Hispanic Market Opportunities

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The Hispanic opportunity is driven by growth. We expect Hispanics to grow from 17% to 21% of the U.S. population by 2030 and 28% by 2060. Understanding the rate of assimilation of Hispanics (fairly rapid), their language preferences for media and advertising (evolving more slowly), the degree to which they prefer different in-store marketing tools, their category preferences, and receptivity to private label brands are crucial for retailers and food manufacturers alike.

Many of the major food manufacturers have been responsive to the cross-over appeal of Hispanic-style foods to non-Hispanics, and have made a series of acquisitions over the past 30 years, including B&G Foods/Ortega, Campbells/Pace, ConAgra/Frontera, as well as the joint venture between Hormel and Herdez known as Megamex. A smaller number of Hispanic companies with roots in Mexico such as Gruma/Mission and Goya with roots in Puerto Rico have rapidly expanded with facilities in the U.S. and have concentrated on “authentic” items.

The study provides depth on:

  •  The projected growth of Hispanics over the next 30 years, including by age group, to drive out their particular importance for products targeting children, adolescents, and teens.
  • How much of the growth in supermarket food and beverage sales will be driven by Hispanics: nearly 50%
  • The assimilation of Hispanics into the larger American society: which is ongoing on all cultural and language dimensions
  • How astute retailers are marketing in-store, and the role of websites and digital advertising in attracting and stimulating Hispanic consumers: more can be done on company websites and digital advertising
  • Private label relevance
  • The size and profitability of the Hispanic Food market: approximately $20 billion in supermarket sales
  • The major producers and marketers of Hispanic Foods: including the product lines and manufacturing facilities of Gruma/Mission (tortillas), Megamex/Hormel/Herdez (sauces, canned/jarred vegetables), General Mills/Old El Paso (meal kits, taco shells/seasonings), Goya (canned beans, dried beans, juices, sauces, and a myriad of other products)
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Table of Contents

Introduction

Demo Content

Chapter 1: Transaction Alternatives

Demo Content

Chapter 2: Communications

Demo Content

Chapter 3: Divestiture Process

3.1 Preparation

Strategic Assessment

Feasibility Assessment

Transaction Preparation

Confidentiality

3.2 Buyers

Identifying Potential Buyers

Private Equity

3.3 Process Alternatives and Timeline

Two-Stage Auction Process

One-Stage Auction Process

Negotiated Transaction with One Party

3.4 Auction Process

Information Memorandum

Non-Binding Letter of Interest (or Indication of Interest)

Management Presentation

Due Diligence Inquiries

Governance Process

3.5 Contracts

Contract Features

Negotiating the Contract

Transition Services

3.6 Closing Requirements

Closing Requirements

Competition Authorities

3.7 Special Topics: Material Divestitures and Insider Sales

3.8 Special Topics: Spin-offs, Split-offs, Merger and Split-off

Chapter 4: Acquisition Process

4.1 Preparation

Candidate Screening, Fit

Financial Constraints/Valuation

4.2 Approach

Initial Contact

Confidentiality Agreements

4.3 Due Diligence

Organization

Checklists: Corporate Matters, Management and Operations, Financial Matters, Legal Matters, Employee Matters, Insurance, Real Estate/Equipment/Personal Property, Intellectual Property, Market Research, Marketing and New Products, Sales and Distribution, Manufacturing/Safety/Environmental, Information Systems, Taxes

Read-Out Process

4.4 Pre-Closing Period

4.5 Special Topics:

Public Company Acquisitions

Stock versus Asset Purchases

Chapter 5: Integration of The Acquired Business

5.1 The Steering Committee

5.2 Integration Advisors Selection

5.3 Personnel

Acquiring Company

Target Company

5.4 Competitively Sensitive Data

5.5 Integration Work Stream: Synergies

5.6 Integrating Cultures

5.7 Day One

Planning and Daiy One Checklist

Critical Process Planning and Day One Testing

Issue Tracking and Resolution on Day One and Post Closing

5.8 Integration Budgets

Chapter 6: Joint Ventures

Demo Content

Chapter 7: Licensing

Demo Content

Chapter 8: Board of Directors

Demo Content

Chapter 9: Internal Transaction Team Members and External Advisors

9.1 Identification and Appointment

9.2 Confidentiality

9.3 Project Management

9.4 Investment Banks

9.5 Accounting Firms

9.6 Law Firms

9.7 Environmental/Safety Consultants

Chapter 10: Corporate Development/Internal M&A Group Best Practices

10.1 Organization and Hiring

10.2 Authority and Standards/Consistency

10.3 Corporate Development Group Responsibilities

Appendices

Sample “Teaser”/ “One Pager”

Sample “short form” Confidentiality Agreement

Sample “long form” Confidentiality Agreement

Sample Process Letter from Seller

Sample Auction First Round Letter from Seller

Sample Non-Binding Indication of Interest from Buyer

Sample Logistics Letter for Management Presentation

Sample Auction Second Round Letter from Seller

Sample Final Bid Letter from Buyer

Fairness Opinion

Index

Demo Content

Description

The Hispanic opportunity is driven by growth. We expect Hispanics to grow from 17% to 21% of the U.S. population by 2030 and 28% by 2060. Understanding the rate of assimilation of Hispanics (fairly rapid), their language preferences for media and advertising (evolving more slowly), the degree to which they prefer different in-store marketing tools, their category preferences, and receptivity to private label brands are crucial for retailers and food manufacturers alike.

