Business Monday

Miami-based Transnational Foods sells quality, low-cost foods nationwide

CEO Marcelo Young, left, and Francisco Young, the executive VP of Transnational Foods Inc., at their office at 1110 Brickell Ave., Miami, on Dec. 12. Transnational Foods Inc. is a Miami-based company that imports hundreds of food products from 25 countries and distributes them, either under its own brands or private labels, to supermarkets, convenience stores and other retail outlets throughout the United States.
CEO Marcelo Young, left, and Francisco Young, the executive VP of Transnational Foods Inc., at their office at 1110 Brickell Ave., Miami, on Dec. 12. Transnational Foods Inc. is a Miami-based company that imports hundreds of food products from 25 countries and distributes them, either under its own brands or private labels, to supermarkets, convenience stores and other retail outlets throughout the United States. pfarrell@miamiherald.com

The company and its products: Transnational Foods imports more than 500 lower-priced canned and packaged products from food-processing companies in 25 countries and sells them to supermarket chains, dollar stores and other retailers throughout the U.S. and overseas. Its products — canned fish from Spain, pasta from Mexico, olives from Peru, bouillon cubes from Egypt, freeze-dried fruit snacks from China and hundreds more — typically retail from $1 to $5 per item.

“We offer a comprehensive line of value products in 25 different dry food categories such as baked goods, beverages, canned fruits, vegetables, meats and seafood, as well as olives, pasta, olive oil and others,” said Marcelo Young, Transnational’s founder, president and CEO.

“Our market is any consumer looking for great quality food products at very low prices,” said Young, who was born and raised in Argentina and worked there in the international processed foods industry. “Since we started in 2002, consumers have learned that they could purchase products that weren’t so well known 30-50 percent cheaper than national brands, with similar quality or sometimes even better. This boom of ‘second- tier’ brands and private label products hasn’t stopped. It grew a lot during tough economic times but consumers continue to purchase these items once they’ve tried them because they see the value.”

With distribution centers in Miami and six other cities, privately owned Transnational sells foods under its own brands — Pampa, della Natura, So Natural and Tummy Treats — and packages food for large companies under private labels.

It sells to companies like Walmart, Safeway, Publix, Dollar Tree, Walgreens, Dollar General, Family Dollar, HEB, Big Lots and others in 50 states, as well as to clients overseas.

“Our main suppliers are located in Mexico, Peru, Spain, Argentina, China, Thailand, India and the U.S.,” Young said. “And our people travel constantly to ensure that each supplier meets the highest quality standards and the specs required by our customers. We’re not just importers.” The company owns shares in some suppliers, so it plays an active role in choosing the agricultural products and overseeing the production, packaging and marketing processes.

Getting started: After working as an executive at Argentina’s largest branded food company, Molinos Río de la Plata, Young saw a big opportunity in the U.S. processed food market, moved to Miami in 2000 and set up Transnational in 2002. “We saw a clear need in the market for the product we were offering: cost competitive and quality food products,” said Young, who runs the company with his brother, Francisco Young, the executive vice president. Supermarkets at the time were brand-conscious, but, “Dollar stores were starting to grow nationwide, offering good quality items and great prices,” the Transnational CEO said. “We saw the opportunity to offer a one-stop-shop for cost competitive and great quality food products.” Getting started was tough. When the company first called on high-end retailers, one buyer said they only purchase well-known brands. “We don’t hear that anymore,” Young said. “Supermarkets have realized that consumers demand value items and competitive prices. After 14 years, our Pampa brand is now well known and recognized for great price/quality products.”

The difference: Transnational consistently provides customers with a diverse line of quality products at very competitive prices, Young said. “We have ownership positions or long-term exclusive agreements with the 100-plus facilities where we manufacture our products. This gives us control over product quality, safety and processes which are key to success when dealing with top U.S. retailers. Regarding costs, we are able to produce in mass quantities due to our large economies of scale, giving our customers the best prices and allowing our factories to work with maximum efficiency. Every cent or inch we can save in logistics will make a big difference at the end of the day. Service is another key to our success. Our customers need product on time and cannot afford empty shelves. We keep them well stocked year-round.”

Sales: Transnational revenues have grown briskly, from $31 million in 2007 to $104.6 million in 2015. The company estimates 2016 sales at $106 million. About 60 percent of sales come from Transnational’s own brands, and the remainder private labels.

Competitors: Some companies compete with specific Transnational product lines, but no one offers over 500 individual items from 25 different countries, Young said. Competitors include Bauducco (baked goods), La Moderna (pasta, flour, rice, soups, cookies, etc.), plus other importers specializing in certain product lines.

Learning experience: “We work very closely with our customers to identify new products before we bring them to the U.S.,” Young said. “But sometimes, retail consumers decide that a product is not the right size or flavor, so we react.” The company consults closely with its wholesale customers and also conducts focus groups with consumers to help develop new products.

Outside view: Ernst & Young chose Young as its Entrepreneur of the Year in 2015 in distribution and manufacturing, and the company has been recognized by several business publications as one of the fastest-growing enterprises in the U.S.

What customers say: Transnational has been working with Valu Merchandisers Co. of Kansas City, Kansas, and its parent, Associated Wholesale Grocers, for about 15 years. “Transnational has been a good partner for VMC,” said Gary Boyle, category manager specialty and dollar at VMC, which supplies a wide variety of low-cost products to more than 3,400 stores in 30 states and overseas. “It has a wider variety of goods than most suppliers, and they source worldwide to ensure quality and value,” he said. VMC buys items that retail for $1.00 and the most popular Transnational products include cookies, cooking oil, pickles, olives and canned seafood. “Transnational’s Pampa brand is becoming a widely recognized label in the value industry,” Boyle said. “Customers know it for value and wide selection.”

“We buy a lot of rice, canned seafood, hot sauce, olive oil and other items from Transnational,” said Elvin Santiago, director of purchasing at Iberia Foods, a major food distributor for the U.S. East Coast. They offer reliable delivery, good pricing, variety and quality, he said. One of Transnational’s biggest advantages is its expertise in exporting from foreign suppliers and importing into the U.S. “They know all the complicated government regulations and they save us money on paperwork,” Santiago said. “They handle everything and make it easier for us. I only have to pay one supplier [Transnational] here when they deliver merchandise.”

Challenges and outlook: “We are always working with our suppliers and our customers to find new products all over the world, especially more healthy foods and snacks,” Young said. As for the company’s outlook, “Our goal is to expand and reach a half-billion dollars in sales in the next three years.”

The writer can be reached at josephmannjr@gmail.com

Business: Imports hundreds of canned and packaged food products from suppliers in 25 different counties and sells them to supermarket chains, dollar stores and other retail groups throughout the United States and overseas. Specializing in quality, cost-competitive foods generally retailing from $1 to $5 per item, Transnational owns shares in some of the overseas companies that provide its 25 categories of food products. These include canned meat and seafood, instant coffee, peanut butter, fruit spreads, crackers, pasta, snacks, candies and olives. The fast-growing company sells products under its own brands — Pampa, So Natural, Tummy Treats and della Natura — and packages products for large processed food companies. It has warehouse distribution centers in Miami and six other cities.

Headquarters: 1110 Brickell Ave., Miami

Founded: In Miami in 2002 by Marcelo Young

Leadership: Marcelo Young, president and CEO; Francisco Young, executive vice president

Employees: 50 full time, plus more than 150 brokers and independent sales staff

Owners: Marcelo Young, Francisco Young and a group of private equity investors

Website: www.transnationalfoods.com

Source: Transnational Foods

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