Tortillas move on market

Booming: The round, flat bread that originated in Mexico is catching up with white bread in sales. It's now just 2 percentage points behind.

November 14, 2003|By Barry Shlachter | Barry Shlachter,KNIGHT RIDDER/TRIBUNE

Watch out, Wonder Bread.

Sales of the unassuming but versatile tortilla are catching up to white bread, reflecting the growth of the nation's Hispanic population and the broadening of the American palate.

"Tortillas have had steady growth 10 to 15 percent a year seemingly forever," said Irwin Steinberg, founding president of the 14-year-old Dallas-based Tortilla Industry Association.

The popularity of wraps -- renamed flour tortillas that are sometimes flavored -- also helped boost the round, flat bread's share to 32 percent of the combined retail and food service market for bread, just behind white loaves at 34 percent, says a report from market researcher Mintel for the association.

"I think people are bored with white bread, but tortillas and ethnic breads have caught their imagination," Steinberg said.

And how.

In Fort Worth, Texas, Leo's Foods Inc. not only bakes millions of corn and flour tortillas for food service accounts throughout the continental United States, Puerto Rico and Brazil, but also produces such exotic flavors as pineapple and chocolate for a client in South Florida.

"I don't know what they use them for, but people love them," President Leo Jimenez, 73, said of chocolate tortillas. "We try to give customers what they want -- within reason."

Steinberg said small tortillas are used by some Chinese restaurants as wraps for moo shu dishes.

Noting that many producers, including Leo's, are certified kosher, Steinberg is trying to establish whether unleavened tortillas would be acceptable for the Jewish holiday of Passover.

"And why not?" asked Steinberg, who is Jewish and a former chief executive of the U.S. subsidiary of Gruma, owner of the Mission and Guerrero brands.

"You can't show me some place in the Bible where it says you can only eat matzo," he said, referring to the flour-and-water, crackerlike unleavened bread.

Although there are areas where tortillas remain unfamiliar, the greatest sales growth has been in the upper Midwest and Northeast, where Hispanic communities are not large, according to industry journal Baking & Snack.

What is clear in the industry is that white-bread sales are stagnant while tortilla sales are booming.

Market-research company IRI says supermarket sales of white bread dropped 0.6 percent last year from 2001, while tortilla sales grew 11 percent. Private-label tortilla sales jumped 26 percent.

In dollar terms, retail and food-service sales of tortillas have nearly doubled in six years to $5.2 billion last year, up from $2.8 billion in 1996, said the association, which predicts $6.1 billion in sales next year.

Thirty years ago, annual sales were about $300 million when tortillas were considered a narrow, ethnic food item.

Manufacturers range from numerous mom-and-pop operations to industry giants, such as Irving, Texas-based Mission, the No. 2 maker with $130 million in sales and a 20 percent market share, according to IRI.

The word tortilla comes from the Spanish word torta, which means round cake. What we know today as the corn tortilla was, according to an ancient Mayan legend, invented by a peasant as a gift for his monarch. The flour tortilla originated in Texas as a food during roundups or in northern Mexico to form burritos for people working in mines or fields.

Until the 1970s, most tortillas were made by small mom-and-pop bakeries or operations at the back of Hispanic groceries.

Chicago's Azteca Foods tried a different approach.

The company was born in 1970 when 10 members of the Hispanic-oriented Azteca Lion's Club ponied up $80,000 to launch a tortilleria run like a modern business. To manage the enterprise, they selected from their ranks a man named Art Velasquez, who studied engineering at Notre Dame and then earned a master of business administration degree from the University of Chicago.

"The only demand in the Midwest then was in Mexican neighborhoods," he said. "Our vision was to bring tortillas to the general market, selling through the food broker system to supermarket chains.

"We had to redo the tortilla," he said, referring to a new recipe that extended shelf life from three days to 60, if kept refrigerated.

Thirty-three years ago, Windy City supermarket executives couldn't pronounce the product, but they began ordering, and Azteca caught the attention of Pillsbury, which bought the company for "under $10 million" in 1984.

Pillsbury's intent was to turn a regional enterprise into a national concern, as it was doing with Italian and Chinese food lines. But British-based Grand Metropolitan began negotiations for a takeover, and the ethnic lines were not part of its vision for Pillsbury.

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