To reformulate or not? Kua Foods on preparing its portfolio for Mexico's nutrition label
Founded six years ago and headquartered in Santa Fe, Kua Mex Foods' modus operandi is 'buy and build', searching for brands that complement its portfolio, integrating them into its operations.
Its most recent transactions of Wisconsin-based Impact Confection closed just a few weeks ago and today the company owns 14 food and drink brands all of which fit into one of its three portfolios: health and wellness, gourmet, and confectionery - with listings in major retailers, including CostCo, Walmart, Oxxo and Seven-Eleven.
Its healthy brands include Nopalia (cactus-based snacks), Frutos de Vida (natural juices) and Sin Secretos (fruit and seed mixes to add to smoothies).
Mauricio Rojas García, business development manager said the company’s priorities for 2020 will be “managing and controlling” Mexico’s economic situation that Rojas describes as “complicated” due to stagnant growth rates as well as monitoring how the country’s new nutrition label will impact its products.
“It’s a really hot topic right now but nothing is concrete so we’re not worried – just waiting to see,” Rojas told FoodNavigator-LATAM, although he added that some of its products will be more affected than others.
“From what we have read, our juices are clean – we don’t add anything – it’s made only with the fruit. A whole apple has sugar and that’s like our juice. Kua Candy obviously has sugar so we will need to add a sticker for that but candy is an indulgent category, and consumers are aware that confectionery is made with sugar.
The impact on its snack range, however, could potentially be more worrying. However, it believes it is in a better position than some of its closest competitors, he added.
“The most controversial category is snacks. For Nopalia, we may have to add a sticker for sodium. But we know that we are the healthy option on the shelf for that kind of product. You’re going to see Sabritas with maybe three stickers and we will only have one. Of course, we prefer not to have any but we will have to wait and see, whether we make changes to the formula.”
Mexicans want ‘better for you’ food
In any case, the push towards making healthier food and drink products is coming not just from regulators but consumers, Rojas said, with Mexicans looking for products with less sugar and fewer calories. Affordability, however, is also a key concern.
“Mexicans want products that are ‘better for you’ - not the healthiest or most perfect or the most clean-label ever, but something that is in the middle. On the supermarket shelf, there is a lot of garbage but, at the same time, if it’s too healthy they don’t like the taste. We need to find a good balance between the product’s price and healthiness.”
From field to factory
The company has vertically integrated supply chains for some but not all of its brands.
“When we see that a brand is growing and we need to be more efficient, managing the process faster, we start to consolidate in the company," Rojas said. "That’s why Nopalia is 100%. We bought Nopalia and invested in the manufacturing plant so we could control the whole chain from the cactus in the field to the factory.”
For Frutos de Vida, Kua makes the juice but uses a third-party bottler while its Kua Candy range is a brand that it built “from zero”. It also has a B2B candy manufacturing unit and counts some big-name clients such as Hershey.