|Name:||Arrocera San Francisco S.A. DE C.V.|
|Country / Territory:||El Salvador|
|Date of publication:||January 12, 2011|
|Last update:||January 15, 2015|
Iguana meat is a popular food in El Salvador and many other Central American countries (Photo: Joachim S. Muller)
El Salvador is the smallest yet most densely populated country in Central America, with a population reaching over six million in 2009. Since the early 1970s the country has experienced a migration trend, and by 2010 over twenty-five percent of the Salvadorian population had emigrated, with over two million making their homes in North America.
The rich culture of El Salvador is something that Salvadorian emigrants never keep far from their hearts, and one of the most important ways in which they keep their culture alive is through their rich and diverse cuisine. One of the most popular traditional Salvadorian dishes is garrobos – meat from brown scaled iguanas. Coveted for its medicinal and aphrodisiac properties, garrobos (which tastes like chicken but is tougher and has less fat) is a delicacy in El Salvador and other Central American countries.
In the mid 1990s, rural iguana farmers in El Salvador started to shrink wrap and freeze whole iguanas and export them to a few supermarkets in North America that catered to Salvadorian immigrants. Although expensive, the imported garrobos quickly became popular among local Salvadorians and stores found it difficult to meet demand. Shipments were sporadic, and there was not a stable supplier that stores could rely upon. Recognizing the need to provide Salvadorians with affordable, high quality and familiar food, Arrocera San Francisco S.A. DE C.V. (ASF), one of El Salvador’s largest food manufacturers, diversified its portfolio with innovative products intended primarily for Salvadorians living abroad. ASF’s first and most popular product was a specially prepared garrobos soup.
Because of costs and various regulations, ASF found it difficult to export whole iguanas for sale at an affordable price. ASF food technicians worked for over a year and developed an innovative canned garrobos soup that gave El Salvadorians abroad a taste of home. The soup is very traditional, and includes many vegetables, regional spices, a good portion of iguana meat and no preservatives. This ensured that the soup had the taste that Salvadorians were used to eating back home.
The final product was a resounding success, and Salvadorians in North America were quick to purchase this taste of home. They also started telling their Central American friends about it, and ASF soon found it difficult to keep up with demand. The success of ASF’s garrobos soup allowed it to launch a number of other food products (flavored rice, special beans, chilies, soups and preserves, among others) in various international markets, which sold extremely well among both Salvadorian and non-Salvadorian customers.
Developing a strong brand has been an important part of ASF’s strategy ever since the early 1990s. The company was first founded in 1968 and focused on domestic rice production and distribution throughout its early years. After the Salvadorian political climate stabilized in 1992, ASF decided to change its business model to concentrate more on developing and marketing a wide variety of food products to supermarkets and other outlets. The company also desired to expand into the markets of neighboring countries, and quickly realized that the best tool with which it could reach its goals would be to leverage itself through strong brand names.
Already a well known name in the rice business, ASF created a wide portfolio of competitively priced brand name products that represented high quality and value. These products were given catchy, easy to remember names – such as Mr. Rice, San Francisco and Doña Lisa – and were combined with colorful and appealing logos. With these new products and brand names in hand, the company utilized its good reputation in the Salvadorian food industry to develop new distribution channels to supermarkets, wholesalers, and exporters that were looking for new products. The strategy was a success, and ASF’s brands quickly became some of El Salvador’s most popular and easily recognizable names. Enjoying broad popular appeal, ASF has positioned itself as a household name in the food products industry in El Salvador.
Doña Lisa is one of the company’s leading brand names, and when it decided to expand its market reach to target Salvadorians abroad, ASF did so through the Doña Lisa brand. The success of Doña Lisa products abroad allowed the company to export products bearing other brand names, and as of 2010 the company sells over five hundred products under its various brands in international markets such as Canada, Cyprus, Guatemala and the United States of America (USA).
The Doña Lisa logo and slogan (USPTO Serial No.77587098)
Because strong branding is the vehicle that ASF uses to build its business and reach markets abroad, protecting the company’s brand names through use of the intellectual property (IP) system is an integral part of the company’s overall strategy. Since reorganizing to focus on growth through brand names, ASF has made record use of the IP system at home and abroad, and has made trademark registrations for most of its brand names in El Salvador and other Central American countries.
To ensure the strength of its brand in North America, in 1999 the company applied for a trademark registration with the United States Trademark and Patent Office (USPTO) for its Doña Lisa brand through All Foods, Inc. (All Foods), its North American distribution subsidiary. Trademark registration approval came in March 2002. In 2008 All Foods applied for an updated trademark registration with the USPTO to include a new, more colorful logo and the El Sabor de tu Dia (The Flavor of your Day) slogan.
With over sixty percent market share of the domestic rice industry, ASF has significant commercialization capacity, with 10,000 square meters of industrial manufacturing facilities in four regional hubs throughout the country. The company takes a unique approach towards the commercialization of its products in that it produces some of its own ingredients such as rice and beans, and buys ingredients from local farmers and from other Central American wholesale markets. This provides jobs for the company’s four hundred employees as well as for rural farmers and small and medium-sized enterprises (SMEs) in the region.
As sales of the company’s Doña Lisa products picked up in the late 1990s, ASF decided that a North American distribution hub was needed to meet the growing demand. In February 2001 the company formed All Foods in New York, USA, as a wholly-owned subsidiary tasked with marketing ASF’s products in North America and beyond. All Foods’ early products such as the garrobos soup were sold under ASF’s Doña Lisa brand name as “Back Home Food.” This brand remains one of All Foods’ most popular, but high demand has allowed the company to market other ASF products such as rice, beans, pickled vegetables, tropical canned soups and refried canned beans. The establishment of All Foods marked a positive turning point in ASF’s vision to become a world class distributor and exporter of high quality Central American food products at affordable prices.
The popularity of ASF’s brand names has led to the company securing many lucrative partnerships with multinational corporations. The company’s goal is to create value for its partners by giving them access to its distribution channels and develop an environment conducive to open communication so partners can keep abreast of the market performance of each individual product. This strategy has earned the company various partnerships that resulted in ASF becoming the official Salvadorian distributor of famous products such as Scott tissues, Huggies diapers, and Malt-O-Meal breakfast cereals.
Traditional food is a way in which culture is kept alive while living abroad (Photo: Lee Shaver)
ASF has not only brought a taste of home to Salvadorians abroad, but it has also been able to benefit the economy and environment of El Salvador at the same time. Salvadorians have a tradition of sending regular remittances home, which has played no small part in the rebirth of the Salvadorian economy. Purchasing products made by a Salvadorian company – such as Doña Lisa products – also has a similar effect, as it injects money back into El Salvador. As demand for ASF products has increased, the company has ramped up its production capacity, which has in turn created more jobs at ASF manufacturing and distribution facilities. Because ASF does not exclusively rely on its own infrastructure for ingredients and also makes regular purchases from rural farmers, this has also provided more farmers with more jobs and the opportunity to improve their quality of life.
Iguana meat is in particular is a good example. Increased demand for it from Salvadorians abroad have created more jobs for rural farmers, which has helped to stimulate overall economic growth. It has also helped protect the environment and the iguana population. Because iguanas typically live in trees in rain forests, local residents would cut down trees to capture them, which only contributed to the deforestation problem facing El Salvador’s rain forests. Growing iguanas on farms means that people no longer have to cut down trees to get at a source of food. Salvadorian’s love of iguana meat also nearly brought the reptiles to extinction in El Salvador, but by breeding iguanas in a controlled environment on a farm, wild iguanas are protected, and many farmers release some of their iguana stock into the wild to replenish the population.
Beyond the economic gains brought about by ASF’s successful use of branding and trademarks, the company has taken an active interest in socially responsible initiatives to help the condition of underprivileged Salvadorians, especially in education. As part of the company’s participation in the Strategy for Advancing Girl’s Education (SAGE), an initiative launched by the United States Agency for International Development (USAID), ASF included the message “Support girls’ education!” on approximately 20,000 bags of its rice and beans in 2002. With the broad popular appeal of ASF’s brands, this message made a significant impact in raising awareness for girls’ education in El Salvador.
Initially only in the rice business, ASF’s successful use of branding and trademarks has made the company a household name in El Salvador and neighboring countries. In response to the demand for Salvadorian food products abroad, the company was able to leverage its brand names and trademarks to form a new and successful subsidiary company in North America. As a result, ASF increased its revenues by twenty percent year on year from 2007 to 2010, and has become the leading distributor of popular foreign food and personal product brands in El Salvador.
Strategic use of branding and trademarks gave ASF the opportunity to diversify its product portfolio and become more than just a domestic rice producer and distributor. ASF has transformed itself into the leading Salvadorian food company, successfully entered new international markets, provided familiar food for Salvadorians living abroad, and helped to create jobs for rural farmers, all while making positive contributions to the environment. For ASF and El Salvador as a whole, branding and trademarks have provided a tasteful memory of home and a sustainable means of living.
This case study is based on information from: