How Goya became a go-to food brand
Goya, striving to become a food brand for immigrant families of all kinds, has positioned itself as the “authentic” option that you don’t have to rummage through ethnic markets to find.
The Washington Post
What it is: A family-run food company offering beans, rice, nectars, seasonings and authentic Spanish, Mexican and Hispanic specialties, plus other foreign cuisines.
Headquarters: Secaucus, N.J.
Employees: About 3,500.
Sales: $1.3B in 2012
History: Founded in 1936 in Manhattan by Spaniards Don Prudencio Unanue and his wife, Carolina.
About a year ago, in Washington, D.C.’s Mount Pleasant neighborhood, an independent grocer called Bestway changed hands. The new owner is In Suk Pak, a South Korean by way of Pennsylvania. He renamed the store Bestworld, replacing the second word of the big-block letters out front. He rejiggered the store’s product mix to fit the neighborhood’s changing demographics, adding gourmet chips, high-end beers and Asian items like wasabi peas and dried seaweed.
But there was one aisle he didn’t touch: Goya’s.
Festooned with blue Goya-labeled tape and a Goya-logo spice rack, the aisle is densely packed with sacks, cans, boxes, bottles and jars of every imaginable bean, grain, sauce, juice and spice. The Goya salesperson just tells him what he needs to fill the section, and he’s happy to take the advice.
“I’m not Latino. I don’t know what they eat,” says Pak, shuffling around in a pink striped polo shirt supervising stocking one morning. Plus, he says, the neighborhood’s non-Hispanic residents will buy Goya, too.
A block away, Progreso International also stocks Goya products. They’re cheap and of good quality, the proprietor says.
That level of trust among urban Hispanic communities has landed Goya in nearly every corner bodega and medium-size independent grocery store like Bestworld. And while Goya seems exotic, the food is mostly not imported, and it isn’t even run by people with roots in Latin cultures.
The company, in fact, is based in New Jersey. It was founded 77 years ago by Spaniards who had come to New York through Puerto Rico.
It has hired enough natives to develop a flavor profile close to the real thing and has marketed itself as a Hispanic-owned company.
Now, it’s the largest Hispanic-owned food company in the United States, with $1.3 billion in sales last year (still a long way behind market giants like General Mills, which brought in $16.7 billion in 2012).
But the burgeoning Hispanic population isn’t enough for Goya.
It has moved into other foreign cuisines, like Indian and Chinese, in a bid to become the food company for all people new to America.
It’s also developing products for second and third generations of immigrants, who might want something precooked but still homey-tasting, or who might have intermarried with other nationalities and want to mix everything together.
“It’s a United Nations kind of label,” says Bob Gorland, a supermarket consultant at Matthew P. Casey & Associates.
He regards Goya, more than any other brand, as a section unto itself, much like the kosher aisle or natural-foods area.
Now, as the “general market” becomes more interested in ethnic cuisines, Goya has positioned itself as the “authentic” option that you don’t have to rummage through ethnic markets to find.
In other words, Goya is becoming white.
Which, commercially, is a pretty unbeatable approach.
Named after artist
Goya — so named after the Spanish painter because founder Prudencio Unanue Ortiz liked the simplicity and vague familiarity of the name — started out packing and selling olives and olive oil in Brooklyn. It’s now a sprawling network of 16 worldwide processing and distribution centers, mostly in the U.S.
In Puerto Rico and Spain, Goya now supplies the reverse immigrant population from Latin American countries.
Although the bulk of Goya’s beans are grown in the U.S., many of its specialty products come from around the world: coconut water from Thailand, yucca from Costa Rica, quinoa from Peru.
The company headquarters is across the street from the Secaucus, N.J., train station, but visitors are advised to take a cab door to door, so as not to get lost in the nest of highways in between.
To see the actual packing under way, visitors don a hairnet and earplugs and push through a door to the factory floor, where machines deposit rice into preprinted boxes, spice into packets and beans into bags.
A scale can detect whether even a few grams are missing and will boot an offending product off the line.
From there, conveyor belts run along the ceiling, ferrying boxes toward a device that packs them neatly into pallets, ready for storage.
In modern food processing, everyone’s a manager, watching to make sure the robots are doing their jobs right and sweep up the stray grains that fall onto the floor.
From there, it’s another short cab ride to the cavernous warehouse, which is stacked floor to ceiling both with gigantic sacks of raw ingredients on their way to packaging as well as with Goya’s 2,200 finished products.
Forklifts glide silently among them, pulling things out for loading onto trucks for delivery runs up and down the Eastern Seaboard.
