The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios, Rabobank, México
19 - 23 de Mayo de 2008

The World

If US 59 cents worked in 1990, will US 79 cents work today? That is what Taco Bell, the U.S. fast food chain, is asking. Just like the rest of the food service industry, the fast food segment is suffering in the U.S. market from the combination of an economic downturn, and inflation on the upturn. Although not as bad as other segments, year over year same store sales have fallen by .5%. In response industry players have come out low priced menu options, pitching them as value oriented menus. We have seen McDonald’s “hyping $1 Double Cheeseburgers…KFC hawking 99 – cent Snackers [and] Subway and Quizons waving $5 foot – long subs.” Now it is Taco Bell’s turn. Back in 1990 they “turned the fast – food industry on its head” when they introduced menu offering running from US 59 cents to US 79 cents. Now looking to out do the competition they putting 10 products on their menu, coming in under a U.S. dollar, selling from US 79 cents to US 99 cents.

They will promote their new menu with ads that say that you can eat at Taco Bell with lose change. According to an analyst, Taco Bell’s strategy is designed to appeal to younger male consumers who “will sacrifice food safety, nutrition or whatever just to save a buck.” Reflecting the inconsistencies in consumption habits, the fast food industry, even in today’s tough economic environment, is not just about ‘saving a buck’. Pizza Hut, which like Taco Bell is also a subsidiary of Yum! is coming out with what they call their Ultimate Grill pizza. It has grilled chicken, grilled steak, ham and grilled peppers. Coming in at US$12.99 it isn’t being promoted as a value item. Rather, to create some excitement, it is being launched for a limited time to coincide the warmer months in the North American market. Pizza Hut is further promoting the pizza by giving consumers a chance to win a grill. Maybe that way they’ll be able to grill their food and not buy an expensive pizza.

Eating alone: What do you do if you can’t eat one of the Ultimate Grill pizzas by yourself and didn’t win a grill? One aspect of the changing life styles that is generating more interest among food companies is the single – serving segment. In part this reflects the demand for convenience, but it also reflects the fact that people, especially in the U.S. tend to frequently eat alone. According to a recent survey ”nearly three out of four Americans (73 percent) occasionally dine solo”. Looking to enter that market segment, DiGiorno and California Pizza Kitchen have come out with single severing offerings marketed as For One pizzas. Their marketing campaign says that while people may even enjoy eating alone, consumers have a hard time finding a decent single serving meal. DiGiorno and CPK are promoting the For One pizzas as an alternative so that consumers can actually look forward to eating alone, and still have a good meal at home.

Mexico

Greenhouse agriculture growing: Greenhouse and plastics is the fastest growing area of Mexican agriculture. Exact numbers are hard to come by; SAGARPA is saying that there are 6,000 hectares in greenhouses with 1,700 hectares of greenhouses under construction. In addition there are 2,000 to 3,000 hectares in tunnels or under plastic. Tomatoes are the main crop followed by bell peppers grown in greenhouses.