NAFTA Revisited

Discussion
Aug 11, 2004
Warren Thayer

By David Morse and Warren Thayer


It’s been ten years since NAFTA went into effect. At that time, Ross Perot
was talking about the “great sucking sound” of losing jobs to Mexico while Mexicans
worried about their economy being inundated by U.S. multinationals.


Few of us were speaking about U.S. Latinos at the time, at least not as part
of the NAFTA debate. But there are now 40 million of them, two thirds of whom
are Mexican. According to an article appearing on brandchannel.com, the opportunity
that these 40 million represent is not lost on companies on the south side of
the Rio Grande — the same companies that make the brands many of these consumers
grew up with.


It used to be that Mexicans would always choose an American brand over a Mexican
brand. There’s a Mexican word for it – “Malinchista” – named for the Aztec woman,
known as “La Malinche”, who helped the Spaniards during the conquest.


But to Mexicans living in the United States, Mexican brands, particularly of
the edible or drinkable variety, offer nostalgia.


Novamex is a company whose entire focus is on importing Mexican brands into
the United States and marketing them to Mexican consumers. Sales of one of its
iconic brands, Jarritos, have actually outpaced sales in Mexico.


According to Novamex’s Director of Marketing, Bob Leppan, it’s all about offering
an authentic experience. “Mexicans in the U.S. crave the flavors, the tastes,
the culture of Mexico. They welcome U.S. culture, but they love and miss Mexican
culture as well. We enable them to have the best of both worlds.”


Moderators’ Comments: How successful will Mexican manufacturers
be in attacking the U.S. market with brands familiar to Mexicans now living
here? Would they do well to form an alliance with a retailer or manufacturer?
Or would they be best off, over the long haul, to remain independent? Can they
do it alone?


As Mexican companies become more aggressive in targeting
Mexicans in the U.S., you have to wonder whether there will be room for some
interesting new alliances. Mexican brands – with U.S. manufacturers, or with
U.S. retailers?


Surely the Mexican companies could provide extraordinarily
good guidance to U.S. manufacturers who are stumbling in their efforts to attract
the huge and growing number of Mexicans in this country. They could also, perhaps,
ink some lucrative deals for exclusive distribution with major retailers such
as Wal-Mart, Kroger or Albertsons, to name a few
.

David Morse – Moderator
;
Warren
Thayer – Moderator

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1 Comment on "NAFTA Revisited"


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Virgilio Perez Pascoe
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Virgilio Perez Pascoe
15 years 7 months ago
Companies like NovaMex should focus ultimately on the widest possible array of consumers….in order to increase their scale and become even more of a factor with retailers. So I agree with all of the commentaries that suggest a new stage for the company. There are already examples of products that have ceased to be consumed due to the “nostalgic” factor: Corona, the beer, comes to mind. As I understand it, Corona took off with the Hippies in the 70´s as they traveled to Baja California and found the beer in places like Hussong’s bar in Ensenada. Corona caught on, even though it was not the largest selling beer in Mexico. (Superior, was in the 70’s.) Corona kept on growing in the US until the early 80’s when the marketing importers Gambrinus and Barton shifted their attention to the Mexicans…and that is when it continued its upward climb to the point today where it is the largest selling import in the US for beer. There are other examples….tequila, even Tabasco (a sauce that was never Mexican,… Read more »
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