Grupo Vasconia is much more than its kitchen products division. The company, which closed 2020 with sales of 3,330 million pesos, a growth of 8.3% compared to the previous year, did not retreat in the face of the pandemic and the health and economic crisis and continued with a strategy to renew its portfolio to reach more consumers.
The company, founded 110 years ago, decided to stop focusing only on the specialty market to focus on making basic products and consumables, such as aluminum foil for domestic and industrial use. José Ramón Elizondo, Chairman of the Board of Directors of Grupo Vasconia, details that this decision was based on wanting to explore new strategic areas that would allow them – in a year of uncertainty and challenges brought by the pandemic – to continue growing, through its two divisions of business: Almexa, focused on industrial products, and La Vasconia, the best known, for consumer products.
From its industrial wing, it manufactures roll sheet, sheet, tape and plate, and aluminum foil discs and foil and strengthened the incorporation of new products, at the same time that it has been abandoning certain value-added processes to deal with generic products, that have allowed it to venture into other markets, such as aluminum cooking trays, pharmaceutical packaging and wrappers for food, beverages, sweets and chocolates. This strategy allowed it to register a growth of 12% in 2020, compared to 2019.
In the case of consumer products, its best-known division, La Vasconia, has also renewed its portfolio. Although the company innovates each year in around 250 products that go on the market, Elizondo points out that domestic aluminum foil is the seed of the new business bet, which reaches the table and kitchen of end consumers, along with other 3,500 items from 20 categories, such as express pots, pans and grills, batteries, utensils and auxiliaries, baking molds or knives and cutting boards, among others.
In the last year, this division had a growth in sales of 19%. An increase that, according to the manager, was leveraged in the strengthening of the sales teams, in improving the service proposal and in expanding the portfolio with basic products.
In an environment of economic crisis, such as the current one, the main advantage is that the consumer tends to return to basic products and, consequently, the performance outlook for these products continues to be favorable in the short and medium term. Basic products are prioritized over specialized ones and the last thing the consumer decides to get off the shopping cart, says Yanira Reyes, Analytics and Client Delivery leader at NielsenIQ Mexico, on the strategy.
Another advantage is that with more generic products, companies have a greater reach of consumers with different demographic characteristics, uses and habits, as well as greater efficiency in portfolio management. In a crisis environment, the price factor is decisive in the consumer’s purchase decision, who will have more than one option to compare. “Commodities are where the most aggressive price war and promotions take place that could erode or compromise margins. It is essential to focus efforts and resources on differentiation to be able to challenge the competition, ”says Reyes.
High heat
La Vasconia has more than 20 brands, among which are Vasconia, Presto, Mikasa or Kitchen Aid. The firm also owns Ecko in Mexico and Central America, and at the end of 2020 it acquired the rights to the brand in the United States. Elizondo assures that this acquisition will place them as major competitors in the semi-durable kitchen utensils market. It will also give them higher export earnings which, at the end of last year, represented 21% of their total sales. Currently, the group exports to the United States, Guatemala, El Salvador, Colombia, Ecuador, Chile, Peru and Uruguay.
“We have already opened a company in the United States called Ecko Brands to exploit the acquisition of the brand. The expectation is to achieve sales of 10 million dollars this year ”, affirms the manager.
Investments for this year also include the inauguration of a new plant in the Bruno Pagliai Industrial Park, in Veracruz, during the third quarter of the year, which will be destined to the manufacture of aluminum sheet in hard alloys, which will allow the group gain more ground in the automotive industry.
It will be the sixth plant for Grupo Vasconia, which has a factory in Querétaro and four in the State of Mexico. During 2020 they operated at 70% of their production capacity, but this year, after the contingency, they will do so at 100%.
According to Elizondo, the group will carry out tests at the end of the year and the factory will be fully operational in 2022. “It is a plant that will lead us to triple production capacity in the next two or three years and has around 15,000 meters. squares ”, he details.
For now, Grupo Vasconia is conducting several studies to determine how to expand its capacity where there are bottlenecks. “We have not resolved it yet, but they are projects to make investments in late 2021 and early 2022,” says the manager.
