September 26, 2010 Juicy Fruit

Volume 6 | Issue 3

As one of the few worker-owned companies in Mexico with a strong national presence, Sociedad Cooperativa Trabajadores de Pascual, S.C.L. spe

When it comes to producing juice made with real fruit, Sociedad Cooperativa Trabajadores de Pascual, S.C.L. understands the importance of scouting out quality, right from the start. “Our workers are in direct communication with our agricultural providers – there’s no intermediary involved,” says Raul Uresti, marketing director at the company. “We send workers to oversee the entire process, from planting seeds to harvesting.”

Once the fruit has been harvested, it passes along a conveyor belt and goes through a detailed inspection. “Anything that does not meet the standards we have set in place gets discarded,” notes Uresti. Officials at Pascual work with agricultural providers in nearly every state of Mexico in order to obtain the highest quality of fruit possible for its drinks. “Wherever there is fruit in Mexico – there we are too.”

Pascual currently produces bottled fruit drinks under the brand BOING in a variety of flavors, including mango, guayaba, strawberry, grape, apple, and orange. It also offers soft drinks under the brands Lulu and Pato Pascual.

The company employs approximately 5,400 workers in Mexico, with headquarters in Mexico City. Its main production plant is located in Hidalgo. It has a fruit processing plant located in Querétaro and a plant that bottles water in Culiacán. Workers carry out operations to produce juices made with real fruit and fruit pulp, soft drinks of various flavors, and bottled water in a variety of presentations.

A THREE-YEAR STRIKE

The company originated under the name Pascual S.A. during the late 1930s. Its founder, Rafael Victor Jiménez Zamudio, guided operations to produce lollipops. During the following years, the company branched into bottled water, followed by soft drinks under the brand Pascual.

Operations for the company were carried out in Mexico City, and by 1980, approximately 180 workers were employed at Pascual S.A. In 1982, a financial crisis hit Mexico and the Mexican peso quickly devaluated against the U.S. dollar. Dissatisfied with their pay and other employment issues, the workers went on strike.

They remained on strike for the following three years, as the owner of the company refused to increase wages and tension increased between the two parties. In 1985, Mexico’s president at the time, Miguel de la Madrid Hurtado, in an effort to help the workers receive their salaries, offered to turn the company over to them. They agreed, and the Sociedad Cooperativa Trabajadores de Pascual, C.L.T. was founded.

A NEW COMPANY

While employees at the company were thrilled to take on a more active role in operations, they faced a steep learning curve. “The following two years, from 1985 to 1987, were complicated,” notes Uresti. “180 workers faced the difficult task of getting the company back on its feet.”

In 1987 the company made its first sale as a co-operative. From there, sales took off with the company’s flagship brand, BOING, leading the way. “For a number of years, the company experienced exponential growth. Sales climbed so fast they seemed unstoppable.”

The company’s products continued to thrive in the market until 2006, when sales leveled off due to tough competition in the market. In recent years, the company has experienced steady, sustainable growth. “Even though 2009 was not a monumental year for many businesses in Mexico, we were able to experience a 17 percent growth in sales,” says Uresti. Total annual sales average $450 million.

In Mexico, the company is currently among the leading beverage companies at a national level. “We’re in the top three in the market under the category of juice and nectars.” The company’s main competitors in Mexico are Jumex and Jugos del Valle.

The company’s products can be found throughout Mexico, located in grocery stores, convenient stores, and schools, among other locations. Through the distribution channels established within the company, it is able to reach 87 percent of the market. The rest is covered by other distributors that Pascual has agreements with. In terms of market share, the co-operative currently holds approximately 57.6 percent of the juice segment.

INVESTING IN THE FUTURE

For many years after the strike and recovery, Pascual maintained requirements that all employees hired had to be family members of employees already working at the firm. That has recently changed for the better, notes Uresti. “We now hire employees from any background, regardless of their relationship with the company’s workers.”

Another strategy that the worker-run company has undertaken involves investing in state-of-the-art equipment for its factories. “For many years, the majority of the profits received were used to invest in land and equipment.” The company continues to focus on upgrading its equipment to improve efficiency in its plants and high quality in its end products. Its plants have ISO:9001-2000 certification.

The investment in equipment has paid off in a number of ways. At the fruit processing plant in Querétaro, every step is automated so that human contact with the fruit is avoided until the product is in its final packaging. Also at the plants, any part of the fruit that is not used in the final product is sent down a different conveyor belt. It becomes compost and is used to help grow the next crop of fruit.

Officials at Pascual are aware of current issues facing Mexico and its population, including the increasing rate of obesity in children. In the last few years, the company has developed products to address this growing concern. The secretary of health in Mexico has declared the company’s BOING products to be “liquid food,” given that these products have a high fruit content, contain vitamins A, B1, and C, and are fortified with calcium and iron.

Pascual is also developing low-calorie products with an even higher concentration of fruit for today’s market. “We’re working on fruit drinks that will taste like you just picked the fruit off of the tree and ate it,” notes Uresti. “These products are packed with fruit, low in calories, and free of preservatives.” The company is also developing soy-based products and a line of flavored low-calorie bottled water.

In addition to meeting the needs of today’s consumer, Pascual is committed to enhancing the overall economy of Mexico. “For many of the fruit growers and sugar producers in Mexico, we’re their main client.” The company also purchases the majority of the paper materials it needs for packaging its products from Mexican companies.

For the past few years, Pascual has been reaching into other markets outside of Mexico. It currently sells its products in the southern region of the United States. In the coming years, it plans to build a plant along the Mexico-U.S. border to better serve this market. It also is looking into expanding into various countries in South America.

During the course of its 25-year history, worker-run Pascual has experienced ongoing growth in Mexico’s beverage market. Looking into the future, company officials plan to not only expand into new countries, but also strengthen the company’s productive processes and distribution channels in Mexico. In doing so, Pascual will continue to be a market leader within Mexico’s borders and beyond.

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