Bimbo commits to wheat-free bread
The Bimbo Bear company has also captured these buyers with products such as its breads that, according to its page, are made with sprouted grains and do not contain sweeteners or any other artificial ingredient.
None of the companies have disclosed the investment they make in the innovation of these products, whose price is higher for buyers. For example, a large white bread from Bimbo costs 47 pesos, while the sprouted grain presentation costs 100 pesos.
Bimbo has not detailed the performance of its portfolio with these innovations, but the group’s net sales reached a record level for a first quarter, and closed at 9,565 million pesos, an increase of 9.9%.
Marisol Huerta, a stock market analyst at the Ve por Más (Bx+) financial group, believes that companies continuously test different products to follow market trends. These products represent, at best, a 5% of the total portfolio of brands, Therefore, they still do not allow companies to balance the increases in the prices of traditional products.
“If they get to have a bigger share of the revenue, of course they’re going to be helping protect profitability. They are a strategy for companies and as they grow, they will be a factor that will allow them to cushion the pressures of other products”, he declares.
A strategy to avoid inflation?
Specialists agree that these products still fail to compensate rising pressure on raw materials, such as corn or wheat, although they are market niches that, having differentiated prices, generate better margins than traditional lines.
“Rather than looking for an improvement in the product mix, which is achieved as a result, however, companies decide to participate or not in these niches based on the virtue of each product, with the profitability evaluation made by project/ product and not by portfolio,” says Carlos Hermosillo, an independent stock market analyst.
These product lines are still not enough to offset the effects of inflation. For Gruma, the cost of sales increased 27% in the first quarter of the year, up to 1,044.8 million dollars. Bimbo did not detail the cost of sales, but since the beginning of 2022, the company has reported on the impact of the rise in inputs in international markets.
“Companies have to necessarily participate in these lines since the market trend is going there, the mix of products will change year after year and perhaps if today you see that white bread is a certain percentage and “zero zero” bread is another (much minor), after a few years it is likely that the proportions are reversed. It is a relatively slow migration, but one that we have already seen for many years, and now it is intensifying, producing many additional niches”, comments Hermosillo.