Nascent is Mexico’s only Nationwide food and beverage importer and one of the largest distributors in the California, Baja Mexico area. They distribute over 2,000 domestic and imported brands to over 1,400 customers. Having recently built a new distribution center in Mexico City, Mexico, they are aggressively pursuing their strategy to dominate the food and beverage distribution market within Mexico. Future acquisitions of smaller distribution centers throughout Mexico are planned as the company attempts to consolidate the market.
It has procured several exclusive distribution agreements with a number of Major brand name products. Miller Beer Company has granted them rights to distribute Miller Beer in Baja California through a 5 year agreement. They also have exclusive rights with Avasoft Ice-cream, Reed Beverages, Ferelle Water, and Cabo Chips. Distribution agreements with Haagen Daz Ice Cream, Pillsbury and Green Giant products for General Mills De Mexico and Atlantic International Foods are also in place. Soon the company will also be the only distributor of Sushi and French products into Mexico. Nascent is in an ongoing process of increasing its product line and actively pursuing distribution agreements with Major Food and Beverage producers.
They also distribute a line of frozen products including: frozen meats, fully cooked meals and desserts, as well as fresh meat and cheese. In addition to its food lines they also carry food related products such as napkins, forks, and cups. It is also in the process of diversifying into service like: food safety, menu planning, inventory and usage control and other related services.
Throughout Mexico they service over 240,000 sales points. These include: Wal-Mart, Costco, Soriana, Comercial Mexicana, AM/PM, 7-ELEVEN, OXXO. Its main customers are supermarkets, convenience stores, and restaurants. In fact 60% of the business comes from “Mom and Pop Stores” according to Mr. Piancone the CEO. According to him there are over 500,000 of these stores throughout Mexico.
Right now the company sees competition from over 25,000 small distribution centers many are family owned and only carry limited lines of product. At present they are the only Major Multi-Line Food and Beverage distributors in Mexico. Although the company does see competition from Sam’s Club and other Wholesalers located in Mexico, exclusive distribution rights, broad product lines, and services provide Nascent with a strong competitive advantage.
Last year they recorded $4,679,868 in revenue up from $1400 mainly due to it being in developmental stages. Revenue is expected to be in the $96 million range by the end of 2007. Much of the revenue growth is coming from the value added 1+1=3 acquisitions they have been pursuing. In fact revenue could reach $158 million in three years and this is assuming no additional acquisitions. Beacon research has given it a price target significantly higher than its current market price. With the positive growth outlook of Nascent and its strong position in the Market its price as of December 7, 2007 of $.44 makes it look like a Bargain.
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