1 / 17

Baking Perspectives Baking in Puerto Rico & the Caribbean

Baking Perspectives Baking in Puerto Rico & the Caribbean. Mario Somoza President and CEO, Pan Pepin . Sponsored by:. Baking Perspectives in Puerto Rico and The Caribbean. Mario Somoza Pan Pepín, Inc. June 27, 2008. Puerto Rico Basic Facts Bread Market Pan Pepín Who we are What we do

PamelaLan
Download Presentation

Baking Perspectives Baking in Puerto Rico & the Caribbean

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Baking PerspectivesBaking in Puerto Rico & the Caribbean Mario Somoza President and CEO, Pan Pepin Sponsored by:

  2. Baking Perspectives in Puerto Rico and The Caribbean Mario Somoza Pan Pepín, Inc. June 27, 2008

  3. Puerto Rico • Basic Facts • Bread Market • Pan Pepín • Who we are • What we do • Situation and Challenges • Q & A

  4. Puerto Rico Facts • Easternmost of Greater Antilles. • PR is 110 miles long X 39 miles wide. • Split by a mountain range from east to west. • Population of 4 million people. • 12% over 65, 29% 19 and under. • One-third live within the San Juan Metro Area.

  5. Puerto Rico Facts • Commonwealth of the US • US citizens since 1917. • Currency, banking and postal systems within the US system. • Own Internal Revenue system, not subject to US taxes. • Participation in all federal programs ($20 billion). • Resident Commissioner representation in Congress. • No right to vote in general elections. • Strong sense of national pridewith a keen awareness of our US citizenship/relationship. • Less than 5% support for Independence. • National sports teams.

  6. Puerto Rico Facts • The local economy is driven by the manufacturing sector, which represents +40% of GDP, followed by Finance, Insurance and Real Estate. • 11% Unemployment. • 45% of HH on US Food Stamps program. • Lower SEL that behaves like mid-SEL. • PR culture is a mix of Spanish, Caribbean and American influences. • Diet includes a lot of rice, pork, seafood and fried foods. • Music reflects this mix with Salsa and, more recently, Reggaeton.

  7. Puerto Rico Bread Facts • Bread is considered a staple of the PR diet with over 97% in-home penetration. • 72% of the people have bread at least 4 times weekly, with 56% consuming it daily. • Over 80% of bread consumption happens in the AM. • The market is evenly split (50/50) between pan bread and “Pan Criollo” (Agua, Sobao, etc.).

  8. Puerto Rico Market • Segmentation • Two wholesale bakeries specializing in pan bread and buns: Pan Pepín, Holsum. • Market evenly split between them. • Two frozen dough companies: Cidrines, Mi Pan. • Small, specialty and neighborhood bakeries. • Imports from US, Europe and Central America. • Channels • 55% of volume through chain supermarkets (approx. 300 stores). • Volume is relatively stable throughout the year. • Slight increase in bun sales during the Summer. • In tough economic times the category grows. • Small share for private label products at 7%. • 16% in US, +30% in Europe. • Highest in Latin America (Mexico 1%).

  9. Who is Pan Pepín, Inc.? • Founded in 1970 in Bayamón, PR. • 100% locally owned company. • Acquired in 1998 by the B. Fernandez Holding group of companies. • $60+ Million in annual sales. • Employ more than 520 people in five facilities across the Island. • Service over 4,500 customers in PR, Virgin Islands and Dominican Republic. • Selected three times as one of the 20 Best Companies to work for in Puerto Rico.

  10. Who is Pan Pepín, Inc.? • Our brand is available at all primary retail and consumption outlets. • Primary chains: Wal-Mart, Amigo, Grande, Costco, etc. • C-stores, colmados and small supermarkets • Cafeterias and restaurants • Hotels and cruise ships • Schools and corporate cafeterias • We also supply 13 of 15 private labels available on the Island. • Exclusive bun supplier to QSR customers like Wendy’s and Johnny Rockets, as well as casual dining chains like Denny’s and Ponderosa. • Exclusive licensees of Healthy Choice (ConAgra) and Nature’s Own (Flowers Foods) brands in the market.

  11. Pan Pepín, Inc. • All our baking is done in one primary facility. • 2 pan bread lines currently putting out 115,000 units daily. • 3 bun lines currently putting out 40,000 units daily. • Company’s historical growth has not allowed for optimal equipment and machinery planning. • Little consistency in equipment across baking lines which complicates operation. • Only cooling systems, bagger, tier, and coding machines are similar in all lines.

  12. Pan Pepín, Inc. • Our bakeries are all rated Superior or Excellent by The American Institute of Baking (AIB). • Pan Pepín operates 5 distribution centers throughout the island for optimum service. • We operate 165 sales routes; 5 days a week for 100% coverage throughout Puerto Rico and the neighboring Islands. • Delivery 5 days a week; Merchandising 7 days a week.

  13. Pan Pepín Products • We bake 16 different types of pan bread. • Top seller is the Club Sandwich White Bread. • Whole Grain White Club Bread has become #2 item in less than 12 months. • White bread still dominates market although wheat/whole grain products continue to grow fast. • 18 different kinds of buns and rolls. • 10-count Hot Dog buns is #1 bun item. • Local specialty items • Media Noche, Criollo Breakfast Bun, Sweet Dinner Roll • Contract packaging by outside suppliers. • Crackers, Polvorones, Besitos de Coco. • Currently evaluating other categories.

  14. Situation and Challenges • Island Environment • Limited space within current facilities and in the surrounding areas (urban sprawl). • Planning for growth without a dramatic impact to the operation is extremely challenging. • Market concentration – Only 2 players supplying the market, neither can absorb the other’s demand. • Raw material supply • One flour mill, few options for bulk ingredients. • Storage space within facility is at a premium. • Technical personnel recruiting • No breeding ground for personnel, must be homegrown. • Costly to retain when competing with large, multi-national corporations.

  15. Situation and Challenges • Planning for food trends • Tend to lag the US but are quicker to spread once established. • Difficult to gauge right timing, risk of being too early or too late. • Energy costs • Island currently has highest cost for energy in all of Latin America and US. • Can equipment companies provide some expertise in managing this area more efficiently? • Supplier support • Proactiveness of equipment companies vs. ingredient suppliers. • Constant and easy accessibility to technical support to effectively and promptly resolve emerging situations.

  16. Thank You

  17. Thank You Session Sponsor

More Related