Tortilla turnover on the rise

by Eric Schroeder
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For many companies participating in the tortillas/wraps category, the past year has been a strong one in terms of positive dollar sales and unit sales momentum.

In the 52 weeks ended Aug. 8, dollar sales of tortillas/wraps totaled $1,085,263,000, up 4% from the same period a year ago, according to SymphonyIRI Group, a Chicago-based market research firm. Unit sales, meanwhile, rose more than 7% to 504,751,100.

Leading the charge was Mission Foods Inc., which commands a 25% share of the market. The Irving, Texas-based company posted 7% unit sales growth in the 52 weeks ended Aug. 8 on a 0.4% gain in dollar sales. According to SymphonyIRI, Mission’s tortillas/wraps have an average price of $2.68 per unit, which make it the third most expensive among the category’s top 10 brands. But perhaps contributing to the uptick in sales during the period, Mission slashed its tortilla products by an average of 16c during the past year, according to SymphonyIRI.

Mission also was one of the few companies to launch new products over the past year. In June, the company added 100% whole wheat flour tortillas to its product line. The tortillas are 100% whole wheat, cholesterol free and contain 30 grams of whole grain per serving.

“Mission Foods is committed to meeting the demands of consumers for healthier options,” Norma Rojas, senior director of marketing for Mission Foods, said when the tortillas were launched this summer. “Mission Whole Wheat Flour Tortillas provide an affordable solution for families expecting the same quality and taste of our flour tortillas, but also want to make small, simple steps to integrate healthy eating habits for their families.”

Beyond new products, Mission also made headlines in September with the major restart of its Panorama City, Calif., facility. The plant has two corn tortilla lines, with space for four additional corn lines, as well as two press lines for wheat tortillas and space for two more lines. The lines run 24 hours a day, five days a week.

Just as important, the facility was constructed with an eye toward sustainability. The Panorama City plant is LEED-certified, and is the first Mission facility to install a solar panel system. The system takes up about 20,000 square feet of roof space and includes 194 panel units, Mission Foods said.

Another company making changes on the production end is Casa de Oro Foods, Omaha. The company, which is owned by private equity firm Plaza Belmont Management Group, Shawnee Mission, Kas., recently ramped up operations in Omaha.

Casa de Oro supplies major U.S. food companies with manufactured products, and in April 2009 launched the Casa de Oro brand of tortillas, marketed and sold through retail chains.

The company manufactures more than 4 million tortillas per day and is one of the few tortilla plants to have a pilot plant, complete with a mini production line, a variety of mixers and ample room for experimentation. The plant produces white wheat, whole wheat and whole grain tortillas and flavored wraps and home meal kits. Flavored wraps are available in spinach, tomato basil, garlic herb, jalapeño and chipotle.

La Tortilla Factory, Santa Rosa, Calif., is a small player in the tortillas category, but continues to gather momentum thanks to innovation. The company’s 100 Calorie Tortillas have been well received in the marketplace and the company also now is receiving a boost from its Hand Made Style Corn Tortillas.

In the 52 weeks ended Aug. 8, dollar sales at La Tortilla Factory rose 62% to $29,203,050, while unit sales soared 84% to 9,181,111. The company’s products are geared more toward a specific market, and therefore carry a higher price point. According to SymphonyIRI, the average unit price for La Tortilla products was $3.18 in the 52 weeks ended Aug. 8, down 43c from the same period a year earlier but still the highest price point of the top 10 brands tracked by SymphonyIRI.

Two companies that have not fared well in the category from a sales perspective during the past year were Gruma Corp. and Bimbo Bakeries. Gruma, the No. 2 player, suffered an 11% decline in dollar sales to $196,652,600, according to SymphonyIRI, while Bimbo’s sales dropped 23% to $28,869,680. From a unit sales perspective, Gruma eased 10% while Bimbo fell 20%.

For Monterrey, Mexico-based Gruma, part of the decline may be attributed to a reduction in the number of stock-keeping units sold in the United States during 2009 to about 800 from 1,500 previously. Gruma said the effort allowed the company to reduce the number of brands by 38%, reduce complexity in terms of package size, reduce production and distribution costs, strengthen sales of existing brands, and realize economies of scale with regard to remaining brands and s.k.u.s. The company also in 2009 closed plants in Fort Worth and El Paso, Texas, and Las Vegas, and shifted production volumes to nearby facilities in Dallas, Los Angeles and other locations.

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