General Mills' Old El Paso brand is a hit in the US and ready to expand
MINNEAPOLIS — It started as a canning factory along the Mexican border near El Paso, Texas, almost 100 years ago.
The founders’ vision: introduce Americans to Mexican food by selling canned tomatoes and pinto beans that would not offend more temperamental taste buds. Today, the brand known globally as Old El Paso sells stand-up taco shells and guacamole in squeeze bottles to people around the world.
The line became part of General Mills’ vast packaged food portfolio in 2001, and it has been one of the company’s big successes. As a gateway for consumers into new flavors, Old El Paso has benefited from the world’s growing love affair with Mexican food.
The dominant Mexican food brand in the U.S. grocery store, Old El Paso controls 16.4 percent of the Mexican aisle, according to Nielsen. In Europe, where fewer food companies sell Mexican-inspired food, Old El Paso commands half the market.
“Old El Paso is our largest business in convenient meals (segment) and it’s driving growth around the world,” General Mills President Jeff Harmening said at a conference in September. “Despite its origin as an American brand, this business is now larger outside the United States.”
General Mills, like many other big food companies, has struggled to maintain its market position as consumers migrate toward smaller, new brands that are perceived as healthier. Many of the company’s famous brands, like Hamburger Helper and Betty Crocker cake mixes, have experienced steady sales declines.
In response, General Mills, headquartered in suburban Minneapolis, recently separated its brands into two camps: growth and foundational. The company said it will invest more money in products that fall under the growth column, which contains the likes of Annie’s Homegrown organic products, gluten-free Cheerios, the protein-packed Greek yogurt segment — and Old El Paso.
At first blush, Old El Paso might seem an odd bedfellow with the other growth brands, many of which more clearly align with shifting consumer priorities toward organic, fresh and unprocessed foods. As consumers increasingly shop the store’s perimeter where meat, produce and dairy are found, many center-of-the-store brands have floundered.
But while Old El Paso’s marquee products are staples found in the center aisles, the brand also harnesses several consumer shifts.
Its sales are boosted by the popularity of tacos, Old El Paso’s core product, which land at the intersection of two key food trends: freshness and customization. U.S. sales of Old El Paso products in the United States were up 1.5 percent last year, according to Nielsen.
“Tacos are the most democratic food. People get whatever they want,” said Brad Hiranaga, director of marketing for Old El Paso. “And, with the vegetables, you are introducing things that you know are good for you.”
At General Mills headquarters, far away from El Paso, the brand’s marketing team sees its role as the cuisine’s ambassador, educating less-intrepid eaters and solving problems for busy consumers with Mexican-inspired food.
The team believes it can increase the number of times a week Americans consume Mexican food at home — and it’s building off a strong legacy of doing just that.
Making Mexican food more accessible and easy is still “a big influence for the brand today,” Hiranaga said, “the idea of pushing Mexican food and the spirit of it forward in everything we do.”
The brand was among the earliest U.S. companies to try and bring Mexican food north of the border a century ago.
The company, originally called Mountain Pass Canning Co., started in 1917. It changed the name to Old El Paso in 1938 and continued to roll out additional products that pushed Americans to experiment. In 1946, Old El Paso became the first company outside of Mexico to launch a hot sauce.
Pet Inc. bought the canning company in 1968, and the following year it introduced the first Mexican meal kit.
Pillsbury then purchased Pet Inc. in 1995 before General Mills finally got its hands on the brand in 2001 when it acquired Pillsbury and all of its brands.
Today, Old El Paso sells products like flour tortillas in a bowl shape and barbecue-flavored taco kits.
The brand’s growth has always been linked to the growing popularity of Mexican food in the United States. As Mexican-Americans migrated north, so did the cuisine, said Gustavo Arellano, author of “Taco USA: How Mexican Food Conquered America.”
Companies that originated near the border helped carry it. The cuisine is now so pervasive, and travel so much more common, that the spread of Mexican food is less dependent on the movement of people.
“Nowadays it is a bit different. It’s not so much migration as much as globalization,” said Arellano. “It’s not like the old days where you would have cuisine cut off from the mother ship.”
Mexican is now America’s second-most popular ethnic cuisine, just behind Italian.
“A lot of the elements that go into Hispanic foods are on trend,” said Darren Seifer, a food and beverage analyst with the NPD Group. “They really do address freshness in their cooking. They have fresh chicken, fresh veggies and they cook with oils not butters.”
Packages of Old El Paso taco shells now proclaim they are made with just three ingredients: corn flour, palm oil and salt. This labeling shift is a nod to skeptical consumers who want more transparency about the ingredients that are in their food.
Americans are wanting to experiment with different cuisines in the kitchen, Seifer said, and “it’s a little different, it’s a little new, it’s bold flavors.”
General Mills’ marketing team is led by a group of millennials and young Gen Xers whose friends tend to eat more adventurously than their parents did.
“We are meant to be a fun, modern brand. There’s no wrong way to taco,” said Michelle La Berge, senior marketing manager for Old El Paso. “Yes, we are not going to be your most authentic player, but we are reliable and we are going to make your taco night a better experience.”
The Old El Paso team members often visit homes, come into kitchens and observe how people eat. They are looking for where things go wrong and then imagining ways to solve that problem.
“The innovations that Old El Paso has been able to bring have all been around making it more convenient and relieving some of the known, or unknown, pain points that consumers experience,” said Alyssa Buckalew, research and development manager for Old El Paso.
On one visit, 32-year-old La Berge saw a mom stuffing and wrapping flour-tortilla tacos for all her children. One boy’s taco kept coming unwrapped, escalating his frustration.
“He had an absolute meltdown,” La Berge said. “I don’t have kids, so that was really eye-opening.”
To remedy this common problem, Old El Paso introduced taco bowls, which are soft, flour tortillas with walls that sit upright and can be filled with toppings.
Now a commonplace cuisine in nearly every corner of America, Mexican is a lesser-known food in Europe, Canada and Australia.
In the United States, consumers eat Mexican food at home 60 times a year, compared to four or five times in Europe. But interest is growing, and General Mills hopes to be the one to introduce the cuisine elsewhere.
Sales of Old El Paso increased 2 percent in Canada and 3 percent in Europe last year, the company reported in June. The brand has 72 percent of the Mexican food market in France.
“We just see so much upside globally because tacos are relatively unknown,” Hiranaga said.
With more of a learning curve in Europe, Old El Paso’s products look a lot different there.
“The influences of being close to Mexico and having more exposure to Mexican food is very different in the U.S. than in Europe and Australia. Their familiarity with tacos is pretty low,” Buckalew said. “A lot of products that do well outside of the U.S. are dinner kits because people still need assistance on knowing what goes into a taco and how to make it.”
The company tries to listen to what consumers want and create products that meet them where they are at. As a result, General Mills introduces different product in different markets — like crispy chicken fajitas, barbecue taco kits and “extra mild” spices — that are not typically associated with Mexican foods.
“Now we see not just new migration bringing in their cuisine, but just a continuous exchange of foods,” Arellano said. “Mexican food is ever growing. It’s ever evolving. And why do they love Mexican food? Because of the flavors.”
HISTORY OF THE BRAND
1917: Mountain Pass Canning Co. is founded.
1938: Mountain Pass changes its name to Old El Paso
1968: Pet Inc. buys company
1982: Brand enters Canada
1984: Old El Paso launches in the U.K. and Australia
1990: Brand enters France
1995: Pillsbury purchases Pet
2001: General Mills buys Pillsbury