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Mexican food market grew 8% in 1994 to reach $2.4 billion.

Mexican foods are hotter than ever. Sales projections to hit 2.5 billion in 1995.

The key factors promoting growth of the Mexican food market include the "mainstreaming" of Mexican cuisine by fast-food restaurants, an increasing Hispanic population, and Americans' continuing fascination with spicy ethnic dishes.

"Americans' have gone gonzo for Mexican sauces these past few years, especially salsas. And there's nothing to indicate that sales of Mexican sauces will slow down anytime soon," says David Weiss, President of the New York City research firm Packaged Facts.

Projections of the market for Mexican foods will approach $3.5 billion by 1999, with annual growth rates to average about 8% - a slower rate of growth than the double digit percentages of the recent past, but still quite respectable by food industry standards. "The sauce category should continue to be the dynamo of the Mexican food market, powering growth over the next several years," says Weiss.

The hottest category in the Mexican food market has been sauces. Of the three major categories of Mexican food (sauces, frozen/refrigerated, shelf-stable), sauces have moved from being the smallest in 1989, with sales of $464 million, to the largest in 1994, with sales soaring to an estimated $940 million.

U.S. retail consumption of prepared Mexican sauces increased from 260 million pounds in 1989 to 469 million pounds in 1994 - a total increase of almost 80%. Surprisingly, during that period, sales of taco sauces actually dropped - from $71 million in 1991 to $58 million in 1994 a drop of over 18%. The majority of growth came in the sales of salsa and Mexican sauces, which reached $825 million in 199.4 - up from sales of $576 million in 1991, making for an impressive increase of 41%. Refrigerated sauces showed somewhat slower growth as total sales increased from about $47 million in 1991 to an estimated $57 million in 1994 a 21% increase.

"What makes salsa such a strong seller is that it has a healthy image, says Weiss. "However, in reality, it's a nutrition-neutral food and supplies very few vitamins and nutrients. But, because it's free of cholesterol and fat and is full of vegetables, people look at is as healthy and feel good about using it," concludes Weiss.

Expectations are for retail sales of Mexican sauces to increase from $940 million in 1994 to about $1.57 billion in 1999, an increase of about 54%.

After double-digit growth rates in the late 1980s, sales of frozen and refrigerated Mexican foods took a nose-dive in the early 1990s. 1994 dollar sales, estimated at $660 million, have just now come back to 1990 levels.

Sales of Mexican frozen foods were given a cold reception by consumers, as sales fell from $460 million dollars in 1990 to $392 million in 1994. On the other hand, refrigerated Mexican foods have shown good growth, posting five straight years of sales growth. Sales increased from $165 million in 1989 to an estimated $268 million in 1994, representing a 53% increase in dollar sales.

It's expected that retail sales of frozen and refrigerated Mexican foods will increase from $600 million in 1994 to $785 million in 1999, a total increase of about 19%.

After two years of weak growth, the shelf-stable category posted an 11% dollar sales increase in 1994 to reach an estimated $756 million, up from $508 million in 1989, for total market growth of a respectable 49%. Dollar sales of taco products led the way as they increased from $339 million in 1989 to an estimated $548 million in 1994, representing a jump of 62%.

Retail sales of shelf-stable Mexican foods are expected to increase from $756 million in 1994 to $1.1 billion in 1999, a total rise of about 46%.

Packaged Facts estimates that there are at least 300 major marketers, and many more that compete on a regional or local basis. Five of the top seven food marketers are conglomerates and the top seven marketers account for over half of dollar sales. Furthermore, the top three marketers control a one-third share of the Mexican food market. The top seven marketers are Pet, Inc. (which owns the leading Mexican food brand - Old El Paso), Pace (the powerhouse brand in the sauce category), ConAgra, RJR Nabisco, Gruma Corp., PepsiCo's Frito Lay division, and George Hormel.

About 93% of Mexican food is sold in grocery stores. Supermarkets account for 73% of those sales, and smaller grocery stores about 20%.

"One of the trends for the market is deli-style in-store production," says Weiss, "consumers are paying more attention to the items available in the delicatessen case in the supermarket. In areas where demand for Mexican food is high, grocery stores are even setting up tortillerias to make fresh tortillas."

Mexican restaurants, and fast food restaurants offering Mexican food, are also playing a major role in popularizing Mexican food. By promoting Mexican cuisine in general, each new restaurant has the potential for generating new consumers of packaged Mexican foods. It's estimated that a total of 20,271 Mexican restaurants were in business in 1993.

Users of Mexican food have a distinct profile. Overall, Westerners and Midwesterners are more likely than residents of other areas to use Mexican food and/or ingredients, as are those with at least some college, and a household income of at least $30,000. Other factors favoring use include having a white-collar occupation, being a parent, having at least one child, and having a household size of at least three.
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Publication:Frozen Food Digest
Date:Jul 1, 1995
Words:914
Previous Article:New survey finds consumers motivated to try ethnic cuisines for different reasons.
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