Different is good

In his niche of the food business, authenticity is as important as consistency. “Being Mexican, I know what authentic food tastes like, and we’ve always flavored our products the way my mom prepared enchiladas, tacos, burritos and tamales at home. We started on this path, and we’re very fortunate that consumers have grown with us.”

While he credits the mass popularity of Mexican food to restaurants like Taco Bell and El Pollo Loco, “Our food is not Americanized, and that’s a competitive advantage. When major food companies conduct focus groups for a Mexican product, they ask if the food tastes good and if the consumer would buy it. One thing they don’t ask is, does it taste Mexican?”

As Mexican consumers have acclimatized to the U.S., they have changed their cooking and eating habits, according to Ruiz. Second-generation Latinos, who are now Americans, work hard and don’t have as much time to prepare food, so they are looking for convenient ways to feed their families. “They know what good Mexican food tastes like, so they are very much a consumer of ours. In fact, we get letters from them all the time thanking us for picking up the slack.”

Ruiz has great expertise on trends in the Mexican/Hispanic community. “The issue of spiciness and authenticity is an important trend,” he says. “Not only is the Latino migration impacting the Anglo population, but the Anglo population is more global. They travel to different parts of the world and are exposed to many ethnic foods. People are not afraid to try spicier foods, so I see ethnic foods in general continuing to grow.”

“R&D is really important to us, in fact, we have a mandate: I ask that 20-25 percent of our sales every year come from new products,” says Ruiz. A new product takes time from introduction until it achieves success, up to four years, according to his expectations. “But if a product does not earn its right to the table, we discontinue it,” he says.

“Innovation is what retailers are looking for, so we try to build that into our whole business. We build teams around our key customers, with their own sales, marketing, logistic and R&D support. That’s really important. There are so many changes at the retail level, so it’s not uncommon for us to have a new buyer with limited experience. It becomes our responsibility to educate them about our products so they can be successful. We want our customers to look at us as part of the solution, not a problem.”

Some 20 cents of every dollar spent on Mexican frozen food is spent on El Monterey products, according to Information Resources Inc. Despite this success, the company also strives to be an efficient, low-cost manufacturer.

Ruiz’s strategy for growth might include an acquisition, and that’s more likely to happen under the next generation of family leadership — which started 2005 when his elder daughter, Kim Ruiz Beck, was named vice chairman. That transition continued last year with the promotion of his son Bryce to president and COO.

“We have many ideas for new products and have hired a new marketing person to strengthen that side of our business,” he says. “The Go Go Taquito, a product developed specifically for 7-Eleven, and the El Monterey Tornado are the result of our new product innovation initiative and serve the consumer’s increasing desire for quality products that are hot-to-go.” A rolled tortilla dipped in a seasoned batter and stuffed with savory meats and real cheeses, Tornados have given new life to roller grill in c-stores, movie theatres and other gran-and-go outlets.

Ruiz serves on Governor Arnold Schwarzenegger’s Healthy California Food Initiative Committee. Early in 2006, Ruiz announced the removal of trans fats from all its El Monterey brand products. “It’s the responsibility of food companies to make our products healthier, and we are taking that very seriously,” he says. “Can we take additives out? We’re working with vendors to see if they are necessary. There’s a new consumer awareness that all processors have to be sensitive to, and we need to respond to these issues.

“I think the most important thing is doing the right thing for our family, customers, and business,” Ruiz says about his philosophy of life. “Hard work, honesty, sharing, fairness and communication are keys.

“It’s sometimes a little painful to be a Latino because of immigration issues. Most of our employees are Latino; they work very hard, add a lot of value and contribute to the U.S. economy. Border issues are the responsibility of government. I try to be a role model, give them opportunities, improve their education by helping them get their GEDs and college scholarships, improve their quality of life and provide good healthcare programs.”

Ruiz Foods has a legacy of community involvement, and Fred Ruiz is involved with the University of California Board of Regents, Institute for Family Business, California Chamber of Commerce, Ruiz 4 Kids, and others. “There are great needs out there, and making a difference in people’s lives is important,” he says. “Saying no is really hard.”

Piecing together a $515 million company