FRUCO

The brand that is present today in 8 out of 10 households, curiously reaches this figure in one
of the countries with the lowest consumption of ketchup and mayonnaise in Latin America
per capita: Colombia.
This phenomenon of success is explained by the secret of flavor, as follows: After the Second
World War, several countries in Latin America take important steps in the direction of
industrialization, without Colombia being the exception – but arriving relatively late. In this
framework Leo Feldsberg, Austrian and expert in agriculture and food production together
with 10 employees founded in 1948 Frutera Colombiana SA, in a garage in the city of Cali
(Valle del Cauca - see figure 1) as a company producing jams and vinegars, better known as
Fruco.

Figure 1: key counties to keep in mind: Colombia: Valle del Cauca/Cali - headquarters of Fruco; Atlántico:
expansion of manufacturing facilities. Also: mayor cities in Antioquia/Medellin; Coffee lands: Caldas, Risaralda,
Quindío. Other industrial counties: Santander, Norte de Santander, Atlántico, Boyacá, Cundinamarca. IN
VENEZUELA: industrial counties: Táchira, Merida, Zulia, Barinas, Carabobo, Miranda.
Two years later, in partnership with the food engineer Felix Zweig, Feldsberg complements
his portfolio with mayonnaise and tomato sauce and communicates it in mass media such as
television, radio and print media, and gave life to the image that Many years she identified
the brand Fruco: Fruquita, which a few days after its launch became a topic of conversation
in the families, for its tenderness and friendly smile without a little tooth, like all the girls who
are of age to move.

Since then, the tomato sauce Fruco, then without Fruquita, but always with the secret of
flavor, begins to conquer the market: Starting with a distribution route with coverage in the
main cities and developed counties of the country (|Cali, Medellin, Bogota, Barranquilla;
counties: Cauca, Valle del Cauca, Quindío, Risaralda, Caldas Cundinamarca, Santander,
Antioquia, Bolívar and Atlántico - national coverage?). In the 1960s, Frutera Colombiana S.A
was acquired by Best Foods and a new plant was opened in Malambo Atlántico in order to
guarantee the freshness and better quality of the tomatoes as a result of avoiding long
transport journeys. In the following decades, the Fruco brand continues to deliver the secret
of flavor to Colombian families, consolidating itself as an oligopoly in the sale of tomato sauce
in the country.
By 1990, Fruco is the market leader with 70% penetration in stores, and in Colombia, with a
brand presence close to 300 thousand stores. In addition, several times the brand has taken
the first place in marketing metrics such as TOM (Top Of Mind) and be one of the brands most
loved by Colombians. Note that for two generations no other brand of tomato sauce has
entered the Colombian market.
Since the 70s the brand decided to change the category of tomato sauce that until then was
wrong in its packaging strategy with a heavy, uncomfortable and little dispenser glass jar,
which became a danger to children and housewives, which are the target market of the brand.
In the 90s the doy-pack revolutionized, the marketing world of tomato sauces. In addition,
new customers and new consumer moments have been successfully introduced, such as the
individual sachet and the multiple sizes going up to the institutional presentation.
By the middle of the 90s, Fruco is betting on being the ally of the housewife and being present
in the daily life of her recipes, as well as extending the line with products such as mayonnaise,
mustard, pink sauce, tomato paste , the vinegars, the jams, the compotes and the liquid
seasoning sauces.
In the regional context, since the end of the 80s, Latin America began to experience a process
of economic opening. Countries such as Venezuela, Argentina, Chile and Brazil became the
base of operations of multinationals that in some cases developed alliances with local
companies or made acquisitions of well-consolidated companies in these countries. An
example of this is Mavesa, leader in Venezuela in the production of sauces and dressings,
which developed a strategic alliance with Kraft for the commercialization of Heintz - the first
brand that produced and marketed tomato sauce in the world - in the Venezuelan territory.
In Colombia, food companies like The National Company of Chocolates and Noel (both
specialized in confectionery) begin to contemplate the possibility of developing their own
brands to break the monopoly position of Fruco, but ... ... ...

As a strategy team of the Nacional Company of Chocolates you have been chosen to develop
a strategy that allows the introduction and successful positioning of the company’s own
brand in the tomato sauce (ketchup) market in Colombia. Define the sequence of actions of
your plan and the end game of your strategy.

TIPS (for your future independent study – consultation for this exercise):
Benefits and possible limitations of Porter’s generic strategies