Spread the love: a Peruvian foodstuffs maker, popular for its mayonnaise, looks to China to grow.

Peruvians love their mayonnaise. They eat it with chicken, lentils, potatoes, corn, hamburgers--even on French fries.

But up until a few years ago, many home cooks would make their own mayonnaise. Commercial brands available were not only more expensive but, more importantly, they lacked the zesty lemon taste locals craved. That was the case until the AlaCena mayo brand came along in 2002.

"AlaCena is comfortably priced and it has that Peruvian taste that I like," says Sonia Laynes, a 32-year-old housekeeper who now buys AlaCena rather than make her own at home.

Laynes is one of many in Peru that have helped this local condiment capture 94% of the country's commercial mayonnaise market by volume since it launched. After just one year on the market, it had attained 50% of total mayonnaise sales.

"AlaCena is our star product," says Leslie Pierce, general manager of Alicorp, a Peruvian-owned company that produces and commercializes foodstuffs and derivatives, including AlaCena mayonnaise and other condiments. Today, the company markets seven products under the AlaCena brand--including ketchup, aji and rocoto sauce--and exports its mayonnaise to Ecuador and to the United States.

The AlaCena experience exemplifies what the company aims to achieve: Spur sales growth by developing more value-added products, and by tapping new business segments and markets overseas. So far, this strategy appears to be working well. Sales in 2006 rose 20% from a year earlier to hit US$664 million. Net income last year came to $35 million, a 41% increase from the previous year. All three company business lines--foodstuffs, animal nutrition and processed industrial feeds--have been strong. "We are breaking company records nowadays," Pierce says.

Alicorp has come a long way since it was founded in 1956 as Anderson, Clayton & Company, a small business that produced oils, edible fats and laundry soap. In 1971 Peruvian conglomerate Grupo Romero bought the company and still controls it today.

After a decade of consolidating its local operations and strengthening internal processes, Alicorp is now set to expand abroad, Pierce says. Its products are sold in 20 countries. In addition to increasing its presence and entering new markets throughout Latin America, Central America and the Caribbean, the company is looking to increase its presence in the United States, as well as to enter Asian markets.

Last year, foreign sales comprised 12% of revenues, compared to 8% in 2005. In the next five years, Pierce expects this number to increase fourfold. "My personal vision is that figure surpasses 50%," he says. The company will arrive in China--the world's largest producer of farmed shrimp and crawfish--with its Nicovita shrimp feed by year end 2008. The company's animal nutrition business line, which includes sea shrimp and trout feed, already comprises three-quarters of its total exports.

Looking in. While Alicorp has its eyes set on the business and growth opportunities outside Peru's borders, the company is not putting aside its efforts to enter new business lines and products within Peru. The launch of Anua shampoo and conditioner in September marked the company's entrance into Peru's personal care segment. "Our revenue from the Anua personal care platform has opened a window to launch other products in the future," says Pierce.

Pet food is another profitable line for the company. Alicorp controls 41% of the market with its Nutrican and Mimaskot brands. The company's animal feed category in general has been growing 25% a year for the past five years.

Investors applaud Alicorp's global expansion plans. "It is going to be difficult to continue growing here because they already have large market share. That's why they are looking abroad to grow," says Gonzalo de las Casas, head of investment and finance at pension fund AFP Integra.

Not only are markets important, but so are the products. "Its strategy of diversifying markets and products of greater added value is generating greater value for the shareholder in the long term," says Jorge Luis Rodriguez, head of research at Centura SAB, the brokerage arm of Peru's Interbank.

Buyers and sellers appear to be cheering Alicorp on as well. "Over the last few years, it has positioned its brands very well, expanded its product portfolio and ventured into new areas and categories," says Guillermo Wieland, business manager at Corporacion Wong, which owns Peru's largest supermarket chain and sells Alicorp products. "This growth has been accompanied by excellent logistics and attention to the client."

Fernando Reyes, general manager of Panificadora Rolly's, a Peruvian bread and baked goods company, has worked with Alicorp for more than three decades as both a buyer and a supplier. "They offer us 'laboratory' service with reports and analysis on the quality of the products that help us develop products in accord with their needs and the market's needs," he says.

LISA K. WING * LIMA