ENTERING

THE MEXICAN JUICE MARKET

PROPOSAL FOR ALFRESH CANADA

Prepared by Alejandro Martin-Sanchez

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Index Page

Back Ground ………………………………………….3

General Objective …………………………………….3

Introduction …………………………………………...4

The Mexican Juice Market……………………………5

Entering Strategy. …………………………………….6

Volume Projection and Timing………………………7

Services Personnel and Cost …………………………8

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Back Ground:

• Alfresh is the market leader in Canada reaching 70%

of market share.
• Alfresh produces and sell different type of products
in terms of juice content, flavors, containers and
brands across Canada and USA.
• Alfresh has the intention to expand it’s franchise and
products within additional high volume base / high
juice consumption markets, such Mexico.
• Alejandro Martin-Sanchez was contacted through
Mr. Gary Lumsdem and Mr. Jack Jennings in order to
develop the best strategy to penetrate the Mexican
market.

General Objective:

To penetrate and dominate the Naranjada market through

positioning a new Alfresh quality brand in Mexico.

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Introduction:

The objective will be reached through a different stage

process. The first one, consists in identify and take
advantage of our knowledge of the Mexican juice Market.
This step will be done through the recompilation of
available market and consumer data. The interpretation
will allow us to develop the…

Second stage is to define the best entering strategy and to

identify the potential volume. In the third stage we will
develop the relationship between Alfresh and their
possible partners, and the legal aspects. The last stage is
to develop produce the product and the launching plan.

The present document is focused in the first two stages

but we will describe the stages three and four.

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The Mexican Juice Market:

• The market is known as juice category and has four

segments: Juice (100% fruit juice), Nectars (made with 25
to% 75% of fruit pulp), Orangeades / Fruit Base Drinks
(made with 10% to 25% of fruit juice) and Refreshing
Beverages (less than 10% of juice).
• Is a large category: 847 M Liters and $920 M.
Volume Share - 12 Months Ending DJ 02

12.1

44.9 23.2

19.8
Jugos Nectares Bebidas Refrescantes Naranjadas

• Each segment has its dominant participant but Naranjadas.

Juices: Jumex: 38% SOM points, Nectars: Jumex: 57%
SOM points, R. Beverages: Pascual: 51% SOM points.
Naranjadas: Lala 28% SOM points and is very fragmented
by local brands.
• Sales are done mainly in Supermarkets chains: 54%
followed by Mom & Pop stores.

2%

44%

54%

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Entering Strategy:

In order to capitalize the huge potential of the Mexican

Juice Market, we recommend to develop a new
Naranjada product due to:
1. Naranjadas is the largest segment.
2. There is not a clear / dominant leader.
3. Naranjadas segment have maintain a constant
growing trend over 5% during the last five years.
4. Major competitors with low marketing support
investment behind their brands.

Overall Strategy:

1. Start up an Alfresh Mexican branch in order to

capitalize the concentrate base know how and
import the concentrate with reasonable transfer
price.
2. Product will be produced at third party facilities
(to be define) in order to avoid investment.
3. Commercialization (sales and merchandising) will
be done through distributors (to be define).

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Five Year Volume Projection:
ALFRESH MARKET VOL % SHARE
YEAR 1
TOTAL LITERS 17,287,442 381,257,325 4.5%

YEAR 2
TOTAL LITERS 39,051,948 400,320,191 9.8%

YEAR 3
TOTAL LITERS 54,681,320 420,336,201 13.0%

YEAR 4
TOTAL LITERS 99,018,192 441,353,011 22.4%

YEAR 5
TOTAL LITERS 152,558,750 459,007,131 33.2%

Overall Timing:

Start Up a company….…… …………….6-8 weeks.

Inscribe it at Mexican legal regulations…6-8 weeks.

Identify, evaluate and negotiate toll producer (s) and

distributors……………………………10-12 weeks.

Note: this timing is according to normal time and

begins once that all components of each stage are done
such as company name, brand names etc are approved.

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Services, Personnel and Cost:

1. Mr. Martin-Sanchez agrees in using his experience

within the Mexican and beverages market in favor
of Alfresh as consultant. If Alfresh wants Mr.
Martin-Sanchez as a permanent member of the new
company, this subject can be discussed further.
2. During the first stage, Alejandro Martin-Sanchez
will provide general market (AC Nielsen)
information. If further information or additional
consumer insights are needed, the research type,
methodology and supplier will be agreed before
quotation is requested.
3. In order to develop the overall strategy, Mr.
Martin-Sanchez will sub-contract specialists in
each legal area in order to ensure results and
achieve timing.
4. The cost of the consulting or the earnings of Mr.
Martin-Sanchez as permanent employee of Alfresh
will be based in a base salary and commissions.
Exhibit A.
5. During the first stages no permanent
personnel will be needed. Once the product is
ready to be launch, additional employees will be
contract accordingly to the Exhibit A.
6. The contract proposal will be five years.