbs,
tomato and basil, and multigrain. MBN
- Eric Schroeder

32 / June 7, 2016 XMilling & Baking News

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Milling & Baking News - June 7, 2016

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