A tortilla takeover
May 8, 2013
by Eric Schroeder
A report published late last year from Packaged Facts showed that the market for Hispanic foods and beverages reached almost $8.2 billion in 2012, up 3% from 2011 and up 8% from $7.5 billion in 2009. In addition, sales of Hispanic foods and beverages are expected to reach $10.7 billion in 2017, up 31% from the present market level, the report noted.
Tortillas are a key driver of the growth.
With dollar sales of nearly $2.2 billion, tortillas (refrigerated/hard/soft/taco kits) are outselling many American staples, including pasta, hamburger and hot dog buns, and bagels, according to Information Resources, Inc., a Chicago-based market research firm.
In the 52 weeks ended March 24, dollar sales of hard/soft tortillas/taco kits totaled $2,025,269,000, up 3% from the same period a year ago, while unit sales rose nearly 2% to 908,047,800, according to I.R.I.
One of the fastest-selling brands in the past year has been Chi Chi’s, manufactured by Hormel Foods L.L.C., Austin, Minn. In a category lacking much in the way of innovation over the past few years, Chi Chi’s Bistro Wraps have been the exception, helping drive a 47% increase in dollar sales for the Chi Chi’s brand during the 52 weeks ended March 24. Total sales for the brand during the period were $40,168,910.
The Bistro Wraps are considered by Hormel to be a “premium” flour tortilla, and come in several varieties, including white whole wheat, sun-dried tomato, red pepper, spinach and artisan blend.
The trend toward tasting tortillas is going beyond the supermarket, too. While Mission Foods Inc., Irving, Texas, is the nation’s largest provider of hard/soft tortillas/taco kits with dollar sales of $555,287,200, equating to more than 27% of the dollar market share, the company recently received a boost to its food service business with the announcement that McDonald’s Corp., Oak Brook, Ill., has rolled out Premium McWraps.
The new meal-sized wraps combine vegetables, sauces and chicken in a warm tortilla. While neither Mission Foods nor McDonald’s would confirm the extent of the partnership, a spokesperson for McDonald’s said at least some of the tortillas for the McWraps are being made by Mission Foods. Mission has maintained a piece of the McDonald’s tortilla business ever since the fast-food chain first rolled out wraps several years ago.
More good news for the tortilla industry was delivered by Don Thompson, president and chief executive officer of McDonald’s, in an April 19 conference call with financial analysts, when he said the McWraps are not a limited-time offer promotion.
“It is one of those things that will be a platform for McDonald’s as we move forward,” he said. “It’s been that way in Europe and performed well. We feel that the performance at these early stages in the U.S. has met the expectations that we have.”
Tortillas also are popping up at Dunkin’ Donuts. The Canton, Mass.-based quick-service restaurant chain has offered tortilla breakfast wraps for several years, but just last month introduced chicken salad and tuna salad wraps. Served on a warm, 8-inch tortilla with white cheddar cheese and bacon, the wraps are a permanent addition to the menu, which includes oven-toasted bakery sandwiches.
“Dunkin’ Donuts has distinguished itself for serving fast, satisfying menu items that can be enjoyed any time,” said John Costello, president of global marketing and innovation for Dunkin’ Donuts. “We are committed to finding new and innovative ways to meet the needs of people seeking more variety and more choices in snacks to help get them through their busy days. Our new Wraps enhance our popular lineup of bakery sandwiches and baked goods, and offer our guests even more ways to keep running on Dunkin’ whether it’s 8 a.m. or 8 p.m.”
The wraps are available at locations nationwide.
Even as some tortilla makers are finding ways to get their products into more food service outlets, others are making the move to find more supermarket shelf space.
In February, Tyson Mexican Original, Inc., a subsidiary of Tyson Foods, Inc. and the second-largest manufacturer of tortillas in the United States, acquired the assets of Clearfield, Utah-based Don Julio Foods. Among its products, Don Julio makes flour and corn tortillas under the Don Julio Authentic and Clover Club brands.
The majority of Tyson Mexican Original’s tortilla sales are with food service customers, but the company said the acquisition of Don Julio should allow it to expand its reach to grocery stores.
“Don Julio is an example of a brand that’s the right fit for Tyson Foods,” said Donnie Smith, president and chief executive officer of Tyson Foods. “The people are great, the business expands on an existing tortilla business where we already have expertise and it will allow us to offer our retail customers another product with a loyal consumer following.”
Annual tortilla meeting set for May
ARLINGTON, VA. — The Tortilla Industry Association will hold its 2013 Convention & Exposition on May 10-11 at Caesars Palace in Las Vegas.
The event brings together tortilla producers and suppliers who will be exposed to the latest in equipment and components, ingredients, packaging and systems. Educational sessions will be held to discuss the latest advances in tortilla technology and supplies.
For more information visit www.tortilla-info.com.