Many of the major food manufacturers have been responsive to the cross-over appeal of Hispanic-style foods to non-Hispanics, and have made a series of acquisitions over the past 30 years, including B&G Foods/Ortega, Campbells/Pace, ConAgra/Frontera, as well as the joint venture between Hormel and Herdez known as Megamex. A smaller number of Hispanic companies with roots in Mexico such as Gruma/Mission and Goya with roots in Puerto Rico have rapidly expanded with facilities in the U.S. and have concentrated on “authentic” items.

The study provides depth on:

  •  The projected growth of Hispanics over the next 30 years, including by age group, to drive out their particular importance for products targeting children, adolescents, and teens.
  • How much of the growth in supermarket food and beverage sales will be driven by Hispanics: nearly 50%
  • The assimilation of Hispanics into the larger American society: which is ongoing on all cultural and language dimensions
  • How astute retailers are marketing in-store, and the role of websites and digital advertising in attracting and stimulating Hispanic consumers: more can be done on company websites and digital advertising
  • Private label relevance
  • The size and profitability of the Hispanic Food market: approximately $20 billion in supermarket sales
  • The major producers and marketers of Hispanic Foods: including the product lines and manufacturing facilities of Gruma/Mission (tortillas), Megamex/Hormel/Herdez (sauces, canned/jarred vegetables), General Mills/Old El Paso (meal kits, taco shells/seasonings), Goya (canned beans, dried beans, juices, sauces, and a myriad of other products)

Additional information

License Type

Individual Usage, Enterprise Usage

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CST Consulting has gathered over 200 operating profit margin figures for branded offerings to inform our estimates of profitability in 85 US Food and Beverage categories.

And, ground-breaking statistical analysis conclusively identifying WHY some categories have significantly higher profitability for branded offerings than others

HOW companies, private equity firms, and commercial lenders can out-perform their competitors with this study includes:

It is clear with this study WHY McDonalds has targeted their entry into retail grocery with coffee with their McCafe brand.

We can also see WHY Coke can be expected to rapidly enter the US retail grocery business with their own ready-to drink coffees (or even more likely, acquired brands or partnerships), following their $5 billion acquisition last year in Europe of the Costa coffee company

It is less clear if the Pepsi-Starbucks ready-to-drink coffee alliance in the US will be maintained in light of the Nestle-Starbucks grocery marketing arrangement: if not, Pepsi will need its own “play” in the category

Buy Now


Buy Now


Buy Now

This one-of-a-kind study is based on fundamental economics to understand the challenges facing retailers and restaurants as they respond to consumers’ need for convenience in an increasingly digital economy. We use precise data to inform our market size and growth projections, identify what approaches are most likely to succeed, and understand the strategic drivers of market participants.  Studies from other firms focus on a description of WHAT is occurring, and are unable to take a perspective on WHY the industry is evolving.

The study makes clear:

Large grocery retailers are at risk of seeing up to 15% of groceries purchased over the internet by 2025, and they are building next day delivery systems to fulfill orders taken over their own portals.

Amazon with an estimated 65 million “Amazon Prime” members in the US (and 100 million worldwide) are in the center of the target households with convenience needs, with average family income over $100,000.

A nationwide delivery network also facilitated by internet-ordering portals, is being built by firms such as UberEats and GrubHub. It now covers 30% of all restaurants, and coverage is projected to grow to 50% by 2025.

Economies of scale and low labor costs per unit are the winning formula

The Hispanic opportunity is driven by growth. We expect Hispanics to grow from 17% to 21% of the U.S. population by 2030 and 28% by 2060. Understanding the rate of assimilation of Hispanics (fairly rapid), their language preferences for media and advertising (evolving more slowly), the degree to which they prefer different in-store marketing tools, their category preferences, and receptivity to private label brands are crucial for retailers and food manufacturers alike.

Many of the major food manufacturers have been responsive to the cross-over appeal of Hispanic-style foods to non-Hispanics, and have made a series of acquisitions over the past 30 years, including B&G Foods/Ortega, Campbells/Pace, ConAgra/Frontera, as well as the joint venture between Hormel and Herdez known as Megamex. A smaller number of Hispanic companies with roots in Mexico such as Gruma/Mission and Goya with roots in Puerto Rico have rapidly expanded with facilities in the U.S. and have concentrated on “authentic” items.

The study provides depth on:

CST Consulting has gathered over 200 operating profit margin figures for branded offerings to inform our estimates of profitability in 85 US Food and Beverage categories.

And, ground-breaking statistical analysis conclusively identifying WHY some categories have significantly higher profitability for branded offerings than others

HOW companies, private equity firms, and commercial lenders can out-perform their competitors with this study includes:

It is clear with this study WHY McDonalds has targeted their entry into retail grocery with coffee with their McCafe brand.

