In 2011, GRUMA will likely face various challenges. Thanks to the company’s preparation – much as in previous years – its strategic business approach will allow it to move forward with great success.
The Mexican multinational, with 93 plants strategically located to sell its products in 102 countries throughout America, Europe, Asia and Oceania, is already aware of some of problems it will encounter. Grain price volatility, maintaining consumption levels – mainly in the US – and utilising optimal flow generation to maintain a healthy financial structure are all concerns. In light of this the company is already prepreparing to meet these challenges head on.
GRUMA has now purchased all the corn to cover its production needs in the US, the market currently with the greatest grain price volatility impact. Having addressed this situation, the company can now offer a competitive price strategy and continue growing in the tortilla market.
On the consumption side, the company’s basic and defensive character of its products continues to allow it to ensure sales volumes in Mexico and Latin America, its core business after the US. However, GRUMA is always looking to broaden its reach and as such includes market expansion activities in all its strategic planning schemes.
According to the philosophy of its chairman Roberto González Barrera, the key to GRUMA’s world success is to adapt to the cultures, people and laws of each and every country where it invests. At the same time, its founder also believes that crises constitute growth opportunities, for constant portfolio evolution to meet customer and consumer needs.
In 2000, this most globalised of Mexican food companies went into the European tortilla market, with the construction of its first production plant in Coventry, England. Now, 10 years later, GRUMA has production operations in the UK, the Netherlands, Italy and the Ukraine, and exports products to most of the countries across the continent, as well as to Africa and the Middle East.
Furthermore, in 2006 GRUMA built and launched its first tortilla production in China and, through acquisitions, went into Australia, where it recently opened a state-of-the-art tortilla and chips plant, fully developed by its own technological area.
With these facilities, GRUMA has not only consolidated its international presence in the tortilla market, but allowed the production of a large range of flat breads (wraps, chapatti, naan, pitta bread, pizza base, piadina and more). This has allowed GRUMA to establish a major presence in those continents, aiding the expansion into these potential markets.
GRUMA sales worldwide are currently around $4bn, and there’s great potential to continue growing through products where a lot of experience has already been acquired. Implementing vertical integration through corn flour and grits production operations as raw materials in the aforementioned regions will also be an aim.
In 2011, GRUMA’s challenge in these regions is to expand its customer and product base. This will be achieved in part through strategic acquisitions to cover new regions. More importantly though, GRUMA aims to become more familiar with consumer tastes and preferences and thus meet consumption needs. For this objective, GRUMA has adapted many of its products to the culinary customs of the regions where it’s located. At the same time, GRUMA is aiming for increased consumer interaction, showing the variety of ways its high quality and value-added products can be used and consumed.
In Asia and Oceania, with 62 percent of the world population – over 4 billion – GRUMA and its management are certain that their products and opportunities will prove more than attractive.
Of course, this is not neglecting its operations in America and Europe, where each market offers near infinite growth opportunities. GRUMA’s future challenge is to continue consolidating its presence in the regions where it already operates, as well as to take advantage of all new market opportunities that occur across the planet.
Over the next year, GRUMA plans to grow sales and profits in all the regions where it operates, to continue reducing its leverage levels and enhancing its financial structure, which is the basis behind the company’s sustained growth.
The most globalised Mexican food company, that nourishes the heart of Mexico and the world, therefore has enormous global growth opportunities. With the world population now 6.5 billion people, all seeking high quality products that are healthy, practical and environmentally friendly characteristics, GRUMA has taken great strides to meet these needs, as it continues to demonstrate through the regions and markets where its products are already available.
