Published On: February 2018
Tortilla is a form of baked bread which is majorly prepared from corn and wheat and consumed mostly in Spain and Mexico. The use of corn in the preparation of tortilla enhances its nutritional value as corn is a rich source of proteins, vitamins and minerals. Vitamin B controls the vital metabolism of cell. The process of production of tortilla from corn involves the soaking of corn in the limewater and this process helps in the availability of Vitamin B after its consumption. Tortilla has potential application as bread replacer as it is found to be more nutritious.
High consumers’ inclination towards adoption of healthy life-style has encouraged the demand for bread alternatives globally. Owning to this, the sale of corn-based tortilla is experiencing a surge. Additionally, in order to expand their market, the manufacturers of tortilla are highly focusing on bring innovations into their product line in order to generate high revenues. Manufacturers are found to fortify tortillas with fibre and flaxseeds to increase its nutrient content. This strategy has found to gain attention of mass consumers thereby further increasing its sale. It was also observed that tortillas sales value was higher than sandwich bread, majorly in the U.S. in 2010.
Product Marketing: is it a way to success?
Tortilla manufacturers focusing in the product promotion in order to create strong awareness among the consumers. The key manufacturers are arranging various promotional events during the launch of new products in the market. Apart from that, key players in tortilla market are emphasizing in the celebraty endorsement in order to make strong awareness of their new product launch.
Enhanced production technique
Technological advancement always creates an opportunistic scenario for any market. The key players are highly focusing on packaging material and the production technique to yield higher productivity. To meet the growing production demand, the companies are looking around for new bagging and casing equipment that could improve operating efficiencies. For instance, In Nov 2017, Gruma has equipped latest technology at their new plant in Dallas, Texas and enhanced their capacity to produce 30 Million tortillas daily. It has specially designed areas for the production and packaging of each product, with ecological equipment that guarantees environmental and health controls in processes.
Surge in demand of corn in tortilla production
Corn segment is expected to retain its dominance throughout the forecast period of 2017-2023. The segment is projected to reach USD 28.78 billion by the end of 2023 with registering growth rate of 4.83% during the forecast period. The growth of the corn segment is attributed to the various factors. Corn is rich in vitamin B constituents, especially thiamin and niacin. Thiamin is essential for maintaining nerve health and cognitive function. Niacin deficiency leads to pellagra; a disease characterized by diarrhea, dementia, and dermatitis that is commonly observed in malnourished individuals. Corn is also a decent source of pantothenic acid, which is an essential vitamin for carbohydrate, protein, and lipid metabolism in the body. Apart from that, the tortilla has been invented in Mexico and the production of corn in Mexico is high. So, manufacturers have been using corn as a raw material to produce tortilla.
North American market: The Rulers of the Global Market
The global tortilla market collected USD 35.99 billion during the year 2017, backed by rapidly growing hispanic population. The changing landscape of American demographics creates new opportunities for the tortilla market. The number of consumers preferring Mexican foods in the US is growing rapidly. Tortilla is one of the popular snacks among the consumers in U.S. The major restaurant chains in the US such as Yum Brands and Brinker International that control a significant proportion of the market share sell mainstream Mexican food which in turn escalates the demand for tortilla in U.S. Mexico tortilla market is estimated to reach USD 3.96 billion in the year of 2017 and it is projected to expand at an above average growth rate.
Gluten free tortilla is gaining massive popularity in North America & Europe region
Gluten- free tortilla is projected to expand at a high pace in North America & Europe. Increasing awareness about the celiac diseases and other gluten allergens among the consumers. Increasing population of people having lifestyle-related diseases and gluten intolerant disorder in these regions are boosting market growth of gluten- free tortilla. Since the consumer is aware of the gluten-free products and their benefits related to health such as nutritional value and weight management and associated diseases, the demand for gluten- free tortilla is expected to stimulate very fast.
Growing popularity of tortilla chips among the consumers
Tortilla chips is also estimated to hold a decent market share of 25.03% in the year of 2017 and the segment is expected to witness a massive growth during the forecast period of 2017-2023. The growth of the tortilla chips is attributed to the various factors. The rising demand for healthy snacks is the main influencing factor for the rising growth of tortilla chips. Consumers both in developed and developing economies are opting for healthy snacks due to the increasing incidence of obesity, celiac diseases, diabetes and other chronic diseases which in turn accelerates the demand for tortilla chips. Strong performance of the retail sector and product promotions have played a vital role in increasing the sale of tortilla chips via supermarkets/hypermarkets and specialty stores. More than 50% sales of tortilla chips were observed to have been accomplished through supermarkets and grocery stores.
So, what is the future of the tortilla market?
However, tortilla market may be hindered due to the fluctuation of material prices which is used as an ingredients. The gap in the demand and supply of corn will directly hamper the prices of corn- based tortilla. Globally, many regions have experienced the phases of fluctuations in the supply of corn due to climatic conditions. This has led to uncertain rise and fall in the prices of corn which is anticipated to increase the overall price of tortilla.
Consumers continuously demand variety in the food products due to which manufacturers need to focus highly on the R&D sector to continuously meet the demands from the consumers’ side. R&D investments will ensure quality product which would be delivered to the product and also minimizes the chances of product recalls. Manufacturers can bring in innovations in their product line which will not only create product differentiation but will also attract the attention of mass consumers. In conclusion, in order to keep the brand identity and stand out in the market, manufacturers have to bring in new products which needs high investments to be made in the R&D sector.
When it comes to food, it is such an emotional topic as consumers’ spending behavior is determined by consumers’ loyalty towards certain brands. Consumers go for brands that are recognizable and that connect with their emotions. The tortilla industry is fragmented and consumers majorly prefer branded tortilla over non-branded ones which poses challenge for new market players to establish themselves.