Mexico is emerging as a very very popular travel destination for middle and upper class Americans and for some very sound reasons. One is that the cost of living and the cost of consumer items is low in comparison, and then of course there is the history, scenery, and quality destinations to be found. Thousands of miles of white sand beaches, world class fishing, mountains, and a host of natural scenic wonders draws millions of visitors annually.
It is not a coincidence that Nascent Inc. decided that they would capitalize on all that tourism and the side effect benefits of it by launching a world class food service and distribution company in country. The food distribution system in Mexico is fragmented throughout, and is mainly carried out by small family owned businesses. However, this is a case where the sum is considerably greater than the parts. With some 25,000 small independent food service distributors, each with sales averaging approximately 1.5 million annually, the industry is ripe for consolidation .
According to the Secretary of Tourism in Mexico, there are some 12,000 hotels and an astounding 225,000 Restaurants in Mexico. That’s big scale business opportunity and Nascent has determined that servicing all those hotels and restaurants, along with the thousands of small grocery type stores, is a business whose time has come. We certainly agree.
In a paper put out by the US Department of Agriculture, the hotel, restaurant and institutional food service sector in Mexico had annual sales of $46 billion in 2003, and experienced growth in each successive year since. As impressive as that number is, it doesn’t take into account the spectacular growth of Mexico’s burgeoning younger and upwardly mobile class. With over 50% of the Mexican population aged 24 years or younger, and a strong American cultural influence due to television, movies and the Internet, demand for American prepared foods and beverages among young Mexicans is rising. As a result, companies that distribute American food and beverages are benefiting from robust demand for their products.
Nascent has coupled the strong demand from hotels, restaurants and grocers with demographic demand from the millions of young Mexicans with an urge to imitate American culture. This combination is proving to be quite spectacular in scope, and paves the way for tremendous opportunities to bring product and services to this market. Nascent is laying the groundwork to be a major force in providing these products and services to a Country hungry for all things American. From their distribution pact with Miller beer to their acquisition of Palermo Italian foods, Nascent is a one stop shop for bringing the tastes of America to all of Mexico.
Mexico is a large country with a lot of people, and the opportunity to take a commanding lead in this industry is just what Nascent is positioning for. Investors may wish to position themselves in Nascent and take the ride, it could be quite rewarding.
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