News Column

A Tasty Revolution

June 2004, HISPANIC BUSINESS Magazine

Scott Williams

Fred (left) and Louis Ruiz.
Fred (left) and Louis Ruiz.

From its start in a small warehouse 40 years ago, Ruiz Food Products Inc. has grown into a massive manufacturer of frozen Mexican food, turning out more than 185 products that are distributed in all 50 states, as well as Canada, Mexico, Central America, and the Pacific Rim.

Revenues for 2003 topped $232 million, ranking Ruiz Food Products No. 17 on the Hispanic Business 500 list of the largest Hispanic-owned companies in the United States. The company now employs more than 1,700 people (85 percent in manufacturing jobs), and operates from a 300,000-square-foot facility in Dinuba, California, and a smaller plant in nearby Tulare.

And Fred Ruiz, chairman of the company he founded with his father in 1964, isn't stopping there. Mr. Ruiz says he expects the company to top the $300 million annual-sales mark soon, add 100,000 to 150,000 square feet to the Dinuba plant this year, and continue pushing its El Monterrey brand into new markets.

"Our business has been growing at double-digit numbers from the very beginning," says Mr. Ruiz, 60, who plans to turn over his post to his daughter, Kimberly Ruiz Beck, in four years. And while so far Ruiz Food Products has grown organically, Mr. Ruiz says the company now has its eyes open for possible acquisitions.

Ruiz Food Products' growth comes during a tough time for the general manufacturing sector. The National Association of Manufacturers, which represents a broad range of companies from food producers to auto makers, reports continued slow growth for the overall industry. Manufacturing lost more than 2.7 million jobs in recent years amid rising costs for natural gas and health care, increasing regulation, and fierce global competition. A recent association-funded study found that external, non-production expenses add around 22 percent to the cost of U.S. production expenses that major foreign competitors don't have to bear.

Ruiz Food Products has been able to buck the downward trend in manufacturing, however, because of the expanding Hispanic population, which is introducing Mexican food into new territories, Mr. Ruiz says.

"What that has done for our business is that people sample real Mexican food and when they can't get it in a restaurant, the next best thing is to get it out of their freezer," he says. Migrant populations aren't big buyers of frozen Mexican food, Mr. Ruiz says, but second- and third-generation Mexican-Americans are.
"I would say the growth of the [Hispanic] population has made a big, big difference in the consumption [of Mexican food]," Mr. Ruiz says. "It's been phenomenal for us."

One key to the company's success has been its new-products initiative that mandates 25 to 30 percent of revenues must come from "new" products defined as any product that is three years old or less. The company's research and development department presents around 300 new products to consumers each year, Mr. Ruiz says, with one or two becoming part of the company's product line. The effort is worth it: a successful new product can mean as much as $40 million to $50 million in additional revenue.

As for the future of the frozen food industry in general, Mr. Ruiz sees concerns over bio-terrorism as a continuing issue in food safety, and says consumers will continue to demand more diversity in their foods. Technology and automation will continue to define successful companies, he says, and consolidation will mean fewer, bigger customers.


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