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April 9, 2011


Only Mexicans go to Taco Bell

Taco Bell Drive Through

After a brief negotiation period, many renditions of a business plan and answering a plethora of mundane question, I  reached a tentative agreement with the private equity group that wished to purchase the healthy lifestyle  frozen pizza brand I had developed. The equity group had recently purchased a pizza manufacturing facility from a larger consumer packaged goods company and was looking to find an opening into the frozen pizza category.  They currently only sold through the refrigerated meat and deli categories and wanted a piece of the much larger and lucrative frozen pizza category.

At first blush, they seemed like a reasonable group of individuals.  They harkened from an assorted background of food businesses.  Mostly in flour milling or baked goods but giving the benefit of the doubt, I thought they might be savvy enough to learn the idiosyncrasies of the frozen pizza category.

My first visit to the pizza manufacturing plant left me with mixed emotions of whether I had made the right choice.  I was introduced to the new president of the company and one of the private equity guys flew in from Missouri to meet with me.  I was introduced to  other key personnel and then  given a plant tour.

I was impressed with the facility.  I had visited a lot of  food manufacturing facilities and this one was exceptionally clean.  It seemed there was a good vibe among the workforce too.  The plant was capable of high efficiency production and that was exciting to me  because I thought this meant our products could be competitively priced. I began to look forward to  creating high quality products to market into the feircely competitive frozen pizza aisle.

At the end of the plant tour, the president and the equity guy wanted to head out to do store checks in the local grocery stores to discuss the frozen pizza category and any insight or thoughts I had about the category as we moved forward. While walking around the stores, the equity guy wanted to look at some of the Mexican type entrees too.  He explained that they had the capability of making flat bread at another facility and was interested in looking at what was on the market in that category.

We were in a small town in Ohio, I was thinking they probably had grocery stores around Kansas City too, but he behaved as though he had never stepped foot inside a  grocery store before in his life.  As we looked at the quesadilla and tamales, I said I thought that producing and marketing new flavor profiles of quesadilla and flat bread pizza might present an opportunity.  The equity guy said he thought that was interesting when just as suddenly the president screeched that poor people were not interested in anything new!

Puzzled by this outburst, I asked him for clarification.  He went on to state that Mexican and Hispanic people would not buy any new flavors of quesadilla.  I countered with we would not be marketing to the Mexican and Hispanic population, but rather the same demographic that purchases uniquely flavored frozen food convenience products.  He raised his voice to me right there in the store and screamed,  “Jo, no poor person is going to buy flat bread pizza and all Mexicans and Hispanics are poor.  And since that would be the only group buying these products, just forget it!”

I couldn’t forget it. I looked at him and said that made absolutely no sense whatsoever.  First of all, Hispanic consumers more than likely were not buying processed frozen food but were buying rice, beans and quality cuts of meat. Typically not raised on fast food, the Hispanic consumer is not the target market for any of the frozen  artificial cheese, and sodium laden Mexican items already present in the frozen food case.  Most frozen foods are targeted to one to two person households looking for convenience items on the way home from work.

I had ruffled his feathers with this discussion I could tell.  He was now squinting his eyes at me while pretending to be joking when he said, ” Come on Jo, those people don’t care what they feed their families.  They are just buying what is the cheapest, you know, belly fillers.”

I countered with just because you are in a lower income bracket does not mean you don’t care about your family’s nutritional needs. And since when are the only consumers buying ethnic food products only the consumers from that ethnic group?  Do you think only Mexicans go to Taco Bell ?  That the only consumers  buying egg rolls in the frozen food department are Chinese?  The president stomped off.  The  equity guy said the president has a point.

A cold shiver ran through my body. I should have taken this primitive response more seriously than I did at the time.  Grocery stores are often cold and the shiver I attributed to a lower temperature in the store and not as the primeval fight or flee signal my body was sending. I liked the plant and the production capability, most of the team, but the top management, not so much. I rolled my eyes to myself  as we walked  out of the store.


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