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Mexican foods will total $2.190 billion in 1992.

This study goes on to predict that the market will continue to grow in double-digits through 1997, when it will reach $3.935 billion.

Of the three segments in the market, two (frozen/refrigerated and canned/packaged) are projected to grow in the 7%-8% annual growth range; Mexican sauces (the third segment) is projected to increase at a rate of 20% per year.

The New York-based research company, Packaged Facts, states retail sales of Mexican Foods will total $2.190 billion in 1992, an 11% gain over 1991 sales.

Though this substantial growth might raise eyebrows in another market, double-digit growth has been constant for Mexican foods for over a decade. And the trend is predicted to continue. Packaged Facts projects that growth will stay in double-digits over the next five years, gaining between 12% and 13% per year through 1997, when total sales will reach $3,935 billion.

There are three different segments in the market frozen/refrigerated with 10% growth in 1992, to reach sales of $815 million; canned/packaged, up 10%, to $645 million; and Mexican sauces with a 14% gain, to achieve sales of $730 million.

Over the next five years, all three segments are expected to grow substantially, but Mexican sauce (which last year surpassed ketchup as the nation's most popular condiment) will be far and away the leader.

Packaged Facts is predicting that the Mexican sauce segment (including picante sauce, salsa, taco sauce, and enchilada sauce) will increase 20% in 1993, maintaining that level of annual growth through 1997, when sales will reach $1. 8 billion.

If Packaged Facts projections hold true, it will mean that the market (only $332 million in 1987) will have more than quadrupled in a decade.

This has been made possible by the proliferation of Mexican restaurants spreading across America. Customers at such restaurants are invariably greeted with a jar of sauce and a basket of chips. And, simply by purchasing chips and salsa at the supermarket, then serving them up, it isn't difficult for consumers to prepare a reasonable facsimile of the restaurant fare at home.

The restaurant effect can be seen most clearly in the relative market shares held by the different sauces in the segment. The two sauces most frequently served with chips at restaurants are also the top sellers at retail outlets picante sauce (with a 35% share), and salsa (with a 29% share). Significantly, taco sauce (not a restaurant chipdip) has been relegated to third place (with a 26% share) after holding the top spot from the mid-fifties through the mid-eighties. Bringing up the rear are enchilada sauce, with an 8% share, and other sauces, amounting to a collective 2% share.

The segment has long been dominated by Pace and Pet, Inc. (Old El Paso, Las Palmas), each with about a quarter of the market. But new companies are entering the fray on what seems to be an almost daily basis.

The strongest second-tier marketers are Frito-Lay, La Victoria, George A. Hormel (Chi Chi's) and RJR Nabisco (Ortega). These marketers control shares that range from 7 to 10%.

Packaged Facts President David A. Weiss predicts that along with success some changes are in store for the Mexican sauce category. Says he, "It's likely that salsa will move into the number one spot because it serves as a restaurant chipdip even more than picante sauce. In addition, more unusual sauces, such as mole and cactus, will make their way to the American table.'

The other two segments in the market (frozen/refrigerated and canned/packaged) are also benefitting from the interest in Mexican food being generated by the proliferation of Mexican restaurants. But annual growth in these segments is not anticipated to exceed the 7%-8% range. This should elevate 1997 total sales in the frozen/refrigerated segment to the $1.2 billion mark, while the canned/ packaged segment will be pushed to $0.935 billion.

Although 7%-8% annual growth is none too shabby, it is a far cry from the Mexican sauce segment's 20% projected annual gains. Mr. Weiss explains the disparity this way. "If the products in the frozen/refrigerated and canned/packaged segments yielded as restaurant-like results, with as little effort as the Sauces segment, they would also be chugging along with double-digit growth." In addition, Mr Weiss believes, "That Americans are a snack-crazy nation also adds to sauce's growth dominance over the other two segments.'

Nonetheless, the ease with which Mexican food products, in general, are able to jump from the restaurant to home far surpasses that of many other ethnic cuisines, and Mr. Weiss ascribes this to "the idiot-proof factor." He says, |Some cuisines, such as French and Japanese, do not suffer inept preparation or food processing very well, and that's why their restaurant popularity has never been equaled by retail sales. But Mexican food is pretty tasty, no matter what you do to it."

And just about everything is being done to it. All sorts of products are available in the Frozen/refrigerated and Canned/Packaged segments, ranging from base ingredients, such as tortillas and chili peppers, to ready-to-heat entrees and dinners.

ConAgra, through its Banquet, Patio, and Morton brands is the leading marketer in the Frozen/Refrigerated segment, with many heavy hitters and feisty regional manufacturers among the other contenders. These include Nestle, Heinz, Anheuser-Busch, Camino Real Foods, Ruiz Foods, Campbell Soup Co., and Pet, Inc.

In the Canned/Packaged segment, ConAgra occupies the number two spot with the help of its flagship Rosarita brand. Number one is Pet, Inc., with its mainstay, Old El Paso, and supporting players, Las Palmas and Pancho Villa; RJR Nabisco (Ortega) and Unilever (Lawry's and Tio Sancho) ranking three and four, respectively.

Over 250 pages in length, THE MEXICAN FOODS MARKET contains an overviews of the overall market, as well as the three segments in the market (frozen/refrigerated, Mexican sauces, canned/ packaged fact). It features market size and growth statistics and focus sections on company profiles, the competitive situation, distribution, retail activity, and consumer purchasing habits, not only for the market but for each segments as well.

Information about the THE MEXICAN FOODS MARKET, which costs $1,750 is available from Packaged Facts Inc., 581 Avenue of the Americas, New York, NY 10011. Phone 212-627-FACT.
Projected Sales: Mexican Foods Market (1993-1997)
 (In Millions)
 Frozen/ Mexican Canned/
Year Refrigerated Sauces Packaged Total
 $ Vol % Chg $ Vol % Chg $ Vol % Chg $ Vol % Chg
1997 $1,200 8% $1,800 20% $935 7% $3,935 13%
1996 1,110 8 1,500 20 $870 7 3,480 13
1995 1,025 8 1,250 20 805 7 3,080 12
1994 950 8 1,050 20 750 8 2,750 12
1993 880 8 875 14 695 8 2,450 12
Source: Packaged Facts
COPYRIGHT 1993 Frozen Food Digest, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Publication:Frozen Food Digest
Date:Feb 1, 1993
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