SIZE ALWAYS MATTERS

Mexico 2017 | INDUSTRY | INTERVIEW

TBY talks to Sergio Ayala & Alberto Rementeria, Directors of GIFAN, on identifying and capturing niche markets in Mexico, importing healthy and profitable solutions in the food industry, and working with forward-thinking, medium-sized companies.

Sergio Ayala
BIOGRAPHY
Born in Mexico City, Sergio Ayala started his career working for the cleaning products companies Ecolab and SC Johnson. He later worked for COTY to develop its sales and marketing skills. In 2002, together with Alberto, he founded GIFAN and started developing a brokerage and distribution model.
Alberto Rementeria
BIOGRAPHY
Alberto Rementeria was born in Chile and raised in Canada and the US. He graduated with honors in finance from the University of Florida. He started by working for an American distribution company where he quickly developed strong relationships with suppliers and retailers.

How did GIFAN first get started as a concept?

ALBERTO REMENTERIA We started in 2002, selling closeouts and opportunity buys to Sam's Club and Wal-Mart that we found in the US—fragrances, watches, sunglasses, and similar products. Before we started with P&G in 2006, it was an opportunistic business. P&G had asked several buyers if they could recommend someone, and one of the buyers recommended us. We started selling Bounce, the dryer sheets, before they gave us Tide, the detergent brand. At that point, it was priced at almost 100% above the market leader, Ariel. But it started selling in certain stores, and we realized there was a niche for higher-end consumers. Therefore, that segment became our focus. It took us about two to three years to fine-tune the model; now it represents almost USD30 million.

How do you decıde what products are appropriate for the Mexican market?

AR In those years, we noticed there was an attraction for health and wellness, a growing trend in the world of food. Therefore, we started with 100% all-natural, no sugar, and non-fat premium products. We launched almost three times what the market wanted, as there is now a clear niche of people who want to eat healthy and exercise. We now have two brands of gluten free bread coming out next year.

SERGIO AYALA We try to find the proper product for the proper market. We started with super foods and other products that may be fashionable right now, but at the end of the day Mexico is one of the most obese countries in the world, and we have a role to play in bringing healthier foods to the market.

What makes GIFAN different from a typical broker or distributor?

AR We are not a broker or distributor, since these are ugly words. Many people will not work with P&G directly, but at the end of the day we own the brand for Mexico. We have a full marketing department, a full regulatory department, a full logistics department, and a full sales team. We are now actually doing a full digital in-house department.

What is the current appeal for the Mexican market for multinational consumer brands?

AR What has changed in the past 25 years is the growth and existence of a solid middle class. These are people that are making more money, scaling up a little in their purchases, and getting small luxuries for their families; the middle class wants quality.

What do you see as the biggest growth goal for you?

SA It is a mix of everything. We want to expand our base of businesses with existing partners and start working with new partners and clients. We also want to grow our portfolio with existing clients. At the end of the day, we will try to bring more products that offer differentiation to the Mexican market.

AR We are also looking internationally. P&G has been talking with us to expand our model into Asia. We have pitched to work with them in Japan, which has a huge consumer base with discretionary income, loves American products, and wants superior products. They can and will pay for it, which is our first step. The last four years running we have won the Distributor of the Year; this year we won Distributor of the Year for the Future. This is basically where they want to go—to become a full service distributor.

Where do you want to see the company in the next two to three years?

SA We are currently working with six large and several medium-sized companies, for these tend to be the innovative ones. We also have several different products we want to bring to Mexico. We will try to grow the base and brands we already have with these companies. We will definitel try to develop this business into perhaps 50% of our total growth over the next five years.