MexAmerica Foods pushes geographic boundaries
In a time of economic turmoil, this tortilla company fully expects its business to double within the next 18 months, by reaching new customers beyond its traditional niche.
Until MexAmerica Foods was acquired in July, the company distributed its products within fairly limited geographic November 2008 BAKINGMANAGEMENT 19 OPERATIONS REVIEW boundaries. However, its new management has its sites set on growth–with a goal of turning MexAmerica into a national brand.
St. Marys, Pa., located deep in the Allegheny mountains, isn't the first place anyone would expect to find a tortilla manufacturing facility. Yet, after 21 years in business, MexAmerica Foods is nearly exceeding its current production capacity. The company was founded by Gerry and Sue Riddle in 1987. The couple had lived out West, and after returning to their roots in the East, were disappointed with the availability of authentic Mexican tortillas.
The Riddles started their tortilla business in a portion of a building owned by a lumber company. As their business grew, they eventually acquired the entire building and its plant manager Tom Kornacki, who assembled the tortilla equipment,assisted with the original formulas and has been with the company ever since. During the years, the Riddles developed a solid business that sold a high quality, award-winning product distributed within a 300-mile radius of its operating facility.
In July, MexAmerica Foods was acquired by Wingspan Capital Partners, Birmingham, Mich., a private equity firm that invests in promising specialized manufacturing companies throughout the United States. Joe Riley, a food manufacturing specialist with Wingspan and president and C.E.O. of MexAmerica Foods since its acquisition, realized the vast potential of the tortilla company that was, perhaps, stifling its own growth by limiting its geographic boundaries.
During the past several months, the company has begun to loosen its reins, having expanded its territory and considered business opportunities with customers the previous owners may have rebuffed. Riley and his fellow managers must now consider how to efficiently manage rapid growth as they work toward the goal of growing MexAmerica into a national brand.
Mexico moves east
When the Riddles realized the availability of authentic, great tasting tortillas was lacking in the eastern portion of the country, they seized the opportunity that lay before them. Developing the right formula required research and a trip back west to visit some tortilla producers, who provided guidance on the process.
“Mr. Riddle took samples of his tortillas to a number of supermarket chains and restaurants to see if there was any interest,” Riley explains. “He would go into the store and buy the product the store stocked. Then he would meet with the buyer with a sample of what the store was selling and a sample of what they could make and say, ‘If I could mass produce these, would you buy them?’ Upon tasting these unique tortillas, potential customers immediately said yes.”
Steam pockets are evident as flour tortillas are discharged from the oven.
When Wegman's Food Markets, a prestigious supermarket chain in Rochester, N.Y., agreed to buy the tortillas and put them in all of its stores, the Riddles knew their start-up venture would be worth pursuing. They leased a portion of the lumber company's 36,000 sq. ft. of space, purchased some used equipment and began revising the formula they had developed while out West to account for water, temperature and humidity differences associated with Pennsylvania's climate, Riley notes.
As MexAmerica Foods started supplying Wegman's and a few other supermarket chains, its business grew. Eventually, the company expanded from its original three or four employees to the nearly 42 it has today, and it occupies all 36,000 sq. ft. of the original building.
Targeting quality
Although MexAmerica's production facility is older and features familiar tortilla equipment, the bakery produces distinctive tortillas. “The difference is in the formula and the quality control used,” Riley says. The Riddles focused on creating a tortilla that would behave like a fresh tortilla, but could be mass-produced, shipped and stored.
What the Riddles actually created was an award-winning product. In 2004, MexAmerica Foods' white flour tortillas, whole wheat flour tortillas and corn tortillas were judged to be the best tasting tortillas in each of their respective categories by the American Culinary Institute. Additionally, in 2007 and 2008, Men's Health magazine named MexAmerica tortillas as one of its 100 Best Foods for Men.
The company prides itself on using the minimum amount of preservatives to avoid having a chemical aftertaste or aroma when the package is opened. Its tortillas also are among the most healthful of all the national brands, Riley notes.
“Our tortillas have a sealed surface,” says Mike Renaud, sales and marketing manager. “The fact that this product is pressed means its surface is sealed. You can put juicy meats or vegetables in it, wrap it and they're not going to soak through. It's a very versatile, consumer-friendly product.”
In recent years, MexAmerica Foods has seen its flour tortilla line of products grow as the company branched out into some of the trendy and more healthful areas, such as whole grains, Renaud notes. Growth also will come from the natural and organic sectors.
While at the Natural Products Expo in Boston, Riley noticed his competitors offering lines of all-natural tortillas. However, when he questioned the products' availability, the natural tortillas were not being produced yet because of shelf life issues. “From what I'm hearing, shelf life is anywhere from four to 12 days,” Riley says. “In my opinion, if we can't get something that's at least 25 or 30 days, it's probably not worth doing.” Still, the company continues to work on its all-natural line as it searches for a natural solution to inhibiting mold and maintaining freshness, the biggest obstacles to marketing a natural tortilla.
Other product development projects in process include a line extension of 10-in. wraps for retail in a number of traditional and trendy flavors, as well as nutrient-enriched products.
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