Tag Archives: Grupo Bimbo

Mexico Poised to Pass Brazil as LATAM's Most Powerful Economy

Consumer Goods, Featured, Rankings, Telecoms, , , , , ,

Mexico. We’ve all heard of the recent political unrest. We’ve all heard the dark tales of violence, corruption, and a seemingly never-ending drug war. But little has said by the outside world about the country’s successes, growth, and position in the new global economy. Meanwhile, beyond the bad news and political propaganda, Mexico has quietly placed itself at the top of the pack in the region; ready to become the region’s economic leader. With recent success in a variety of industries, a prime geographic location, and a strong, cheap workforce, Mexico is poised to become THE place to do business in Latin America, even giving Brazil a run for their money.

Why Mexico? Why now?

Mexico’s economic success is nothing new to anyone familiar with the North American republic.  Since the birth of NAFTA during the ’90’s, Mexico has been able to leverage free trade with the US and Canada to bolster its trade market, and in turn ramp up production across a number of industries. Automobile production, consumer services, beverage production/distribution, and telecom have been some of the main industries adding to the economic development, and all have great potential for future growth.

A company like America Movil, ranked #5 on the Latin Target  500 list, is not only growing in Mexico, but also as a MultiLatina expanding further afield is holding dominant market shares in many countries outside the region. This is also happening with companies like FEMSA, who controls a significant part of Coca Cola’s distribution and production, and Grupo Bimbo, who has quietly become the world’s biggest baker and distributor of baked goods. With this wave of sustained growth, many economists predict that within the next 10 years, Mexico may be able to pass Brazil as the region’s top economy.

 The World’s Most Energy Secure Nation 

According to an official report by the U.S. Chamber of Commerce, Mexico has long positioned itself as the world’s most energy secure nation. This statistic was measured amongst the 25 largest energy-consuming countries. Although we may just be realizing it now, this has actually been the case for the past 30 years. While this may not necessarily be great for direct investment due to state ownership of Pemex, the country’s larges energy company, it does a lot to help fuel (no pun intended) the local economy. Petroleum and other gas sales represent 40% of the Mexican government’s revenue, thus strengthening government capital, and making it easier for other companies to operate under a stable economic climate.

There are also many residual benefits to this energy dominance, as Pemex works with many companies to help make its operation run smoothly. In recent years, the company has awarded hundreds of millions of dollars worth of development rights to outside businesses, giving private companies long-term contracts. In the first quarter of last year (2012), Pemex reported revenues at USD $10.6 billion, up nearly 30% from the previous year.

 

The bottom line is that with steady trade and exports (USD $227 billion in 2012), a growing telecom sector, energy stability, and a burgeoning working class, Mexico’s future looks as bright as ever. Industries are growing, investment options are widening, and the world is finally starting to listen. Mexico is poised to become the biggest economy in Latin America, and they are ready for it, one step at a time.

For more insight and access into Mexico’s top companies, including America Movil, FEMSA, and Pemex, take a test drive of Latin Target and find out how Latin Target can enable your sales and marketing teams with contact info on decision makers in the region.

Will Hostess’ Loss be Bimbo’s Gain?

Consumer Goods, , , , , , ,

They say a Twinkie can last for 1,000 years before it goes bad, and slowly disappears into the proverbial circle of life. Unfortunately, the company that makes them cannot. Last week, one of America’s most recognizable food brands, Hostess, announced that it would be closing its doors for good. On the heels of bankruptcy, debt, private equity buyouts, and a workers’ strike, the Texas baked goods maker decided that it could no longer sustain itself as a profitable business. But while scorns of Devil Dog, Ho Ho, and Wonder Bread lovers lament the end of an era, there may still be hope to save their sugary snacks. Hope, in this case, that comes from one of Mexico’s biggest businesses, Grupo Bimbo.
Grupo Bimbo

Who is Bimbo, and where did they come from?

Grupo Bimbo, S.A.B. de C.V. (BIMBO) is a publicly traded bakery concern that has a $10 billion value, as well as holding the title of being the world’s largest bread maker. The company is listed on the Latin Target 500 and Latin Target 100 MultiLatina Rankings, and has seen significant growth in the last 10 years. Sliding under the radar of many in the US, Grupo Bimbo has more than doubled its profit since 2002, bringing in roughly $400 million annually. With this recent news coming out of the states, the Mexican bread maker could potentially expand its reach even further by buying rights to Hostess’ already strong brands. The power of Hostess’ brand recognition, partnered by Bimbo’s efficient corporate structure and massive production capabilities, may be the key to dominating the US market; something the Mexican juggernaut has had in the works for years.

Why the timing is perfect

While some could call this premature speculation, there are many signs that indicate that a Bimbo purchase may be imminent. For starters, they’ve already made public interest in Hostess more than once. They tested the waters on a purchase in the early 2000’s, eventually passing on the Texas-based baker, opting instead to purchase a company called Earthgrains. And in 2007 they made an unsuccessful bid for the company during the first round of bankruptcy, and shelved the buyout indefinitely.

Hostess Brands

So what’s changed now?

Well, for starters, the company’s relative positioning in the current economy. Little by little, as Hostess shrunk, Bimbo grew, and this gives them significantly more leverage. With Grupo Bimbo’s profit margins at a steady gain, it lowers the risk of taking on Hostess’ baggage. And while the Mexican company hasn’t publicly made interest in a purchase yet, many signs point in that direction. While Bimbo does sell its products in the US, its branding is mostly geared towards Latin Americans already familiar with Bimbo products from home. Adding Hostess has the potential to break the market wide open for Bimbo, and solidify their brand recognition with millions of customers across the US. Our prediction is, it’s only a matter of time.

A strong MultiLatina like Grupo Bimbo can’t afford to be ignored. And with ELEVATE’s Market Access Tool, we give you inside access to the top players in both this company, as well as hundreds of key businesses throughout the region. Don’t miss out on one of the strongest tools available for doing business in Latin America.  To find out more, visit our website www.latintarget.com, or call us at (312) 265 6538.