Mexican Food Will Be in the Spotlight in 2022

Since its inception in 2009, MegaMex Foods has become one of the fastest-growing Mexican food companies in the United States.

Food industry giants Hormel Foods in the U.S. and Herdez del Fuerte in Mexico established MegaMex as a joint venture, focused on redefining Mexican flavors and maintaining its leadership in the $6.5 billion Mexican foods category.

Recently, during a conference call to discuss fiscal 2021 financial results, James P. Snee, president and CEO of Hormel Foods, highlighted MegaMex’s contribution to the sales rebound. “During the fourth quarter of fiscal 2021, foodservice teams across the organization posted 72% sales growth for the quarter, up 33% from pre-pandemic levels. This followed the growth of 28% in the second quarter and 45% in the third quarter. Strength was across the board, with significant contributions from Refrigerated Foods, Jennie-O Turkey Store, and MegaMex.”

To learn more about the company’s work to continue captivating consumers’ palates with Mexican food products and the plans they have for 2022, Abasto magazine interviewed Ryan Michaelis, president and CEO of MegaMex, and Luis Marconi, vice president of Hormel’s food products group. At the end of 2021, Marconi retired after a 20-year career with the company.

Abasto Magazine: Ryan, what are MegaMex’s main purposes for this year 2022?

Ryan Michaelis, president and CEO of MegaMex.

Ryan Michaelis: Our primary focus is really anchored around our purpose as a company which is about reimagining Mexican flavors, and as you know, the dynamics continue to change, the growth of Mexican cuisine as a meal or occasion continues to exceed expectations and is now number one.

So the focus of our company is primarily on how we begin to leverage those experiences and those consumer needs really around the anchors of our brands, around authenticity, flavor, and all of those really optimistic expectations in our continued growth in the very near future and the long term.

AM: You’ve been leading MegaMex since 2015, but you’ve worked with Hormel since 1997. How have you seen the growth of Mexican food products in the U.S. during all this time?

RM: I think what we focus on is the reimagining of Mexican flavor, and we know that regardless of where you come from, your background, your origins, Mexican cuisine is at the core of those experiences and those occasions for consumers. The way we all consume Mexican food may be very different, but we all love the cuisine.

Our primary focus is on Mexican flavors, and what we are doing is about innovation and bringing revolutionary products to market. We’ve been doing that with products like Herdez guacamole salsa or launching new products like Herdez avocado hot sauce and Wholly Guacamole products. We continue to see products’ growth, evolution, and adaptability, like mole Doña María. Those segments of those categories and the experiences around Mexican cuisine continue to anchor our core focus, reimagining that experience for consumers.

AM: Looking back over the past two years, in which the coronavirus pandemic caused all kinds of problems, how did MegaMex navigate those difficulties, and where did the company stand in 2021?

RM: I can say that the last 20 months have been a challenge for us as it has been for everyone else. But the main goal that we had at MegaMex Foods and Hormel Foods was really the safety of our employees. I’m very proud to say that we have done everything necessary to make sure that we live our cultural belief of always being safe for our company and our employees.

As we continue to look forward to emerging from the pandemic, we continue to focus on keeping our team safe while still delivering the products consumers are looking for.

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We will continue to leverage the capabilities of our Mexican food products into the macro trends more consumers and consumption patterns are taking place in the home. I believe more consumers are beginning to rediscover the beauty of cooking and the use of flavors and experiences.

Despite all the challenges of the last 24 months, we continue to have a good eye on innovation; we have a portfolio of products that we have focused on and that we continue to think are really relevant to consumers. So we make sure that our brands are there and available to consumers when they want them.

That’s been the primary focus, but behind the scenes, we continue to leverage our innovation portfolio to make sure that we continue to meet consumer needs as we go forward.

AM: The appetite for authentic Mexican food flavors by consumers in the U.S. seems to know no boundaries, and the product offerings are growing. How does MegaMex differentiate itself from the competition?

RM: The way we look at this, I think there are three powerful macro trends that the industry, in general, is paying attention to. One is that Mexican cuisine is number one in the United States.

Secondly, we know that the U.S. culture and demographics continue to change and evolve as a country, and they are starting to lean more towards that cuisine. But I think the most important thing for us is that it’s the younger generation, who like to experience the world through food and have a strong affiliation for spices.

Those are the things that we’ve leveraged concerning our innovation.

What I think differentiates MegaMex from our competition is that we have brands that bring authenticity to the category. But at the same time, they get those two key elements that I was talking about before: the authenticity of that experience of traveling the world through food and, in this particular case, in Mexican food, with brands like Herdez or Doña María. And then secondly, I think our ability to think about how consumers are using those products on their occasions, how are they using it as a flavor enhancer? How they continue to add a little bit of customization capability to that cuisine is exceptionally critical, and I think we’ve been able to deliver on that.

Not only because of the brand but also because of the experience we’ve gained from bringing together two strong consumer goods companies, Hormel Foods in the U.S. and Herdez del Fuerte in Mexico. And I will tell you that there’s a lot of collaboration between MegaMex and those two-parent organizations around consumer insights and the innovation platform.

The Legacy of Luis Marconi

Luis Marconi, vice president of Hormel’s food products group.

AM: Luis, you are a veteran of Hormel Foods, with 21 years working for them. Earlier this month, the company announced that you are retiring after serving as group vice president for grocery for the past five years. What can you tell me about the legacy you are leaving at this global food company?

Luis Marconi: Absolutely, very proud of the team and all it has achieved. What I can say is that working with and being inspired by this diverse, talented, and very professional team is the reason why I love and appreciate this company so much.

I started working at Hormel in the late 1990s. I knew I could create value because they didn’t have much experience in Latin America. Still, they also made me feel highly valued, so that combination of creating value and feeling valued was powerful, and that’s why I decided to grow as a person and as a professional in this amazing company.

My first responsibility in Miami was sales and marketing for Latin America. At that time, this is in the late 1990s, the first objective I had was to build Hormel’s foodservice business in Mexico.

We created the entire platform and one of the main contributors to Hormel foodservice internationally. Then we came to Hormel domestic U.S., and that’s where we started to think and visualize what would be the opportunity for us to capitalize on the growth of Mexican food in the United States. We had a small joint venture with our partners in Mexico, Grupo Herdez. Still, it was minimal, embryonic, so to speak, and so we built an investment case, the investment thesis, then a couple of stars aligned in the right way, and we were able to create and ignite that big explosion called MegaMex.

And today, it’s one of the fastest-growing Mexican food companies in America, and I would say in the world. I’m very excited about Ryan and his vision for growth and what he’s been able to accomplish. I can’t thank Hormel enough for the opportunity and privilege to be the founding leader of this great lot once again.

MegaMex was transformational to my career. Working with the team here was very meaningful to me; their understanding and value creation and feeling valued.

The evolution of the portfolio to Hormel, the division I work in is the second largest, was focused on canned meat, had Spam at the core. Then we added Mexican products, and we started to diversify the portfolio by adding nut butter, and recently, with the acquisition of Planters, it was the largest acquisition in Hormel’s history. We have created one of the most robust brand portfolios in the entire food industry, which makes me very proud of the team and the future of this company.

AM: Being Hispanic, a native of Colombia, what was it like to start your professional life here in the United States?

LM: Of course, you have aspirations, you dream, but you never think, oh yeah, I’m going to do it. You have those aspirations, but you never think you’re going to do it.

I would be lying if I told you that I had a high degree of confidence that I would do it, but I had those dreams of working in the United States.

And I was building my blocks to get there and going to college and trying to do the right thing by making sure I was building the proper framework and making the decisions along the way.

For me, it’s about the constancy of purpose. It requires you to have the north in your mind because otherwise, you can end up, you know, drifting. It requires the value framework to get there.

AM: How do you see the future of Hispanic food marketing in the United States?

LM: I see it becoming the evolution of how existing brands in the U.S. change and to evolve their brand values to appeal to those emerging consumer segments that are more comfortable with planning for multiple consumption targets.

Think about the popularity of J. Balvin or the popularity of Shakira. Shakira is not just for Colombians; she is known around the world, and that’s what I think is happening with big brands and branding like Spam is a great example.

The growth of Spam is not coming from the consumer segments of the general population. Spam growth is coming from Hispanic segments; it’s coming from Asian American segments.

That’s the future of marketing to Hispanic segments. It’s about better positioning our brands in this growing multicultural America.