We can also see WHY Coke can be expected to rapidly enter the US retail grocery business with their own ready-to drink coffees (or even more likely, acquired brands or partnerships), following their $5 billion acquisition last year in Europe of the Costa coffee company

It is less clear if the Pepsi-Starbucks ready-to-drink coffee alliance in the US will be maintained in light of the Nestle-Starbucks grocery marketing arrangement: if not, Pepsi will need its own “play” in the category

Buy Now


Buy Now


Buy Now

This one-of-a-kind study is based on fundamental economics to understand the challenges facing retailers and restaurants as they respond to consumers’ need for convenience in an increasingly digital economy. We use precise data to inform our market size and growth projections, identify what approaches are most likely to succeed, and understand the strategic drivers of market participants.  Studies from other firms focus on a description of WHAT is occurring, and are unable to take a perspective on WHY the industry is evolving.

The study makes clear:

Large grocery retailers are at risk of seeing up to 15% of groceries purchased over the internet by 2025, and they are building next day delivery systems to fulfill orders taken over their own portals.

Amazon with an estimated 65 million “Amazon Prime” members in the US (and 100 million worldwide) are in the center of the target households with convenience needs, with average family income over $100,000.

A nationwide delivery network also facilitated by internet-ordering portals, is being built by firms such as UberEats and GrubHub. It now covers 30% of all restaurants, and coverage is projected to grow to 50% by 2025.

Economies of scale and low labor costs per unit are the winning formula

The Hispanic opportunity is driven by growth. We expect Hispanics to grow from 17% to 21% of the U.S. population by 2030 and 28% by 2060. Understanding the rate of assimilation of Hispanics (fairly rapid), their language preferences for media and advertising (evolving more slowly), the degree to which they prefer different in-store marketing tools, their category preferences, and receptivity to private label brands are crucial for retailers and food manufacturers alike.

Many of the major food manufacturers have been responsive to the cross-over appeal of Hispanic-style foods to non-Hispanics, and have made a series of acquisitions over the past 30 years, including B&G Foods/Ortega, Campbells/Pace, ConAgra/Frontera, as well as the joint venture between Hormel and Herdez known as Megamex. A smaller number of Hispanic companies with roots in Mexico such as Gruma/Mission and Goya with roots in Puerto Rico have rapidly expanded with facilities in the U.S. and have concentrated on “authentic” items.

The study provides depth on:

CST Consulting has gathered over 200 operating profit margin figures for branded offerings to inform our estimates of profitability in 85 US Food and Beverage categories.

And, ground-breaking statistical analysis conclusively identifying WHY some categories have significantly higher profitability for branded offerings than others

HOW companies, private equity firms, and commercial lenders can out-perform their competitors with this study includes:

It is clear with this study WHY McDonalds has targeted their entry into retail grocery with coffee with their McCafe brand.

We can also see WHY Coke can be expected to rapidly enter the US retail grocery business with their own ready-to drink coffees (or even more likely, acquired brands or partnerships), following their $5 billion acquisition last year in Europe of the Costa coffee company

It is less clear if the Pepsi-Starbucks ready-to-drink coffee alliance in the US will be maintained in light of the Nestle-Starbucks grocery marketing arrangement: if not, Pepsi will need its own “play” in the category

Buy Now


Buy Now


Buy Now

This one-of-a-kind study is based on fundamental economics to understand the challenges facing retailers and restaurants as they respond to consumers’ need for convenience in an increasingly digital economy. We use precise data to inform our market size and growth projections, identify what approaches are most likely to succeed, and understand the strategic drivers of market participants.  Studies from other firms focus on a description of WHAT is occurring, and are unable to take a perspective on WHY the industry is evolving.

The study makes clear:

Large grocery retailers are at risk of seeing up to 15% of groceries purchased over the internet by 2025, and they are building next day delivery systems to fulfill orders taken over their own portals.

Amazon with an estimated 65 million “Amazon Prime” members in the US (and 100 million worldwide) are in the center of the target households with convenience needs, with average family income over $100,000.

A nationwide delivery network also facilitated by internet-ordering portals, is being built by firms such as UberEats and GrubHub. It now covers 30% of all restaurants, and coverage is projected to grow to 50% by 2025.

Economies of scale and low labor costs per unit are the winning formula

The Hispanic opportunity is driven by growth. We expect Hispanics to grow from 17% to 21% of the U.S. population by 2030 and 28% by 2060. Understanding the rate of assimilation of Hispanics (fairly rapid), their language preferences for media and advertising (evolving more slowly), the degree to which they prefer different in-store marketing tools, their category preferences, and receptivity to private label brands are crucial for retailers and food manufacturers alike.

Many of the major food manufacturers have been responsive to the cross-over appeal of Hispanic-style foods to non-Hispanics, and have made a series of acquisitions over the past 30 years, including B&G Foods/Ortega, Campbells/Pace, ConAgra/Frontera, as well as the joint venture between Hormel and Herdez known as Megamex. A smaller number of Hispanic companies with roots in Mexico such as Gruma/Mission and Goya with roots in Puerto Rico have rapidly expanded with facilities in the U.S. and have concentrated on “authentic” items.

The study provides depth on: