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A Mexican Food Seasonings and Spices Supplier Targets the US Market

The largest supplier of food seasonings and spices in Mexico was recently faced with a decision about whether or not to try to enter the lucrative US market and if so, how. TLCN identified a lucrative avenue through the specialty ethnic grocery retailer segment that represents $266 million in market potential and recommended a strategy built around targeting the rapidly growing Hispanic and Asian ethnic markets before attempting to break into the mainstream American market.

Assessing the Market's Attractiveness

Driven by the NAFTA and the large size of the US market, the Mexican company asked TLCN to help them:

  • Identify the various customer segments in the seasonings and spices market and understand the key drivers behind their consumption
  • Evaluate the channels to market and how they drive the demand for the seasonings
  • Determine the potential for a new entrant in this market and the attractiveness of each consumer and customer segment
  • Develop a market entry strategy based on the market assessment

TLCN utilized the strength of its primary research team to contact important players in the market including food processing companies, food distributors, existing seasonings suppliers and grocery retail chains. Once interviews with these players were completed, the consulting team analyzed the purchase behavior and consumption patterns of the various consumer segments as well as evaluated?

Why Not Target the Large Mainstream Market?

Despite the growing market opportunity in the mainstream market for seasonings and spices, the Hispanic and Asian ethnic foods market emerged as the lowest hanging fruit for the client to target. While these segments were already subject to intense competition, the nature of these markets—characterized by undefined supply-chain structures and a lack of strong supply and distribution arrangements—made them a much easier segue for the client's business model.

TLCN was able to:

  • identify the principal players in the ethnic grocery retailer segment and the geographic regions that would be most feasible top enter with these retailers
  • forecast revenues the client would likely achieve in the first five years in the US market
  • highlight the risks inherent in such a relationship-oriented market which is also under intense bombardment by the mainstream grocery retailers as Albertsons, and Fry's.
  • develop three options for entry into the US market
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Written By:
Alur ShashiKiran
Principal Consultant