That Goya has warehouses at all is unusual. Many big food companies ship their products directly to warehouses belonging to grocery chains, like Safeway, which load their own trucks from there.
Goya has always done direct store delivery — “DSD” in industry jargon — because, as the owners see it, every store has a different audience.
The sales staff researches local immigrant groups with the help of a business-intelligence tool called Geoscape, as well as more enterprising techniques, like hanging out at the local money-transfer franchise to see where people send checks home to.
That way, Goya knows how to stock exactly what Cubans or Salvadorans or Peruvians are looking for, which creates brand loyalty.
“To us, it’s important to make the connection through a product that maybe we’re not going to sell truckloads of, but we’re going to have the product on the shelf so when a consumer goes in they say, ‘Wow, I can relate to Goya because it’s authentic, this product makes me feel like I’m at home,’ ’’ says Peter Unanue, the chief executive’s younger brother and executive vice president for distribution.
Often, Goya’s representatives will even help the big supermarkets decide how to stock the rest of their store to welcome local immigrant groups, like selling plantains and yucca in the produce section if there are Mexicans living nearby, and consulting on the right cuts of meat.
New CEO in charge
Upstairs from the break room at the Goya plant, past the test kitchen, across a floor full of sales and advertising people, is CEO Bob Unanue’s office.
Unanue took over from his father, Joseph, when he died in June.
Inheriting an empire has piled on the frequent-flier miles. He breezes in, puts down his coat and heaves himself into a couch, just back from a few days at a bean convention in Chicago.
At conventions, buyers like Unanue forge and maintain relationships with farmers from the “bean belt” that stretches from New York over the mountains to Idaho.
“I learned something yesterday I didn’t know, which happens a lot,” Unanue begins in a soft Jersey accent.
“The average age of a bean farmer is 63 years old,” he said. “It’s a lot more work than if you’re planting corn or soybeans.”
That launches a diatribe against federal ethanol requirements for gasoline that have boosted the price of corn — and the cost of farming, even for beans.
That’s a real concern for Goya, which can’t stray far from its low-cost price point and is scrambling to supply a ballooning infrastructure. The company has opened facilities in the past few years in Miami, Houston and outside Chicago, and it’s expanding westward and into Mexico.
Meanwhile, its product line has doubled over the past eight years, moving into categories like frozen foods and organics.
Huge food companies typically diversify their offerings — and bolster their authenticity in the hope of resonating with the immigrant crowd — by buying smaller brands like Hormel Foods did with La Victoria Mexican products, Campbell Soup did with Pace Salsa, and B&G Foods did with Ortega.
Goya banks on its own authenticity, developing its own products along two basic principles:
First, stick with tropical cuisines that share ingredients, like coconut milk and pigeon peas that can be adapted for Indian recipes (they also sell imported basmati rice and jasmine rice for Thai food).
Second, develop convenient products that serve the upwardly mobile immigrant, like microwaveable rice and beans, low-sodium and sugar-free colas, baby food in Latin flavors and even stuff in squeeze tubes.
And all the while, teach the rest of the market how to use your foods, which Goya attempts to do through a series of cookbooks, especially for cuisines as they start growing popular — Peruvian ceviche, for example.
Sometimes, though, Goya can’t do it all by itself.
For its new line of baked beans, which has no Spanish on its shiny metallic labels, Goya partnered with another processor. If the product starts to sell well, Unanue says, they’ll bring the production in house.
While charging into the 21st century, Goya is also a very old-world American. It has a high cost structure, with a large sales force and labor-intensive delivery model.
At the same time, its growth potential makes it an attractive acquisition target. Buyout offers come “all the time,” Unanue says.
But he says he’s not interested in selling to a megacorporation or hedge fund that might turn Goya into a financial instrument, like KKR did with Nabisco.
“Sometimes, an outside company would come in and say, ‘Well, the way you do business is very expensive,’ ” Unanue says.
“We can cut costs, and then there’s hundreds of brokers out of jobs, hundreds of drivers out of jobs, and warehouse people, and we’re not serving the consumer.”
Plus, that might ultimately not be good for the business.
Joe Perez, Goya’s director of product development, takes Progresso Soup — now owned by General Mills — as a cautionary tale.
“Progresso in its day, the 1950s and 1960s, was the Goya of Italian food. And now what is Progresso? It’s a soup company,” Perez says.
America already has a Sysco foods, after all, which supplies general staples in bulk. What Goya is becoming is a Sysco for the new America, where chipotle is as common as ketchup.
At the end of the day, what’s good for immigrant America is good for Goya.
“We are a country of immigrants, and thank goodness,” Perez says. “Because that way, we can tailor our product lines to all those who are coming in.”