Ruiz Food Products, the number 22 company, has grown its total sales at a 20 percent annual rate for a decade. Last year it more than doubled the dollar value of its exports to $8.7 million. Still, that figure – based mainly on exports to Canada and Mexico – represents only 3 percent of the company's overall sales.
"In the United States, there's a tradition and culture of buying frozen food. That is just emerging in Latin America," says CEO Fred Ruiz. "As that culture spreads, we are going to be right there in the freezer bins."
The humble pork rind was responsible for a 20 percent growth in exports to $11.25 million at Chicago-based Evans Food Group, which now controls 35 percent of the world market. Today, its Mac's line ranks second only in brand recognition to Frito Lay's Baken-ets.
The company, ranked 16th on the Hispanic Business list of exporters, received just under 12 percent of its total income in 2004 from exports, including markets throughout Latin America, Europe, and the Orient, says CEO Alejandro Silva. Its Patriots Choice brand is sold on U.S. military bases abroad and at home. "Our military has lots of Hispanics and Afro-Americans," Mr. Silva says. "These are our prime customers."
The company has two plants in Mexico and three plants in the United States, as well as a joint venture in St. Louis. A second joint venture in Denmark took its licks last year due to currency fluctuations when the value of the euro jumped from 85 cents to $1.26. "It made us less competitive and took away from our profits – temporarily," says Mr. Silva. "But these things balance out. We found off-setting profits elsewhere."
The company dates to the late 1970s when Mr. Silva and two partners opened a pork rind facility in Mexico. That country's poor economy forced the group to look north. One of the founders stayed in Saltillo to downsize a plant; one went to Mexico City; and Mr. Silva moved to Los Angeles to look for opportunities in the United States. Eventually, Mr. Silva moved to Sioux City, Iowa, and then Chicago, before taking over a plant in 1985 that eventually became Evans Food Products.
The company's success in the export arena, Mr. Silva says, comes from knowing how to adapt. That includes knowing when to challenge the Goliath of the snack industry, Frito Lay, and when to join it. In certain markets where it has little chance of developing its own distribution system, Evans sells directly to the multinational.
Being adaptable also means knowing how to cope with harsh rules on imports. For example, when Evans found Colombian laws hostile to imports, it set up its own company (since disbanded) to import rinds. Adaptability also means understanding the peculiar palates of Europeans. The Danes "have been eating rinds forever," Mr. Silva reports. Norwegians, Spaniards, Italians, and "some Germans" also happily munch away, he says, while the French "don't touch them."
Adapting in a much brisker fashion has been the only way another member of the top exporter list, Fruit Pros of San Diego, could survive. The company, ranked 12th, rose to prominence by exporting produce to Mexico and Central America. But dizzying changes in the Mexican retailing market have changed the company's paradigm, says CEO Carlos Velarde.
What was once a flow chart full of intermediaries involved in produce export to Mexico has vanished as Wal-Mart and a handful of Mexican supermarket chains have told producers to "shape up or ship out," according to Mr. Velarde. "They have completely restructured the business," he says. "They control it from start to finish. They've overwhelmed the neighborhood grocery stores and street markets. Everywhere we look in the industry, people are being displaced."
What does that mean to Fruit Pros, whose exports in 2004 accounted for 95 percent of its income? Fortunately, Mr. Velarde says, Mexico continues to be a country "obsessed with fresh produce." The company will focus on some of its traditional but volatile niches, such as export of plums, apricots, peaches, nectarines, and apples and bank on its experience at navigating the tricky waters of governmental regulations.
"Knowing the ins and outs of USDA and SAGARPA [Mexico's Secretary of Agriculture] is an expertise in and of itself – and we know that part well," Mr. Velarde says.
But that expertise may come at a cost: According to Mr. Velarde, the company lost "seven or eight truckloads of apricots" last year because mandatory fumigation at the Mexico port of entry killed the shipment.
"We recognize that we are going to be service providers for these monsters [a not-so-delicate reference to Mexico's mega-retailers]and that is where we are investing," he says. "Someone still needs to bring the produce, cross the border, and get it to market. We can have a truck picking up produce on Monday in Fresno, be in Nogales [Arizona] the next morning, and be ready for sale on Thursday morning in Guadalajara. If we can do this efficiently, we should be able to survive."
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